Vietnam : Monthly Investor Report

VietNam Holding Limited ("VNH" or the "Company")

Monthly Investor Report

A report detailing the activities of the Company for the month of April 2015 has been issued by VietNam Holding Asset Management Limited, the investment manager of the Company. Electronic copies of the report have been made available to shareholders on the Company's website athttp://www.vietnamholding.com/latest-publications.aspxand a summary of the report is included below.

Investor Report Summary

Vietnam News

The VNAS index climbed 1.6% in April to 556.2. The strong economy continued to be a theme, with the World Bank raising its current year GDP growth forecast to 6.5% (from 6.0%), and some private sector economists beginning to whisper 7%.

The HSBC April purchasing managers index came in at an impressive reading of 53.7 (March: 50.7), with a sharp increase in business from new customers cited. Meanwhile, April inflation remained virtually absent, at 0.14% MoM and 1% YoY. Government finances are fine despite the oil price situation, with the January-April deficit running well below the government projection at an annualised rate of under 4% of GDP.

FDI disbursed flows remain solid (USD4.2bn through April) and the property market recovery is broad-based (e.g. Saigon office occupancy is at 91%, its highest level in seven years).

VNH Insights

Your fund - whose NAV in April rose 2.4% to USD2.045, for a calendar year to date decline of 0.7% - on 23 April announced EGM approval for a new issue of warrants to shareholders: 1 warrant per 3 shares held, with an 18/24 month life and an exercise price of USD1.998 (equal to the 31 March 2015 NAV). Assuming the warrants are exercised, the increased fund size is expected to provide the potential for increased liquidity in VNH's shares and lower charges per share.

We think that the timing for these warrants is excellent because (a) the economic cycle in Vietnam is favourable, more so than in many other emerging/frontier markets; (b) the correlation with world stock markets is very low (please see our recent article on this at blog.vietnamholding.com); (c) Vietnam looks very modestly valued compared to its peer markets; (d) Vietnamese policy makers are showing signs of enhanced reform commitment; and (e) the external impetus of prospective free trade agreements, especially the US-led Trans-Pacific Partnership, will likely be the strongest for Vietnam compared to all other likely signatories.

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