VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month of April 2024 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: April's Movers and Shakers
Vietnam's stock market weathered a sharp correction in April with some expected profit taking after a five-month rally. From the new KRX trading platform launch being further delayed because of technical issues to the sudden resignation of the Chairman of the National Assembly - a mix of headline news rattled the market, 90% of which is driven by local investors.
The changing global outlook to 'higher for longer' US interest rates also fuelled greater volatility in the FX market, while growing global geopolitical risks caused movements in crude oil and gold prices. With evolving uncertainties around the wars and an unprecedented number of national elections around the world this year, global stock markets experienced declines as well - the Dow Jones (-5.0%), Nikkei 225 (-4.9%) and S&P (-4.2%) - adding to an already unsettling local sentiment. Nevertheless, the VN-Index managed to recover nearly half of the drawdown by the end of the month. Although down -5.9% for the month, VNH still managed to outperform the index and remains significantly ahead of the index year-to-date, and on a 1, 3, 5, 10 (and even 15)-year basis.
The 'made in Vietnam' theme continued to propel the country's sustainable economic growth with yet another record trade surplus, reaching US$8.4 bn in April. Vietnam's exports to the US made a notable year-on-year increase of 19.1%, and its manufacturing PMI recovered to 50.3 from 49.9 in March mainly due to a solid rebound of new orders which should pave the way for further production and enhanced exports in coming months. It is also worth noting that foreign direct investment (FDI) implementation continued to rise for a 15th consecutive month, resulting in a year-on-year (YoY) increase of 7.4% for the first four months of 2024 (4M24). Disbursement in the Real Estate sector surged by a whopping 100% YoY for the 4M24 period, contributing the most to FDI implementation growth year to date.
During the volatile trading month, stocks tumbled across all sectors apart from Transportation, Consumer Services and Technology. FPT and Gemadept, our top two positions both made gains of 2.9%. FPT attracted additional positive media attention in April having signed a MoU with Nvidia to invest US$200m in building a cloud computing platform for AI research and development in Vietnam. Narayana Murthy, the billionaire co-founder of Infosys (and father-in-law of UK Prime Minister Rishi Sunak) will visit Vietnam, and FPT, in May. Gemadept reported better than expected first quarter results. Despite high beta sectors such as Banks, Financial Services, Real Estate and Construction performing poorly, most investee companies reported Q1 2024 earnings growth in line with expectations. We took the opportunity in the soft market to add to a couple of positions where more foreign investor room became available.
The usual concerns about global risks are bound to affect market sentiment in May but opportunities will continue to emerge in Vietnam not least where FDI is concerned. Vietnam continues to be a magnet for foreign enterprises seeking investment opportunities and strategic partnerships across sectors. According to the General Statistics Office, disbursed foreign investment in Vietnam reached US$6.28 bn in 4M24, the highest in five years. Vietnam also recorded over 51,000 newly established enterprises during this period. So, considering the significant 28.8% increase in the number of new projects in 4M24 - totalling US$7.1 bn, a 73.2% rise in capital on the same period last year - the mood in May could tell a different story.
The National Assembly is also meeting in May and will consider and decide on a raft of important matters, including appointing a new Chairman, and a new President. This may further strengthen domestic investor confidence.
For more information please contact:
Dynam Capital Limited
Craig Martin Tel: +84 28 3827 7590
info@dynamcapital.com |www.dynamcapital.com
Cavendish Capital Markets Limited
Corporate Broker and Financial Advisor Tel: +44 20 7220 0500
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