Vietnam Holding (VNH ) has published a monthly investor report in which it states that the Vietnam market saw a revival in April as vacationers took to travelling around the country.
Despite April 2022 representing a tricky period for the world - namely due to the growing concerns regarding the war in Ukraine and intensifying disruptions which in turn, affected global equities - the company said April also signalled “somewhat of a revival” in Vietnam.
Vietnam saw the last of its Covid-19 restrictions wane in April as vacationers from home and abroad were travelling around the country over the Reunification and Labour Day holidays.
It said the renewed tourism boosted retail sales - up 12.1% from March - and encouraged the country’s positive economic outlook “despite increased inflationary issues flaring up globally.”
Almost 900,000 people visited Thanh Hoa Province, an 85% jump from 2021, while Son La attracted swarms of tourists to its new iconic glass bridge, apparently the world’s longest.
Despite Vietnam’s recovery, the company also acknowledged the state of the global markets amid the ongoing war in
Ukraine and the intensifying disruptions that are accelerating globally, ‘not least regarding the record rising inflation and expanding supply chain risks,’ it reported.
“Coincidentally, 2022 was the worst April for the S&P 500 since World War II and with the market now taking the view that the pandemic has ended, corrections in ‘stay-at-home’ stocks, for example, also made a significant amount of noise worldwide,” Vietnam writes.
In fact, in just one month the VN Index reversed all gains it made since June 2021, making a MoM decline of -8.9%, its worst since March 2020 when the first lockdown was implemented.
The most hard-hitting selloffs in Vietnam stocks stemmed from the government’s crackdown on market manipulations.
Meanwhile, there was also a notable underperformance of the real estate sector that saw the Fund’s NAV drop -6.7% in April 2020, the company told investors.
The Company highlighted that top positive contributors included Hai An Transport (HAH), a port operator that provides marine transport services, which reported its 1Q22 that NPAT was up 3 times from 2021 amid a dramatic revenue increase of +82% and better profit margins.
Another business, Gemadept (GMD), fell by 7.4% despite all segments reporting strong profit growth while Mobile World (MWG), an omnichannel retailer, was another strong performing portfolio company in April 2022, having achieved a record revenue increase for 1Q22.
It added that VND, one of the most reputable brokers in Vietnam, also continued to achieve new milestones in 1Q22 and announced a private placement for 20% of the company.
Despite the global risks abound, Vietnam said it remains “relatively resilient” for now, and the company has characterised April’s macroeconomic data for Vietnam to its shareholders as “especially upbeat” even with the uncertain risk landscape and stock market corrections.
‘In fact, the General Statistics Office data for the month shows that growth is accelerating in almost all economic activities with exports and imports having surged by 25% and 15.5% year-on-year, respectively, taking the trade surplus to U$$2.5bn YTD,’ the company wrote.
The company also acknowledged that the IMF has maintained its 2022 6% growth forecast for Vietnam stating how ‘policy support and an impressive vaccination rollout prompting a strategic shift towards living with Covid’ will continue to help the country achieve this.
View from Vox
In March 2021, Vietnam recorded a “strong” six month period to 31 December 2021 with net asset value per share rising 14.1% in US dollars and 31.7% in GBP pounds, respectively.
It seems Vietnam remained a very open economy with its trade reaching more than $668 bn in 2021, representing more than 200% of GDP, levels seen by only a few countries globally.
Overall, Vietnam’s stock market was one of the best performing in the world in 2021 with domestic indices hitting record levels. As a result, the Fund was up over 63.9% for calendar 2021, and 14.1% for the period under review outperforming the VNAS (+10.6%) and peers.
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