VNL impact of February 2011 currency devaluation on the Company

21 February 2011

Vinaland Limited

Impact of February 2011 currency devaluation on the Company

Vinaland Limited (the "Company" or “VNL”) 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 VNL, 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.

Notwithstanding the above, the direct, immediate impact of the 11 February devaluation on VinaLand Limited’s NAV is difficult to quantify, but is expected to be minimal. Although official prices are quoted in VND, the value of real estate in Vietnam is based on pricing that is a combination of VND, USD and gold. For this reason, a decline in the value of the VND against the USD does not necessarily mean proportionately lower prices will be obtained in USD. Furthermore, in VNL’s case, some costs may actually decline slightly in USD as service provision fees are normally fixed and paid in VND. It is also worth noting that in anticipation of the widely-expected currency devaluation, VNL had increased the sales prices of its residential offerings in both November and December of 2010. This was after the last cycle of revaluations for most of the fund’s real estate assets.

Therefore, considering all aspects of VNL’s business operations, it is anticipated there will be only a negligible impact on the March 2011 NAV due to the devaluation.


Michael L. Gray
VinaCapital Investment Management Limited
Investor Relations/Communications
+84 8 821 9930
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