Asia Frontier Capital (AFC) - October 2015 Newsletter
"An investment in knowledge pays the best interest"
AFC Asia Frontier Fund (AAFF) USD A-shares gained +2.1% in October 2015. The fund this month underperformed the MSCI Frontier Asia Index (+3.2%), the MSCI World Index (+7.8%) and the MSCI Frontier Index (+3.6%) after outperforming the same indexes in September. The year to date performance of the AFC Asia Frontier Fund A-shares stands now at +1.4% versus the MSCI Frontier Asia Index which is down 11.6% during the same period.
The AFC Iraq Fund Class D shares returned -7.0% in October 2015, this was an outperformance against the Rabee USD Index (RSISUSD) which returned -9.9% in USD terms. The fund has outperformed the RSISUSD by +2.6% since inception.
The AFC Vietnam Fund gained +6.9% in October bringing the net returns since inception to +44.2%, which is a significant outperformance of the Ho Chi Minh City VN Index and the Hanoi VH Index, which are up +12.8% and +13.8% respectively in the same period in USD. The year to date performance of the AFC Vietnam Fund stands at +6.3% versus the VN Index and VH Index which have returned +6.6% and -5.0% respectively, in USD terms, over the same time period.
AFC Asia Frontier Fund tops the league tables
AFC Asia Frontier Fund (AAFF) USD A-shares gained +2.1% in October 2015. This month, the fund underperformed the MSCI Frontier Asia Index (+3.2%), the MSCI World Index (+7.8%), and the MSCI Frontier Index (+3.6%) after outperforming the same indexes in September. The year to date performance of the AFC Asia Frontier Fund A-shares stands now at +1.4% versus the MSCI Frontier Asia Index which is down -11.6% during the same period.
Global markets, including frontier and emerging markets, witnessed a recovery this month after the selloff which occurred in August and September. It was not surprising to see a recovery as the fundamentals of most of the larger markets of the fund are in better shape than they were 12-18 months ago. This is reflected in the past two quarterly numbers of companies across the fund’s key markets of Bangladesh, Pakistan, Sri Lanka, and Vietnam. Both consumer and consumer discretionary companies have posted good numbers across these markets as disposable income has improved due to lower oil prices and input costs have decreased due to lower commodity prices. Furthermore, cyclical companies in Pakistan and Vietnam within the industrial/infrastructure related industries have also shown good numbers as industrial activity has picked up while input prices have remained weak.
The fund’s performance this month was led by consumer and cyclical stocks in Pakistan and Vietnam. In Pakistan, the fund’s top holding, a pharmaceutical company, delivered good growth in its latest quarter, leading to a rally in its stock. Pakistani cement companies also showed positive quarterly numbers, helping with the fund’s performance.
In Vietnam, most of the stocks that led to positive performance were infrastructure related. The top performer for the fund in Vietnam was a truck manufacturer followed by a construction company, two cement plays, and a pipe company which supplies products to residential and civil construction projects. Over the past few quarters, the fund has increased its weighting in some of the cyclical names in Vietnam due to the recovery in GDP and industrial activities and this strategy has helped the fund in terms of performance as two of the infrastructure related companies have been amongst the top performers for the fund year to date.
Though Bangladesh did not contribute much to performance this month, the consumer companies there have declared good results for the recent quarter and this reflects our optimistic stance towards the consumer sector in Bangladesh given its rising income levels and large young population. The other drags on performance during the month were Sri Lanka, Iraq, and Mongolia. The Sri Lankan market appears to be waiting for the new budget which will be announced in November, while Iraq and Mongolia continue to be impacted by low resource prices with the additional issue of unrest in Iraq.
The best performing indices within the AAFF universe in October were Vietnam (+8.0%), followed by Pakistan (+6.1%) and Laos / Mongolia (both +0.6%). The poorest performing markets were Iraq with (-9.9%) and Bangladesh (-5.9%). The top-performing portfolio stocks were a Cambodian junior gold mining company (+40%), followed by a Vietnamese truck producer (+39.8%), an oil producer from Myanmar (+33.3%), and a Mongolian construction material company (+29%).
