In November, the Kenno Vietnam Fund declined 3.6% in USD and 4.2% in EUR. Consumer stocks, which account for 60% of our portfolio, retreated in November, primarily due to investors’ concerns about the negative impact of severe flooding on demand and distribution. Although floods caused short-term disruptions to daily activities in parts of the country over the last two months, we remain constructive on the broader economic outlook, as well as the long-term outlook for domestic consumption. During the month, we selectively increased exposure to attractively valued consumer and real estate companies.
Market Overview
Market sentiment in Vietnam improved in November, supported by two key developments: the National Assembly’s approval of a 10% GDP growth target for 2026, and FTSE Russell’s release of a preliminary list of 28 Vietnamese stocks that could be added to the FTSE Global All Cap Index in September 2026. This marked a period of stabilization after October’s sharp volatility, which was driven by the Government Inspectorate’s report on past corporate bond violations and profit-taking in financial and Vingroup-related stocks, which account for around 50% of the VN Index’s total market capitalization. The VN Index closed the month up roughly 3.1% in local currency. While early November saw pressure from margin-related selling, sentiment strengthened significantly following these two positive developments, combining an ambitious growth target with tangible progress toward a stock market upgrade.
Nevertheless, stock market liquidity fell, and this month’s rally was highly concentrated in a small number of large-cap stocks such as Vingroup-related stocks and Vietjet Air. The average daily trading value decreased to USD 960 million, down 31% month-over-month (MoM) and below the USD 1.2 billion average in the first ten months of 2025 (10M/2025). Foreign investors remained net sellers, recording approximately USD 322 million in outflows, slower than the 10-month average of USD 536 million. The lighter turnover reflected concerns over liquidity tightening toward year-end and recent increases in short-term deposit rates at several banks. Positively, in our view, expectations of more global interest rate cuts in 2026, combined with the State Bank of Vietnam’s supportive monetary policy, will reduce the likelihood of further liquidity tightening.
Consumer stocks declined in November as investors worried about the impact of severe flooding on demand and distribution disruptions. The floods caused temporary disruptions across both staple and discretionary retail categories, particularly in the northern and, especially, the central region over the past two months. However, we believe these effects will be short-lived. On a broader scale, the impact on overall economic growth should be minimal, given the central region’s limited contribution to GDP. As reconstruction progresses, business activity and household spending are expected to normalize alongside stable employment conditions.
Domestic drivers are setting the stage for a stronger recovery in consumption in 2026. The government plans to launch 198 projects across transportation, residential, and industrial sectors in December, representing nearly USD 40 billion in total investment, all domestically funded. This scale of activity should support employment and income, creating positive spillovers for household spending. Together with faster public investment, stable inflation, and a steadily improving foreign exchange environment, these conditions form a solid foundation for domestic demand recovery. In our opinion, Vietnam’s stock market is well-positioned to benefit from strengthening consumer momentum and continued loosening fiscal and monetary policies next year.
Portfolio Updates
The Kenno Vietnam Fund returned -3.6% (USD) and -4.2% (EUR) in November 2025.
Although the VN Index increased 3.1% MoM in local currency, the rally was highly concentrated in a small number of large-cap stocks such as Vingroup-related stocks. Consumer stocks, which account for 60% of our portfolio, retreated in November, primarily due to investors’ concerns about the negative impact of severe flooding on consumer demand and distribution capabilities.
We took advantage of early-month margin-related selling pressure to increase our position in Masan Group (MSN) at an attractive valuation (a 30% discount to its fair value based on our estimates), while maintaining our positions in other consumer companies. As highlighted in our previous update, we participated in the rights issue of Nam Long Investment Group (NLG), as we have strong confidence in the company’s fundamentals to capture the next upcycle in Vietnam’s property market, supported by strong pre-sales across its upcoming township launches.
Below we highlight three investment cases that illustrate our portfolio management activities during the month.
Traphaco (TRA): Healthcare | 6.3% weight | +2.2% MTD
On November 11, pharmaceutical manufacturer TRA appointed a new CEO with nearly 30 years of experience with the company, following her most recent tenure as director of marketing and head of the Western medicine business. We see this leadership change as timely for TRA, as the company focuses on accelerating brand development, driving product innovation, and expanding its premium product offerings. The new CEO’s mandate is to reinforce TRA’s leading position in Eastern medicine, while accelerating growth in Western medicine. To achieve this, TRA will accelerate the launch of more premium Eastern medicine products. TRA will invest in a new Western medicine factory, complying with European Union Good Manufacturing Practices (EU-GMP). By meeting EU-GMP standards, TRA’s Western medicine products will qualify for a higher category, allowing the company to offer products with greater value, stronger profit margins, and less competition in hospital drug tenders.
TRA’s share price rose 2.2% in November as the company reported results that exceeded expectations. In 9M/2025, revenue increased 11.8% year-over-year (YoY), and net profit increased 12% YoY, driven mainly by Eastern medicine products. As one of Vietnam’s leading herbal brands, TRA has benefited from the government’s 2025 nationwide crackdown on counterfeit and low-quality supplements, a move that has boosted consumer confidence in high-quality branded products like TRA’s. The launch of a new herbal tea line and the solid performance in premium herbal categories further supported earnings.
