Last checked at 
14 Jul 2022 07:01
VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month of June 2022 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 - when Macro matters
Putting risk and the opportunities it creates into perspective in today's chaotic world is as much of an art as it is a science - considering its continued growth stats, Vietnam is no exception. Not only is the country proving to maintain resiliency in what has so far been an economic curveball of a year globally, it also is painting a relatively brighter picture for what is to come in the second half locally. This month Vietnam stood out with a staggering 7.7% YoY GDP growth for Q2 - exceeding expectations and ranking significantly higher than other nations around the world including in the G20 area which rose by only 0.7%, according to OECD reports. Vietnam's continued 'broad-based recovery' has led some international financial institutions to upgrade their growth forecasts for it for the rest of 2022 as different sectors in the country regain pre-pandemic momentum. Both HSBC and Singapore-based United Overseas Bank, for example, recently raised their Vietnam growth forecasts for 2022 to 6.9% from 6.6% and 7.0% from 6.5%, respectively.
Vietnam's growth this year is noteworthy given record rising inflation and other unprecedented disruptions affecting trade and investment worldwide. Despite today's intense global risk landscape, the country's manufacturing sector managed to expand for the ninth consecutive month in June, for example. New orders rose further, and production capacity continued to improve. Disbursed FDI also hit record highs during the first half of 2022 reaching USD 2.9bn in June, the highest monthly amount this year. Looking ahead, as Vietnam's handling of the pandemic pays off, we expect the full reopening of economic activities to continue to boost investment initiatives and feasibility assessments for new projects 2H 2022.
Although equities markets at home and abroad have endured an unsettling 1H 2022, Vietnam's retailers and basic exports sectors have shown increased resilience. The Fund's overweight in these - and underweight in banks and real estate - helped it outperform the benchmark index again in June: -6% versus -8.7% for the month; and -16% versus -24.5% YTD.
The Fund outperformed other indices, including the VN70 midcaps index, which saw a widening divergence of performance driven largely by the switch of retail investors from small and medium caps into larger caps. June set new records in the number of retail stock trading accounts opened, with 1.2m accounts opened in Q2, twice the level in Q1. The market correction in late June led to more attractive valuation levels and, after two years of selling, foreign investors became net buyers in Vietnam's equities markets.
Moving into 2H 2022, the global mood remains weak. Although recessionary risks remain less severe for Asia than the West, a global recession would hit Vietnam's export growth in 2023 and we will be watching the implications closely, including how policy directions and actions unfold. Trade is key to Vietnam's economy, especially given its more prominent place on the global supply chain map - the country posted a trade surplus of over USD 700m in 1H 2022.
A global recession would not only weigh in on the country's impressive exports and production growth but could also impact its banking sector. On the positive front, the domestic economy may benefit from an increased amount of government spending on infrastructure, which has been under-budget in the first half of 2022. Infrastructure expenditure has a multiplier effect on economic growth, including accelerating the pace of urbanisation, and leading to a growth in real-estate development and the growth in modern trade.
Agile policy making will be as important as ever. As the IMF recently reported, Vietnam's handling of the pandemic and associated risks helped the country get through the last two years, particularly its remarkable vaccination rollout, so with rising retail sales, improving industrial production, and increasing foreign investment, there's a lot to consider when it comes to Vietnam's monetary policy and economic growth as the world evolves.
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