“To conquer without danger is to triumph without glory.”

– Pierre Corneille - one of the three great 17th-century French dramatists.

Lower Crude Oil Prices Are Positive for Key Asian Frontier Countries

Though an elongated ceasefire was announced on 17^th June between the U.S. and Iran, the tit-for-tat strikes in the last few days have made investors a bit nervous with respect to the durability of the ceasefire. However, crude oil prices have remained soft and still remain close to where they were before the conflict began as talks between both sides continue.

A lower crude oil price environment is a very positive sign for key Asian frontier countries that are net oil importers like Bangladesh, Pakistan, Sri Lanka, and Vietnam, as this will help reduce macroeconomic uncertainties, especially inflation.

More normalised crude oil prices and a less volatile geopolitical environment will also allow investors to focus on the positives that have been taking place in our universe so far in 2026 and have been clouded out by the conflict in the Middle East. There is greater political stability in Bangladesh since its parliamentary elections in February 2026; both Pakistan and Sri Lanka have continued to display macroeconomic stability despite the conflict, and Uzbekistan’s capital markets and economic reforms have gathered momentum.

With significantly stronger macroeconomic and political stability and ongoing economic momentum across Asian frontier markets, we would not be surprised to see a very strong second half of 2026 across our markets as investors can now focus more on the fundamentals given that there could potentially be less geopolitical tensions in the Middle East.

In our past newsletters, we have written that Asian frontier markets are in good shape to withstand a higher oil price environment caused by the conflict in the Middle East, and any de-escalation will be positive. Hence, we are now beginning to see stock market momentum once again across our universe.

Lower Crude Oil Prices are Very Positive for Bangladesh, Pakistan, Sri Lanka, and Vietnam

Sovereign Wealth Funds Deserting Frontier Equity Markets?

We have in the past few weeks learned through informal sources that two of the world’s biggest Sovereign Wealth Funds (one from Europe and one from Asia) are either reducing their investments in frontier equity markets or have stopped new investments. This confirms our observation that most frontier equity markets globally see since many years a continued outflow by foreign investors. This is for a passionate frontier investor like Asia Frontier Capital certainly “sad news” but since AFC is also a convinced contrarian investor, we see this news also as a sign that we are not too far from a turnaround in foreign investor interest in global frontier equity markets. Watch this space!

AFC Quarterly Webinar on Thursday, 13^th August 2026

Asian frontier markets are entering the second half of 2026 on strong footing as their macroeconomic and political stability has given them a good platform for growth now that there are lower geopolitical headwinds in the Middle East. Investors will now be able to focus on the positives that have taken place so far in Asian frontier countries in 2026.

Please join us for our quarterly update on Asian frontier markets, where we will discuss these significant developments, such as the performance and outlook for our AFC Asia Frontier Fund, AFC Iraq Fund, AFC Uzbekistan Fund, and AFC Vietnam Fund.

The speakers on the webinar will be:

• Thomas Hugger, CEO & Fund Manager
• Ruchir Desai, Co-Fund Manager of the AFC Asia Frontier Fund
• Ahmed Tabaqchali, Chief Strategist of the AFC Iraq Fund
• Scott Osheroff, CIO of the AFC Uzbekistan Fund
• Vicente Nguyen, CIO of the AFC Vietnam Fund

The webinar will highlight the following key points:

• Drivers of Performance in the first half of 2026
• Potential longer-term winners from the geopolitical tensions in the Middle East
• AFC Asia Frontier Fund Key Market Picks for the second half of 2026
• 2026 Outlook for the AFC Iraq Fund, AFC Uzbekistan Fund, AFC Vietnam Fund
• Key Concerns and Risks

The webinar will be held on Thursday, 13^th August 2026 at 9:00 am NY, 2:00 pm UK, 3:00 pm Swiss and 9:00 pm HK/SG time and will be recorded for viewing at your convenience.

The webinar will run for 75 minutes, including a 30-minute Q&A session following the fund managers' presentations.

If you are unable to attend, please register nonetheless, and we will send you the link to the recording a day after the webinar.

