In November, the VN-Index bounced back by +6.4% from the previous month’s sell-off, propelled by the broker, real estate, and oil & gas recovery. PYN Elite rose by +5.7%, with banks showing a slower recovery. The year-long investigation into Saigon Commercial Bank (SCB) concluded, and the property developer VTP’s chairwoman was accused of embezzling $12.5bn from SCB. She is the major owner of both companies. Though the case is not new, the scale of loss triggered vigorous discussions on social media. The news hit the banking sector’s sentiment, even though other banks have no connection to the SCB case.
Macro: In November, manufacturing and consumption continued to improve, while FDI and public investment remained solid: IIP accelerated to +5.8% YoY (with manufacturing +6.3% YoY), the highest since Oct 2022. Export +6.7% YoY, the 3rd consecutive month of growth. Retail sales +10.1% YoY. International arrivals reached 1.2m (+15% MoM, +107% YoY), a post-pandemic high. Disbursement of public investment +36% YoY to USD19.0bn. FDI registrations surged +14.8% YoY over 11M, with a +40% surge in manufacturing sectors. On a cautious note, PMI unexpectedly dipped to a five-month low of 47.3, as manufacturers faced a renewed reduction in new orders during Nov.
Stock of the Month: SHS
SHS is the fourth-largest broker firm in Vietnam by shareholder equity, a crucial factor in margin lending size. SHS has a good track record in proprietary investment and mid-size investment banking deals, thanks to its well-connected management. SHS conducted two right issuances two years ago, and currently, it is debt-free. Their management anticipates a strong business outlook for the next 2 years, and plans to leverage when demand surges. In the October’s sell-off, the brokerage sector was down by -23%. We took this opportunity to build positions in the sector including SHS. The brokerage sector is set to take off in the next 6-12 months, driven by the launch of a new KRX platform on December 25th and other ongoing market modernization efforts.
Important information regarding the text and the Fund
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 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.