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- Vietnam Enterprise Investments reports double digit NAV returns
Vietnam Enterprise Investments Limited (VEIL) has released its annual results for the 12 months ending 31 December 2023.
Le Anh Tuan, VEIL portfolio manager, commented:
“After a tough 18 month period, investors should be able to look forward to a much brighter outlook in 2024. In terms of the macroeconomic outlook, Vietnam’s stability remains a strong point for the economy with inflation remaining manageable, averaging 3.3% in 2023, and the foreign exchange rate relatively benign. Much of the Government’s focus is now on growing the economy. From a monetary perspective, Vietnam is now in full-easing mode with the interest rate falling back to 2022 level. The SBV has also granted full credit growth quota to the banks from the start of the year instead of on a quarterly basis, ensuring there is no shortage of capital for the local economy. After fiscal spending hit a record high in 2023 of US$27.8 billion, the Government once again put forward an ambitious plan of fiscal spending of over US$28 billion. At the same time, various task forces of top-ranking Government officials, some of whom were set up in 2023, were asked to directly work with local corporates to resolve the legal issues that have historically hamstrung private investments. For 2024, the Government has set a GDP growth target of 6.0%. Whilst there might be some remnants of challenging times earlier on in the year, VEIL believes investors can look forward to an accelerating growth outlook for Vietnam in 2024.
“In 2023, despite negative EPS growth in Dragon Capital’s Top-80 of -4.3%, the VN Index TR$ was still +11.1%, reflecting improving investor sentiment on the outlook for the economy. We anticipate mid teens EPS growth for 2024 for the Top-80, whilst its price to forward EPS ratio trades at just 9.6x. In VEIL’s view, a very attractive growth and value profile compared with Vietnam’s regional peers. The portfolio is now well positioned in the key sectors that should benefit from the macro backdrop of a boost in public and private investment as well as a material recovery in consumption in 2024.”
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