Monthly Investor Report

VietNam Holding Limited

12 October 2023

 

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

Monthly Investor Report

A report detailing the activities of the Company for the month of September 2023 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 - Taking stock in Vietnam 

Vietnam continues to outpace the world and other ASEAN countries in terms of real GDP growth, having expanded by 5.33% in the July to September period from a year earlier, despite unremitting global geopolitical and economic distress. Q3 2023 stats show how its economy is benefiting from both the government's slew of supportive measures this year, including more public investment roll outs particularly in Ho Chi Minh City, and the ever-evolving shift in manufacturing supply chains given today's exponential technological and regulatory change. A healthy flow of foreign direct investment is also helping Vietnam strengthen its position in the global supply chain.

In September, the country's trade balance managed to stay on its month-to-month record-surplus course in spite of lingering headwinds, namely the continued economic weakening in the US and Europe, which together account for around 42% of Vietnam's goods exports. In the end, enhanced domestic demand and steady increases in other manufacturing exports helped fuel the growth throughout the month, with electronic exports to mainland China rising after having shown significant declines in early 2023. Industrial production also stood out, climbing 5.1% YoY after having contracted by 0.4% YoY in the first eight months of 2023. Additionally, retail sales maintained its momentum, with an 8% YoY rise.

The International Monetary Fund (IMF), which is currently holding its annual meetings with the World Bank and international banking community (this year gathering in Marrakech), forecasts Vietnam's growth for 2023 at 4.7% while the Asian Development Bank (ADB) expects a growth of 5.8%. Although a cut down from earlier expectations, these rates still make Vietnam once again the fastest growing country in Southeast Asia.

September proved to be another volatile month in Vietnam's equity market, however, due to an upsurge in profit taking activities after the long rally that had been running since May. The bearish sentiment this month was also attributable to fresh volatility in the FX market when the VND depreciated 1.3% given the dollar index's surge and the pressure that put on all emerging market currencies.  The Fund's NAV declined 4.3% during the month, outperforming the VNAS index. The Fund has outperformed the market on a 1-year, 3-year, 5-year and 10-year basis.

While Vietnam's equities are still trading at an attractive valuation versus its peers, the market volatility is likely to last in Q4 because of the considerable amount of retail participants. This is not a bad thing though since their active participation supports the long-term development of Vietnam's stock market, including its ultimate progression towards being included in the MSCI EM Indices.

With our high conviction and concentration across key themes of domestic consumption, urbanisation and industrialisation, VNH remains focused on maintaining a resilient portfolio for more solid growth in 2024. For example, Gemadept (GMD), one of our top-ten holdings, is a pioneer in many sectors, and leading performer in its core businesses of Port Operation and Logistics. The portfolio has benefited from our overweight in GMD this year as the company continues to implement key projects for increasing its scale and long-term growth plan for the period 2021 to 2025 with a vision to 2030 that ensures the needed resources and cash flows are there for expanding both its Gemalink Deep-sea Port and Nam Dinh Vu Port projects. Vietnam will remain a key beneficiary of the shift in global manufacturing supply chains to competitive Southeast Asian hubs.

For more information please contact:

Dynam Capital Limited                  

Craig Martin                                                                                       Tel: [phone]

[e-mail] |www.dynamcapital.com

www.vietnamholding.com

Cavendish Capital Markets Limited

Corporate Broker and Financial Advisor                                            Tel: [phone]      

William Marle

 

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