Vietnam : Monthly Investor Report

VietNam Holding Limited (the "Company")

Investor Report

A report detailing the activities of the Company for the month of June 2014 has been issued by VietNam Holding Asset Management Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website athttp://www.vietnamholding.com/latest-publications.aspxand a summary of the report is included below.

Investor Report Summary

Vietnam News

Vietnam's GDP growth in the second quarter of 2014 has been provisionally put at +5.3%.  With a revised +5.1% figure for the first quarter of the year, the GDP growth for 1H2014 was +5.2%.  The World Bank is sticking with its full year GDP forecast of +5.4% for the full year.  The Purchasing Manager's Index (PMI) stayed in positive territory for all of 1H2014, and was 52.3 in June, with new orders, higher input prices and growing employment all apparent in the data.  Inflation was just 0.3% MoM in June, taking the YTD figure to a mere 1.4%.  This helped the State Bank of Vietnam to depreciate the VNDong by 1% in mid-June, to 21,246 against the US Dollar, as part of a bid to keep exports competitive, subsequent to much larger declines in virtually all other Southeast Asia currencies against the USD.

Turning to Vietnam's equities, the Vietnam Index (VNI) in HCM City rose 2.9% in June. As a result, the VNI was up 15.5% YTD, only exceeded in Asia by India's SENSEX (up 20.0%) and the Philippines' PSEI (up 16.2%). Indeed, over the last 18 months the VNI has been the best performing market in Asia, rising almost 40% since the beginning of 2013.  Similarly, over the last 30 months, the VNI has risen 64.5%.

VNH Insights

With the IPO and listing of Petrovietnam Gas (GAS) shares on the HCM City stock exchange, the VNI benchmark index has become significantly oriented towards the performance of this single stock, even though the free-float is just 3.3% of this company's total equity.  Thus, we have begun to put greater emphasis on the Vietnam All Share (VNAS) Index, which provides a more representative benchmark indication of the Vietnamese equities universe. 

While the VNI rose 2.9% in June, the VNAS rose by a more modest 0.3%. Within this context, VietNam Holding performed well in June, with its net asset value (NAV) per share rising 0.6%. For 1H2014 as a whole, VietNam Holding's NAV per share has risen 10.2%, thereby out-performing the 9.0% rise in the VNAS benchmark. By contrast, the GAS-weighted VNI increased by 14.57% over the same period.  At the end of June the GAS stock price was up 68.4% YTD and trading on a trailing P/E ratio of a lofty 18.9x.            

We believe the VNAS provides a more realistic benchmark for an equity investor such as VNH.

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