Asia Frontier Capital (AFC) - June 2015 Newsletter
"I cannot teach anybody anything,
In June 2015, the AFC Asia Frontier Fund returned +3.2% which was in line with the MSCI Frontier Asia Index (+3.3%) whilst outperforming the MSCI Frontier Index (-0.3%) and the MSCI World Index (-2.5%). The year to date performance of the AFC Asia Frontier Fund A-shares now stands at +1.0% versus the MSCI Frontier Asia Index which is down -3.3% during the same period.
The AFC Vietnam Fund returned +0.1% in June whilst the Ho Chi Minh VN Index (+4.1%) and Hanoi VH Index (+2.1%) both rallied strongly as banking stocks and some heavily weighted index names attracted significant buying activity. Since inception the AFC Vietnam Fund has outperformed the VN Index and VH Index by +30.9% and +21.4% respectively, in USD terms, over the same period.
The AFC Iraq Fund has officially begun investment activities after the fund launch on the 26th June 2015. The first NAV was set at USD 1,000 for initial investors and the next NAV calculation showing the first month’s performance will be available as of the 31st July 2015 and will feature in next month’s newsletter. In the first month of investing in Iraq there were some good corporate results for companies that we see as attractive, which we expect will be positive for the fund as well as for the Iraq market more generally.
Looking at the markets in Asia there were a number of developments in the past month. China has seen some dramatic market movements with the Shanghai Composite Index dropping more than 30% since the peak in June 2015. In a bid to insulate themselves from the meltdown, hundreds more companies have announced that they will suspend trading with nearly 1,300 firms (roughly half of China’s main shares) doing so thus far. Roughly 80% of the investors in China are individuals who frequently trade on margin using leveraged accounts. Given that so many individuals will be impacted by this crash, Chinese regulators have announced a number of policies to try to boost market confidence but there appears to be genuine panic selling and a potential liquidity squeeze underway. In the months prior to the crash, Chinese shares had seen a meteoric run up with a great deal of new retail investor participation. Despite the recent drop, however, the local market currently remains above where it was 12 months prior and looking forward it appears likely that there will continue to be some irrationality moving the Chinese market.
In Asia’s frontier markets, Vietnam had some positive news with the announcement that the foreign ownership restriction for listed equities will be lowered in all sectors with the exception of banking and other ‘sensitive’ industries. There was also good economic news with GDP data indicating that Vietnam is continuing to grow faster than expected. The continued development of Vietnamese equity markets will support the investment environment for foreigners and a continuation of positive reforms such as this could potentially pave the way for the reclassification of Vietnam from a frontier market to an emerging market country, as has recently happened with Pakistan.
Whilst situations similar to the two above could have occurred in many markets, one of the important takeaways from these events is that volatility exists and it can generate both positive as well as negative spikes in the performance of your portfolio. Whilst many find correlation and diversification to be uninteresting topics at the best of times, they tend to become of more interest to investors when markets have moved against them. With this in mind, we are proud that AFC offers unique funds that have low correlation to both emerging and developed markets and we will always encourage you to proactively look to invest in a diversified collection of geographies as well as asset classes.
AFC’s funds have again had investment inflows this month and we would like to extend a warm welcome to all of our new investors who have come on board in June.
If you have an interest in meeting with our team during their travels, please contact our Marketing Director Stephen Friel at email@example.com.
AFC Asia Frontier Fund (AAFF) USD A-shares gained +3.2% in June 2015, in line with the MSCI Frontier Asia Index (+3.3%) and outperforming the MSCI Frontier Index (-0.3%) and the MSCI World Index (-2.5%). The year to date performance of the AFC Asia Frontier Fund A-shares stands now at +1.0% versus the MSCI Frontier Asia Index which is down -3.3% during the same period.
