Monthly Investor Report

RNS Number : 4013O

VietNam Holding Limited

08 February 2016

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of January 2016 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/publications/investor-reports and a summary of the report is included below.

Investor Report Summary

Vietnam News

A torrid January, down a USD-adjusted -6.6% for the VNAS Index versus -2.7% for VNH, saw the first index decline in a January since 2010 and the worst one since 2008. It really wasn't much about Vietnam per se; this was the month of spiking-down oil prices into the 20s and of heightened global concern about big-neighbor China.

Falling oil prices hit oil-related stocks in Vietnam, which account for less than 3% of the (free-float-based) VNAS, but we fail to find other negatives of cheap oil in Vietnam. Oil made up less than 7% of government revenues in 2015, down from a peak of 19% in 2012: this adjustment for the government revenues has coincided with a period of solid economic recovery for the country, with the fiscal deficit unchanged at c. 5-6% of GDP. Meanwhile, falling oil prices represent a direct boon to manufacturing and consumption, the two key drivers of Vietnam's economic story. Vietnam is no longer a commodity-dependent economy.        

China is of concern to the world and indeed to Vietnam, though Vietnam is positioned relatively resiliently in this respect. First, as a major net importer from China - huge imports at c. 25% of GDP versus exports at c. 8% - Vietnam is not as directly vulnerable to slowing China in the way that commodity exporters to the Chinese industrial sector like Australia, or as purveyors of middle class goods to the Chinese consumer like Apple are.

VNH Insights

Of course Vietnam did have some of its own news in January, not least the five-yearly party congress which has just ended, apparently with - unusually - the septuagenarian Mr Trong getting another five-year term as general secretary on top of the five he's already had, and deputy Prime Minister Phuc being elevated to Prime Minister. 

This leaves the current Prime Minister Dung seeking new pasture after his ten years of bountiful feasting. Vietnamese politics don't give us the tawdry excitement of the US electoral system, so there really isn't too much to say about these developments. Probably things carry on much as before, which from the stock market's point of view is somewhat good and somewhat bad at the same time. 

All the while, Vietnamese economic indicators in January were very satisfactorily as before. Although January industrial production was up only 5.9% YoY (the lowest growth rate in a year), retail sales rose 11.7% (the highest in a year).  

For more information please contact:

VietNam Holding Asset Management Limited	Tel: [phone]
Investor Relations Gyentsen Zatul [e-mail] www.vietnamholding.com
Smith & Williamson Corporate Finance Limited Nominated Adviser	Tel: [phone]
Azhic Basirov / Ben Jeynes
Winterflood Investment Trusts Broker	Tel: [phone]
Joe Winkley / Neil Langford
Buchanan Communications Financial Public Relations	Tel: [phone]
Charles Ryland / Vicky Watkins

 

END

 

 

MSCAKFDKNBKDKBK