VietNam Holding Limited Monthly Investor Report (0367C)
October 14 2020 - 2:10AM
UK Regulatory
TIDMVNH
RNS Number : 0367C
VietNam Holding Limited
14 October 2020
VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month
September 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.
Banking on a sustainable recovery
Vietnam saw a strong boost in sentiment and economic activity in
September with an improved PMI of 52.2 and a GDP growth of 2.6% for
Q3. Although the full year expected growth of 2.5% is below its
multi-decade average of 7%, its macro-economic picture looks
uniquely positive despite the global pandemic. It is now likely
that 2020 will end with a record level of foreign reserves in
Vietnam, possibly over US$100bn. This is the culmination of a
record trade surplus - US$17bn for the year to September - as well
as a nine-month high in foreign direct investment as Vietnam
continues to emerge strongly as an attractive location for
manufacturing and natural diversification to China. The UK's
Foreign Minister, Dominic Raab, recently visited Hanoi to discuss
trade matters. As the current Chair of ASEAN, Vietnam is likely to
support the UK's ambition to become part of the successor to the
Trans-Pacific Partnership (even though the UK faces the Atlantic)
and to replicate the EU's free trade agreement with Vietnam sealed
earlier this year.
The VNAS Index performed well in September, rising 4.4% for the
month, and driven mainly by banks, food & beverage (F&B)
and industrial goods. Most of the listed banks achieved above
market-expectation earnings for Q3, and F&B companies (VNM,
SAB) are also likely to release surprise earnings growth for Q3
considering the notable domestic retail sales increases. The Fund's
NAV rose by 4.0% led partly by our increased allocation to the
banking sector: we have more than doubled our allocation this year
to 20% (the index weighting is more than 25%). As listed banks tend
to be large, a consequence of this higher allocation is that our
median portfolio market capitalization has risen to cUS$833m. This
has also resulted in a higher liquidity profile for the underlying
portfolio.
In our view, the banking sector stands out in Vietnam unlike in
many developed countries right now. Banks are regulated more than
other industries and as a result must adopt best practice
standards, which pushes them to maintain healthier balance sheets
and operational resilience. Moreover, we believe 2021 could see
strong returns from banks on the back of economic recovery, with
GDP growth of 7-8% forecast. In the longer-term, as Vietnam's
e-commerce market continues to grow and middle-income consumers
continue to multiply, technological advancements will ultimately
lead to greater financial inclusion and wider use of investment and
credit products. The growth potential in Vietnam is huge since
despite rapid growth over the past 20 years, less than 40% of the
population today has a bank account. As the country further
industrializes and urbanizes, there will be escalating demand for
modern yet affordable housing, mortgage and savings products, and
e-payments. The momentum was marked at the end of the month with
Timo Plus, Vietnam's first digital bank, re-launching its services
at the end of September, and the government's ongoing focus on
policies to expand its online payments and fintech sector, namely
by offering start-ups preferential loans from the Vietnam
Development Bank.
The Fund has issued its 2020 annual report and announced the
date for the AGM (30 October). The Fund has recently made two
important announcements, firstly a proposed tender to purchase 15
per cent of its shares at a 2% discount to NAV, and secondly,
adjustments to its fee structure, including a removal of the
incentive fee and modifications to the management fee. Details are
available on www.vietnamholding.com
Dynam is hosting a webinar on Friday 30th October at 10:00 AM
(UK) and all are welcome to register to attend.
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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