Change to Company's policy

Vietnam Opportunity Fund Limited
14 October 2004


Vietnam Opportunity Fund Limited (the 'Company' or 'VOF')

Change to the Company's policy on returning value to shareholders and other
matters

This announcement sets out the Board's proposal to change the Company's policy
on the manner in which it returns realised profits to Shareholders and to
provide Shareholders with information relating to some recent and proposed
changes to the administration of the Company including the appointment of one
new non-executive director to the Board, the appointment of a new member of the
advisory committee and a change to the performance fee payable to the Company's
investment manager VinaCapital Investment Management Limited (the 'Manager').

Change to policy on returning value to Shareholders

The Company's current policy, as set out in its AIM admission document dated 24
September 2003, is to distribute substantially all of its income and capital
gains after administrative expenses and tax to shareholders by way of annually
declared dividends.

The current dividend policy was established with the primary aim of providing
ongoing income and for a faster return of capital to investors. Since this
policy was established, the Company has had several requests from existing and
prospective investors to change this policy. Firstly, some investors would
rather retain their profits in the fund for reinvestment. Secondly, paying
capital gains in the form of a dividend is highly tax inefficient in certain
markets where dividends are taxed much higher than capital gains. Consequently,
it was decided to change the annual dividend to an annual tender offer at net
asset value ('NAV') equal to the amount of realised returns and income available
for distribution. This will achieve the same practical result of paying out
realised returns to those who want it while allowing those who wish to retain
their money in the Company to decline the offer. Having a tender offer at NAV
should also reduce any potential discount that the share price may have to NAV.

Tender Facility

Consequently the Board is proposing that, subject to the passing of the
resolution to be proposed at the EGM of the Company (further details of which
are set out below), the Board will not declare annual dividends but will instead
utilise any profits which would otherwise have been available for distribution
in purchasing by way of an annual tender offer the Company's ordinary shares of
$0.01 each ('Ordinary Shares') at the then prevailing NAV per Ordinary Share
(the 'Tender Facility').

The Tender Facility (which will take the form of a tender offer to all
Shareholders) will be utilised on at least an annual basis. Pursuant to the
Tender Facility (and subject to, where necessary, the approval of Shareholders
in general meeting), Shareholders may request to tender all or part of their
holdings of Ordinary Shares for cash. Repurchase will be effected at the
prevailing NAV per Ordinary Share on the record date chosen by the Board
('Record Date') (less any incidental administrative costs) in a tax efficient
manner, where possible. Subject to the above limitations, this facility will
operate annually commencing in October 2005. Repurchases on any chosen Record
Date will be restricted to such proportion of the Ordinary Shares as the
Directors may decide based upon the amount of realised returns and income
available for distribution with any tender requests in excess of this number
being scaled back pro rata.

The mechanics of the Tender Facility will be as follows:

   • not less than thirty business days before each Record Date, if the
    Company intends to repurchase any Ordinary Shares on that date, it will send
    a short, written circular to Shareholders announcing the extent of the
    tender offer to be made, together with a tender form;

   • Shareholders may then tender some or all of their Ordinary Shares by
    returning the tender form to the Company's Administrators not less than 10
    business days prior to the relevant Record Date;

   • the purchase price will be calculated by reference to the NAV per
    Ordinary Share as at the close of business on the relevant Record Date and
    Ordinary Shares will be repurchased at that price on that date;

   • if the number of Ordinary Shares tendered for repurchase exceeds the
    number of Ordinary Shares which the Company has the resources to repurchase,
    tenders will be scaled back pro rata in proportion to the excess amount
    tendered; and

   • cheques or wire transfers are expected to be despatched (at the
    recipient's option and risk) within 10 business days of the relevant Record
    Date.

The Company makes no statement regarding the effect of the Tender Facility on
the tax position of Shareholders' investments in the Company and Shareholders
who are in any doubt about the effect of this change to the Company's policy in
terms of returning value to Shareholders are advised to seek advice from their
professional tax advisers.

Authority to purchase Ordinary Shares

Under the terms of the Company's Articles of Association the ability of the
Company to purchase its own Ordinary Shares, and therefore the operation of the
Tender Facility, is dependent upon the approval by Shareholders of the method of
purchase by way of an ordinary resolution. Accordingly, at the end of this
document Shareholders will find a notice convening the EGM to be held at 9.00
a.m. (Vietnam time) on Wednesday 27 October, 2004 at the offices of VinaCapital
Investment Management Limited, 17th Floor, Sun-Wah Tower, Ho Chi Minh City,
Vietnam at which an ordinary resolution will be proposed to grant the Directors
the power to purchase the Company's issued Ordinary Shares at a minimum price
equivalent to the prevailing NAV per Ordinary Share on the relevant Redemption
Date ('Buy-back Authority') and to approve in general terms the proposed change
to the Company's policy on returning value to Shareholders.

