Monthly Investor Report

RNS Number : 0111H

VietNam Holding Limited

13 June 2013

 



VietNam Holding Limited (the "Company")

Investor Report

A report detailing the activities of the Company for the month of May 2013 has been issued by VietNam Holding Asset Management Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website at http://www.vietnamholding.com/latest-publications.aspx and a summary of the report is included below.

Investor Report Summary

Vietnam News:

The most note-worthy event during May was in the political front where a plenum of the Vietnam Communist Party (VCP) elected two new Politburo members even though it had been expected that three, not just two, new appointments to the 16-person VCP leadership would be made. The National Assembly formally approved Dinh Tien Dung as the new Minister of Finance.  Mr Dung, aged 52 and the youngest ever finance minister, was Auditor General prior to this new role, as had been the case with his predecessor, Vuong Dinh Hue.  Mr Hue recently vacated the ministerial position in order to become the full-time Chairperson of the VCP's Economic Commission.  A number of pundits noted that neither Mr Hue nor Nguyen Ba Thanh - the high-profile former head of Danang, and now chair of the VCP's Internal Affairs Commission - made it to the Politburo, as widely anticipated.

The signs of economic recovery were mixed in May.  Purchasing Managers' Index came in at 48.8 in May, compared with 51.0 in April, suggesting that the corporate sector continued to struggle to sustain its expansion.  Falling output prices and lower overall manufacturing output reflected anemic local demand.  On the other hand, it was good to see export orders continue to grow and finished goods inventories shrinking which suggested restocking may lead to future increases of economic activities.   Nonetheless, the government has since revised the outlook for the country's annual GDP growth to hit below its target of 5.5%.  The IMF is now forecasting 5.2% for 2013 and next.

VNH Insights:

After a brief consolidation in April, Vietnamese equity markets resumed the impressive rally that it achieved in 1Q2013.  The benchmark VNI broke confidently through the 500 barrier to end the month at 518.39, thereby rising 25.30% YTD.  

Much of the recent rally could be attributed to the net flows of over US$250m of foreign portfolio money into Vietnamese stocks so far in 2013 - a trend not seen since 2008.

Despite continued concerns over SOE restructuring, the fragile banking sector and a badly bruised property market, institutional investors seemed buoyed by some of the latest economic stimulus measures, including a USD 1.4bn support package for social and affordable housing. As a result, the real estate sector became the main driver behind VNI's strong performance of 9.25% increase in May.

The Vietnam stock market has outperformed its regional peers by quite a margin since the beginning of the year. This is also reflected in the markedly increased valuations of 14.64x P/E from 11.49x at the end of last year.

Thanks to its value approach VNH's portfolio with a trailing P/E of 9.42x is still substantially better valued as compared to the market, despite the 9.58% increase of NAV during last month.

It is worth mentioning that performance wise equities of Vietnamese small- and mid-cap companies have managed to gain some ground in the most recent market rally. However, we believe that there remains ample upside potential for SMEs with attractive valuations, solid balance sheets and superior EPS growth.

For more information please contact:
VietNam Holding Asset Management Limited
Gyentsen Zatul	Telephone: [phone]
- Investor Relations

 

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