In October, we added to existing positions in Bangladesh, Laos, Mongolia, Papua New Guinea, and Vietnam. We completely exited a construction material company in Vietnam, a bank and an insurance company in Pakistan, a textile company, trading house, and oil distributor in Bangladesh, as well as two mining companies in Mongolia. Additionally we further reduced our holding in one company in Vietnam, one in Bangladesh, and two in Sri Lanka.
As of 31st October 2015, the portfolio was invested in 104 companies, 1 fund, and held 7.4% in cash. The two biggest stock positions are two pharmaceutical companies, one in Pakistan (6.4%) and one in Bangladesh (5.0%). The countries with the largest asset allocation include Vietnam (29.9%), Pakistan (19.5%), and Bangladesh (13.7%). The sectors with the largest allocation of assets are consumer goods (39.3%) and materials (14.3%). The estimated weighted average trailing portfolio P/E ratio (only companies with profit) was 15.65x, the estimated weighted average P/B ratio was 1.53x and the estimated portfolio dividend yield was 3.28%.
For more information about Asia Frontier Capital’s Asia Frontier Fund please click the following links:
The AFC Iraq Fund returned Class D shares returned -7.0% in October 2015, this was an outperformance against the Rabee USD Index (RSISUSD) which returned -9.9% in USD terms. The fund has outperformed the RSISUSD by +2.6% since inception.
In October the AFC Iraq Fund continued to build positions in several Iraq companies in the consumer, telecommunications, and real estate sectors. It made no changes to current foreign listed holdings, which derive the majority of their business from Iraq, in the energy and oil sectors. The fund has only undertaken buying activities and has not yet made any full or partial exits.
The RSISUSD index’s –9.9% decline in October was on the lowest monthly traded value of the year for a total of around USD 9.25 million or 10% lower than the Eid holiday shortened September, which itself set new 6 year lows in total traded value. Index underperformers were market leaders: Baghdad Soft Drinks (-22.2%), Gulf Commercial Bank (-13.4%), Bank of Baghdad (-10.7%) and Mamoura Real Estate (-10.0%). Only two stocks traded up in October. They were Iraq Middle East Investment Bank (+2.0%) and Asiacell (+1.1%). The index was spared further decline by the suspension of trading of North Bank from early August for failure to report audited full year 2014 results, although the company has continued to provide unaudited quarterly numbers. The RSISUSD index is down -23.2% YTD, down 25.3% from its June high and only up 16.6% from the March lows.
Strains on local liquidity from lower oil prices and the short-term dislocations from the recent political reform package continue to drive prices lower. Exasperating these issues was a combination of the reversal of net foreign inflows (data for the month show a decline as measured by proxy portfolio flows) in October after seemingly stabilizing over the last few months and by the diversion of local liquidity to a number of rights issues which amounted to about USD 1.5-2.0 million or almost 10% of the combined traded values for September and October. This led to big price moves on low volumes in a small illiquid market like the ISX.
ISX total monthly traded value in USD up to September
One notable company to analyse is Baghdad Soft Drinks (IBSD), which reported continued strong earnings growth in Q3 2015 up 54% year over year in 4 quarters ending in Q3 2015. The stock is down 45% from the June peak, 22.2% in the month and currently trades at a P/E of about 8.6x and 1.1x book value. The disconnect between stock prices and valuations is a feature of nascent illiquid frontier markets and can present attractive opportunities. Asiacell’s valuations and stock price had such a disconnect over the summer with the stock down 47% from the June peak by September but by early November it is up over 53% from the lows. Realizing that volatility of monthly returns on both the upside and downside is an inevitable part of the Iraq investment story, the focus of the fund is to ride out periods of market noise, no matter how dramatic, whether returns are negative magnified by fear or positive magnified by greed, and focus on the long term story.
Iran’s re-connection with the world continues with the recent Syrian peace conference. Irrespective of public announcements in the weeks ahead, its mere taking place implies that a major alignment of interests of all parties has taken place and that a broad outline of a solution is under consideration. These alignments of interest center on the threat posed by ISIS to the region and the broader spill-over effects in the form of the refugee crisis and the rise of extremism.
Iran’s integration into the world economy would lead to regional stability as we argued in the July newsletter, with Iraq as a prime beneficiary.
