London, UK, 09 February 2022
Edison issues review on VietNam Holding (VNH)
2021 was a remarkable year for the Vietnamese equity market, with the VN All Share Index (VNAS) rising 53.0% compared with a 1.3% fall in the MSCI Emerging Markets (EM) Index. VietNam Holding (VNH), managed by Dynam Capital (Dynam) for over three years, returned 65.6% (NAV total return), outperforming the VNAS. Vietnam has handled COVID-19 with some lag to the developed world (as the pandemic visibly hit Vietnam in 2021, rather than 2020), but the situation has now stabilised. For 2022 the IMF forecasts that the Vietnamese economy will grow 6.6%, outpacing the expected world GDP growth of 4.9%. Dynam's investment team chooses a tightly focused selection of businesses for VNH's portfolio. These are set to benefit from well-established positive demographic, industrial and urbanisation trends, as well as newly emerging trends such as rapid growth and the development of financial markets in Vietnam.
We believe this country specialist fund offers investors exposure to a high-growth frontier market with conviction stock ideas across the market cap spectrum and can be held as part of a global growth portfolio. VNH's board is proactive and, having listened to shareholders, initiated a tender offer, intending to manage the discount. Executed in September 2021 for 12.7m shares (30% of all shares outstanding) repurchased for $56.7m (equivalent to £41m), this has brought about the desired outcome. Between November and December 2021 the discount to NAV narrowed from c 15% to c 5%, but January's volatile equity market saw the discount widening to the mid-teens again.
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