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

Monthly Investor Report

A report detailing the activities of the Company for the month of February 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 - Growing pains and long-term gains 

Unprecedented political events in Vietnam trumped all macro and market fundamentals in February, amid the Party's ongoing anti-corruption campaign and extraordinary reshuffle of the country's leadership, which by the beginning of March, saw Vo Van Thuong, the youngest member of its Politburo, appointed as the country's new president.

Reduced macro threats - from the further stabilising of FX and inflation risks to improved liquidity - were also overshadowed by the government's attempts to help stave off a short-term collapse of Vietnam's corporate bond market, which remains highly concentrated in top property developers. Although these commitments to restore confidence and control systemic risk in the markets are healthy for Vietnam in the long run, we anticipate internal disruptions could dampen sentiment into Q2 given the timing of this credit crunch and the Party's regulatory and financial "clean-up" happening all at once.

So far, neither have stopped foreign direct investment from flowing into the country and according to Vietnam's Ministry of Planning and Investment total FDI for 2M 2023 remained considerable at US$3.1 bn, even if lower than the same period last year. The Singapore came top in February with a relatively big investment of US$978m for the month. It was followed by Taiwan with US$407m, and then Netherlands with US$369m. 

Despite weaker demand for goods globally, Vietnam posted an impressive trade surplus YTD of US$ 2.8bn and we expect a 5% trade growth for the calendar year. Resilient domestic consumption and an ample room for easing fiscal policies are currently counteracting the uncertainty around higher export growth, with GDP for Vietnam in 2023 still forecasted to grow 6.5%. Additionally, Vietnam's manufacturing sector should benefit from the reopening of China and the milder-than-expected slowdown in some major markets.

High volatility was the story for equities in February considering the market was down 11% after having gained 12% the month before. VNH outperformed the benchmark index, which was dragged down by concerns over the financial state of Novaland (HOSE:NVL) and whether other property developers could follow suit or default.

VNH benefited by not holding NVL, and only having relatively small positions in other residential real estate stocks. The Fund's outperformance can also be attributed to our overweight in industrial plays including Idico and Gemadept, a relatively high cash holding and the fact we did not have any exposure to Travel & Leisure, which ended the month lower. Considering the near all-time low valuations, the market continued to attract new money from foreign investors while locals also re-entered to "bottom-fish".

Conviction continues to play an important role in how Dynam Capital, VNH's investment manager, weathers uncertainty. For example, as Vietnam's GDP per capital is around US$ 4,000 - or four times the level when its stock market was born - we consider this unique growth an inflection point in consumer demand which bodes well for domestic brands and retailers, particularly those with competitive positions in the "modern trade" segment. We also look at how Vietnam's urbanisation rate, still relatively low at 37%, provides opportunities as cities expand, infrastructure improves, and as a result modern retail chains grow. Moreover, as Vietnam's "middle income" is projected to expand at a rate of 18% annually, we can foresee an additional 35 million consumers of branded products by 2030 sparking a whole new stage of growth and development.

Dynam Capital will be hosting a Webinar on Thursday the 23rd of March 10am UK time to discuss opportunities in Vietnam's retail sector with Phu Nhuan Jewellery, one of our core holdings. PNJ is the leading producer and retailer of jewellery in the country with more than 50% of the market share. We also will provide an update on VNH's interim results as of 31st December 2022, so please join us then.

We thank all our investors for their continued interest and support in the Fund. 

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

Corporate Broker and Financial Advisor                                            Tel: +44 20 7220 0500      

William Marle