July 2026 Subscription Cut-Off Date

The next cut-off date for subscriptions for our funds will be 27^th July 2026. If you would like to know more about the subscription process, please get in touch with us at This email address is being protected from spambots. You need JavaScript enabled to view it.

Please find below the managers’ comments on each of our four funds for June 2026.

AFC in the Press

AFC Travel

Thomas Hugger, Ruchir Desai, and Peter de Vries are based in Hong Kong, while Andreas Vogelsanger is based in Bangkok, Vicente Nguyen in Ho Chi Minh City, Scott Osheroff in Tashkent, and Ahmed Tabaqchali in London and Iraq. If you have an interest in meeting with our team at their homeports or during their travels, please contact Peter de Vries at This email address is being protected from spambots. You need JavaScript enabled to view it.

AFC Iraq Fund - Manager Comment

The AFC Iraq Fund Class D shares finished its 11^th year track record with an all-time high NAV of USD 2,690.36, after gaining 3.8% in June, underperforming its benchmark, the Rabee Securities RSISX USD Index (RSISUSD index), which gained 5.7% during the month. The fund gained 43.5% in 2024 on the back of a stellar performance in 2023 of +110.4%. The fund is up by 12.1% for the year versus the index, which went up by 8.9%. Since inception, the fund has gained 169.0% while the RSISUSD index is up by 85.6%, an outperformance of 83.4%. The annualised return since inception of the fund stands at +9.4% p.a.

The draft announcement of the Islamabad Memorandum of Understanding between the U.S. and Iran, aimed at ending the US-Israel war on Iran, acted as a catalyst for the market to rise further – its initial 0.9% monthly increase accelerated to 7.8% following the draft’s announcement, before profit-taking pared it down to an increase of 5.7%. While on the surface such an increase on good news would be expected given the dangers that the war and the closure of the Strait of Hormuz posed to Iraq, unlike many other markets, in the immediate aftermath of the war’s start and in the months since then, the Iraqi market was discounting a near-term end to the war. As such, the end of hostilities, if not the war, should have led to a sell-off or at least a pullback to the lower end of its three-year uptrend (chart below) – in line with the market dynamic of “Buy the rumour, sell the news”, as the good news should have been priced in. Crucially, Iraq is not insulated from the potential negative effects of the war, as it’s almost in the eye of the storm, from both geographic and economic perspectives. Moreover, this was not the first time of such seemingly bewildering market behaviour in the Iraqi equity market, as its current behaviour is similar to that following the attack of 7^th October 2023, and the subsequent war on Gaza. In both cases, the market continued to go higher despite the escalation of hostilities – in the first case it was during the series of Israeli and Iranian attacks and counterattacks, while in the second it was during the intensification phase of the current war.

As such, the obvious question is: what gives? The logical answer, as asserted here in the past, most recently in “What Next After a Gangbuster Three-Year Rally?”, is that the market in looking through these conflicts is discounting the economy’s significant structural transformation following the decades of conflict, driven by two key dynamics – the cumulative positive effects of the country’s relative stability and the acceleration of banking adoption that are in the early stages of their transformation of the economy. Moreover, Iraq’s extensive history of over four decades of conflict has made it, and by extension its people and businesses, “anti-fragile” – as can be witnessed by anyone who visited the country in the last few years, or in the strong earnings growth of some of the top companies listed on the Iraq Stock Exchange (ISX) as expressed in the humongous dividends paid out by these companies.

The market’s action, from a technical analysis perspective, continues to be that of consolidating its three-year gains, and that a continued consolidation or a pullback should be within its multi-month uptrend (chart below).

Rabee Securities U.S. Dollar Equity Index and Daily Turnover

In conclusion, while being fully cognizant of the geopolitical risks, we remain convinced that the high quality of the fund’s holdings and their future earnings growth will drive the fund’s performance irrespective of any volatility that the next few days and weeks might bring. The same holds for the two key dynamics discussed above. However, considerable risks remain in that the current pause in the U.S.-Israel war on Iran, following the signing of the Islamabad memorandum, could collapse reigniting a conflict that could escalate considerably beyond the control of participants, direct and indirect, and become an all-out war engulfing the region, filled with all the nightmare scenarios that popped up a few months ago in the media by experts and “experts”.

