Sustainable Investingin Vietnam

Vietnam Holding Ltd.TBLI Asia, 27 May 2010

1

Large universe of investable companies

“Grow now, clean up later“

Quality of information is spotty at best

Government and market regulators lagging behind OECD

Few offshore listings

Local managers with limited ESG sensitivity

Language and cultural challenges

High ESG pressure

Rapidly increasing pollution

Neglect of human resource development

Low Transparency

The Emerging Market Challenge

2

86 million population and favorable demographics

Pragmatic policies avert overheating in 1H’08

Swift measures after global crisis in 3Q’08

Resilient despite lower exports and capital inflow

Export mix and new markets soften the blow

GDP growth at 5.5% in 2009

Attractive valuation and expected EPS growth

1,700 State-owned Enterprises to be privatized

Political stable and low social inequality

Sources: Fitch Report, HSBC, VNHAM, Economist Intelligence Unit

Vietnam

3

4

Economic Indicators

2005 2006 2007 2008 2009 2010e 2011e

Industrial production (% change y-o-y) 25.5 16 18.2 15.9 8.6 17.5 11.5

Exports (% change y-o-y) 22.5 22.1 22.7 29.9 -10.0 15.0 20.0

Imports (% change y-o-y) 15.7 33.4 41.2 28.5 -14.0 26.0 3.0

Total external debt (% of GDP) 23.8 22.9 23.4 23.6 24.5 25.5 25.0

Source: EIU Vietnam Country Forecast 2010

Limited 2009 damage to export success story

Agricultural price volatility explains discrepancy between export vs. production growth

Large amounts of imports linked to large direct foreign investments

External debt levels continue to be very well managed

5

Sources: GSO, Bloomberg, Credit Suisse

Foreign direct investment flow stays high

Disbursed FDI result in positive BOP

Inflation 9.2% y-o-y as of 30 April, 2010

Foreign Direct Investment Inflation

FDI and Inflation

FDI in % of GDP 2007 2008 2009

India 2.1 3.4 2.4E

China 4.0 3.8 1.6E

Vietnam 9.4 10.7 7.8

1,250

1,000

750

500

200

VNIndex

6

Source: Bloomberg 30 Apr 2010

USD bln Market Cap (left axis) Foreign Market Share 30Dma (right axis)

Price / Earnings At high 2007 : > 40

P/E Growth: > 20% p.a.

Investment Environment

Region Avg Vietnam VNH

17.73 13.04 10.2

Sources: Fitch Report, HSBC, VNHAM, Economist Intelligence Unit

Growth and ESG Development

7

GDP growth in past 20 years second only to China

Accelerates from 5.3% in Q4 2009 to 5.8% in Q1 2010

Growth causes ecological strain which is 10 yr delay compared to China

Deteriorating water and air quality

Disclosure standards applied selectively

Poor monitoring and limited institutions

Developing regulation and political agenda

Bottom-up social and environmental awareness developing

GDP Growth p.a. - BRIC vs. Vietnam

0

100

200

300

400

500

600

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

China Vietnam India Brazil Russia

7.2%

9.8%

6.6%

3.0%

1.7%

Vietnam Holding Asset Management Ltd.Engagement | Analysis | ESG Assessment

Vietnam Holding Ltd. ASrIA | UN PRI | CDP

Value Approach

Macro & Micro

Fundamentals

Due Diligence

Integration Engagement

Research Partnership

Investment Universe

SRI Strategy

8

Sector AnalysisESG IndicatorsExclusion

Key Issues

Call ScheduleRequest for Disclosure

Voting Policy

Action Items

Follow-up

Valuation

Analysis

Portfolio

SelectionINrate VNH Forum

Return

LeadershipKnow-How

Culture

Investment Analysis

ESG and Financial analysis

Investment context

Availability of market data Integrate ESG to investment process

Key Issues

Portfolio Assessment

ESG Grading

Core Indicators

Controversial Practices Proactive and progressing investees

Product Screening

Analysis and Data reveal ESG awareness

ESG Integration

9

Sector Approach

Key Issues Material Investment Proposal and Update

Actionable

Priorities 1. Investment Return

2. Compliance

3. Risk : reputation, disruption of business etc.

4. Opportunities: differentiation, new markets etc.

Monitor improvement through active engagement

Investment Process

10

ESG Assessment

GRADING SYSTEM

Controversial Practices

Score

Business Ethics

Labour

Human rights

Environment

Governance

Reporting

Sustainability Score

124 CRITERIA

38 CRITERIA

Sustainability Grade

PROACTIVE

IN PROGRESS

PASSIVE

clearly above Industry/region

average

average Industry/region

Average Industry/region

Controversial Practices Implications

LOW HIGH

BEST

WORSE

PASSIVE

PASSIVE

PASSIVE

Su

sta

ina

bility

ma

na

ge

me

nt

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Criteria

124 Sustainability Criteria

INrate methodology

Benchmark

MSCI Emerging Markets Asia ex JP

Exclusion

Controversial Practices & Products

Exclusion

Clear Exclusion

Sin Stocks

Weapons and Defense

Child Labor and Forced Labor

Nuclear Energy

Potential Exclusion

Genetically Modified Plant Organisms (GMO)

