Vietnam’s stock market had a bumpy start to July as the VN-Index fell to a 17-month low of 1149 points on July 6th. It then started bottoming out and recovered strongly over the rest of July before closing the month up 0.7% MoM. The sentiment was bolstered by positive global momentum and buoyant Q2 earnings results – especially from the banking sector. PYN Elite +0.9% MoM, thanks to the outperformance of ACV, MBB and CTG. Year-to-date, PYN Elite -19.3% vs. VN-Index’s -19.5%. Despite underperforming the global market, VN-Index’s valuation indicates a stronger upside ahead: Its forward 2022 P/E is at a staggering low 11.1 vs. MSCI ACWI World Index at 15,4.
Macro: After very strong GDP growth in Q2, July macro data suggested even more robust growth in Q3: Industrial production +11.2% YoY, export +8.9% YoY, disbursed FDI +20% YoY in July. Retail sales saw a significant jump of 42.6% YoY, but not just from a low base: It is 12% and 18% higher than July 2020 and July 2019 levels, respectively. Tourism revenue +3451% YoY in July and is already 82% of July 2019 (pre-COVID level).
Despite the country’s vigorous growth, inflation is still under control at 3.14% YoY. With gasoline prices on a downward trend, there should be less pressure on inflation over the coming months.
Stock of the Month: VHM. Vietnam’s largest developer Vinhomes became the real estate market’s highlight as it reported a record high presales value of USD 3.2 billion in Q2, +250% YoY only from the launch of its new 460-ha mega project The Empire. That is the first one among 4 mega projects that VHM plans to bring to the market over the next 1.5 years after the long COVID years – as the market continues to face a severe lack of supply despite buoyant demand. With a total area of 1,270 ha and a combined GDV of USD 17.5 billion, the projects are expected to secure earnings growth for VHM in the FY23-24 period.
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.
PYN Elite Monthly Review_July_2022_EN_V6.pdf