At the end of June 2026, the AFC Iraq Fund was invested in 8 names and had a cash level of 8.5%. The fund invests in both local and foreign-listed companies that have the majority of their business activities in Iraq. The markets with the largest asset allocation were Iraq (90.0%), Norway (1.4%), and the U.K. (0.1%). The sectors with the largest allocation of assets were financials (60.9%) and communications (19.7%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 7.94x, the estimated weighted harmonic average P/B ratio was 2.23x, and the estimated weighted average portfolio dividend yield was 6.74%. The fund’s portfolio carbon footprint is 0.06 tons per USD 1 mn invested.

AFC Asia Frontier Fund - Manager Comment

The AFC Asia Frontier Fund (AAFF) USD A-shares returned +0.8% in June 2026 with a NAV of USD 2,403.39. The MSCI Frontier Markets Asia Net Total Return USD Index gained +0.3%, as did the MSCI Frontier Markets Net Total Return USD Index, while the MSCI World Net Total Return USD Index lost 0.7%. Year to date, the fund returned +5.0% while the MSCI Frontier Markets Asia Net Total Return USD Index returned +4.4 during the same period. The performance of the AFC Asia Frontier Fund USD A-shares since inception on 30^th March 2012 now stands at +140.3%, while the MSCI Frontier Markets Asia Net Total Return USD Index increased +30.1% during the same period. The fund’s annualised performance over 5 years is +9.7% with a Sharpe ratio of 0.57 and a Sortino ratio of 0.74. The broad diversification of the fund’s portfolio has resulted in low risk with an annualised volatility of 10.6% and a correlation of the fund versus the MSCI World Net Total Return USD Index of 0.51, all based on monthly observations since inception.

The announcement of an elongated ceasefire between the U.S. and Iran was a huge positive for Asian frontier countries, especially the net oil-importing countries like Bangladesh, Pakistan, Sri Lanka, and Vietnam. Given the decline in crude oil prices post the ceasefire announcement, we were not surprised by the rally in our key markets like Bangladesh and Pakistan, which led gains for the fund in June, followed by Iraq and Uzbekistan. The key negative contributors to performance in the month were Kazakhstan, Papua New Guinea, and Mongolia.

Though there has been some escalation in the Middle East in the last few days, crude oil prices remain soft and we expect this to be a positive theme for our markets in the second half of 2026.

AFC was on the ground in Georgia in June. This was our first visit to the country, and we were on the ground in Tbilisi, Batumi, and Kutaisi. The fund holds Lion Finance Group and TBC Bank Group, the two leading banks in Georgia, and we were in Tbilisi to attend Lion Finance Group’s 2026 Investor Day. During our visit, we also met with TBC Bank Group and Georgia Capital.

AFC at Freedom Square in Tbilisi, Georgia

The Dhaka Stock Exchange Broad Index gained +8.0% in June, taking its year-to-date return to +17.0%. The ongoing re-rating in Bangladesh is not only because of the Middle East ceasefire announced on 17^th June but also because of political stability post the parliamentary elections held in February 2026.

We have been flagging for the past few months that we could see a good rally in Bangladesh post parliamentary elections given that a majority government will add impetus to the ongoing macroeconomic stability. With an elongated ceasefire in place in the Middle East, we expect the Dhaka Stock Exchange Broad Index to re-rate further as the market focuses on an earnings recovery supported by very discounted valuations.

Bangladesh has Re-Rated Year to Date as Anticipated

Pakistan’s macroeconomic gains continue with the finance minister announcing another stable budget, which the market has taken positively. One of the key positives from the annual budget was that Pakistan is now in line to post its fourth consecutive primary surplus, and we believe this reflects the commitment from the government to maintain and sustain the macroeconomic gains made in the last few years.

