Fund Launches

RNS Number:1618E
London Asia Capital PLC
07 June 2006


7 June 2006


                    LONDON ASIA CAPITAL PLC ("LONDON ASIA")
                                      
                FUND LAUNCHES AND EXPANSION INTO NEW TERRITORIES
                   NEW VIETNAM FUND AND EXPANSION IN MONGOLIA


London Asia Capital plc ("London Asia"), the Asia focused merchant banking
group, is pleased to announce that it has entered into a memorandum of
understanding with Vietcombank Fund Management ("VCBF") to launch a fund
("proposed fund") for investment in Vietnam. Additionally, London Asia announces
that it has expanded its operations in Mongolia, with Bodi International
("Bodi"), the leading Mongolian private financial services group, taking a stake
in London Asia's recently formed subsidiary, London Asia Capital Mongolia Ltd
("LACM"). LACM intends to launch a fund focused on pre-IPO opportunities in the
region.


Vietnam
VCBF is a Vietnamese Government licensed fund management business, which is a
joint venture between the Bank for Foreign Trade of Vietnam ("Vietcombank or
"VCB"), a leading bank in Vietnam, and Singapore incorporated Viet Capital
Holding ("VCH"). It already manages one of the first on-shore funds for
investment in Vietnam. The VCBF team, headed by Dr LIM Boh Soon, has significant
experience of investing in South East Asia, and consists of professionals from
Rothschilds, UBS Investment and UBS Capital, VCB, UOB, and KPMG.

The proposed fund will focus on seeking capital growth via investment in pre-IPO
opportunities or late stage companies in Vietnam. It will be jointly managed by
London Asia and VCBF, with VCBF providing access to deal flow and local due
diligence, and London Asia providing its expertise in exiting and financing
Asian investments through international markets.

The Fund will invest in Vietnamese businesses which are being privatised as part
of the Vietnam governments move to a more market economy, and businesses looking
to list on capital markets worldwide. The manager will seek businesses, whose
products and services will benefit from Vietnam's economic growth, increasing
wealth and anticipated entry into the World Trade Organisation later this year.
Vietnam has a young, well-educated, skilled and motivated work force and low
operating costs.

Dr LIM Boh Soon, Chief Executive of VCBF said: "I have known the London Asia
management team for many years, and believe that matching their experience and
access to international markets and finance, with our access to high quality
deal flow and ability to perform due diligence in a rapidly developing market
provides us with a unique platform to access the opportunities available in
Vietnam."


Mongolia
Bodi is a holding company for a number of businesses in Mongolia, including
Golomt Bank, the second largest bank in Mongolia by assets, and the largest
insurance company in Mongolia. Golomt bank, formed in 1996, has net assets of
#167 million and is the largest issuer of Visa and Mastercard credit cards in
Mongolia. Bodi has acquired 70% of London Asia's existing Mongolian partner, BIG
Ltd. LACM is 60% owned by London Asia, and 40% owned by BIG.

LACM has been formed to explore opportunities in the energy and environment,
tourism, logistics, banking, insurance, commodities, and real estate sectors in
Mongolia. Working together with Bodi, LACM intends to raise a fund to invest in
pre-IPO opportunities available in the region.

Mongolia has large deposits of copper, coal, uranium and other commodities,
which are at a relatively early stage of exploration. Mongolia, situated on the
border of China, has benefited substantially from the economic growth of China,
which has become a major customer for its commodities and a significant
investor, as China seeks to satisfy its increasing demand for raw materials.
Mongolia has a freely traded currency, and places few restrictions on foreign
investment and ownership.

Luvsanvandan Boldkhuyag, director of Bodi, said: "Mongolia's vast natural
resources, for which China represents a ready market, rising standard of living,
and relatively undeveloped commercial sector present a number of opportunities,
particularly in the sectors in which we and London Asia are strongest, namely
financial services, energy and environment and consumer products."

Simon Littlewood, Chief Executive, London Asia Capital said: "London Asia is
expanding into new regions which are directly benefiting from China's economic
growth. Mongolia and Vietnam offer opportunities to replicate our success to
date in partnering with major players to gain access to quality deal flow, raise
money to fund pre-IPO opportunities, then list companies on international
capital markets where appropriate."