It was a good month for AAFF as positive moves in some of our top holdings led to strong performance. In Bangladesh, a pharmaceutical company that is the fund’s largest holding got approval from the US’s Federal Drug Administration (FDA) for one its products. The company in question, alongside another Bangladeshi pharmaceutical player, are the first two companies in the country to get US FDA approval, which is a very notable event for the young and growing local pharmaceutical industry.
Pakistan saw a neat rally on the back of positive news regarding the possible upgrade of the country to emerging market status in 2016 by MSCI. Further, Moody’s upgraded the country’s foreign currency bonds up one notch to B3 on the back of more economic stability. With lower crude oil prices, inflation has come under control and the central bank has cut interest rates thrice this year leading to positive sentiment in equity markets. This has also been positive for economic activity and auto sales as well as cement dispatches have been upbeat. Pakistan was the leading contributor to returns this month with the major impact coming from the larger positons held by AAFF, namely a pharmaceutical company and the two cement companies.
Sri Lanka did not see much of a move this month with the upcoming parliamentary elections set to take place in August 2015. An interesting election looks set to take place with the former President Mahinda Rajapaksa deciding to put himself forward as a candidate. We think that the worst for infrastructure related stocks, which took a beating when the former President lost the elections, seems to be over as the current government has already signed off on certain projects such as the Southern Expressway Extension, which is being funded by China. Chinese funding for projects was one of the issues that the prior government got itself entangled in and the current government looked to review.
The major positive news from the fund’s investment universe was from Vietnam which saw approval of increased foreign ownership limits in almost all sectors with the exception of banking and some other sensitive sectors. This process should be completed in the coming few months which could see foreigners owning more than 49% of a publicly listed company. Most large cap and well-known names in Vietnam have already reached the 49% limit so this is good news. The other positive news for Vietnam was the passing of the TPA (Trans Pacific Authority) bill in the U.S. Senate. The passing of the TPA bill allows for the final round of negotiations with respect to the TPP (Trans Pacific Partnership) which is a free trade agreement between the U.S. and eleven other countries including Vietnam. The TPP could be signed as soon as the end of 2015 and if this happens it will be positive for Vietnam’s export industry which will get duty free access to two of its four largest export markets, i.e. the U.S. and Japan. Getting this duty free access is based on certain technicalities which we will not get into here but the big picture is that Vietnamese exports can get a big boost especially the country’s textile exports.
Looking at AAFF’s Iraq holdings, a local soft drinks manufacturer declared very good results despite the situation on the ground which led to a stock price rally of 60% after having been pushed down over the past year. Given the drop in valuations in Iraq, the fund also increased its exposure to the country through the AFC Iraq Fund.
Overall the performance this month was led by top holdings in Pakistan and Bangladesh as well as small/mid cap holdings in Vietnam and the rally in the Iraqi consumer company. The best performing indices within the AAFF universe in May were Cambodia (+29.6%), followed by Mongolia (+17.8%) and Iraq (Rabee Index) with +10.1%. The poorest performing markets were Sri Lanka (-2.8%) and Laos (-2.5%). The top-performing portfolio stocks were an Iraqi consumer food company (+60.2%), followed by a Vietnamese consumer food company (+40.0%), a Bangladeshi textile company (+38.2%) and a Pakistani pharmaceutical company (+25.1%).
June was the quietest month so far this year, from the point of view of investment activity. We added to existing positions in Mongolia, Papua New Guinea and Vietnam. We completely exited a finance company in Papua New Guinea and reduced the holdings in five companies in Vietnam.
As of 30th June 2015, the portfolio was invested in 115 shares and held 5.7% in cash. The two biggest stock positions are a pharmaceutical company in Bangladesh (4.5%) and a Pakistani pharmaceutical company (4.1%). The countries with the largest asset allocation include Vietnam (26.5%), Pakistan (19.7%) and Bangladesh (13.3%). The sectors with the largest allocation of assets are consumer goods (41.9%) and materials (14.4%). The weighted average trailing portfolio P/E ratio (only companies with profit) was 14.5x, the weighted average P/B ratio was 1.63x and the dividend yield was 3.75%.