Challenges loom in the near term, however, as the government’s reform program is under threat from vested interests whose active rear-guard action over the last two months has evolved into open opposition. The reform package was born out of massive summer demonstrations over the lack of basic infrastructure during the prior leadership’s disastrous 8 years in government. Since then a tug of war ensued between vested interests: the new leadership’s tentative reforms and the continued demonstrations for more robust reforms. The summer’s protests were sparked by the lack of electricity during searing heat, and the last few days of flooding of Iraqi cities and towns following heavy rains due to the same lack of basic infrastructure might provide a new impetus to the demonstrations. The failure to rebuild the country’s infrastructure during the years of the oil boom since 2003 (power, communications, water & sewage treatment, severely damaged in 35 years of conflict) were brought to bear as the floods almost paralyzed cities and brought suffering to large parts of the population. Just as in the summer, most Iraqis blame corruption and cronyism for this failure.
For more information about Asia Frontier Capital’s Iraq Fund, please click the following links:
The AFC Vietnam Fund gained +6.9% in October, bringing the net returns since inception to +44.2%, which is a significant outperformance of the Ho Chi Minh City VN Index and the Hanoi VH Index, which were up +12.8% and +13.8% respectively in the same period in USD. The year to date performance of the AFC Vietnam Fund stands at +6.3% versus the VN Index and VH Index which have returned +6.6% and -5.0% respectively, in USD terms, over the same period.
It is amazing how quickly short-term fears can transform into so called “long-term” purchase decisions by market participants. Last month emerging markets were suffering billions of outflows and yet already this month the same markets recovered significantly. For example, Brazil rose by over 10% in US dollar terms.
Also in Vietnam suddenly everybody started to focus again on all the positive fundamental data (we couldn’t agree more). The two indices, Ho Chi Minh City and Hanoi, recovered significantly from their lows and closed the month up +8.6% and +6.1% respectively. Even the Vietnamese Dong was influenced by this positive sentiment and managed to strengthen a little bit (+0.7%). In particular, the index heavyweight Vinamilk, which is in the process of increasing its foreign ownership limit, positively influenced other stocks with a similar story. But also some of our attractively valued holdings, which reported mostly good Q3 results, experienced a sharp liquidity and stock price increase, which led to the pleasing result that, despite this year’s Dong-devaluations, our NAV climbed to a new all-time high of USD 1,441.65, which is an increase of +6.9%.
Long Term Vietnam VH Index Chart
And as so often noticed, despite the recent NAV increase, we are still in the midst of a long consolidation period, as the 5-year Hanoi chart above demonstrates quite clearly. Also from a macroeconomic point of view there aren’t really any major changes, neither in Vietnam nor in international markets and we will probably continue to have the Fed debate until the end of the diesel engine.
The question remains if we have already seen the big sell-off in September, or if we are in a technical rebound and have to expect that mainly Asian stock markets will see further losses? For sure, there is still a lot of uncertainty around. This would actually be a perfect scenario for a continuation of the recovery in emerging markets, which have been heavily underweighted by fund managers for a considerable time now, after they were everybody’s darling only 5 years ago when they were trading at their highs.
iShares MSCI Emerging Markets ETF
With the increasing positive performance of these markets, professional investors will become under more and more buying pressure in order to reduce their underweight stance or even move towards a neutral weighting. This situation reminds me a little bit of autumn 2011, when the sentiment in European bond markets was equally negative. A very good example is Italian government bonds: at the peak of Eurosceptic (end 2011), a huge sell-off happened, which pushed up yields all the way to 7%.
Italy 10 Year Government Bond Yield
Although Italian macroeconomic data hasn’t really improved much since then and the economy is still almost stagnant, the risks of a euro exit and therefore the government bond yields have reduced significantly - and all this long before Draghi's ECB decided to intervene in the free market to aggressively buy bonds. This action was widely put in question from the beginning since its economic benefit seemed to be minimal at best. It certainly doesn’t make sense to compare the very different issues of very different countries around the world and it is difficult to imagine that they all will be solved in the near future. The non-occurrence of a partly feared crisis such as in 1997/98 does however reduce the pressure on markets significantly.
