PYN Elite gained +11% in November, driven by VHM, VRE and CTG. VN Index (+2%) was volatile: it first dived -15% before a strong rebound. Two real estate developers suffered margin call as their shares were used as collateral for borrowings. Their shares had 17 consecutive limit-down sessions with little liquidity. The sell-off spread to the entire real estate sector. However, later in the month, market sentiment turned around on signs of improvement. Troubled developers could find solutions to raise funds, restructure debt repayments, or the possibility to obtain new equity investments. Foreign net buy on the stock market jumped to $682m, the highest since May 2018. A Taiwanese ETF raised $160m to invest in Vietnam, further boosting sentiment.
November macro: The global economy affected Vietnam’s export, although FDI and retail sales have been resilient. November retail sales +17.5% YoY, and grew strongly compared with pre-covid (+11% from Nov 2020, +20% from Nov 2019). 10M passenger car sales +52.2%. CPI +4.4% on higher fuel prices and rental costs. November Exports (-8.4% YoY) contracted due to a decline in the computers and electronics category, while 11M Exports +13.4% YoY on solid performance earlier. November trade surplus reached $780m, bringing YTD surplus to $11bn. PMI 47.4. 11M FDI disbursement +15.1% YoY and registered manufacturing FDI +6.7% YoY.
The PYN Elite stock of the month: Sacombank
Sacombank is the 6th largest bank by loans, and 4th largest by branches. Thanks to its large network and affluent customer base, its bancassurance performance ranks top 3. Sacombank has been bearing a large burden of non-performing assets (NPA) inherited from the financial crisis a decade ago. Each year, Sacombank set aside revenue and profit to make provisions for the NPAs, therefore its growth and profitability appear weaker than they actually are. We expect all NPA to be cleared during 2023. Sacombank has little exposure to corporate bonds and troubled real estate developers. We built substantial positions during the market sell-off early in November.
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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.pdf