The AFC Iraq Fund has officially begun investment activities after the fund launch on the 26th June 2015. The first NAV was set at USD 1,000 for initial investors and the next NAV calculation showing the first month’s performance will be available as of 31st July 2015 and will feature in next month’s newsletter.
The Iraqi equity market had a very interesting June with two major developments taking place. The first was a reversal of net foreign portfolio flows that broke the down-trend which was in force since October 2013 as can been seen in the chart below. Net-foreign portfolio flows started declining, turned negative in January, stabilized sideways for a few months and then turned sharply higher in June. This contributed to the strong performance of the RSISX Index, developed by Rabee Securities, which was up 10% in June on the back of an 18% up move in May.
Should this positive net-flow reversal continue, it would reflect increasing confidence in the end of conflict in Iraq, the containment of the military threat of ISIS, and a focus on the country’s huge post conflict potential. Asia Frontier Capital has held this view over the last year and has launched the AFC Iraq Fund to capitalize on this post-conflict recovery as highlighted in our prior newsletters over the last few months.
The second major development was the partial listing of ZAIN-Iraq, a mobile phone operator, on the Iraq Stock Exchange (ISX) on the 23 June with an indicated market capitalization of USD 9.4 billion. This has taken the total market capitalization of the ISX up to USD 16.7 billion from USD 7.3 billion, eclipsing its number 1 competitor Asiacell at USD 1.95 billion and its parent ZAIN at USD 6.1 billion (Note : ZAIN-Iraq is the operating name of Al-Khatem Telecom which is about 76% owned by Kuwait-based ZAIN group). These large numbers, although exciting to quote, do not reflect the full story so with this in mind it is worth spending some time to review the background of this new listing:
ZAIN-Iraq went through a different route to comply with the license requirement of listing on the ISX as it received approvals to offer 25% of its shares on the ISX which went as follows:
A comparison of the two companies is below as of 5th July 2015:
Such rich valuations, in absolute terms and relative to its competition, should not last with an inevitable reversion to the mean over the next few weeks & months. A comparative valuation to Asiacell suggests a market capitalization of USD 1.6-2.1 billion (based on Asiacell’s P/E and book value) or an average of USD 1.9 billion.
Telecom, mobile and fixed line IPO offerings transformed a number of emerging markets in the 90’s and 00’s and drew a large number of foreign investors and as such there was jubilation and excitement that the same would happen for the ISX. However, this somewhat misses the point: that other telecom IPO’s were often inefficient state operated companies that would reap huge benefits from private ownerships and would ride the wave of deregulations. This is not the case with Iraq’s mobile operators, which were already private companies operating in relatively deregulated and free markets. Not withstanding the misplaced optimism or likely equally misplaced pessimism on these IPO’s we like the space with valuations becoming compelling for Asiacell with a very strong likelihood of the reversal of the negative operating environment later this year. This will be further helped by the offering of 3G services. We will review the telecom environment & outlook in more detail in a future newsletter.
The key to investing in Iraq is the huge operating leverage for companies operating in conflict where costs are significant due to the security issues. Sales, meanwhile, are limited by these same issues as well as held back by weak infrastructure. All of these points, we strongly believe, will dissipate in the years to come and the same weaknesses plaguing these companies should reverse into meaningful operating leverage as can be seen in Baghdad Soft Drinks, a company that has just started to witness a glimpse of this transformation.
Bagdad Soft Drinks (ticker: IBSD) is a Pepsi bottler with a license to operate in densely populated central Iraq and like many Iraqi companies was a state owned enterprise (SOE) set up in 1989 which was privatized in 2009. Due to its franchise, good management, size, and easy to understand business model, it has become a market favorite both with local and international investors. Its market performance has not failed to disappoint its fans.