Should we really see a turnaround in emerging markets, it would be very interesting to know the risks and opportunities in such a scenario. Using the example of Vietnam, which increasingly appears on investors’ radar screens within the Frontier and Emerging Markets asset classes, we have often pointed out that this early stage economy still has enormous upside potential but at the same time it is still not reflected in the market price of our attractively valued holdings. After all, we expect an average growth in 2015 of around 12% in our roughly 80 companies with an average price / earnings ratio of only 7.8. We are often approached by existing and potential investors regarding the associated risk when investing in Vietnam. While Vietnam is politically one of the most stable countries in the region, which is an important factor when relocating production sites to a new country, the recent currency fluctuations have shown the world that Vietnam cannot fully decouple, but it has nevertheless demonstrated a relative stability. When looking at our portfolio, we are certainly very well diversified, mainly to minimize risks in corporate governance, but also to reduce the market impact when trading in low liquidity stocks. The performance since inception has also shown that we thereby achieve a very low volatility in comparison to the HCMC or Hanoi index, even though they themselves compare favourably in terms of fluctuations to developed markets.
Annualized Volatility of various Asset Classes
(Source: Asia Frontier Capital, based on the last 12 monthly observations)
For more information about Asia Frontier Capital’s Vietnam Fund please click the following links:
Following recent democratization measures, including the release of hundreds of political prisoners, cease-fire agreements with ethnic rebels, and the incorporation of long-time human rights champion Aung San Suu Kyi into the political process, it is apparent that Myanmar is determined to become fully integrated into the international community. After being isolated for the better part of the last three decades, Myanmar is emerging as a potentially high growth target market for private equity investment due to its abundance of natural resources, including oil and gas, attractive tourist destinations, and young, well-educated labor force eager to work at regionally-competitive wages. These attributes, coupled with its strategic location bordering China, India, Thailand and Laos, provide Myanmar with the potential to emerge as one of the most dynamic economies of the twenty-first century.
Myanmar - GDP Growth Rate (%)
The Myanmar Securities Exchange (MSEC) was established in June 1996 as a 50-50 joint venture between Daiwa Institute of Research Ltd. (the core information-generating arm of Daiwa Securities group) and Myanmar Economic Bank with an authorized capital of 17 million USD and paid-up capital of 3.4 million USD. The MSEC is the country's second stock exchange after the Rangoon Stock Exchange (RSE), which traded shares of a few British and American stocks in the 1930s. The fledgling exchange, operated by seven European firms, was a secondary OTC market with most of the quotes sourced from Calcutta and Bombay exchanges. It closed down at the outbreak of World War II. The RSE was revived in the late 1950s to trade shares of nine public-private joint-venture corporations. But this OTC market also died in the 1960s when all the firms were nationalized by the military government that seized power in 1962.
Thus far the MSEC has not had great success. Employees who handled over-the-counter transactions manually updated share prices using a whiteboard, a marker pen and a stencil whenever a customer dropped by. Indeed, most people do not even know that the market exists at all. State-owned and private enterprises alike have chosen not to list. Their reasons include the firm's fear of tax liability, fear of loss of control and unfamiliarity with the corporate culture. At present the exchange lists just two companies -- Forest Products Joint Venture Corporation Ltd. and Myanmar Citizen Bank Ltd. - and is considered the world’s smallest, if not most primitive stock exchange. In May 2012, the Myanmar Central Bank (MCB) signed a Memorandum of Understanding (MOU) with the Tokyo Stock Exchange Group Inc. (TSE) and Daiwa Institute of Research Ltd. to coordinate efforts toward establishing a securities exchange and supporting the cultivation of capital markets in Myanmar. The upcoming Yangon Stock Exchange launch is now expected to be in the first week of December 2015 and Myanmar is likely to allow five companies to be listed. Three local public companies, Asia Green Development Bank (AGD), First Myanmar Investment Co Ltd (FMI) and Myanmar Agribusiness Public Corporation (MAPCO), have already been approved for listing and another two are yet to be chosen. More about the development of the new stock exchange below under the travel report.
Useful Link: Myanmar Securities Exchange website: www.msecmyanmar.com
In line with our process of being on the ground in the countries we invest in, Thomas Hugger travelled to Yangon to attend an investment conference and learn more about the Myanmar market.
My last trip to Yangon was a little over two years ago. When arriving at the airport nothing has changed since then – just the immigration staff became more efficient – or maybe their computers are newer and thus faster? Last time it took the staff over 5 minutes to handle one person and fortunately this time it was much faster and I was through immigration in less than 10 minutes.
