Last checked at 
12 May 2020 14:25
VietNam Holding Limited ("VNH" or the "Company")
Monthly Investor Report
A report detailing the activities of the Company for the month April 2020 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.
What a difference a month makes
Global markets made a dramatic comeback in April after freefalling at record rates the month before when covid-19 spread across Europe and the US. The global economy, however, tells a different story as the lockdowns around the world lead to sharp contractions unseen in a lifetime.
Amidst it all, Vietnam continues to stand out for its impressive handling of the pandemic with the Wall Street Journal proclaiming: "Vietnam's coronavirus recovery is as good as it gets for emerging economies". A week later, The Economist listed it as the 12th strongest economy among 66 countries, applauding the government's measures both to contain the virus and to support affected enterprises and households. CNBC also ran a piece on how Vietnam's early action against the virus could help it avoid a recession. As such, the Vietnam All Share Index bounced back by 17.6 percent in April compared with the Emerging Market All Share Index's 8.5 percent gain, while the Fund's NAV went up 18.4 percent compared to a decline of 28.2 percent in March.
In the sell-off by foreign investors we have taken the opportunity to add to stocks that until recently have been hard to access (including one or two banks). This has resulted in an increase in the median portfolio market cap to $517m (from $352m). Our nimble approach across the spectrum of opportunities in Vietnam remains intact, as does our focus on engaging authentically with mid-cap companies and contributing to their ESG thinking in a meaningful way.
A great growth story within the portfolio is Mobile World Group (MWG), which rose by 40 percent in April. In our view, this company has always had a knack for timing. To start, it launched itself as the mobile-accessories retailer in Vietnam, and cleverly built up its business with careful store locations and sound financial disciplines. It also moved into consumer electronics at a ripe time and has developed a robust market share in that sector as well. When we invested we knew their management was first class, and that their business could double in value. For them to then move forward into groceries when they did was especially shrewd, and we believe they will come out of the Covid-19 crisis even stronger as they expand their online shopping focus and take market share from (or takeover) smaller competitors.
Despite the global lockdowns, Vietnam's export value for the first four months of 2020 saw a year-on-year increase of 4.8 percent, with phones, PCs and other technological services proving most resilient. In addition, the government sensibly scrapped a ban on rice exports imposed back in March to ensure national food security, realising that supply would exceed demand by 6.7 million tonnes by the end of the year. This was positive news not only for farmers and traders but the wider economy since Vietnam is the world's third largest rice exporter.
There also was a growing sense of euphoria across the country as restaurants, shops, schools and businesses re-opened. Vietnam has one of the fastest growing middle classes, and there are signs that more foreign investors are taking notice of the country's favourable demographics. Vietnam's thriving high-tech manufacturing sector, its young, highly skilled workforce and proven resilience throughout the pandemic continues to impress foreign groups looking at a 'China-plus-one' strategy.
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
Nominated Adviser and Corporate Broker Tel: +44 20 7220 0500
William Marle / Giles Rolls