VietNam Holding (VNH, ), a company that invests in high-growth companies in Vietnam, has announced today its unaudited results for the six-month period from 1 July 2022 to 31 December 2022.
VietNam Holding outperformed the Vietnam All Share Index (VNAS) during the first half of the financial year, with a 16.8% decline in net asset value (NAV) per share compared to the index's 20.5% decline. This brings the Fund's overall return for 2022 to -30.1% versus a -39.8% decline in the VNAS Index. The Fund maintained its outperformance on a one, three, five, and ten-year basis, despite a decline in market value resulting in a decrease in total assets to USD 105,983,143 as of December 31, 2022 (from USD 129,177,449 at 30 June 2022).
The board addressed the discount between share price and NAV through share buybacks, with 505,037 shares bought back and an estimated 0.26% NAV per share accretion. Share buyback authority was renewed at the October 2022 AGM, allowing up to 14.99% of issued shares to be bought back.
The board closely monitored Vietnam's developments by meeting the manager's research team and portfolio companies twice in the last six months, noting progress made towards Environmental, Social and Governance (ESG) goals. This resulted in the Fund receiving two five stars in the UN PRI transparency report and outperforming against the VNAS in carbon footprint.
Despite a challenging year for equity investors in 2022 due to Russia's invasion of Ukraine, Vietnam's economy reached a decade-high GDP growth, attracted record levels of foreign direct investment, and achieved an unmatched trade surplus. Vietnam's stock markets are showing signs of recovery this year, driven by net inflows and historically cheap valuations, with potential growth drivers such as the reform of the bond market and government action against corruption.
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An overall solid performance from VietNam Holding despite market conditions, with their portfolio managing to outperform the Vietnam All Share Index in the second half of 2022, a period of significant volatility. The company reported that this period required "nimble stock and sector selection", reducing the Fund's exposure to the real-estate transportation, and retail sectors.
On the upside, Vietnam’s macro-economic performance showed much more promise in the period, with record levels of disbursed foreign direct investment at $22.4bn, the second-highest trade surplus of all time at $11.2bn, high GDP growth of 8%, low levels of inflation at 3.15%, and modest currency devaluation at 3.4%.
The overarching theme seems to be that better times lie ahead for the markets, with investors starting to return to the country's stock markets and seeing net inflows recorded for the first time since 2019. For the remainder of 2023, VietNam Holding aims to make sure that they outperform similar investment portfolios and manage risks well, by continuing to carefully select and actively managing a small group of well-researched companies.
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