February was a turbulent period for global stock markets when more cases of people infected with the Coronavirus were reported in Korea, Italy and other regions. VN Index declined 5.8%, caused by VIC (-8.2%), SAB (-22.2%) and BID (-11.7%) while PYN Elite’s NAV slipped 2.8%, impacted by CII (-12.2%), VEA (-9.1%) and MWG (-3.9%).
However, amid the bad news, Vietnam has been successful in containing the virus. Up to now, only 16 people were infected and all have recovered, not bad for a country sharing border with China. Vietnam’s government has taken very strong measures to limit virus spread. Schools at all levels have been closed since beginning of February and students at Ho Chi Minh City and Hanoi will go back to school the soonest on March 9 while students at other provinces went back to school on March 2.
Major border crossings were also closed since end of January and reopened since February 20 with strict health monitoring of people who crossed the border. With the recent virus outbreak in South Korea, Vietnam´s government also temporarily sus-pended the visa waiver program for South Koreans. People who have stayed in South Korea within 14 days of arriving to Vietnam are put in quarantine. As a result of these efforts, on February 27, The US Centres for Disease Control and Prevention, CDC removed Vietnam from the list of countries vulnerable to community transmission of Coronavirus which is a very good signal.
Airlines, tourism related businesses and oil related businesses all had a very hard month of February in Vietnam, but agricul-tural product export was decent considering the situation. In the first 2 months 2020, main agricultural product exports came to 2.5B USD, a decrease of 4.3% YoY, aquaculture products exports decreased 15.9% YoY to 932M USD and livestock & poultry product exports reached 74M USD, decreased 9.6% YoY.
Vietnam manufacturing PMI fell to 49 in February from 50.6 from previous month as new orders fell and insufficient supply of Chinese goods pushed up input prices. However, producers are still expecting an improvement in output over the next 12 months.
We have managed to take some advantage of the stock market weakness and made some interesting portfolio rollover to most damaged quality names.
PYN Elite Monthly Review_Feb_2020.pdf