Realised returns for the financial year ending 30 June 2004 will still be paid
as a dividend to Shareholders as at 30 June 2004, which will be declared at the
Company's forthcoming annual general meeting.

Extraordinary General Meeting

Whether or not you intend to attend the EGM Shareholders are requested to
complete and return the enclosed form of proxy in accordance with the
instructions printed thereon as soon as possible and in any event, so as to be
received by HSBC Trustee (Cayman) Limited not later than 48 hours before the
meeting. The completion and return of a form of proxy will not prevent a
Shareholder from attending the EGM and voting in person if he/she wishes to do
so.

The quorum for the EGM is two Shareholders present in person or by proxy and
entitled to vote at the meeting. In the event that a quorum is not achieved the
EGM will be adjourned until the same time on Wednesday 3 November, 2004 and the
adjourned EGM will be held at the same place as the original meeting. The quorum
for such adjourned meeting is one Shareholder present in person or by proxy.

If you have any queries regarding any of the meetings please contact the Manager
on [phone]. (Please note that the Manager can only give procedural advise
in relation to the meeting and is not authorised to provide investment advice).

Appointment of New Director and Adviser

At its board meeting to be held on 27 October 2004 the Board intends to appoint
Mr William Vanderfelt as a non-executive director of the Company, effective as
of that date.

Mr Vanderfelt is a highly experienced institutional investor with over 30 years
experience as Managing Partner of Petercam, the leading Benelux investment bank,
in charge of Institutional Research and Sales. Mr Vanderfelt is an experienced
fund investor and acts as a board director of several listed funds. He is a
passionate proponent of good corporate governance and will help the Company
ensure that it maintains best practice in its corporate governance. His
appointment to the Board will also create an even balance between its
independent and non-independent directors. The Company aims to add one further
independent director in the near future.

In addition the Manager has appointed Mr Markus Winkler to its advisory
committee. Mr Winkler as Managing Director of VGZ has over 30 years of direct
investment experience with particular focus on emerging market closed-ended
funds. He is a founder-member and a former Vice-President of the Swiss
Association of Asset Managers as well as a founder and Board member of the Swiss
Investors' Association and brings a wealth of experience and relationships to
the advisory committee.

Amendment to Manager's Performance Fee

Under the current investment management agreement between the Company and the
Manager dated 24 September 2003 (the 'IMA') the Manager is entitled to receive a
performance fee amounting to 20 per cent. of the returns received by the Company
in respect of individual investments over an annualised hurdle rate of 10 per
cent. compounded for each year or fraction of a year during which such
investment is held. Instead of the performance fee operating at the time a
specific investment is realised, the Board and the Manager have agreed to amend
the terms of the IMA in order to simplify the performance fee with effect that
the performance fee will be paid on an annual basis at the rate of 20 per cent.
of the total increase of the NAV of the Company during the course of a year with
a high water mark over an annualised compounding hurdle rate of 10 per cent.

This change will ensure that the performance fee is paid on the total absolute
performance of the Company from inception rather than being based upon the
performance of individual investments, which the Board believes will align the
Manager's interests more fully with that of the Company's investors and is more
in line with industry practice.

As the amendment to the IMA represents a 'related party transaction' for the
purposes of the rules of the Alternative Investment Market of the London Stock
Exchange plc (the 'AIM Rules') the Board has consulted (in accordance with the
provisions of the AIM Rules) with its AIM nominated adviser, Grant Thornton
Corporate Finance, with regard to the proposed amendment to the IMA and is
consequently satisfied that the amendment is fair and reasonable in so far as
Shareholders are concerned.

Change of Broker

With effect from 1 November 2004, following the expiry of the notice period
under its current brokerage arrangements with Collins Stewart Limited, the
Company will be formally appointing LCF Rothschilds Securities Limited as its
market broker.

LCF Edmond de Rothschild Securities Limited in London is a fully owned
subsidiary of Banque Privee Edmond de Rothschild in Geneva. It is a leading
broker for listed emerging market funds, covering Eastern Europe, Asia and Latin
America. It has a devoted team of five people with an aggregate of over fifty
years experience in the sector.

Change to NAV Reporting

In order to increase transparency in the Company's share price the Board has
decided that the Company's NAV should be quoted on a monthly basis rather than
on the current quarterly basis. The Board feels that this change to the
Company's reporting procedures will be advantageous for existing and prospective
Shareholders and is part of the Company's ongoing review of its Shareholder
relations strategy.

Copies of this circular have been sent by the Company to shareholders today and
will also be available, free of charge from the offices of Grant Thornton
Corporate Finance, Grant Thornton House, Melton Street, Euston Square, London
NW1 2EP or, Unit 1703, Sun Wah Tower, 115 Nguyen Hue Boulevard, District 1, Ho
Chi Minh City, Vietnam, for a period of 30 days from the date of this
announcement.



Dated 14 October 2004




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