Source : DirectFN Pro 10
The stock returned 101% in 2013, followed by a decline of 24% in 2014 and a YTD return of 28%. These moves, however, do not highlight the rise of over 150% from trough to peak between March - June this year and the almost 50% increase during June 2015. These moves in price pale in comparison to where we expect the stock to trade once the benefits of operating leverage kick in.
Baghdad Soft Drinks faces significant competition within the country due to the availability of cheap imports from the region such as other Pepsi products from regional Pepsi franchises, cheap local & regional cola products and Coke from regional Coke franchises. These are on top of the additional logistical challenges and associated costs of operating in conflict. Sales & margin performance over the past few years are provided by the chart below which featured in a recent research report provided by Rabee Securities.
This chart beautifully illustrates the company’s story as the effect of the terrible civil war years (2005-2007) on squashing sales and margins as well as the power of recovery in boosting margins and sales in 2008-2010. Earnings growth from 2011-2013 was mostly driven by margin recovery due to management’s ability to improve its operations in the relative stability of the period while sales growth was hampered by fierce competition from imports. For all of 2014’s horrible events, beginning with the uncertainty and violence prior to the elections in April, followed by the ISIS occupation of Mosul in June and the ensuing armed conflict, sales were down 8% year on year while margins were mostly flat to slightly up which resulted in a drop in earnings 7% year on year.
The real excitement in this story is the true recovery potential that can be, once sustained, transformative when paced by strong sales & earnings recovery. This could have happened in the first two quarters of 2015 in which H1/2015 sales were up 14% year on year while operating profit was up 66% driven by operating margin improvement in the period from 7.2% to 10.6% year on year which illustrates the operating leverage. Net profit was also up 59% year on year.
The driver for this transformation was the addition of a new PET bottling line in March increasing the company’s production lines to 8, 4 of which are PET, resulting in increasing total production capacity by 15% from 46.7 million units to 53.7 million units. This was all made possible by the relative stability that the country has seen so far in 2015. The company has been able to sell everything it can produce irrespective of the present fierce price competition.
As impressive as this performance is, it still is only one aspect within the bigger picture, as there are many tail winds for this company including:
Taking into account both the near & long term earnings potential the company’s valuations are compelling even after taking into account the price performance. (data as of 08 July)
Baghdad Soft Drink illustrates the opportunities that the AFC Iraq Fund can offer investors as there are many other companies with similar potential which will be highlighting in the months to come.
In June 2015 the AFC Vietnam Fund returned +0.1% which was an underperformance against the Ho Chi Minh City VN Index (+4.1%) and Hanoi VH Index (+2.1%) which rallied strongly last month. June was marked by a very weak market breadth with only a handful of stocks up as buying interest was focused on very few sectors. The rally was primarily driven by several banking stocks and a few heavily weighted index names. Due to the continuation of the strong banking rally until just before the end of the month, and the foreign buying interest in some of the index constituents, there was a relative underperformance of small- and mid-caps in June resulting in the underperformance of the fund.
The two charts above show the current weak picture of the majority of shares. In many stocks local buyers were simply not there and even very small sell orders have been pushing down prices. It has been shown in the past that the market breadth, in the long run, is correlated with economic growth and we therefore expect the stock market to catch up strongly. This should be driven by the return of local Vietnamese investors who make up 80-90% of the market share by volume. On a related note, positive economic news was released with the first half 2015 GDP figures showing that growth has risen to +6.28% which is far above prior estimates and the highest increase since 2009!