Pakistan is Set to Post Fourth Consecutive Primary Surplus in the Upcoming Financial Year
(as % of GDP)

Sri Lanka’s economic momentum continues with the country reporting 1Q26 GDP growth of +5.1%, which also accounted for one month of the Middle East conflict. As discussed in our previous manager comments, Sri Lanka has economic momentum behind it, and the 1Q26 GDP growth makes it nine quarters in a row of robust economic momentum.

During the month, the fund purchased Digital Mobility Solutions, which owns and operates the leading ride-hailing app in Sri Lanka named PickMe which has a market share of 70% in ride-hailing. Besides ride-hailing, PickMe is also building out its food delivery, marketplace, and logistics services as the overall market in Sri Lanka for such services remains underpenetrated.

Ninth Consecutive Quarter of Robust GDP Growth in Sri Lanka

During the month, we participated in one of Oman’s largest IPOs to date and subscribed for the shares of Oman India Fertiliser Company (OMIFCO). OMIFCO is backed by the state and is the largest fertiliser producer in Oman and among the top 5 in the GCC (Gulf Cooperation Council).

The key long-term positives for OMIFCO are that its largest shareholder is the government-owned conglomerate OQ, and this provides OMIFCO with stable gas supplies at competitive prices. Furthermore, the other two key shareholders in the company are leading Indian fertiliser companies, which gives OMIFCO access to long-term fertiliser demand from India which is its largest market.

However, one of the key attractions for investing in OMIFCO is that its fertiliser production facilities are located well outside the Strait of Hormuz which gives it a very strong geographic advantage over some of its peers whose manufacturing plants are situated within the Strait of Hormuz.

We witnessed how fertiliser supplies were negatively impacted when the Middle East conflict was in full swing, and though there is an ongoing ceasefire, the geopolitical uncertainty surrounding the region puts OMIFCO in a very advantageous geographic position relative to its peers with respect to both its ability to produce and supply a critical product like fertiliser at times of geopolitical stress. Taking a big picture view, we are long-term positive on Oman because of its advantageous geographic location.

OMIFCO Fertiliser Manufacturing Location has a Geographic Advantage Outside the Strait of Hormuz

The best-performing indexes in the AAFF universe in June were Bangladesh (+8.0%) and Iraq (+5.7%). The poorest-performing markets were Oman (−3.2%) and Kazakhstan (−1.6%). The top-performing portfolio stocks this month were the stock exchange operator in Pakistan (+40.0%), a pharmaceutical producer in Bangladesh (+17.6%), a Bangladeshi bank (+11.5%), a consumer electronics manufacturer in Bangladesh (+10.7%), and another pharmaceutical producer in Bangladesh (+10.1%).

In June, the fund participated in the IPO of an Omani fertiliser company and purchased shares of a Sri Lankan technology company while adding to existing positions in Papua New Guinea. The fund also exited a gold mining company in Mongolia.

At the end of June 2026, the portfolio was invested in 63 companies, 2 funds, and held 5.2% in cash. The two biggest stock positions were a bank in Uzbekistan (5.6%) and a cement producer in Pakistan (4.2%). The countries with the largest asset allocation were Pakistan (16.2%), Uzbekistan (13.7%), and Sri Lanka (11.7%). The sectors with the largest allocation of assets were financials (37.5%) and consumer goods (16.8%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 7.40x, the estimated weighted harmonic average P/B ratio was 1.37x, and the estimated weighted average portfolio dividend yield was 4.17%. The fund’s portfolio carbon footprint is 0.33 tons per USD 1 mn invested.

AFC Uzbekistan Fund - Manager Comment

The AFC Uzbekistan Fund Class F shares returned +0.8% in June 2026 with a NAV of USD 2,075.65, bringing the year-to-date return to +37.3%. The return since inception (29^th March 2019) now stands at +107.6%, representing an annualised return of +10.6% p.a.

