Vietnam Holdings Regulatory News (VNH)

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

Monthly Investor Report

A report detailing the activities of the Company for the month of December 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: New year cheer in an increasingly uncertain world

Vietnam and VNH kicked off 2024 on the right feet thanks to many end of year highs. Trade continued to improve in December 2023 amid growing global complexities, with Vietnam's trade surplus reaching a record USD 28bn. This not only supports monetary policy easing, but also helps pave a more favourable macroeconomic environment in Vietnam for the start of 2024. Exports recovered for the third consecutive month, despite global supply chain bottlenecks and geopolitical implications weighing on exports and imports, which fell -4.3% and -8.7% month on month, respectively, in December. Vietnam's electronic product exports were particularly robust in Q4 2023, and overall exports to key global markets continued their recovery streak that began in Q3 2023. Retail sales momentum was another area worth mentioning, with a 9.3% year-on-year (YoY) increase.

Foreign direct investment should continue to contribute to Vietnam's sustainable growth, with disbursed FDI reaching USD 23.2bn at the end of 2023, a new record high. In December, disbursed FDI increased by 3.5% YoY while registered FDI surged by 32.1%. We estimate FDI disbursement to accelerate even further in 2024, and with public investment reaching new highs of USD 26.1bn, a 27% YoY increase, it will remain a primary focus for the government this year. Reduced foreign exchange risk also contributed to the country's promising outlook for 2024. The VND depreciated within the projected range, in spite of all the market volatility in 2023, and a 2% devaluation (30-year average) would certainly deliver another solid boost to Vietnam's exports.

VNH itself finished 2023 with high marks. Despite a small underperformance versus the index in December, the Fund significantly outperformed the benchmark index and remained ahead of its Vietnamese peers throughout 2023. Furthermore, as we enter 2024, its single-digit discount to NAV is still the narrowest of the three UK-listed Vietnam-focused funds.

VNH earned the UK Investor Magazine award for 'best developing market fund' for 2023, following its Citywire gong the month before, and achieved top grades for its latest UN Principles for Responsible Investment scorecard. It was also pleased to announce that the continuation vote had received 99% approval in December, and that shareholders approved an innovative annual redemption programme.

In terms of our outlook for 2024, we expect to see more impressive growth in corporate earnings and believe that present valuations remain relatively undemanding. As sales growth improves, operating profit margins could rise given lower input costs and less aggressive price competition. Falling interest rates should boost net margins even further, while foreign currency losses on US dollar debt should be minimised. Meanwhile, banks may benefit from increasing loan growth and higher credit costs as asset quality improves due to a stronger economy and an extended period of low interest rates. The government's financial situation is also in good shape, and we anticipate considerable budget allocations for infrastructure projects to continue throughout the year. We also see potential for further recovery in foreign visitor arrivals, not least in February over the Lunar New Year, as well as a gradual rebound in real estate and construction activity, thanks to lower mortgage rates and ongoing regulatory improvements to relieve legal hold-ups for developers. At the end of 2023, the administration reiterated its intent on advancing Vietnam's stock market. In a December 13th dispatch, Prime Minister Pham Minh Chinh called for the Ministry of Finance to work with the State Bank of Vietnam, the Ministry of Planning and Investment, and relevant agencies to "drastically implement" the necessary tasks and solutions to upgrade Vietnam's stock market from "frontier" to "emerging" status as soon as possible, adding that this will attract more international cash and institutional investment.

For more information please contact:

Dynam Capital Limited

Craig Martin Tel: +84 28 3827 7590

info@dynamcapital.com |www.dynamcapital.com

www.vietnamholding.com

Cavendish Capital Markets Limited

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