Market breadth can also be used as an adequate tool for active managers to generate alpha (the outperformance over the index). The AFC Vietnam Fund has had a consistent outperformance of other Vietnam focused investment vehicles particularly up to the end of June 2015 since the end of autumn 2014. The following chart compares our fund with the much larger and better-known Market Vector Vietnam ETF, which demonstrates this clearly:
The number of undervalued mid and large-caps in our portfolio has been steadily increasing. This has been partially driven by our growing assets under management and the lengthy sideways movement of the overall market. The main focus of our fund will continue to be on fundamental valuations, but the rebalancing of our portfolio is an important and ongoing process in order to quickly adjust to changing market conditions. While our portfolio consists of a number of stocks which are, due to their size, not relevant to the index, we have observed some other fund managers heavily over weighting some individual companies. Due to their size and importance they are now considered strategic positions due to a lack of alternatives. So far we have seen that stocks with a fully-utilized foreign ownership limit (FOL) do not necessarily perform better than the rest of the market. Just a few days ago the government finally announced a relaxation of these foreign ownership limits. Although this will be of great importance and very positive for the stock market, we still need to see if this is really the long awaited and much quoted "game changer". So far we have only seen a positive impact on a few stocks, where it is clearly foreseeable that foreigners will increase their stake immediately after this new regulation is implemented.
Another fund manager, from a leading asset management firm, regards this step (relaxation of FOL) as very timely, since undoubtedly large foreign investors have been interested in entering this market for months, but have been prevented from doing so due to this legislation. The manager in question holds the opinion that the Vietnamese stock market may soon be seen on par with markets such as Thailand (USD 420 billion market capitalization) and Indonesia (USD 345 billion) compared to USD 57 billion in Vietnam. The future will show whether this up and coming country will soon see a reclassification from a frontier market to an emerging market.
It is also interesting to mention that with the current turmoil around the potential Grexit, the Vietnamese stock market hasn’t reacted to it. Once again it clearly shows that Vietnam has a very low correlation to world markets including the Dow Jones, DAX or SMI.
Looking at our fund holdings we have a well-diversified portfolio with a P/E of only 7.3x which is a discount of more than 50% relative to regional and international funds. We believe that puts the AFC Vietnam Fund in a very strong position to outperform in the coming years. We are now expecting that new money inflow will not only be invested in blue chips, but also eventually in medium-sized and smaller companies with a substantial fundamental safety cushion. This "safety margin", as called by the Oracle of Omaha, Warren Buffett, is in the long run the most powerful argument for a market to outperform. We are therefore very happy with our current portfolio, even if in the short term some large caps will be positively impacted by short term market shocks such as the new foreign ownership limits.
Our investments are also roughly equally split between the two main stock exchanges in Vietnam. In terms of total market cap, however, HCMC represents around 85%, where as in the much smaller Hanoi there are still many undiscovered small companies listed. In contrast to when we launched the fund 18 months ago, we now see brokers increasingly following small and mid-caps. Recently a well renowned broker released a market report with stock recommendations for the second half of the year. We were very surprised to notice that around 50% of their recommendations were shares which we are already holding in our portfolio.
In June the fund’s largest positions were: Sam Cuong Material Electrical and Telecom Corp (3.3%) - a manufacturer of electrical and telecom equipment, Bao Viet Securities JSC (2.2%) – a brokerage company, Thuan An Wood Processing JSC (1.7%) – a household furniture manufacturer, VNDirect Securities Corporation (1.7%) – a brokerage company, and Nui Nho Stone JSC (1.6%) – a construction materials company.
As of 30th June 2015 the portfolio was invested in 85 shares and held 7.2% in cash after a significant inflow of new funds this month. The sectors with the largest allocation of assets were consumer goods (34.4%) and industrials (21.8%). The fund’s weighted average trailing P/E ratio was 7.30x, the weighted average P/B ratio was 1.13x and the average dividend yield was 6.07%.
Since the introduction of market reforms that opened up the country to foreign investment in the late 1980s, Vietnam has become one of the fastest-growing economies in the world, averaging annual GDP growth rates of 7-8% throughout the nineties. Agribusiness production has nearly doubled over the past two decades, transforming Vietnam into one of the world's largest exporters of rice and shrimp. Currently, Vietnam is in the midst of a transformation from a manual labour/agrarian-based economy towards one fuelled by skilled-labour. Agriculture production has decreased 5% to account for 20% of GDP over the last five years, while the government has begun to provide incentives for hi-tech companies -- such as Intel, Canon, and Samsung -- to bring skilled manufacturing jobs to Vietnam.