Outside of the airport, however, the progress since my last trip was visible everywhere as soon as I stepped out of the airport terminal building. Instead of the 20+ year old cars, I saw modern cars everywhere. Most of them were Japanese made (mainly Toyota) or Korean and surprisingly almost all of them are right hand driven despite the fact that cars are driven on the right hand side of the road. The reason is that many of the cars are imported from Japan or sometimes from Thailand where cars are driven on the left hand side. Even the number plates of the cars changed in the meantime. Previously the numbers or letters were in Burmese letters which were not readable for foreigners without specific knowledge. It was also a nice and new experience that the taxi driver switched on the aircon without specifically asking when hiring their service and not charging an additional USD 1 like in the past!
Also the skyline of Yangon is rapidly changing: construction work is going on everywhere: new hotels, office or residential towers, shopping centers, and road construction. On my way back to the airport I was stuck for 45 minutes in front of a building site for a new fly over. Also traffic jams are notorious in Yangon today and an interesting observation is that motorbikes are banned in Yangon (the rumor has it that in the past a general was nearly shot by a gunman driving a motorbike). This does not help to reduce the traffic since public transport barely exists, perhaps with the exception of some rundown old buses.
Construction is everywhere in Yangon
The reason for visiting Yangon this time was an investment conference organized by Myanmar Investments Limited (“MIL”), which is an investment company that listed on the AIM Market in London in June 2013 and which AFC Asia Frontier Fund has had in its portfolio since July this year. MIL is focused on unlisted securities and has made two investments so far: USD 2.85 million into a microfinance joint venture and USD 30 million into Apollo Towers. Apollo builds and operates the towers for communication purposes, mainly to mobile phone operators. Currently there are 6 tower companies in Myanmar which have built 5,038 towers thus far in addition to the 2,200 operated by the government MNO. It is widely expected that an additional 20,000 towers are needed to achieve Myanmar’s mobile penetration target. Apollo has built 1,081 towers so far for Telenor and is executing an order from Telenor to build additional 717 towers. The US government’s OPIC has agreed to a USD 250 million loan to Apollo which should be finalized soon and which will help to finance future growth. The microfinance investee company is operating in Yangon and Bago with 5 branches and extends micro loans to groups of lower income people of up to USD 500 per person at an interest rate of up to 30% per annum. The company follows the successful model of Grameen or BRAC from Bangladesh in providing loans to borrowers within a “group” which cross guarantee each other. The focus is on urban areas and diverse businesses (streetside food vendors, basket makers, phone sellers etc.) in order to reduce the impact of adverse weather events (Myanmar experienced this year some of the worst floods ever in its history).
Asia Frontier Capital believes that Myanmar now provides many opportunities after 50 years of hardly any investments due to the sanctions. Myanmar is a large country (677,000 km2 in size), which is comparable to Texas or France. It is densely populated with 52 million people, the 4th highest population in ASEAN while similarly sized Texas has just 28 million inhabitants. The GDP per capita of USD 1,204 is still low but growing fast (8.5% for example in 2015 and 2016). The median age is 28.3 years and 34.1% live in urban areas. However there are 135 ethnic groups and about 89% are Buddhist. Despite 93.1% literacy rate, the average education is only 9 years which will lead in the short term future to a shortage of qualified staff or middle management. Education is one of the very promising sectors in Myanmar. The country is also very resource rich: oil, gas, copper, gold, coal and especially jade (well-liked by the Asians and especially the Chinese) to name a few. Myanmar has huge tourist potential thanks to its great cultural heritage (especially Bagan, Inle Lake and Mandalay among many others) and beautiful beaches (like Ngapali Beach). In 2014 only 3.1 million tourists arrived in Myanmar which is less then Cambodia with 4.5 million or Thailand with 24.8 million. Interestingly, Myanmar also has a ski resort, Hkakabo Razi, in the north of the country but with no infrastructure like chair lifts yet. Hkakabo Razi is at 5,881 meters the highest mountain in Myanmar and the summit borders Tibet and India.
We believe that the most interesting investment opportunities can be found in consumer goods, education, financial services, infrastructure, telecommunication, textiles, and tourism. A sector we would avoid right now is property since the prices for land in certain areas of Yangon can be as high as in Hong Kong. We expect that many land owners are waiting for the election and will try to sell their land which will create some kind of overhang in the short term future. However there is a considerable shortage of low cost housing and good demand for smaller apartments.
