We thought PYN Elite’s previous Investor Letter on March 15 was so good in content, that now we ended up sending it again – with fresh comments. In addition to the letter, a few essential charts from PYN Elite’s Investor evening (April 7) are also included. I have added my comments to both the texts and the graphs.
Here are some key thoughts:
The situation of central banks is difficult when, in order to curb inflation, they are forced to continue the rate hikes, which at the same time freeze already shaky economic growth.
In Asia, the situation is better. Inflation is moderate and countries have been disciplined in terms of market liquidity and interest rates.
The valuations of the US equities have started to normalize, which seems natural. The huge net money flows into US stocks and American technology companies will most likely to moderate in the next few years.
The Vietnamese stock market crashed in April-May, as the Vietnamese Government suddenly started the disciplinary measures and arrested a well-known stock manipulator. At the same time Vietnam’s peer markets, Thailand, Indonesia, and Philippines, have not experienced similar sell-off.
The earnings growth of the Vietnamese stock market during Q1 was +31%. According to a fresh analysis banking sector’s earnings growth is estimated to be at 34% for the full year of 2022. Our target for the Vietnamese listed companies’ 2022 earnings growth is still +25%.
The Vietnam Stock Exchange’s P/E of 11.4 for 2022 is attractively low and the market has a lot of cheap stocks. Of course, market events in Europe and the US may from time to time also dampen the Vietnamese market’s sentiment.
Important information regarding the text and the Fund
The attached publication is marketing material and should not be regarded as a recommendation to subscribe or redeem units of the PYN Elite Fund. Before subscribing please familiarize yourself with the Key Investor Information Document, the Prospectus and the Rules of the Fund. The material presented in this text is based on PYN Fund Management’s view of markets and investment opportunities. PYN Elite Fund (non-UCITS) invests its assets in a highly allocated manner in frontier markets and in a small number of companies. This investment approach involves a larger risk of volatility compared to ordinary broadly diversified equity investments. The value of an investment may decline substantially in unfavorable market conditions or due to an individual unsuccessful investment. It is entirely possible that the estimates of economic development or a company’s business performance presented in this presentation will not be realized as presented and they involve material uncertainties.