Vietnam in Perspective:

Crises? What Crises?

June 2008

Macroeconomic Highlights
10-year average annual GDP
growth rate 7.5%
Primary Drivers;
export growth
domestic demand
Foreign Direct Investment
57% of population under 30
Literacy rate of 94%
Politically stable

Headline Economic Statistics

2006
GDP Growth (%)
8.2
GDP per capita (US$)
724
Trade Deficit (US$ BLN) 5.1
F.D.I (US$ BLN)
10.0
Retail Sales (% YOY) +20.9
CPI (% YOY)
+6.6
Source: Government Statistics Office

2007
8.5
832
12.4
20.3
+25.0
+12.6

Top-5 Exports 2007

US$ BLN
1.
2.
3.
4.
5.

Crude Oil
Garments
Footwear
Aquatic Products
Furniture

8.5
7.8
4.0
3.8
2.4

Top-5 Imports 2007

US$ BLN
1.
2.
3.
4.
5.

Machinery
Petroleum Products
Textiles
Steel
Electronics

10.4
7.5
6.7
4.9
2.9

Areas of Concern 2008/9

Inflation
Trade Deficit
Balance of Payments
Foreign Currency Reserves
Currency Devaluation
Slowing Growth
Banking Sector

The View from Phan Xi Pang

Inflationary pressures likely to ease from
August 2008
Trade Deficit concerns should decline from
July as fiscal & monetary tightening take effect
Banking sector may be further opened to
foreign investors sooner than required
Balance of Payments was in surplus YTD in
May 2008
Greater transparency with publication of
foreign currency reserves & BoP figures
We believe that economic conditions are less severe
than recent observers have suggested, and will
improve in the short- to medium-term.

The Viet Nam Index

Source: Ho Chi Minh City Securities

Viet Nam Index Highlights

19 January 2006:
Listing of Vinamilk
Market Capitalisation > US$ 1 billion
Vietnam Index (VNI) closes at 307.07
3 February 2006:
Release of Merrill Lynch Report
announcing Vietnam as 10 year buy
VNI rose 105% (from 309.00 to 632.69)
in 12 weeks before re-tracing

Viet Nam Index Highlights (contd)

2 August 2006:
Index dips below 400
Announcement of removal of tax break
listing incentives effective 31 Dec 06
29 December 2006:
VNI finishes the year at 762.79
Market Capitalisation > US$ 9 billion

Viet Nam Index Highlights (contd)

2007:
Index peaks at 1,170 on 12 March 2007
Finishes the year at 927.02

2008:
Market falls 55% YTD to 30 May
largely on macro-economic fears
As of 13 June 2008 the Viet Nam Index has returned to
a level last seen 3 weeks after the release of the Merrill
Lynch 10-year Buy recommendation two years ago

Valuation Comparison
8 Mar 06

13 Jun 08

409.28

372.68

Market Cap (US$) 1.3BN

10.3BN

VN Index

Historic P/E

17.3x 05

10.9x 07

Forward P/E

14.5x 06

9.9x 08

Stock Filter

20 HCM City-listed stocks

Weighted Average:
6x 07, 5x 08 earnings
1.3x 2007 book value
Sectors include:
Construction; Consumer Staples; Energy;
Financials; Industrials; Logistics; Plastics;
Property; Seafood; Soft Commodities

The View from Phan Xi Pang (2)

Confidence is showing distinct signs of
improvement in recent days, with more
stocks up than down although selling in blue
chips has not yet cleared
There is renewed discussion of reversion to a
5% daily trading band, which should allow
the removal of overhang in the short-term
Consultation process underway between
authorities & market participants

 Vietnams first listed & pre-listed

equity specialist investment manager
Ho Chi Minh City-based
AUM approximately US$ 300 million
18 staff including 5 analysts
Manager of the best-performing
Vietnam fund of 2007 (PXP VF)

Relative Performance*
Viet Nam Index
(VNI)

YTD

(45.52)

(55.33)

2007

15.87

23.31

One Year*

(44.20)

(61.71)

Inception

(37.16)

(46.61)

* To 30 May 2008

Top 10 Holdings*
Saigon Post & Telecommunications
SSG Development
Hau Giang Pharmaceutical (DHG)
Imexpharm (IMP)
Vietcombank
Navico (ANV)
Sao Mai
Vinamilk (VNM)
Gemadept (GMD)
Pha Lai Thermal Power (PPC)
* At 30 May 2008: 69% of Portfolio

Vietnam Lotus Fund

Issue Size: 10,834,500 Shares
To be priced at estimated Net Asset Value on
19th June 2008
NAV on 30 May 2008: US$ 3.142
Estimated NAV on 12 June 2008: US$ 2.813
Existing Shareholders have right to buy 1 new
Share for 1 Share (total 9,165,500 Shares)
New Investors may apply for balance (plus any
Shares not subscribed as above) at the
same price plus Placing Fee of up to US$0.10

Vietnam Lotus Fund

Final Date for Applications: 19 June 2008
Closing Date: 20 June 2008
For Prospectus, Placing Letter & Application Form
PLEASE CONTACT:
Kevin Snowball
PXP Vietnam Asset Management Limited
Vietnam Representative Office
Tel. No: + (848) 827 6040
Fax No: + (848) 827 6043
Mobile: + (84) 918 299 980

khsnowball@pxpam.com

www.pxpam.com