Production and R&D

Distribution 0% Threshold

Usage

Continuous monitoring of controversial products and practices

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5% Threshold

0% Threshold

Engagement

Direct Engagement

Encouraging disclosure of ESG topics

Board member and analyst call schedule

Monitoring and follow-up on key issues

Communicating rating and improvement

Engagement Cooperation

Investor opinions and information exchange

Voting with likeminded investors (investment pooling)

Filing AGM and EGM resolutions

Addressing larger corporate audience for sector and country issues VNH Forum

13

Wider Engagement

VNH Forum

Building ESG awareness

Senior executives from SOEs

& VNH investee companies

Showcase global best practice

Within Vietnamese context

Covered by local media

14

Forum Topic Partners / Experts Location Participants

Aug 07 Building Value with Corporate Governance

SCIC / HSG Hanoi 125

Apr 08 Strategic Management

SCIC / HSG HCMC 214

Sep 08 Board Management Practices

SCIC / HSG HanoiHCMC

120

Jun 09 Economic Crisis -Lessons Learnt

HSG HCMC 26

May 10 Long-term Value of Investor Relations

SCIC, Bloomberg / ASrIA , Boa Viet Securities, VCCI, JW Thompson

HanoiHCMC

ca. 210

State Capital Investment Corporation (SCIC)

Addressing ESG issues with a large corporate audience

VNH Forum co-organizer

Association of Sustainable and Responsible Investment in Asia (ASrIA)

ESG training workshop

VNH Forum partner

Vietnam Chamber of Commerce and Industry

Founding member of Business Council for Sustainable Development (BCSD)

VNH Forum partner

Vietnam Cleaner Production Centre (VNCPC)

Green Credit Trust Fund

Marketing assistance

Associations and Partnership

15

16

Performance factors:

Value Investment style

Sourcing in over-the-counter market

Corporate Governance emphasis

VNH Portfolio

25.9%

15.8%

15.6%

7.8%

7.1% 6.5%

5.5%

4.7%

4.1%

2.3%

2.1%

1.6%

1.0%

Distribution

Agro-chemicals & fertilizer Construction & Materials

Food & Beverage Health Care

Industrial Goods & Services Banks

Oil & Gas Automobiles & Parts

Personal & Household Goods Utilities

Retail Financial Services

Insurance

-80%

-60%

-40%

-20%

0%

20%

40%

Jul 07

Sep 07

Nov 07

Jan 08

Mar 08

May 08

Jul 08

Sep 08

Nov 08

Jan 09

Mar 09

May 09

Jul 09

Sep 09

Nov 09

Jan 10

Mar 10

May 10

Return on NAV Vietnam Holding -32% DWS Vietnam -43%

PXP Vietnam -46% Dragon VEIL -55%

FTSE ETFs -44%

VNH Foundation

17

Corporate Social Responsibility

Segregates profits from philanthropy

Separate staff & board

Identify projects for maximum benefit

Initial focus on Agent Orange victims

Identifying donors with similar objective

100% of co-sponsor‘s contributions flow to projects

Swiss supervision and Swiss tax exemptions for donors

Background

18

History

Founders: VietNam Holding Asset Mgmt Ltd. / Juerg Vontobel

Objective: Children-related philanthropy in South-East Asia

Incorporated: June 2007 in Zurich, Switzerland

Board: 1 Executive member, 3 independent members, no overlap to investment

Financials

Expenditures to date: CHF 410’000

VNHAM Donations: USD 820’000

Third-party Donations: CHF 115’700

Projects

19

Scholarships in Ninh Tuan Province

Scholarships for 1’720 children. Literacy rate only 74% in Ninh Tuan. Parents can’t afford

primary schools.

Orthopaedic Hospital in Danang

Equipment donation to increase annual operation capacity increase from 780 to 4000.

Training by staff of Bruderholz Hospital, Basel Land CH.

Handicapped Children in Quang Tri Province

Corrective orthopaedic surgery for 173 children in former DMZ. Operations performed in

Danang.

Children Home in Songklah Province, Thailand

Building and financing a functional centre for 30 homeless children and HIV orphans.

Keeping with our diversified value approach

Integrate ESG assessment on material issues

Actively promote best practices

Introduce systematic SRI approach to Vietnam

We improve value for shareholders

Actively engaging with enterprises

Promoting ESG awareness in Vietnam

Achieving superior investment returns

Financially supporting our VNH Foundation

Vietnam’s Integrated SRI Fund

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Contact

VIETNAM HOLDING ASSET MANAGEMENT LTD.

Ho Chi Minh City1202 Fideco Tower81-85 Ham Nghi, District 1VietnamTel. +84 83 823 0465Fax. +84 83 823 4792

ZurichGartenstrasse 19CH - 8002SwitzerlandTel. +41 43 500 2810Fax. + 41 43 500 2815

www.vietnamholding.com | info@vnham.com

Thank you