Monthly Investor Report

RNS Number : 7727Y
VietNam Holding Limited
11 September 2020
 

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

Monthly Investor Report

A report detailing the activities of the Company for the month August 2020 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.

A Month with Strong Momentum

A fascinating report, Next Generation Vietnam, released in August by the British Council, showed that 40% of Vietnamese 16-to-30-year-olds plan to start their own business. The research, conducted in 2019 before coronavirus struck, also pointed out that the next generation shares three of the top priorities their mothers had in a survey a couple years earlier: food security; access to clean water; and access to higher education.

Ho Chi Minh City Securities Corporation (HSC) became the first brokerage in Vietnam to release a report on the rising focus on environmental, social and governance (ESG) in the country, and highlighted how Vietnamese companies committed to sustainability solutions are proving more resilient throughout the COVID-19 crisis.

Although unrelated, these reports represent another reminder of the driving forces behind Vietnam's road to recovery. Whilst COVID-19 has pulled at the reins on Vietnam's exponential growth over the past three decades, it also has accelerated themes that are already shaping its future. Indeed, one news item that hardly received any notice during lockdown in April was the approval of a free trade agreement between the European Union (EU) and Vietnam. It is unique because it includes certain ESG provisions, for example: property protection, labour rights and sustainable development. Singapore was the only other nation in the region to seal this kind of trade agreement with the EU. The inclusion of labour rights and sustainability criteria will ultimately strengthen the value of ESG measures in Vietnamese companies and lead them to think more long-term.

From an investment point of view, we have an important role to play in guiding companies on how to progress in this respect. It is our responsibility to carry out effective stewardship and encourage company boards to consider what we believe in. During the pandemic, we added to Vinamilk (VNM), which was an early adherent of good corporate governance and has involved foreign specialists as supervisory and main board of directors for more than 12 years now. VNM has attracted significant investment from regional strategic investors largely due its long-term performance and increasingly robust ESG reporting methodology. FPT, one of the biggest contributors in August, is another company with an open-door to foreign non-executive directors as a means of enhancing its corporate governance and resiliency.

 

Many of our top-ten holdings performed strongly in August, contributing to a monthly fund return of 10%, in-line with the Vietnam All Share Index gain of 10.2%. Despite more short-term disruptions caused by a second wave of COVID-19, local investors returned to the market. In addition, Vietnam's exports and imports increased by 2.4% and 2.5% year-on-year, respectively. With an additional US$3.5 bn trade surplus in August, Vietnam's accumulated trade balance for the first eight months of 2020 was US$11.9 bn, more than double that recorded over the same period in 2019. As for FDI, it was in line with expectations, however Vietnam's PMI went down to 45.7 given sluggish global demand. Looking ahead, further targeted restrictions and travel bans are bound to hamper the economy as COVID-19 lingers. GDP growth forecasts have been trimmed to 2.5%.

In our view, Vietnam will also remain an attractive destination for international companies looking to relocate from China because of the trade war with the US and growing geopolitical uncertainties. The way Vietnam dealt with the first wave of the virus has given the world a lot of confidence in the country, and it can bank on that moving forward.

For more information please contact:

Dynam Capital Limited  

Craig Martin  Tel: +84 28 3827 7590

 

info@dynamcapital.com | www.dynamcapital.com

 

www.vietnamholding.com

finnCap

Nominated Adviser and Corporate Broker       Tel: +44 20 7220 0500 

William Marle / Giles Rolls

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