VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month of June 2023 has been issued by Dynam Capital Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website and a summary of the report is included below.
Manager Commentary - Birds-eye view on Vietnam
While Vietnam's economy continued to feel the effects of dampening global demand in June, internal risk reduced further and investment - both public and foreign - helped see it grow 4.1% in Q2 compared to 3.3% in Q1.
Exports and imports growth, though still down YoY in June, recovered MoM. The retail sales upbeat streak continued thanks to healthy domestic consumption and even stronger tourism, and the total number of tourist arrivals in Vietnam surged to 5.6m in 1H 2023, the equivalent to 66% of the number over the same period in 2019.
June also saw the Fund's NAV go up, +5.2%, due to its outperformance of banks, industrials, and financials. VNH benefited from its overweight in selective banks and financial firms, but also from already being underweighted in the underperforming real estate sector. During the month, we trimmed some positions in industrial goods and services, and increased our exposure to the financial sector in the shape of brokerages, given improvements in business prospects that the concerted effort of policy makers is helping to shape in this sector. Consumer stocks delivered some of their biggest negative surprises in earnings in H1 2023 and their share prices were punished as a result.
Calendar year-to-date, the Fund's NAV is up 13.3% and we think the long-term structural growth opportunity remains exceptionally compelling in Vietnam with many major infrastructure projects, further development of its financial system and the challenge of raising US$ 135bn to fund energy transition from coal and hydro to renewable by 2030. Vietnam's policy and diplomatic relations have continued to cushion the impact on dwindling exports and production, and we expect Vietnam to maintain a trade surplus in 2023 despite the slower than usual growth for the manufacturing sector. Easing monetary policies by the State Bank of Vietnam in 1H 2023 also continue to mitigate ripple effects of the crisis in the corporate bond market, which has lifted domestic investors' appetite for equities.
Additionally, a steady flow of foreign direct investment (FDI) has been maintained. This is in part due to issues with Chinese trade but also due to strategic trade agreements. For example, in April 2023, the UAE agreed to start talks on establishing a comprehensive economic partnership agreement (CEPA), as the two countries seek to promote collaboration in trade, investment, economy, industry, energy, logistics, agriculture and infrastructure. More recently, Japan - Vietnam's largest investor to date, according to the Asian Development Bank - signed three exchange documents related to loans with a total value of nearly US$ 440m at the G7 Summit in Hiroshima.
Rapid digitalisation, including adoption of generative AI, means business models everywhere are changing fast, and Vietnamese companies are no exception. Cloud computing has become a key driver of the country's digital transformation and high growth rate relative to other countries.
A recent article in The Economist rated Vietnam's education system one of the best in the world in terms of quality, ongoing improvement, and gender equality. It cited the latest data from the World Bank on aggregate learning scores, which showed that Vietnamese students not only outperform their counterparts in neighboring Malaysia and Thailand, but also from the UK and Canada, countries more than six times richer. The article concluded: "All this has reaped rich rewards. As schools have improved, so has Vietnam's economy."
For more information please contact:
Dynam Capital Limited
Craig Martin Tel: +84 28 3827 7590
info@dynamcapital.com |www.dynamcapital.com
finnCap
Corporate Broker and Financial Advisor Tel: +44 20 7220 0500
William Marle
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