Vietnam Enterprise Investments Regulatory News (VEIL)

13 October 2023

Vietnam Enterprise Investments Limited

("VEIL" or "the Company")

Monthly Update

VEIL is a London-listed investment company investing primarily in listed equities in Vietnam and a FTSE 250 constituent. The Company's NAV performance for September 2023 is set out in this notice.

Company Performance

· As of 30 September, VEIL's NAV decreased 5.5% over the previous month against a fall of 6.6% for its reference index, the Vietnam Index ("VNI"), both in total return USD terms. The Company's NAV per share was US$8.85 and its total NAV was US$1.8bn.

· VEIL's share price decreased 5.6% in September and has risen 3.2% year-to-date, both in USD terms.

· VEIL's three-month NAV per share performance in USD terms is +2.2%, +0.7% over one year and +31.9% over three years. Over the same time periods, the performance of the VNI was +0.4%, +1.7% and +27.1%, respectively.

· In GBP terms, VEIL's NAV decreased 1.8% over the previous month and has risen 11.0% year-to-date. The Company's NAV per share was £7.25 as of 30 September and its total NAV was £1.5bn. The GBP share price decreased by 2.0% for the month and has increased 1.7% year-to-date.

· The share price discount to NAV as of 30 September was 18.2%, compared with 18.1% at the end of August and 10.7% as of 31 December 2022.

· The Company repurchased 1,158,987 shares in September, compared with 391,143 shares repurchased in August. Year-to-date to 30 September, 3,586,058 (1.7% of shares outstanding as of 1 January 2023) have been repurchased.

· The Vietnamese dong ("VND") depreciated 0.9% against the USD in September and has depreciated 2.8% year-to-date. The VND appreciated 3.0% against the GBP in September and has depreciated 4.1% year-to-date.

Dien Vu, Portfolio Manager of VEIL commented:

"Vietnam's Q3 2023 GDP growth registered at 5.3% year-on-year to make an overall increase of 4.2% in the first nine months of 2023 (following growth of 3.3% in Q1 and 4.1% in Q2). The Manager is currently expecting full year 2023 GDP growth of 5%, accelerating to 6.0-6.5% in 2024. Vietnam recorded a trade surplus of US$21.7bn in the first nine months of 2023 (a significant increase compared with US$6.8bn at the same stage of 2022), with exports and imports totalling US$259.7bn and US$238.0bn, down 8.2% and 13.8%, respectively.

"The State Bank of Vietnam has lowered rates on four occasions this year to help boost domestic consumption, thus countering a slowdown in global demand, but the VND remains relatively stable due to disbursed FDI of US$15.9bn so far this year and the aforementioned trade surplus. Average CPI in the first nine months of 2023 was 3.2%, below the Government's 4.5% target.

"The market witnessed early positive momentum in September, peaking at a near one-year high of 1,245.5 points in the first and second weeks of the month. The market then succumbed to profit taking triggered by a blend of domestic and international pressures. Following US inflation data reporting a rise in inflation from 3.2% in July to 3.7% in August, the Federal Reserve hinted there could be more increases to come to combat inflation. As a result, bond yields surged to break 15-year resistance levels as the market digested the 'higher for longer' narrative. As the US dollar index strengthened, Vietnam's equity markets saw net foreign selling of US$165.8mn. A similar situation was also apparent in other countries in the region, with Thailand, Indonesia and the Philippines recording outflows of US$616mn, US$263mn and US$464mn, respectively.

"With the exception of energy, all sectors in the listed market declined in value during September, we believe because local investors feared that the easing of domestic monetary conditions could not be sustained and chose to reduce risk. Market sentiment was further dampened by the State Bank of Vietnam issuing US$5.7bn of bills, and major brokers scaled back on margin lending. Trading volumes trailed off at the end of the month yet average daily turnover in September still averaged US$1.1bn, the sixth consecutive monthly rise.

"Property stocks had another difficult month, this was attributed to a major developer (not in the VEIL portfolio) continuing to struggle with bond restructuring, and because of lowered expectations of how soon further interest rate cuts might happen. Both mid and large-cap property stocks were impacted, including VEIL top-ten holdings Vinhomes ("VHM") and Khang Dien House ("KDH") despite their solid track records through market cycles. Both possess strong balance sheets and have low debt to equity ratios of 0.3-0.4x as well as large land banks and strong ready-to-launch pipelines."

Top Ten Holdings (61.6% of NAV)

Source: Bloomberg, Dragon Capital

NB: All returns are given in USD terms

For further information, please contact:

Vietnam Enterprise Investments Limited

Rachel Hill

Phone: +44 122 561 8150

Mobile: +44 797 121 4852

rachelhill@dragoncapital.com

Jefferies International Limited

Stuart Klein

Phone: +44 207 029 8703

stuart.klein@jefferies.com

Buchanan

Charles Ryland / Henry Wilson / George Beale

Phone: +44 20 7466 5111

veil@buchanan.uk.com

Radnor Capital Partners

Iain Daly

Phone: +44 20 3897 1830

id@radnorcp.com

LEI: 213800SYT3T4AGEVW864