Impact of currency devaluation on the Company
RNS
21 February 2011
VinaCapital Vietnam Opportunity Fund Limited
Impact of February 2011 currency devaluation on the Company
VinaCapital Vietnam Opportunity Fund Limited (the "Company" or "VOF") is pleased to provide additional information on the expected impact of the 11 February 2011 devaluation of the Vietnam dong ("VND"), which saw the value of the currency drop 7.2% against the USD. This information follows the discussion of the devaluation presented during the 15 February 2011 investor conference call.
VinaCapital's funds, including VOF, hold most of their assets in VND-denominated holdings. The full impact of any currency fluctuation involves both direct and indirect factors that are very difficult to quantify precisely. Indirect factors include such issues as: 1) most businesses in Vietnam already transact at the open market rate, which did not change much as a result of the official devaluation;
2) investee companies that export will see their VND earnings rise; and 3) it is anticipated the stock market may rise in the short term as foreign capital enters (analysts have indicated foreign capital allocated to Vietnam but waiting for the devaluation before entering the country). Finally, the devaluation, if successful, will help stabilise the economy and prevent further erosion of the VND's value.
Vietnam Opportunity Fund Limited has approximately 52.5% of its assets in VND-denominated holdings, primarily in the fund's listed and OTC positions. As a result, it is anticipated the February 2011 NAV will decline by approximately 4.2% due to the devaluation. Note that the February NAV has not yet been determined and other market factors may increase or decrease the NAV, in addition to the estimated decline provided herein.
Enquiries:
Michael L. Gray
VinaCapital Investment Management Limited
Investor Relations/Communications
+84 8 821 9930
michael.gray@vinacapital.com
Philip Secrett
Grant Thornton Corporate Finance, Nominated Adviser
+44 20 7383 5100
Hiroshi Funaki
LCF Edmond de Rothschild Securities, Broker
+44 20 7845 5960
David Benda / Hugh Jonathan
Numis Securities Limited
+44 (0)20 7260 1000
Alastair Hetherington
Financial Dynamics, Public Relations (Hong Kong)
+852 3716 9802
Andrew Walton
Financial Dynamics, Public Relations (London)
+44 20 7269 7204
This information is provided by RNS