Monthly Investor Report

RNS Number : 6354E

VietNam Holding Limited

14 March 2022

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of February 2022 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 - the new global game

Once again, we have seen how the velocity and context of global risk can change dramatically within a matter of days, if not hours. The Russia-Ukraine war shook global stock markets in late February just as several countries around the world, including Vietnam, were beginning to lift Covid-19 restrictions and learn how to live with the Omicron variant as more of the population became vaccinated. Globally, the implications of this war include higher energy costs from a surging price of oil and other accelerated inflationary pressures. Some markets will also see a significant dent in tourism with a sheer lack of travelers coming from Russia, however, increased volatility will continue to be felt across all sectors as evolving geo-political risks impact the supply and costs of goods around the world.

Vietnam saw its economy recover further in February in line with our expectations, despite the crisis' onset. Manufacturing bounced back to a PMI of 54.3, trade kept up its growth momentum with exports increasing +13.6 YoY and imports +22.4% YoY, as Foreign Direct Investment disbursement grew further, +7.2% YoY, and retail sales kept improving after the Tet holidays.

The Fund finished the month up 3.8% resulting in a flat YTD NAV per share after January's decline. The Fund's high active weight has contributed to strong outperformance of the market as diverse performance among positions has continued. The mid-caps proportion of the portfolio recovered strongly, with VNH fully gaining back the loss incurred the month before and outperforming the market on the way up. Top positive contributors for February included bank holdings (MBB, VPB and STB) as valuations appeared more attractive after the underperformance in 2H2021, and logistics companies (GMD and HAH), which have seen better net-profit-after-tax growth in 2022 due to stronger demand for sea cargo transport. We expect that demand to continue, if not increase more, since these companies are likely to benefit from further value chain disruption caused by the crisis.

Company fundamentals have become the key focus again for investors in Vietnam and considering that Vietnam's trade with Russia is only around 1% of its total, we do not anticipate the war to hit businesses directly. Instead, we see global inflationary pressures stemming from the conflict as the main risk in Vietnam going forward and domestic money flow already becoming less easy-going as a result of the current environment.

With International Women's Day, World Water Day, and World Consumer Rights Day all taking place throughout the month of March, it seems pertinent to also emphasise our monitoring of how the conflict in Ukraine and consequential rising energy costs might affect environmental, social and governance (ESG) commitments. As a responsible investor, we have always considered carbon footprints in our selection criteria, but it is important to note that we equally look at companies' impacts on people and society and how the E, S and G are so interlinked. Indeed, the 'S' side of ESG can transpire in many ways, including better customer service, high staff retention and positive innovation through greater research and development, to name a few. PNJ, the leading jewellery producer and retailer in Vietnam, is an excellent example of how corporate social responsibility can enhance customer satisfaction and trust. It is a well-respected brand that was recently applauded by Facebook for having over 138x return on ad spend and a 10% conversion rate from Messenger to successful transaction. FPT, another exemplary company in our portfolio in this regard, takes pride in its education business with nearly 74,000 people becoming qualified IT skill workers because of it as of 2021. As one of Vietnam's biggest broadband Internet providers, its management also aims to grow its products and services for domestic SMEs, which is not only positive its own long-term performance but also for further growing the country's economy.

For more information please contact:

Dynam Capital Limited  

Craig Martin                                                                                            Tel: [phone]

[e-mail] | www.dynamcapital.com

www.vietnamholding.com

finnCap

Corporate Broker and Financial Advisor     Tel: [phone] 

William Marle

 

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