He added: "Vietnam's anticipated entry into WTO, reform of its financial and
capital markets, low cost, educated workforce, and shortage of capital as a
result of previous trade restrictions and rapid economic growth make it an ideal
place to invest. Mongolia has large deposits of copper, coal, uranium and other
commodities, which are at a relatively early stage of exploration, and is also
developing burgeoning logistics, tourist and financial services industries,
which offer exciting investment opportunities."


For further information please visit www.londonasia.com or contact:

John West/Matt Ridsdale             Simon Littlewood
Tavistock Communications            London Asia Capital plc
Tel: [phone]                  Tel: [phone]



Notes to Editors

Background on Vietnam
Vietnam, located in the Southeast Asia and alongside China, has a population of
around 80 million. Vietnam is one of the fastest-growing economies in the world:
GDP growth averaged 6.8% per year from 1997 to 2004, with growth hitting 8.4% in
2005.

Vietnam's membership in the ASEAN Free Trade Area (AFTA) and entry into force of
the US-Vietnam Bilateral Trade Agreement in December 2001 have led to even more
rapid changes in Vietnam's trade and economic regime. Vietnam's exports to the
US doubled in 2002 and again in 2003. Vietnam hopes to become a member of the
WTO in 2006.

Agriculture has developed significantly, transforming Vietnam from a net food
importer to the world's second-largest exporter of rice. Vietnam also shifted
away from a command economy to a more market-oriented economic model, improving
the quality of life for many Vietnamese. Per capita income more than doubled
from $220 in 1994 to $485 by 2003.


About Vietcombank (for additional information, visit www.vietcombank.com.vn)
Established in 1963, the Bank is the oldest commercial bank for external affairs
in Vietnam. It is ranked as one of 23 special corporations by the State, with p
aid-up capital of 3,955 billion Vietnamese Dongs. The Bank is one of the first
members of the Vietnam Bankers Association and member of other associations
including the Asian Bankers Association and Asean Pacific Banker's Club. Five
years in a row (2000 to 2004) the Bank has been awarded "Bank of the Year in
Vietnam" by The Banker.

In parallel with its development of banking products and services, the Bank has
continued to expand its network in order to better serve its customers' demand.
By the end of 2004, the group consisted of:

*26 domestic branches, 41 sub-branches and 47 transaction counters;

*1 finance company and 3 representative offices overseas;

*3 subsidiaries (Vietcombank Securities Company, Vietcom bank Leasing  
 Company, Vietcombank Assets Management Company);

*Investment in 6 enterprises (2 insurance companies, 3 real estate 
 companies and 1 technology investment company), 7 banks and 1 credit fund;

*Participation in 4 joint-venture enterprises;


The Bank has established correspondent relationships with over 1,250 banks in
nearly 90 countries and territories around the world.


About Mongolia
Mongolia, which lies between China and Russia, has a population of 2.8 million,
with GDP pr head of around US$700. The contribution to GDP of different sectors
has changed substantially over the last decade. Its services sector displaced
agriculture to become the largest sector, accounting for over 60% of GDP. Since
1992, the economy has been shifting from a centrally planned to a market-based
economy. A series of reforms in financial services are taking place in Mongolia
in order to establish the foundations of a market-based financial system. The
Mongolian currency is fully tradable, and there are few restrictions on foreign
investors.

Mongolia's system of democratic government, independent judiciary, market
economy and liberal financial services system make it the ideal base from which
to capitalise on the increasing trade between China and Russia. The Trans
Siberian railway, which passes through Mongolia, is the shortest route to
deliver goods between Russia and China.

China and Mongolia have signed a series of trade agreements, including an
agreement which gives Mongolian businesses the right to sell energy into the
Chinese market. Mongolia's border is only 500 km from Beijing.

Mongolia has extensive mineral deposits, and most recent foreign investment has
been in the mining sector. Mining accounts for a large portion of Mongolia's
total industrial exports. Approximately 200 deposits of metals and minerals are
currently mined in Mongolia. The country's annual coal capacity of eight million
tons could be greatly increased with foreign investment in equipment,
maintenance and safety. There are 22 known oil fields, 13 of which are partially
contracted by firms from the UK, Canada, Australia and the United States.




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