Click to edit Master title style Click to edit Master title style VinaCapital Vietnam Opportunity Fund Numis – Emerging Markets Fund Seminar Andy Ho Managing Director 13 April 2016
Click to edit Master title style Click to edit Master title style VOF Overview • Launched 2003. Migrated from AIM to the LSE Main Board on 30 th March 2016. A closed-end fund, domiciled in Guernsey. • High-conviction, multi-asset strategy. Focus on sectors that benefit from domestic consumption and infrastructure growth in Vietnam. • Net Assets USD723m, Market Cap USD539m (as at 31 March 2016). VOF is one of the largest and most liquid Vietnam closed-end funds. • Discount to NAV currently 24%. Ongoing share buyback programme has returned $235m 1 to investors over the past 5 years. • Managed by an experienced team across asset classes including private equity, listed equities and real estate. • Fully independent, non-executive board with deep experience in Vietnam and other emerging markets. 1. As at 31 March 2016, VOF has spent USD234.7 million overall repurchasing 113,264,001 shares which have been cancelled and total voting rights in the Company are now 211,346,258. 2
Click to edit Master title style Click to edit Master title style VOF portfolio management team Andy Ho, MBA Duong Vuong, CFA Chief Investment Officer and Managing Director Deputy Managing Director, Capital Markets • 8 years at VinaCapital, currently MD of VOF and Chief • 2 years at VinaCapital, currently responsible for VOF’s capital Investment Officer of VinaCapital. market and PIPE investments. • Former Director of Investments at Prudential Vietnam, • 20 years of experience including the last 9 years in Vietnam. management positions at Dell Ventures and Ernst & Young • Former Research Head at PXP Vietnam Asset Management, in both the US and Vietnam. Senior Investment Analyst at ADIA in Abu Dhabi and Banks • MBA from MIT Sloan School of Management, BS from the Analyst for Merrill Lynch in London. University of Colorado, USA Certified Public Accountant. • Supported by a director and investment manager accompanied by research team. Khanh Vu, M.Com Loan Minh Dang, MBA Investment Director Deputy Managing Director, Private Equity • 5 years at VinaCapital, currently investment director (PIPEs) • 8 years at VinaCapital, responsible for private equity and member of VOF’s investment committee. investments and sourcing. • Over 14 years of managerial experience in corporate • Former Audit Manager for KPMG Vietnam and on the finance, asset management, investment banking, and risk Management and Financial Accounting team at Unilever and compliance. Vietnam. • Previously at Macquarie Bank based in New York and • MBA from University of Hawaii, Vietnamese Certified Public Sydney. Prior to that, he was with Deloitte and Arthur Accountant and UK ACCA member. Andersen based in Sydney. • Supported by a director and two managers accompanied by • Masters degree from University of New South Wales, research team. Sydney. Supported by a 9-member research team, including CFA charter holders or MBA qualified 3
Click to edit Master title style Click to edit Master title style Why Vietnam
Click to edit Master title style Click to edit Master title style Why Vietnam Vietnam’s growth is driven by rising domestic consumption and rapid infrastructure development. Demographics • 94 million people with an average age under 30 High GDP growth • 6.7% GDP growth in 2015, 2016 expected to remain strong Rising foreign investment • FDI inflows continue to support job creation, domestic consumption and enhance exports International trade • Several free-trade agreements will bolster economic growth Privatisations • Capital markets will continue to deepen and broaden through IPOs and large scale privatisations of SOE’s 5
Click to edit Master title style Click to edit Master title style Vietnam forecast to be a top growth country Bloomberg GDP forecasts, 2016 1 Real GDP growth, supported by credit growth Real GDP Credit growth 8.0% India 7.4% 50% Vietnam 6.7% 7.0% 40% Bangladesh 6.6% China 6.5% 30% 6.0% SriLanka 6.4% 20% Kenya 6.1% 5.0% Panama 6.1% 10% Philippines 6.0% 4.0% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F Real GDP Growth Credit growth (%) 1. “Meet 2016's Worst Economic Performers” Bloomberg Source: IMF, ADB, General Statistics Office, VinaCapital Research & Analysis 6