Established in 2000, HOSE currently lists 302 companies and has a market capitalization of USD 50.5 billion and a P/E ratio of 13.9x of as of February 2015. Originally named the Ho Chi Minh City Securities Trading Center (HoSTC) the exchange was officially inaugurated on July 20, 2000, and trading commenced on July 28, 2000. Initially, two equity issues were listed, Refrigeration Electrical Engineering Joint Stock Corporation (REE) and Saigon Cable and Telecommunication Material Joint Stock Company (SACOM). In the beginning, an overall foreign ownership limit of 20% for equities and 40% for bonds was implemented. In July 2003, in a bid to improve liquidity, the government raised the foreign ownership limit for equities to 30% and totally removed the foreign ownership limit of a particular issuer’s bonds. Foreign participants on the Stock Trading Center of Vietnam must register through a custodian licensed to hold securities on behalf of foreigners. Once registered, a securities transaction code is issued to the foreign investor that will permit securities trading. On 8 August 2007, HoSTC was renamed and upgraded to the Ho Chi Minh Stock Exchange.
Hanoi Stock Exchange (HNX), formerly the Hanoi Securities Trading Center (Hanoi STC), was launched in March 2005 and handles auctions and trading of stocks and bonds. The Hanoi STC was renamed to the Hanoi Stock Exchange in 2009. It was the second securities trading center to open in Vietnam after the Ho Chi Minh City Securities Trading Center. The HNX hosts 362 companies and has a market capitalization of USD 6.6 billion and a P/E ratio of 12.7x as of February 2015.
In line with our process of being on the ground in the countries we invest in, Ruchir Desai, Senior Investment Analyst of the AFC Asia Frontier Fund, travelled to Vietnam to meet companies on the ground.
This was my second visit to Vietnam this year with a mission to meet new companies as well as to touch base with existing companies that AFC has already invested in. Meeting companies on the ground helps to get a better picture of the inner workings of businesses and it also gives a good opportunity to get a feel for management and see if there are any factors impacting companies that could be missed from their published numbers alone. The itinerary involved meeting twenty four companies across Hanoi and Ho Chi Minh City with plant/factory visits for certain companies as well. This was the largest number of companies we have met in a single Vietnam trip compared to our previous visits.
The trip started off in Hanoi with the city presently enduring the peak summer season with temperatures ranging from 37-39 degrees Celsius during the day. Typically this is not a good time to be in the sun but coming from the sub-continent it is something that has been handled before. The meetings in Hanoi involved companies in the banking, commercial vehicle, textile, cargo handling, real estate and construction industries.
After some time in the nation’s capital I travelled to a small town in Thanh Hoa province which is about 2.5-3 hours by road from Hanoi. In Thanh Hoa I met with a cement company which the fund has invested in and it provided an opportunity to further look into its operations including checking out its limestone reserves just a few kilometres from the plant. The company in question has a well-established position in North/Central Vietnam.
One thing that I did notice from my previous visits is that the quality of roads has vastly improved. A new highway has been built from Hanoi airport to the city and even some sections of the Hanoi - Thanh Hoa trip were on newly developed highways.
Highway from Noi Bai International Airport (Hanoi) to Hanoi city
The ride to Thanh Hoa is quite picturesque with a mountain range visible for most parts of the journey. Lunch was in Ninh Binh, a small city and the capital of Ninh Binh province. This was not lunch at the usual Vietnamese restaurants one would go to in Hanoi but a local joint on the side of the road which was actually someone’s house with some of the rooms converted into seating areas (no fancy banh mi’s here but more of the local stuff). Restaurant-houses such as this are quite common and can be found in many parts of Vietnam.