The downside of Myanmar currently is the poor education level and the poor state of the infrastructure. Road density for example is only 4km per 100 km2 land area compared with 36 km in neighboring Thailand. Power production in Myanmar was in 2011 (it has not changed a lot since then) about 7,300 GWh compared with 156,000 GWh in Thailand and health expense per capita was USD 14 compared with USD 264 in Thailand. However the use of mobile phones, especially smart phones, is growing exponentially and prices for a SIM card have dropped from USD 300 in 2011 to now USD 1.50. Almost every person I talked to (taxi driver, hotel employees) had a smart phone and everybody was using Facebook which is now the most important and neutral communication tool for independent opinion (the press and news channels are still censored). But despite smart phones, the internet penetration in 2014 was only around 2.1%.
Investing in Myanmar for foreigners is still not easy. Foreigners are currently not allowed to own land or take up mortgages. The only way to own land for foreigners today is either through a JV or a lease. It is also amazing that in some parts of Yangon the price of land is more expensive than in Hong Kong or Manhattan – but the land prices are finally weakening. A new investment law will replace the “Foreign Investment Law” (hopefully) soon. Unfortunately the new investment law was delayed due to bureaucracy (one panel member admitted it was the Asian Development Bank “ADB”) and it looks like the new investment law will be passed only after the 8th November 2015 elections. Until then most investments need to be done through a JV with a local partner. Interestingly the current investment law does not allow foreigners to be engaged in “trading of goods”.
Foreign and local investors have been waiting for a long time for the Yangon Stock Exchange “YSE” to be opened. The YSE was supposed to start operating in early October 2015 but this was postponed to early December 2015. The YSE will open early December 2015, however that does not mean it will start trading stocks. Most importantly the local company act and the foreign investment act need to be changed in order to allow foreigners to participate in trading. Both acts are currently submitted for approval in the parliament but since the elections are very close these acts will not go through that soon. Additionally, the listing rules, accounting standards and approved auditors among dozens of other rules and regulations need to be confirmed before a regular market can be started. Then the companies can have an IPO or a simple listing. We expect that the first listing will happen at the end of Q1 2016 at the earliest and that by the end of 2016 five to six companies will be listed. Candidates for listing are: FMI – First Myanmar Investment – Serge Pun’s holding company of Yoma Corp which is listed in Singapore and the Japanese backed special economic zone “Thilawa” which had a kind of IPO some months ago. Last but not least the brokers need to be appointed. We have heard that there will be 10 brokers (some of the applicants have received the appointment letter) when the YSE will open its doors having carved out at least USD 10 million each. Until the YSE opens and the two acts are changed, foreign investors can only purchase stocks listed outside of Myanmar which derive most of their business from Myanmar. These are stocks include Yoma (holding company – mainly property), Mega Life Sciences (generic pharmaceuticals), mysquar (mobile messaging and services), Ko Lao Holdings (car distribution), Super Group (convenience food), Interra Resources (oil), and Daewoo International (gas).
Last but not least I would like to write here briefly about the elections which will be held on Sunday, 8th November 2015 right at the time when this newsletter will be sent out. These elections will be the first after the opening of the country. The last election in 2010 was boycotted by Aung San Suu Kyi’s (“Suu Kyi”) party National League for Democracy (NLD) and some ethnic parties. It is debatable if this year’s elections are “free and fair” since 25% of the seats in the parliament belong automatically to the army. Thus Suu Kyi needs 68% of the votes this Sunday in order to gain the majority in the parliament. Despite that according to article 436 of Myanmar’s 2008 constitution all amendments can only be made with the approval of more than 75% off all parliamentary representatives which gives the military an effective veto over any constitutional changes. I talked to various people like taxi drivers, hotel staff and the overwhelming response was “I will vote for NLD” or “We (Myanmar people) love Suu Kyi”. Another reason for a clear victory of Suu Kyi is that many voters will put in a “protest vote” for the last 30 years of misery under the old regime(s). Therefore I would not be surprised that despite the very high hurdle Suu Kyi might win more that 68% of the votes on Sunday, 8th November 2015.
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.
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