In addition to cleaning up the market, the National Strategy for Pharmaceutical Development targets raising the share of domestically produced medicines to 80% of national demand by 2030, up from approximately 50% today. At the same time, the government’s role as a shareholder in state-owned enterprises and its goal of achieving double-digit economic growth from 2026 provide strong incentives for companies like TRA, where the State holds a 35.7% stake. These factors align with TRA’s commitment to R&D and expanding manufacturing capacity, positioning the company to be among the first beneficiaries as localization accelerates.
Against this backdrop, we maintain a positive outlook on TRA’s 2026 performance – forecasting a growth rate of 7% for revenue and 14% for net profit, thanks to single-digit sales growth of both Eastern and Western medicine and improved margins driven by a higher contribution of premium Eastern medicine products and a leaner, more efficient sales network.
Phu Nhuan Jewelry (PNJ): Consumer Discretionary | 8.3% weight | -3.8% MTD
In November, PNJ shares experienced selling pressure after retail investors reacted to a provision in Decree 232 that restricts the use of credit cards for purchases of gold or gold jewelry above VND 20 million (approximately USD 760). Fundamentally, we see this as a temporary trend that has insignificant impact on the company’s earnings – the main reason being that higher value items, such as 24K gold and natural diamond jewelry, are typically bought by customers who can readily shift to other permitted payment methods, such as bank cards and bank transfers. Moreover, this restriction also contrasts with the government’s broader intent to support retail activity, suggesting that it is subject to revision.
In the meantime, PNJ has remained disciplined in managing constraints in the gold material market. From 2012 to October 2025, the State had a monopoly on importing and producing gold bars in Vietnam, which created a domestic shortage of gold bars. PNJ expects that the recent removal of the State’s monopoly will not resolve supply shortages immediately due to concerns over the foreign exchange rate when the government uses USD for gold imports. However, this change should gradually ease the issue over the medium to long term. Like last year, the company has been consistently and proactively securing inventory ahead of peak sales periods. Notably, it also re-established buyback prices to be based on gold content at the current market price rather than the original invoice price – a repurchase policy revised to encourage customers to recycle gold jewelry through PNJ and thereby supports raw material access.
Following PNJ’s 9M/2025 results that exceeded our expectations, we have increased our full-year earnings growth forecast to 11%, while expecting a 15% earnings CAGR over the next two years. Given its long-established brand, strong design and manufacturing capabilities, and a nationwide network of more than 430 stores, we believe PNJ will be a leader in the shift from traditional to modern jewelry retail in Vietnam.
Mobile World Group (MWG): Consumer Discretionary | 17.4% weight | -3.3% MTD
MWG continued to deliver strong results with 10M/2025 revenue up 15.2% YoY, led by two retail chains specializing in mobile phones, laptops, accessories, electronics, white goods and home appliances. This segment expanded 16.4% YoY – supported by a new replacement cycle, continued market share gains, and rising demand for AI-integrated devices that encourage upgrades and increase average selling prices. The company also built demand in previously niche retail categories, such as water purifiers, dryers, and home security devices.
At the same time, MWG’s grocery & FMCG chain (under its sub-brand “Bach Hoa Xanh” or BHX), which holds a prominent position in the southern market, accelerated its expansion by opening over 600 stores year-to-date (YTD) – well above the initial target of 450 – with more than half of these stores located in the recently entered central region. The chain also initiated its expansion into the northern region through early recruitment and pilot store openings. BHX’s nationwide expansion comes at the right time, as traditional markets are rapidly shifting toward modern retail models. Same-store sales growth softened in the short term, from 8% in 6M/2025 to 2% in 9M/2025 due to changes in fresh-product assortment that helped reduce shrinkage in the stormy season. Positively, BHX’s profitability has been consistently improving from 0.2% net margin in 2024 to 1.3% net margin in 9M/2025 through better logistics and more efficient store-level operations.
After a 6-month rally of 28% since May, MWG’s share price pulled back 3% in November as investors re-evaluate 2026 expectations. Meanwhile, our assessment of the company’s fundamentals further reaffirmed a solid earnings outlook – the ICT and CE segment is positioned for continued double-digit growth, while BHX should see better profit margins as the chain scales up and its store operations improve. With this in mind, we forecast earnings growth of 25% in 2026 and a three-year earnings CAGR of 22% for MWG. This outlook is driven by continued store expansion and margin improvements at BHX, as modern retail gains ground over traditional trade. In addition, ongoing progress toward an initial public offering of the ICT & CE chain presents a potential catalyst for its share value.
Closing Remarks
Even though the Vietnamese market was slightly up in November, the gains were concentrated in a handful of large-cap names, while consumer stocks pulled back. As a result, the fund was down –3.6% (USD) for the month. That said, our disciplined approach allowed us to use the early-month selling pressure to our advantage. We increased our exposure to fundamentally strong companies, adding Masan Group (MSN) at a 30% discount to our estimated fair value and participating in Nam Long Group’s rights issue.
With the government’s supportive economic policies and substantial infrastructure investment set to bolster income and accelerate domestic consumption in 2026, we believe the portfolio is strategically weighted to benefit from the strengthening economic momentum next year.
