VietNam Holding Ltd hails vaccine rollout and LEGO investment boost

VietNam Holding Ltd (LSE:VNH) reported a 3.1% increase in net asset value in November and highlighted the progress of Vietnam’s vaccination rollout in the month.

By early December, 75% of the adult population had received the first jab and 56% the second, with the investment trust’s manager, Dynam Capital, saying this has given both businesses and Christmas shoppers “a good reason for feeling festive”.

Although slower to start, Vietnam has caught up quickly with Western nations, having already started vaccinating children in early November and therefore helping to contain the superspreading in schools seen all over the world.

Although the emergence of Omicron came just as the country was reopening, the manager said toy giant LEGO provided a boost for the economy and local market sentiment by announcing that it intends to invest US$1bn to build a carbon-neutral factory in the southern Binh Duong province.

This is the largest investment ever in Vietnam by a Danish company and, according to the Danish ambassador, shows the confidence and optimism of Danish investors in the relationship between the two countries.

“In our view, it also underlines the attraction of future foreign investment in Vietnam, given the government’s facilitation of trade and international integration, on top of the country’s abundant workforce and geographical location,” said Dynam.

The VNH trust’s 3.1% increase in NAV in November underperformed the VNAS index to reflect a diverse range of performance among its investments as the equity market reached new peaks.

Financial services outperformed and the trust benefited from its overweight in brokerage firms.

“The brokerage sector is expected to benefit from further development of equity and bond markets,” the manager added, with the market driven mostly by local retail investors throughout the month with a record number of new accounts opened and speculative money flowing into mid-cap stocks.

“We viewed this as an opportunity to rebalance the portfolio starting with taking profits on some positions,” Dynam said, adding that with the new layer of uncertainty surrounding Omicron positioning in the retail sector was decreased.

Additions were made to some existing holdings in anticipation of a recovery in earnings growth in the new year.

As noted by the Associated of Investment companies last week, the fund has been one of the top three investment trusts listed on the London Stock Exchange in terms of performance year to date.

“This can be attributed to how both the Vietnamese markets have weathered the ongoing Covid-19 disruptions and how we exercised our high-conviction stock selection and nimbleness,” said Dynam.

“Looking ahead, monetary and fiscal policy will be making an increasingly bigger impact as the world learns to live with Covid-19 variants and the digital and…