Quarterly Insights

Vietnam Enterprise Investments Ltd

21 May 2026

 

21 May 2026

Vietnam Enterprise Investments Limited

("VEIL" or the "Company")

Quarterly Insights

VEIL is a London-listed investment company investing  primarily in listed equities in Vietnam and is a FTSE 250 constituent.

Vietnam's Energy Stress Test

Tuan Le, Lead Portfolio Manager

Vietnam has just absorbed what the IEA called one of the largest oil supply disruptions in the history of the global oil market.

Domestic gasoline rose 50% and diesel 70% in the first three weeks of the shock. The institutional response was fast, coordinated and structural. Q1 corporate earnings accelerated through the shock; equity prices did not. The question now is whether that gap closes or widens, and to what extent energy decides that path.

Anatomy of the response

Vietnam entered the shock without optionality. The country imports 50 - 60% of its crude demand, with Kuwait accounting for around 86% of 2025 crude, and the Nghi Son refinery sourcing all of its feedstock from the Middle East.

The response was fast. The National Task Force on Energy Security was set up by the Prime Minister in just four days. In most emerging markets, this would have taken weeks.

It was coordinated. On supply, domestic LPG output was lifted by 5%, Binh Son's Dung Quat refinery ran above 100% capacity, and PetroVietnam proposed halting crude exports. On price, the Stabilisation Fund was deployed across five consecutive cycles from 7 March, Decree 72 cut refined-product import tariffs to 0%, and fuel taxes were cut to 0% through 30 June. On demand, work-from-home guidance was issued and the E10 bioethanol rollout was pulled forward to 30 April. Diplomacy ran in parallel: Gulf phone calls within ten days, Japan's pledge to provide access to 1.2bn barrels of crude under its POWERR Asia regional energy-resilience initiative, and an accelerated Vietnam-UAE Strategic Partnership. Few peers could have moved this many levers in concert.

It was structural. The LPG sourcing pivot to the US and Australia, Binh Son's capacity increase, the rerouting of crude away from the Strait of Hormuz, and an accelerated build-out of strategic petroleum reserves are not workarounds. They are a restructuring of Vietnam's energy supply chain that should outlast the conflict. Vietnam will be less Hormuz-dependent after this than before, and for global allocators weighing the country's external risk premium, that is the part that matters.

Fundamentals firmer, prices weaker

The shock has left a footprint. April CPI rose 5.5% YoY, the first hard evidence that lagged pass-through has begun. The 4M average sits at 4.0%, below the government's 4.5-to-5.0% ceiling, but that cushion exists because the early months ran cool, and it compresses if oil stays elevated. Vietnam's policy buffers, including the tariff cut and the fuel-tax extension, expire at end-June. If the conflict escalates, second-round inflation, FX, and interest rate pressure could materialise.

Vietnam's growth phase appears to have accelerated through the shock. Industrial production rose 9.9% YoY in April, FDI hit a five-year high, and Q1 corporate earnings rebounded sharply, with Dragon Capital's Top-100 coverage universe reporting positive earnings growth across 69 out of 100 names.

Equity prices did not echo this. The Vietnam Index fell 6.2% in Q1 in USD total return terms, with VEIL broadly in line at -6.5%. April's 10.7% Index rally was extremely narrow, concentrated in Vingroup and Vinhomes, where the portfolio is underweight, with VEIL's NAV trailing the rally for that reason.

What this means for VEIL

VEIL's sector preferences remain infrastructure, banking, domestic consumption and retail, and real estate, each aligned to the investment-led growth phase Q1 data has begun to confirm.

Infrastructure is the most directly supported, with public investment disbursement up 10.4% YoY in 4M26 and the manufacturing cycle broadening into investment-linked sectors, such as chemicals, metals, non-metallic minerals, and motor vehicles, all delivering double-digit growth in April. Banking, the largest portfolio weighting, has been rebalanced toward stronger funding profiles to absorb the indirect transmission risk from inflation, FX, and rates.

Credit demand at the SME end is supported by a 50.7% YoY rise in new business formation; dispersion is surfacing in asset quality, but bank earnings remain the largest single anchor of aggregate corporate profit.

Consumption and retail continue to grow at double-digit rates, with retail sales and services revenue up 11.1% YTD and tourism-related services up 12.1%, while real wages remain the Q2 watch as inflation pass-through builds. Real estate is where tactical positioning sits apart from structural conviction; developer weights were trimmed against rates and liquidity, but the investment case is intact, and the sector becomes a candidate for re-engagement as conditions normalise.

Vietnam's institutional response to the oil supply disruption demonstrates the kind of state capacity that should, in our view, compress the country's external risk premium over time. On the evidence so far, the response has bought the macro the time it needed, and we read the Q1 dislocation as more likely to resolve through price catch-up if external conditions stabilise.

Provided the conflict's risks do not deepen, VEIL is positioned to benefit over the rest of the year. With the portfolio trading at 10.7x FY26 earnings against 25.5% EPS growth at end-April, we have begun deploying elevated cash into recent weakness.

Top Ten Holdings (47.5% of NAV)

	Company	Sector	NAV Weight (%)	VNI Weight (%)	Weight vs VNI (%)	YTD 2026 Return (%)	1-Year Rolling Return (%)
1	Mobile World	Consumer Discretionary	8.3	1.5	6.8	(7.6)	36.5
2	BIDV	Financials (Banks)	7.3	3.5	3.8	1.1	(0.2)
3	VP Bank	Financials (Banks)	4.6	2.7	1.9	(7.0)	40.1
4	Vietinbank	Financials (Banks)	4.5	3.4	1.1	(3.4)	18.1
5	Vingroup	Real Estate	4.5	13.2	(8.7)	(20.5)	351.8
6	Vinhomes	Real Estate	4.2	5.4	(1.2)	(17.1)	94.9
7	Techcombank	Financials (Banks)	3.8	2.8	1.0	(12.2)	11.2
8	Vietcombank	Financials (Banks)	3.6	6.2	(2.6)	0.9	(11.3)
9	Hoa Phat Group	Materials	3.6	2.6	1.0	1.7	17.1
10	MB Bank	Financials (Banks)	3.1	2.7	0.4	4.4	41.8
	VEIL NAV	-	-	-	-	(6.5)	17.2
	Vietnam Index	-	-	-	-	(6.2)	25.6

Source: Bloomberg, Dragon Capital

All returns are given in total return USD terms as at 31 March 2026

For further information, please contact:

Vietnam Enterprise Investments Limited

Steven Mantle

[phone]

[e-mail]

Jefferies International Limited

Stuart Klein                                                                                                                       

[phone]

[e-mail] 

Montfort

Gay Collins

[phone]

[phone]

[e-mail]

h2Radnor

Iain Daly

[phone]

[e-mail]

LEI: 213800SYT3T4AGEVW864

 

END