Monthly Investor Report

RNS Number : 0477J

VietNam Holding Limited

10 July 2013

 



VietNam Holding Limited (the "Company")

Investor Report

A report detailing the activities of the Company for the month of June 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:

Initial estimates suggest that GDP grew by 5.0% in 2Q2013, thereby taking the 1H2013 economic growth figure to 4.9%. In the first half of 2013, the industry and construction sector saw 5.18% growth, the trade and services sector had 5.92% growth, and the agriculture, forestry and fisheries sector saw 2.07% growth. The Purchasing Manager's Index (PMI) for June was a disappointing 46.4; down from 48.8 in May.  Export orders were very slightly weaker in June, but domestic demand - or rather the lack of it - remains the chief culprit.  Inventories of finished goods were on the rise again in June, and production volumes were trending down as a result.

Inflation rose by just 0.05% in June, taking the YoY figure to 6.69%, compared with 6.36% in May. The government responded by lowering the interest rate ceilings on VND and USD deposits, in a bid to try to stimulate lackluster credit growth. The 7.5% ceiling on VND deposits of less than six months was taken down 50bps to 7.0%, and the 2.0% ceiling on USD deposits for individual savers was reduced by 75bps to 1.25% - corporate USD depositors can now expect just 0.25% interest.

Late in June, the State Bank of Vietnam enacted a 1% devaluation in the VND, by shifting the reference rate - from which all USD-VND exchange trades may only deviate by +/-1% - from 20,282 to 21,036.  This is the first such move since late 2011. Initial figures suggest the trade deficit for 1H2013 was a manageable US$1.4bn, on total exports of US$62.1bn and imports of US$63.5bn.  Both exports and imports are up on the same period last year, by 15.3% and 21.7% respectively.

Samsung has announced that it will inject an additional US$1bn into its telephone assembly plant in Bac Ninh province, thereby taking its total investment in Vietnam to US$4.5bn across two large plants, both in the north of the country. The new Bac Ninh plant is poised to become Samsung's largest outside of South Korea. Total FDI disbursements in 1H2013 were reported to be US$5.7bn; a rise of just under 6% on the same period in 2012.

Vietnam's parliament, the National Assembly went ahead with the first of its annual votes of confidence, applied to the 47 most senior members of the government. The State Bank of Vietnam's Governor, the Minister of Education and Training, as well as Prime Minister Nguyen Tan Dung found themselves at the end of the ranking. However, none of the 47 being appraised got less than a 50% approval rating, and thus none will be obliged to resign if they get a similarly low score next year.

VNH Insights:

Vietnam's equity markets had a disappointing month in June.  The benchmark VNI dropped by 7.2% to end the month at 481.13, although still up 16.3% for 1H2013.  Adjusted for the VND devaluation, the VNI increased by 14.3% YTD.

The dull market environment was also affected by selling pressure from ETFs, however VNH's NAV decreased by only a  moderate 1.3% in June - including the most recent VND devaluation - which brings the YTD performance to 24.8%. The top performers in VNH's portfolio last month were Bin Minh Plastic (+18%) which announced a 30% stock dividend, followed by Southern Seed (+13%) and National Seed (+9%).

Despite the recent sell-off foreign institutional investors remained net buyers in Vietnam YTD (+US$177M) as opposed to the situation in other regional stock markets, e.g. Indonesia (-US$ 256M) or Thailand (-US$2.6bn). This is also reflected in the index performance comparison above, which still sees Vietnam at the top since the beginning of this year. We believe that this general trend can be attributed to the fact that the Vietnamese equity markets are less prone to hot money flows.

Mr Vu Bang, the Chairman of the State Securities Commission has revealed that the Ministry of Finance is to formally propose to the government that the 49% cap placed on the aggregate foreign shareholding of listed companies' should be raised. Details have yet to be provided, but may entail the introduction of non-voting shares.  It is also not clear whether the ceiling would be raised for all listed firms, or just individual companies that are at or close to the foreign limit, or just firms in select sectors.

On a technical note, in an effort to increase liquidity the daily trading hours on the Ho Chi Minh City and Hanoi stock exchanges are to be increased by 45 minutes to 3pm local time, from 22 July and 29 July, respectively.

VietNam Holding Asset Management Limited
Gyentsen Zatul	Telephone: [phone]
- Investor Relations

 

END

 

 

MSCNKKDQQBKDOOD