UzNIF’s Shortfall is Excluding Private Companies with Above-Average Growth

The AFC Uzbekistan Fund’s focus from inception has been to be heavily weighted toward the blue-chips of Uzbekistan, which by nature host the best business moats and management. These have the highest probability of being the most successful compounders in the fast-growing Uzbek market as they continue to reinvest profits in their already dominant market positions. This compounding shows itself in return on equity multiples which range from the double digits to as high as the mid 30% range. At these growth rates, when share prices don’t react, we will witness “multiple compression”. Otherwise, we will see stock prices rise. The latter is the current phase we are in as market access and liquidity continue to improve, being the factor driving the fund’s 10 months’ positive performance. As we can easily foresee another 10-year-plus runway of strong, mid-single-digit economic growth in Uzbekistan, which will accelerate the country towards being the largest economy in Central Asia, overtaking Kazakhstan (something we used to be laughed at for, but which increasingly seems more probabilistic by the day), and therefore, the fund’s core holdings, which are private (not state-owned enterprises) should benefit handsomely.

Digging into the AFC Uzbekistan Fund’s holdings, it currently has 24 investments. The reality is that many of these are small tail positions built in the early days of the fund. Some of these positions have been liquidated over the years, while others we have decided to hold and increase when the opportunity has presented itself. Obviously, patience is required (a given fact for value investors like us) since we are inhibited by some of their small market caps where we do not want to move the share price.

Meanwhile, approximately 75% of the fund’s deployed capital is concentrated in our top four holdings where we see the most upside from both returns on invested capital, management maturity, and potential value unlocks for multi-bagger re-ratings ahead of us, such as maintaining monopolistic market positions, international IPO potential or strategic acquisitions or partnerships with multinational companies.

Therefore, when comparing the AFC Uzbekistan Fund to the Uzbekistan National Investment Fund (UZNF), which an investor can certainly do, and holding for several years, we expect a much greater upside in locally listed equities due to significant growth potential.

Additionally, for those positions which both the fund and UZNF hold, the fund’s torque is much greater. For example, Uzbek Commodity Exchange (TSE: URTS) is approximately only 3.5% of the UZNF NAV while it is arguably the best-run public company in Uzbekistan, trading at a P/E of 8.7x and a dividend yield of 9.3%. A 3.5% weight is a mere rounding error for UZNF, while it is currently 17% of the AFC Uzbekistan Fund. UZNF, which the AFC Uzbekistan Fund holds a position in, will certainly grind higher over the years as its NAV grows, but we believe the much larger opportunity is in the materials, consumer, financial services sectors (which UZNF isn’t as exposed to), as well as future private sector IPOs, of which the first may occur in 2027, and will be accessible through our exposure to local listings. Private sector IPOs are what we ultimately foresee as where we want to have the majority of the fund’s exposure, as this is where we see opportunities for above average returns.

Inflation Reaches a Record Low in May 2026

Inflation expectations among Uzbek households fell to 10.1% for the next 12 months in May 2026 — the lowest reading since the Central Bank of Uzbekistan began publishing the survey. This fall was in line with the CPI falling to 5.5% in May, down from 7% in April 2025, reaching the lowest level since Uzbekistan re-opened to the world in 2016, an impressive feat. Even more impressive is the fact that in 2016 vast swathes of the economy were heavily subsidised, from baking flour for bread, vegetable oil, electricity and water (much more heavily subsidised than today), and other parts of the economy. These subsidies have been largely unwound or are in the process of being so as the cost of goods and services moves toward and above the cost of production in order to incentivise new capital investment. While I do miss the days of USD $1 kebabs and 50-cent beers, as Uzbekistan is naturally not as cheap as during this subsidized regime, the economy is booming off of subsidies being wholly eliminated in some sectors and lifted annually in others, while headline CPI remains in a downtrend, as the below chart shows. While household inflation expectations remain elevated, this is largely due to volatility in foodstuffs where survey respondents noted that meat and dairy, fuel, and fruits and vegetables are the primary pain points.

With the Central Bank having pivoted to an inflation-targeted regime in 2016 and targeting single-digit inflation, which was delayed by several years due to continuous reforms and subsidies across the economy being removed, they are squarely on target. This should in due course allow the central bank policy rate to be lowered from 14% (very likely to have happened already if not for the war with Iran), thereafter negatively affecting interest rates (lower) on term deposits and new bond offerings, leading to continued interest in the equity market. We expect lower rates to also translate to more borrowing and a pickup in credit growth, which will further help stimulate the country’s already robust 2026 GDP growth expectation of between 6.4% and 7.9% depending on the organisation’s estimates one refers to.

