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Vietnam Enterprise (VEIL)


Wednesday 13 April, 2022

Vietnam Enterprise

Monthly Update

RNS Number : 1938I
Vietnam Enterprise Investments Ltd
13 April 2022

13 April 2022


Vietnam Enterprise Investments Limited

("VEIL" or "the Company")


Monthly Update

-0.6% NAV Return in March 2022



Vietnam Enterprise Investments Limited ("VEIL") is a closed-end fund investing primarily in listed equity in Vietnam, and a FTSE 250 constituent. The Company's NAV performance for March 2022 is set out in this notice.


Fund Performance

· As of 31 March, VEIL's NAV decreased -0.6% over the previous month against a rise of +0.1% for its reference index, the Vietnam Index, both in US dollar terms.

· VEIL's NAV per share was US$12.27 as of 31 March, and its total NAV was US$2.6bn (£2.0bn)

· The Company's share price decreased by -0.1% in March, and its discount to NAV as of 31 March was -19.1%, compared to -19.5% at 28 February.

· VEIL's NAV per share has increased +0.5% over three months, +34.1% over one year and +83.1% in three years, over these time periods the performance of Vietnam Index has been -0.3%, +28.0% and +62.5%, respectively.

· Over the course of the month, VEIL repurchased 1.1m shares to be held in treasury, compared with 1.0m shares repurchased in February 2022. Year to date (as of 31 March) 2.8m shares have been repurchased (1.3% of shares outstanding on 1 January 2022).


Economic Overview

· Q1 2022 GDP was recorded at +5.0% year-on-year, up from the +4.7% registered in Q1 2021

· Manufacturing continued as the main growth driver for Q1 2022, rising 7.8% year-on-year

· In Q1 2022, exports rose 13.4% to US$89.1bn and imports grew 15.2% to US$87.6bn creating a trade surplus of US$1.5bn

· Trade was seen to accelerate in March, with exports and imports rising 48.2% and 28.7% year-on-year, respectively to give a trade surplus of US$2.1bn for the month

· Services rose 4.6% year-on-year, continuing their comeback since lockdown ended in October

· Inflation is rising in Vietnam, with the headline CPI at +2.4% year-on-year in March from +1.5% in February. This compares with average inflation of 1.8% for 2021

· Omicron cases had reached up to 270,000 per day in March before starting to subside at month's end

· Since infections were largely benign, worker absences caused only temporary disruptions to economic activity, although the PMI did drop from 54.3 to 51.7

· In response to the disruptions to economic activity, authorities raised monthly overtime limits from 40 to 60 hours and relaxed quarantine requirements for fully vaccinated workers, this was necessary to accommodate the significant export-order backlogs in to Q4 2022

· Registered FDI was US$8.9bn in Q1 2022, down -12.1% compared to Q1 2021, although disbursed FDI was +10.2% at $4.4bn across the same time periods

· Fitch and Moody's reconfirmed their "positive" outlook with respective ratings of BB and Ba3 for Vietnam


Dien Huu Vu, the Portfolio Manager of VEIL commented:


"Vietnam's markets continued to show little reaction to the volatility of global markets, but neither did they register the excellent macroeconomic numbers that were released. VEIL fell slightly against a flat index, with the Company's three positive performers in the top ten making up for most of the decline in the seven holdings that declined in March, five of these banking stocks despite no news in particular to give cause for concern. The AGM season set a positive tone for 2022, with studiously conservative earnings guidance as usual, but even so averaging approximately 15% growth. Bank growth forecasts for 2022 were above average, indicating over 20%, further highlighting the paradox of their monthly performance.


Flows were broadly supportive, with average daily turnover increasing by 17% month-on-month to US$1.3bn on Vietnam's combined exchanges.  Foreign net selling intensified to $174m but was mostly offset by local buying, and the year-to-date net foreign outflow of $313m was barely half the level of Q1 2021. New trading account openings hit an all-time monthly record of 270k, this was 20% above the previous peak in December 2021.  Local investor sentiment dominates Vietnam's markets and does not seem to be bearish, probably due to the clear recovering trend in the domestic economy. However, a consensus is still developing on how immune to external events Vietnam can remain.


Vietnam delivered solid economic numbers for March and Q1 2022 and we believe that the major threats to growth are external: geopolitical tensions and, heavily aggravating them, renewed lockdown in China - by far Vietnam's biggest supplier of raw materials and semi-finished goods.  These twinned crises only increase the risks of more supply-chain disruption and more commodity-price escalation, possibly crimping international trade and boosting inflationary pressures.  Inflation is indeed ticking up in Vietnam, with the headline CPI at +2.4% year-on-year in March from +1.48% in February. This is still a far cry from the US and Europe, but the Government has decided to halve the environmental tax on petrol (cutting 6.7% off the final price), and to reduce VAT from 10% to 8%.  The Investment Manager forecasts that CPI will be around 4% in 2022.


Despite global headwinds, Vietnam has had a solid start to 2022 and its healthy current position and prospects have been recognised by Fitch and Moody's, which recently re-confirmed their "positive" outlook and their respective ratings of BB and Ba3. The World Bank has forecast 5.5% GDP growth for Vietnam although this is below many other banks and multilaterals that are targeting 6.5-6.7%.  With omicron fading, the Investment Manager can see higher than 7% growth as a real possibility if trade continues to accelerate, services pick up momentum on the back of reopening borders and the fiscal stimulus package is rolled out."


March Commentary


At the end of March, the chairmen of two property companies (one small-cap, the other unlisted) were arrested in unconnected cases, one of market manipulation, the other on charges of falsifying information in private bond sales. VEIL has never held a position in either company. The Investment Manager does not foresee a lasting impact and believes the news may potentially help to promote transparency and shareholder protection and move investors towards more fundamentally based stocks.



In VEIL's portfolio, FPT had a strong performance in March due to positive expectations around Q1 2022 results. The company announced the top and bottom lines grew by 26% and 27% year-on-year, respectively. FPT also put forward confident guidance indicating growth across key segments such as 20% growth in software outsourcing, 30% growth in education and 15% growth in telecom services. Management also shared that FPT will continue to invest in technologies such as cloud, big data, artificial intelligence, blockchain and hyperautomation as drivers for long-term growth.


All five bank holdings in VEIL's top ten holdings fell on lingering concerns about growth prospects after a relatively weak Q4 2021. However, in their recent AGMs, early signals from top tier banks have shown optimism for 2022. Military Bank gave guidance for profit before tax to grow by 23% for FY2022, while Asia Commercial Bank announced at its AGM that Q1 2022 profit before tax grew 35%, the bank put forward a target of 25% growth in pre-tax profits FY2022.



Top Ten Holdings (71.5% of NAV)





Vietnam Index %


Monthly Change %


Vietnam Prosperity Bank






Mobile World






Hoa Phat Group






Asia Commercial Bank












Dat Xanh Group

Real Estate






Real Estate





FPT Corporation












Military Bank







For further information, please contact:


Vietnam Enterprise Investments Limited

Rachel Hill

Phone: +44 122 561 8150

Mobile: +44 797 121 4852

[email protected]  


Jefferies International Limited

Stuart Klein 

Phone: +44 207 029 8703

[email protected]  



Charles Ryland / Henry Wilson / George Beale

Phone: +44 20 7466 5111

[email protected]  


LEI: 213800SYT3T4AGEVW864

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