PYN Elite rose by 3.1% in August, outperforming the VN Index’s 2.6%, driven by banks’ outperformance and DBC (+10.9%). Despite initial uncertainty over Vietnam’s leadership change, local businesses perceive the new regime as more business-friendly. The government is focusing on business development and quickly resolving long-standing bottlenecks, while the ideological campaign is expected to ease. On September 2, the Prime Minister stated the aim of 7% GDP growth in 2024 in his official dispatch. The Non-Prefunding (NPF) circular is close to getting approval. Brokers are finetuning operational details and surveying customers’ preferred funding quotas. Rolling out NPF will pave the way for Vietnam’s FTSE Emerging Market upgrade, expected in September 2025.
Macro: With the US labor market cooling and the Fed signalling rate cuts, the USD Dollar weakened by 4.1% in August. This has eased pressure on most Asian currencies, leading to an average recovery of 3.5% against the US dollar. The Vietnamese Dong appreciated by a modest 1.5%, which we attribute to its earlier strength (with a smaller depreciation of -4.8% at its weakest, compared to an average of -7.2% for other Asian currencies) and the likelihood of SBV rebuilding FX reserves. We expect the Dong to appreciate further once the Fed begins cutting rates.
PYN Elite Stock of the Month: TPB
TPB faced setbacks in 2023 due to its pivots into corporate bonds and consumer finance. The bank responded by divesting its credit exposure related to troubled corporate bond and shutting down its consumer finance operations. In 1H2024, TPB completed the final provisioning for non-performing loans from 2023. Although credit demand was weak initially, the bank has a strong loan pipeline and aims to grow loan book by 18% this year. The real estate market’s recovery boosted residential project financing. TPB expects to meet its full-year profit target of +34% YoY, with a projected 75% profit growth in 2H2024, driven by lower provisioning pressure.
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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.