This backdrop gives banks and corporate borrowers the opportunity to decrease their cost of capital. As has been the trend for several years, bank term deposits should continue to gravitate toward mid-teen percentage rates, while corporate bond offerings should increasingly occur in the high-teens. These are very attractive real rates, but are nonetheless falling relative to where they used to be. This should accelerate the attraction of the local equity market with companies like URTS with a nominal dividend yield of 9.25% (and a real yield of 3.75%) and the underlying annual growth of the business which has led to annual nominal increases in the dividend per share.

Uzbekistan Inflation Rate

AFC Uzbekistan Tour 2026

AFC is hosting its 5^th AFC Uzbekistan Tour on Sunday 20^th September and Monday 21^st September 2026, bringing existing and prospective investors to experience the reality of Uzbekistan on the ground. This will be a 1.5-day tour starting with a half-day tour of Tashkent on Sunday, followed by a day of meetings with the fund’s portfolio companies on Monday, and concluding with dinner. If you are interested in joining, please write to us at This email address is being protected from spambots. You need JavaScript enabled to view it. to express your interest, and we will follow up with you.

At the end of June 2026, the fund was invested in 24 names and held 4.8% in cash. The portfolio was allocated to Uzbekistan (95.18%) and Kyrgyzstan (0.04%). The sectors with the largest allocation of assets were financials (58.98%) and materials (14.84%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 6.57x, the estimated weighted harmonic average P/B ratio was 0.92x, and the estimated weighted average portfolio dividend yield was 2.51%.

AFC Vietnam Fund - Manager Comment

The AFC Vietnam Fund returned −0.9% in June with a NAV of USD 3,382.78, bringing the 2026 return to −4.7% and the return since inception to +238.3%. This month, the fund underperformed the benchmark, the Ho Chi Minh City VN Index, which lost 0.2% in USD terms. The fund’s annualised return since inception stands at +10.2% p.a. The broad diversification of the fund’s portfolio resulted in an annualised volatility of 14.71%, a Sharpe ratio of 0.56, and a low correlation of the fund versus the MSCI World Index USD of 0.49, all based on monthly observations since inception.

In June, the 2026 FIFA World Cup became a major global focus, attracting the attention of millions worldwide, including investors in Vietnam. While the impact is difficult to quantify, the tournament may have contributed to a quieter trading environment, particularly among domestic retail investors. Market liquidity continued to decline throughout the month, and overall trading activity remained subdued. Meanwhile, the Fund is now trading at an extremely attractive valuation of 8.65x earnings, a price-to-book ratio of 1.17x, and a dividend yield of 4.07%, levels that are close to those seen when we launched the Fund in December 2013.

VN-Index from June 2025 to June 2026

Market Developments

Meanwhile, geopolitical developments in the Middle East remained a key focus for global markets. Although tensions involving Iran, Israel, and the United States persisted, the situation showed encouraging signs of de-escalation during the month. As expectations for a negotiated settlement increased, oil prices retreated from recent highs to below USD 80 per barrel, reflecting improving market confidence. While developments in the region continue to warrant close monitoring, the likelihood of a lasting ceasefire and the full normalization of shipping through the Strait of Hormuz appears to be increasing, which would be supportive for both the global economy and Vietnam.

Despite these positive developments, many domestic retail investors remained on the sidelines, waiting for greater clarity on the conflict's ultimate resolution and the restoration of normal energy trade flows. This uncertainty continued to weigh on market sentiment and trading activity, even as Vietnam’s economic fundamentals remained resilient and growth prospects stayed strong.

Crude Oil Price (USD/b)

Vietnam Opens the Credit Valve Again

One of the most important policy developments in June was the State Bank of Vietnam’s proposal to increase the maximum ratio of short-term funding that banks can use for medium- and long-term lending from 30% to 40%.

