Monthly Investor Report

RNS Number : 1060U

VietNam Holding Limited

13 October 2014

 



VietNam Holding Limited ("VNH" or the "Company")

Monthly Investor Report

A report detailing the activities of the Company for the month of September 2014 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 third quarter GDP growth was 6.2% YoY, according to preliminary figures.  This is the fastest rate of growth seen in a quarter since 2010, and takes GDP growth to 5.6% YTD, following 5.1% in 1Q2014 and 5.4% in 2Q2014.  The VND ended the month slightly weaker at 21,228 to the greenback.  Yields in sovereign bonds dropped on strong demand from local banks for government paper.  The consumer price index rose 0.4% in September, taking the YoY figure to a very benign 2.25%.

The HSBC Purchasing Managers' Index rose in September to 51.7, from 50.3 in August, signalling slightly improved operating conditions in Vietnam.  Demand strengthened and export orders grew, after a brief dip in August.  There are some initial signs that 'Vietnam Inc.' is ramping up production in anticipation of strong demand growth for the remainder of 2014.  The central bank also declared that commercial credit growth is also burgeoning, after an anaemic couple of years.

YTD loan growth was 7% at end-September, compared with 4.5% a month earlier, and the State Bank of Vietnam is sticking to its guns in forecasting 12-14% loan growth for 2014 as a whole.

This comes as welcome news, as there are growing signs that the State budget funds used to help pump-prime the economy in recent years - and underwrite some of the losses incurred in the SOE sector - have caused a marked increase in gross public debt.

It is widely agreed that the State's official debt level is around 55% of GDP, but views vary on how much 'off balance sheet' debt exists; anywhere between another 20% and 45% of GDP. Whatever the precise figure, Hanoi is confronted with the dialectic of needing to increase public spending on a range of social goods, from improved education to physical infrastructure, while not racking up an unsustainable debt burden. The obvious answer to increasing budget pressures would be: accelerate the SOE privatization.

VNH Insights

Since the Vietnam All Share Index (VNAS) hit the resistance point of 612.25 on September 8, it ended the month at 589.72 with a loss of 2.91%. By comparison, the VNI finished the month at 598.8 with a negative 5.95% performance, dragged down by the 14.5% price loss of PV Gas.

 The VNH NAV per share performance improved by 2.27% from USD 2.113 to USD 2.161. The total net asset value increased by 2.18% to USD 133.08 million. The VNH share price increased by 8.21% from USD 1.64 at the end of August to USD 1.78 on September 30.

Bloomberg reported that the State Securities Commission has begun to explore what it would take for Vietnam's stock markets to graduate from 'frontier market' to 'emerging market' classification, under the MSCI's benchmark coverage.  Such a progression would allow Vietnamese equities to tap a far larger pool of institutional fund money; funds that are not permitted to gain exposure to frontier markets.   

For more information please contact:

VietNam Holding Asset Management Limited	Tel: [phone]
Gyentsen Zatul - Investor Relations
Altium Capital Limited (Nominated Adviser)	Tel: [phone]
Tim Richardson
Winterflood Investment Trusts (Broker)	Tel: [phone]
Joe Winkley / Neil Langford
Buchanan Communications	Tel: [phone]
Charles Ryland / Sophie McNulty

 

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