The VN-Index saw a drop of 8.5% in mid-April, before staging a comeback and closing at -5.8% MoM. PYN Elite -8.2% MoM, driven by short-term profit taking in banking stocks and weak dong. The VND’s depreciation of 2.1% against the USD in April initially fueled rate hike fears, compounded by whispers of political reshuffling. Yet, the depreciation was in line with regional currencies, and reflective of the USD’s recent rally. At month’s end, there were modest deposit rate hikes of 10-50 bps, yet from historic lows and thus interest rates remained at favorable levels. National Assembly Chairman Vuong Dinh Hue’s resignation on April 26th due to his assistant’s abuse of power was an expected development and one that promised to bring about political stability for the foreseeable future.
April macro: Manufacturing PMI climbed back above no-change territory to post at 50.3, driven by solid expansions in new orders. Retail sales +9.0% YoY in April, with tourism revenue +58% YoY, fueled by the resurgence of Chinese visitors. 4M24 international tourists +58.2% YoY, surpassing pre-pandemic levels. YTD disbursed FDI grew by 7.4% YoY. Exports and imports in April expanded by 10.6% YoY and 19.9% YoY, respectively, contributing to a new record trade surplus of $8.6 bn. The government in early May proposed to extend the VAT cut program to December 2024, fostering a conducive environment for sustained consumption growth.
PYN Elite Stock of the Month: PLX
PLX, Vietnam’s petroleum distribution leader with a 68-year history, boasts a 50% market share with just 28% of the nation’s petrol stations, thanks to a strategic network of 4,790 outlets with many in prime urban locations. Amidst the global shift to EVs, Vietnam’s unique infrastructure and urban planning have kept EV adoption to a mere 1%, reinforcing PLX’s growth prospects. With car ownership well below 5% and surging, the country is poised for a sustained petroleum demand outlook, diverging from the global EV trend. PLX saw a 73% YoY leap in 1Q24 earnings with a projected 36% YoY growth in FY24. Anticipated reforms in state pricing mechanisms promise further margin enhancements, a significant growth driver for the next few years.
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.