While this may appear to be a technical regulatory adjustment, its potential impact on the economy is significant. With total banking system deposits estimated at approximately VND 15–16 quadrillion, the proposed change could theoretically unlock an additional VND 1.5–1.6 quadrillion (USD 55–60 billion) of lending capacity for medium- and long-term loans — equivalent to roughly 12–13% of Vietnam’s GDP. This would provide substantial support for business expansion, infrastructure investment, real estate development, and overall economic growth.

The primary beneficiaries are likely to be banks with strong low-cost funding bases and high CASA ratios, such as Military Commercial Joint Stock Bank (MBB), Techcombank (TCB), and Vietcombank (VCB). These institutions are particularly well positioned to expand lending while maintaining healthy profitability and net interest margins.

In our view, the proposal sends a clear signal that policymakers remain committed to supporting credit growth and ensuring sufficient liquidity to achieve Vietnam’s ambitious economic growth targets. Combined with accelerating public investment and strong foreign direct investment inflows, the measure could become another important catalyst supporting economic activity and corporate earnings growth over the coming years.

Top Banks by CASA Ratios (%)

Beyond the banking sector, greater availability of long-term credit could provide meaningful support for infrastructure development, manufacturing expansion, and private-sector investment. Improved access to project financing may accelerate investment across transportation, energy, logistics, industrial parks, and factory construction, while also supporting order growth for contractors, engineering companies, and construction material producers.

The trade-off, of course, is a greater maturity mismatch, as banks would rely more heavily on short-term deposits to fund longer-term assets. Nevertheless, the proposal sends a strong signal that policymakers are prioritizing economic growth, productive investment, and capital formation. Together with recent measures aimed at improving liquidity and supporting business activity, it suggests that Vietnam is once again opening the credit valve to fuel the next phase of its economic development. In our view, this policy shift could be a key catalyst for both corporate earnings growth and investment activity over the coming years.

Minh Phu Seafood (MPC) Achieves Highest First-Five-Month Profit in Its History

At its 2026 Annual General Meeting, Minh Phu Seafood Corporation (MPC) reported pre-tax profit of VND 489.3 bn for the first five months of 2026, equivalent to nearly half of its full-year target. More importantly, this represents the highest first-five-month profit in the Company’s history, highlighting the strength of the ongoing recovery.

Beyond the strong earnings performance, we believe investors should focus on several key messages from the AGM. First, Minh Phu currently has more than 12,000 tons of undelivered orders, equivalent to approximately 17% of its planned 2026 production volume, providing strong earnings visibility for the coming quarters. Second, the newly commissioned Minh Phu Khanh An processing plant operates at less than 30% of capacity. As labor constraints are gradually resolved, higher utilization could become a major earnings driver from 2027 onward.

Third, management reiterated its long-term ambition of generating VND 1.5–2.0 trn in annual profit through a greater focus on value-added products and continued capacity expansion. Based on these profit targets, MPC is currently trading at only about 3x prospective earnings, an exceptionally attractive valuation for a company with significant growth potential. Another noteworthy development is management’s intention to relist the Company on the Ho Chi Minh Stock Exchange (HOSE), potentially as early as 2027, which could enhance liquidity and investor awareness.

Taken together, record profitability, a substantial order backlog, significant unused processing capacity, ambitious long-term earnings targets, and a potential HOSE relisting suggest that Minh Phu is entering a new phase of growth. In our view, the market has yet to fully recognize the scale of this opportunity.

Ambitious Profit Target of MPC (VND trn)

Vietnam Tourism Reaches Another Record High

Vietnam welcomed 10.6 m international visitors during the first five months of 2026, the highest level ever recorded for the period and already equivalent to 42% of the government's full-year target of 25 m visitors. Notably, May alone recorded nearly 1.8 m international arrivals, the strongest May performance in Vietnam’s history, despite being a traditionally low season.

International Visitors to Vietnam in the First Five Months Reached a Record High

Beyond the tourism industry itself, the continued surge in international arrivals has important implications for the broader economy. Tourism is one of Vietnam’s largest sources of foreign currency earnings, supporting the balance of payments while generating demand across airlines, hotels, restaurants, transportation, retail, and a wide range of service industries. The strong recovery also reflects rising consumer confidence and improving global connectivity with Vietnam.

