VN Index +0.8% in September, and PYN Elite +2.1% supported by TPB (+22%). All eyes were on Vietnam’s fast vaccination progress: 70% of HCMC population are fully vaccinated (cf. only single-digit a month ago). And the whole country’s vaccination rate is over 14%, faster than expected. Daily new cases dropped by half from the peak. Major cities reopened and factories ramped up capacities. The market was flat, as investors were cautiously weighing the upsides from reopening against the risks of weak 3Q earnings. New brokerage account openings remained high (+263% YoY), and daily trading liquidity holds at $1.2bn.
Macro: The economy was hit hard on strict lockdown but investors shrugged off the weakness and looked forward to 4Q and next year. 3Q GDP recorded a dramatic contraction of 6.17% (9M2021 +1.4%). In Sep, retail sales were 28.4% YoY, industrial production was 5.5% YoY, export 0.6% YoY due to supply disruptions. PMI was unchanged at 40.2. Government authorities study options to push the economy to rebound in Q4 and even still aim at 3% GDP growth for the whole year. SBV lifted banks’ credit growth quota accordingly. Vietnam’s economy fared COVID-19 better than many peer economies. Vietnamese Dong is among the best performing currencies in emerging economies against the USD.
PYN Elite Stock of the Month: TPB caught up this month: +22% in September and +55% YTD. The bank completed a 10% private placement. With the new capital, its CAR ratio ranks at the top level in the banking industry and can support its credit growth for the next few years. In addition, after private placement, current major shareholders registered to buy 28.4m shares (2.4% of outstanding shares) to maintain their ownership, signaling strong confidence to investors. TPBank would have 30m shares available for foreigners after the placement and we expect these shares will be taken rapidly, as currently its foreign shares trade at a 7% premium and rare to find a seller.
Important information regarding the text and 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.
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