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VietNam Holding says fund's NAV has rebounded in February after January profit-taking

An abrupt rush of profit-taking, mainly by margin-funded local investors, set in before the lunar holidays

Vietnam Holding -

VietNam Holding Limited (LON:VNH) said in its monthly investor report that business and consumer confidence continues to thrive in Vietnam.

The investment company’s investment manager, Dynam Capital, said yet more growth rates are now returning to or exceeding year-on-year (YoY) growth rates seen before the coronavirus (COVID-19) pandemic gripped the world.

Export growth for January 2021 showed solid momentum for an eighth consecutive month, increasing by 51% YoY. Imports also proved impressive, Dynam said, having recorded further growth for the sixth month in a row, rising 42% YoY, thanks to a rise in both domestic as well as external demand ahead of the Tet holidays.

At the same time, the stock market experienced increased volatility due to bursts in global markets and news of a fresh outbreak of COVID-19 cases in the north of Vietnam.

Equities rallied 20% from October 31 until December 31 and this carried on during the first week of January with record inflows of domestic money fuelled by proliferating positive sentiment, before sentiment was hit by an increase in COVID-19 cases, which prompted profit-taking.

The VNI fund ended the month down 4.2% due to profit-taking activities -particularly by those trading "on margin" - and the associated volatility. The selloff was particularly notable in bank stocks, which have been booming since last May due to the huge growth potential for introducing investing and borrowing products in this untapped market, Dynam said.

The fund’s net asset value, riding high in the middle of the month, eventually ended the month 1.7% lower, although it has subsequently rallied.

“We have every confidence that the future for Vietnam remains bright, the economy will continue to thrive in the future, and the fund is well-positioned to benefit directly as the economic performance advances,” Dynam Capital said.

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