Equally important, every international visitor represents an opportunity to strengthen Vietnam’s global visibility. As millions of travelers experience the country each year, tourism serves as a powerful marketing channel, enhancing Vietnam’s reputation as a safe, attractive, and increasingly competitive destination for tourism, business, and investment.

The record-breaking growth in visitor arrivals reinforces our view that tourism will remain a key driver of economic growth, foreign exchange earnings, and job creation in the years ahead. According to estimates from the Vietnam National Tourism Administration, the sector could generate approximately USD 25–30 bn in revenue in 2026. With visitor numbers continuing to exceed expectations, tourism is emerging as another important pillar supporting Vietnam’s long-term growth story.

At the end of June 2026, the fund’s largest positions were: Minh Phu Seafood Corp (9.6%) – a seafood company, Agriculture Bank Insurance (7.9%) – an insurance company, Lam Dong Minerals and Building Materials (7.9%) – a building material supplier, Phu Tai JSC (7.0%) – a home and office furnishings company, and Thien Long Group (4.4%) – a manufacturer of office supplies.

The portfolio was invested in 33 names and held 3.3% in cash. The sectors with the largest allocation of assets were financials (39.4%) and consumer (38.2%). The fund's estimated weighted harmonic average trailing 12-month P/E ratio (only companies with profit) was 8.65x, the estimated weighted harmonic average P/B ratio was 1.17x, and the estimated weighted average portfolio dividend yield was 4.07%. The fund’s portfolio carbon footprint is 1.90 tons per USD 1 mn invested.

I hope you have enjoyed reading this newsletter. If you would like any further information, please get in touch with me or my colleagues at This email address is being protected from spambots. You need JavaScript enabled to view it.

With kind regards,

Thomas Hugger
CEO & Fund Manager

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Disclaimer:

This Newsletter is not intended as an offer or solicitation with respect to the purchase or sale of any security. No such offer or solicitation will be made prior to the delivery of the Offering Documents. Before making an investment decision, potential investors should review the Offering Documents and inform themselves as to the legal requirements and tax consequences within the countries of their citizenship, residence, domicile and place of business with respect to the acquisition, holding or disposal of shares, and any foreign exchange restrictions that may be relevant thereto. This newsletter is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law and regulation, and is intended solely for the use of the person to whom it is intended. The information and opinions contained in this Newsletter have been compiled from or arrived at in good faith from sources deemed reliable. Opinions expressed are current as of the date appearing in this Newsletter only. Neither Asia Frontier Capital Ltd (AFCL), nor any of its subsidiaries or affiliates will make any representation or warranty to the accuracy or completeness of the information contained herein. Certain information contained herein constitutes “forward-looking statements”, which can be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of Funds managed by AFCL or its subsidiaries and affiliates may differ materially from those reflected or contemplated in such forward-looking statements. Past performance is not necessarily indicative of future results.

For Switzerland only: This is an advertising document. The state of the origin of the fund is the Cayman Islands. This document may only be provided to qualified investors within the meaning of art. 10 para. 3 and 3ter CISA. In Switzerland, the representative is Acolin Fund Services AG, Maintower, Thurgauerstrasse 36/38, 8050 Zurich, Switzerland, whilst the paying agent is NPB Neue Privat Bank AG, Limmatquai 1 / am Bellevue, 8024 Zurich, Switzerland. The basic documents of the fund report may be obtained free of charge from the representative. Past performance is no indication of current or future performance. The performance data do not take account of the commissions, if any, and fund transfer costs incurred on the issue and redemption of units.

AFC Asia Frontier Fund is registered for sale to qualified/professional investors in Japan, Singapore, Switzerland, the United Kingdom, and the United States. AFC Iraq Fund and AFC Uzbekistan Fund in Singapore, Switzerland, the United Kingdom, and the United States. AFC Vietnam Fund in Japan, Singapore, Switzerland, and the United Kingdom. 

By accessing information contained herein, users are deemed to be representing and warranting that they are either a Hong Kong Professional Investor or are observing the applicable laws and regulations of their relevant jurisdictions.

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