Click to edit Master title style Click to edit Master title style Increasing global integration through free-trade agreements Vietnam is the only country benefitting from several FTAs 1 combining to cover 79.6% of the world’s GDP. RCEP 2 TPP 3 EUROPEAN ASEAN 4 UNION CANADA INDONESIA VIETNAM INDIA AUSTRALIA CHILE MYANMAR LAOS SINGAPORE NEW ZEALAND CHINA MEXICO BRUNEI PHILIPINES THAILAND KOREAN PERU JAPAN CAMBODIA MALAYSIA USA 1. Free Trade Agreement 2. Regional Comprehensive Economic Partnership 3. Trans-Pacific Partnership 7 4. ASEAN Economic Community Source: McKinsey & Company, NCDT, World Bank, BSC, General Statistics Office of Vietnam
Click to edit Master title style Click to edit Master title style A young, educated and inexpensive workforce The affluent middle-class will double to 21m people Vietnam’s young population has been a catalyst in by 2030. Labour costs are among the lowest in the attracting foreign direct investments and driving region. growth. Average monthly wage by country Net foreign inflows (USDbn) In USD, 2014 12 $453 $403 10 $369 8 $253 $249 6 $176 4 2 0 1970 1980 1990 2000 2010 Malaysia China Thailand Indonesia Philippines Vietnam Kenya Philippines Vietnam Nigeria Sri Lanka Bangladesh Source: General Statistics Office, Ministry of Planning & Investment, VinaCapital Research & Analysis Source: World Bank, General Statistics Office, Ministry of Agricultural & Rural Development, VinaCapital Research & Analysis 8
Click to edit Master title style Click to edit Master title style Moving to a high-value export economy Global companies are expanding their Well balanced export markets dominated by manufacturing bases in Vietnam EU and US Total amount Export value by market, 2015 invested 21% USD11.3bn 50% of Samsung’s mobile phones 33% Europe USA China manufactured in Vietnam 21% Japan Korea Others 5% USD1.5bn 70% of LG Vietnam’s products 9% 11% exported to over 35 countries Diverse export base with an increasing shift to high- USD1.0bn 80% of Intel’s chips made in tech products Vietnam Exports by product category (USD billion), 2015 Cellphones & Accessories 30.1 Textiles & Garments 25.8 USD300m 80% of Canon’s laser printers Commodities 25.1 produced in Vietnam Computers & Electronics 15.6 Footwear 13.4 Machine & Equipment 12.1 USD220m 39 production lines shifted from Wood & Wooden Products 7.5 Hungary, China and Mexico Vehicles 5.8 Crude oil 3.7 Others 22.7 Source: General Statistics Office, Vietnam Customs, Ministry of Planning & Investment, VinaCapital Research & Analysis 9
Click to edit Master title style Click to edit Master title style Overall, improving macroeconomics FX reserves strengthening off positive trade flows Inflation remains stable thanks to low commodity prices MoM CPI YoY CPI USD billion 40 5 8 3 4 6 30 2 3 4 20 1 2 2 10 0 1 - 2013 2014 2015 2016 - 0 (2) (1) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F YoY CPI MoM CPI Gross Reserves (LHS) Months of Imports (RHS) VND remains one of the most stable currencies against the Non-performing loans are declining, but structural issues USD compared to regional peers remain Percentage of total outstanding loans 6.0% 160% 150% 5.0% 140% 4.0% 130% 120% 3.0% 110% 2.0% 100% 1.0% 90% 80% 0.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2012 2013 2014 2015 Indonesian Rupiah Malaysian Ringgit Philippines Peso Thai Baht Vietnam Dong Source: General Statistics Office, State Bank of Vietnam, Vietnam Customs, Bloomberg, VinaCapital Research & Analysis 10
Click to edit Master title style Click to edit Master title style Vietnam Stock Market
Click to edit Master title style Click to edit Master title style Capital markets continue to improve Total market cap of USD57.1 billion 1 across 2 exchanges and 689 listed companies. Foreign interest continues to accelerate on expectation of further privatisations and lifting of FOL. Last price Volume 1,600 10 Improved liquidity as market deepens and 9 1,400 progressive reform 8 1,200 7 Rapid influx of 1,000 “hot” money 6 800 5 Billions 4 600 3 400 2 200 1 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 VNIndex Volume - RHS VNIndex Last Price - LHS MSCI EM Last Price - LHS 1. Market cap of combined bourses, Ho Chi Minh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX), as of 31 March 2016. VNIndex represents HOSE only. Source: Bloomberg, VinaCapital Research & Analysis 12
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