Monthly Investor Report

RNS Number : 7886S

VietNam Holding Limited

12 November 2013

 



VietNam Holding Limited (the "Company")

Investor Report

A report detailing the activities of the Company for the month of October 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

Vietnam's equity markets virtually stood still in October, with the benchmark VNI ending the month broadly unchanged at 497.  However, there was increased net buying by foreign investors, reacting possibly to a wide range of improving macro-economic data releases. 

The Purchasing Manager's Index (PMI) for October was the same as September, at 51.5, indicating an increasing rate of manufacturing growth, primarily for export, with foreign-invested enterprises leading the charge. Inflation was also benign in October, at 0.49% MoM, compared with 1.06% in September.  This takes the YoY inflation figure to 5.92% and the YTD figure to 5.14%, which in turn may encourage some further monetary loosening. 

The VND held steady during October, broadly unchanged at 21,100 / 21,125 to the Dollar.  Speaking during his visit to the US, Prime Minister Nguyen Tan Dung indicated that Hanoi does not want to see the VND depreciate by more than 3% in 2013, despite even larger devaluations already seen this year in a number of other Southeast Asian economies. 

Vietnam's balance of payments benefits from steady inward remittances from the roughly 4mn Vietnamese that reside overseas.  The World Bank estimates that they will send around US$11bn into the country this year. Although the country is the world's 13th largest country by population it is the ninth largest recipient of inward remittances.

VNH Insights

The Ministry of Agriculture and Rural Development has drafted a circular that, if approved, would give a green light for the first genetically modified crops to be grown commercially in Vietnam, initially for animal feed.  Although Vietnam has been importing GM food and feed for some time, it has until now been quite wary about domestic production. This reluctance was in part because one of the leading GM seed producers formerly manufactured Agent Orange during the Vietnam War.  If the decision is made to proceed, the hope is that yields can increase for a number of crops, and the country can reduce its dependence on the import of animal feed and some other agricultural commodities.

Although yet to be confirmed, a number of recent comments made by senior officials and draft circulars issued suggest that the government is gearing up to raise some foreign ownership limits, as advocated by the State Securities Commission.  The first pertains to equity stakes in both listed and unlisted public companies.  The current 49% cap on common shares in listed companies could be increased to 60% through approval by the prime minister.  In addition, an unlimited amount of non-voting preferential shares could be issued to foreign shareholders by companies that have hit the 49% ceiling.  Similarly, the 30% cap on foreign ownership of local banks may also be raised, perhaps to 49%, or even higher in special cases.

The Vietnam Asset Management Company has begun buying up chunks of bad debts from local commercial banks, including AgriBank, Saigon-Hanoi Bank, Saigon Commercial Bank and PG Bank.  Meanwhile, the Ministry of Finance's Debt and Asset Trading Company is preparing to issue over US$625m in guaranteed bonds as part of the financial restructuring of Vinashin, soon to be renamed the Shipbuilding Industry Corp.

VietNam Holding Asset Management Limited
Gyentsen Zatul	Telephone: [phone]
- Investor Relations
Oriel Securities Limited (Nominated Adviser and Broker)
Stewart Wallace / Neil Winward	Telephone: [phone]

 

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