Here is a summary of the key points from the second-quarter update for Vietnam Enterprise Investments Limited (VEIL)
VEILs unaudited NAV performance for Q2 2024 showed a decline of 4.3% in NAV per share compared to a 5.4% decrease in its reference index, the Vietnam Index (VNI), in USD terms.
Vietnams GDP growth exceeded expectations in H1 2024, driven by the processing and manufacturing sectors, with overall domestic consumption also rising. The government has revised its full-year GDP target upwards.
The Vietnamese dong (VND) depreciated against the USD in H1 2024, influenced by expected delays in Federal Reserve rate cuts and domestic political movements. The State Bank of Vietnam (SBV) has taken measures to manage this.
VEILs portfolio restructuring to reduce concentration is nearing completion, with increased exposure to sectors such as banks, retail, manufacturing, property, and industrial parks.
The retail sector was the largest contributor to alpha in Q2 2024, with Mobile World Group (MWG) and FPT Retail (FRT) seeing strong returns.
FPT Corporations (FPT) share price rose significantly in Q2, attributed to its AI partnership with NVIDIA and the acquisition of NAC. FPT reported solid H1 2024 results.
The property sector faced challenges in Q2 2024 due to slow pre-sales and subdued earnings, but VEIL remains optimistic about a potential recovery in the second half.
Two of VEILs main bank holdings, MBB and VCB, experienced double-digit share price declines in Q2, but reported positive Q2 results. TCB also reported strong Q2 results with robust credit growth.
Political transitions in Vietnam, including the passing of the General Secretary of the Communist Party Central Committee, Nguyen Phu Trong, are expected to lead to a smooth transition with a continued commitment to pro-business policies.
VEILs NAV per share as of 28 June was US$9.19, with a total NAV of US$1.8bn. The companys share price decreased 0.4% over the quarter and rose 4.9% year-to-date in USD terms.
VEILs top ten holdings accounted for 60.4% of NAV, with Mobile World Group and Hoa Phat Group being the largest holdings.
The VND depreciated against the USD and GBP in Q2 2024 and year-to-date.