Visit to cement plant and limestone quarry
I was keen to meet a company in the automobile sector as automobile sales in Vietnam have been increasing at a fast pace since the beginning of the year. Both passenger cars and commercial vehicle sales are up significantly over the past six months and this is a positive indicator for economic growth. I must add that part of the increase in commercial vehicle sales is due to certain regulatory changes which limit the maximum capacity a truck can load which has led to increasing truck sales. However, passenger car and commercial vehicle penetration in Vietnam is still lower than some of the ASEAN countries.
The meetings in the North went quite well and next I was off to Ho Chi Minh City (HCMC). I am starting to figure out that when flying domestic in Vietnam you can expect your flight to be delayed, usually by an hour minimum. Next time I think it would be wise to take an earlier flight so I can reach HCMC well before midnight, but no complaints here, we are after all a frontier markets fund!
The weather in HCMC was definitely a relief and the meetings involved companies in the textile, transportation, construction, infrastructure, banking, fishery, consumer staple and consumer discretionary sectors. The textile companies I met were quite positive on the benefits of the TPP (Trans Pacific Partnership) as this would lead to increased investments in the Vietnamese textile industry due to duty free access to large markets such as the U.S. and Japan. The TPP is a free trade agreement between the U.S. and eleven other countries including Vietnam and Japan with possible signing of the agreement by end of 2015. The two textile companies I met, one a garment and yarn producer and the other a polyester yarn producer will both be direct beneficiaries of the TPP agreement.
One of the most interesting meetings was with one of our current investments, which is the leading stationery manufacturer and retailer in Vietnam, in which I went to their manufacturing plant. It is one of the mid-sized companies which has a good management team that has been able to establish modern manufacturing capabilities and a well-known brand. The plant visit only increased my confidence in this company’s capabilities.
Overall, from the meetings I had in Hanoi and HCMC, I got a positive outlook from companies in the infrastructure/construction, automobile, textile industries and also certain consumer-focused companies (i.e. stationery, washing detergent and bedding products). The feedback from the companies which supply material to the real estate industry have seen a pick up in demand and the companies which are involved in constructing real estate have a healthy order book and order pipeline. Management teams appear more upbeat about their businesses and this is reflected in the macro numbers released this month which show better GDP growth and industrial production numbers compared to the previous few years. The problems related to the banking industry seem to be diminishing and there looks to be a good possibility that Vietnam will go through a structural growth trend in the coming few years which will be positive for most industries.
I hope you enjoyed reading our monthly newsletter. If you would like any information about our funds or markets please let me know.
With kind regards,
Asia Frontier Capital Limited
This document does not constitute an offer to sell, or a solicitation of an offer to invest in AFC Asia Frontier Fund, AFC Asia Frontier Fund (non-US), AFC Iraq Fund, AFC Iraq Fund (non-US), AFC Vietnam Fund or any other funds sponsored by Asia Frontier Capital Ltd. or its affiliates. We will not make such offer or solicitation prior to the delivery of a definitive offering memorandum and other materials relating to the matters herein. Before making an investment decision with respect to our Funds, we advise potential investors to read carefully the respective offering memorandum, the limited partnership agreement or operating agreement, and the related subscription documents, and to consult with their tax, legal, and financial advisors. We have compiled this information from sources we believe to be reliable, but we cannot guarantee its correctness. We present our opinions without warranty. Past performance is no guarantee of future results. © Asia Frontier Capital Ltd. All rights reserved.
The representative of the AFC Asia Frontier Fund (non-US), AFC Iraq Fund (non-US) and AFC Vietnam Fund in Switzerland is Hugo Fund Services SA, 6 Cours de Rive, 1204 Geneva. The distribution of Shares in Switzerland must exclusively be made to qualified investors. The place of performance and jurisdiction for Shares in the Fund distributed in Switzerland are at the registered office of the Representative.
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