Monthly Investor ReportSource: RNS
VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month December 2019 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.
Investor Report Summary
The Vietnam All Share Index fell by 1.4% in December - in part due to a 20% drop in Masan (MSN), a widely held conglomerate, as a result of uncertainty over the announcement of a merger of its consumer products business with VinCommerce, a retail chain subsidiary of another widely held conglomerate Vincom (VIC). The Fund doesn't hold either of these positions and so outperformed the index, with NAV falling only 0.5% in December. Year-to-date the NAV rose by 1.8% underperforming the index which rose by 3.4%. The Fund's largest positions did well during the month with retailers Phu Nhuan Jewelry (PNJ) up 6.0%, after announcing a 21% increase in NPAT, and Mobile World (MWG) rising 4.6% (after its 12.5% decline in November) on the back of a 34% increase in profit for the first eleven months. The Fund's largest position, FPT, rose by 3.4% topping off a year in which its share price has risen by 58%. Detractors during the month included Saigon Cargo Services which fell a further 13.7% after falling 9.2% in November. The company has strong cash-flow from its duopoly position at HCMC's air-cargo terminal but some regional funds have been reducing their exposure in a thin market. MB Bank (MBB) fell 6.1% as domestic investors marked down expectations on the price that a foreign investor might pay in a proposed share placement. It is cheap at less than 1.3x Price to Book for a well-managed bank.
As the decade draws to an end we reflect on the performance of Vietnam and the Fund. During the last decade the NAV per share has increased over 90% versus the index's gain of approximately 30%. Looking further-back, Vietnam's macro story has unfolded in an incredible manner: over the last 25 years Vietnam's population has grown by 1m people a year on average, Vietnam's GDP has increased over 16x to USD 262 billion and urbanization has almost doubled to 40%. The stock markets in Vietnam now have a total market capitalization of almost USD 200 billion, less than 17 years after their inception.
Vietnam achieved 7% economic growth in 2019 (from a highbase in 2018) and nominal retail sales growth hit a seven-year high of 12%. Foreign Direct Investment and the Trade Surplus all hit record highs in 2019. The Vietnam Dong is stable, on the back of record ($80bn) foreign reserves. Inflation is inching up due to higher pork prices, and the upcoming Tet holiday may see further seasonal increases.
As we enter 2020, and the Lunar Year of the Rat later in January, the global geopolitics ahead of a US election, and the domestic political reorganisation in Vietnam will no doubt overshadow the short-term. In the longer term, the changes in Vietnam's economic composition, growth of modern trade and the ongoing rise of consumerism, should provide a strong stimulus to our domestically focused investment holdings.
For more information please contact:
Dynam Capital Limited
Craig Martin Tel: +84 28 3827 7590
Nominated Adviser and Corporate Broker Tel: +44 20 7220 0500
William Marle / Giles Rolls
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