United ASEAN Fund. Semi Annual Report. for the half year ended 30 th June 2018

Transcription

1 United ASEAN Fund Semi Annual Report for the half year ended 30 th June

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3 MANAGER UOB Asset Management Ltd Registered Address: 80 Raffles Place UOB Plaza Singapore Company Registration No. : Z Tel: DIRECTORS OF UOB ASSET MANAGEMENT Lee Wai Fai Eric Tham Kah Jin Peh Kian Heng Thio Boon Kiat TRUSTEE State Street Trust (SG) Limited 168 Robinson Road #33-01, Capital Tower Singapore CUSTODIAN / ADMINISTRATOR / REGISTRAR State Street Bank and Trust Company, acting through its Singapore Branch 168 Robinson Road #33-01, Capital Tower Singapore AUDITOR PricewaterhouseCoopers LLP 7 Straits View, Marina One East Tower, Level 12 Singapore

4 A) Fund Performance 3 mth % Growth 6 mth % Growth 1 yr % Growth 3 yr Ann Comp Ret 5 yr Ann Comp Ret Since Inception 10 yr 2 June 1986 Ann Ann Comp Comp Ret Ret Fund Performance/ Benchmark Returns United ASEAN Fund Benchmark Source: Morningstar. Note: The performance returns of the Fund are in Singapore Dollar based on a NAV-to-NAV basis with dividends and distributions reinvested, if any. The benchmark of the Fund: Jun 86 Jan 93: 100% DBS 50; Feb 93 Aug 98: 50% DBS 50, 50% KLEMAS; Sep 98 May 00: 100% DBS 50; Jun 00 May 06: 50% STI Index, 50% KLEMAS; Jun 06 Jun 13: 50% STI Index, 50% KLCI;Jul 13 Present: MSCI South East Asia. For the six months ended, the net asset value of the Fund fell 8.95% compared with a 7.67% decrease in the benchmark MSCI South East Asia Index. The Fund s underperformance for the period under review was largely attributed to negative stock selection. On a stock basis, the Fund s investments in DBS Group (Singapore), PTT Exploration & Production (Thailand), Mitra Adiperkasa (Indonesia), Top Glove (Malaysia) and Wilcon Depot (Philippines) were key contributors to performance. However the outperformance was offset by the following key detractors: Gamuda Bhd, CIMB Group (Malaysia), Telekomunikasi Indonesia (Indonesia) and Metropolitan Bank & Trust (Philippines). Country allocation contributed a positive effect. Our overweight position in the Singapore market contributed positively as the market outperformed. Likewise, the Fund s underweight position in the Philippines contributed positively given the Philippines market s underperformance. However the Fund s underweight position in Malaysia detracted as this market eventually outperformed its ASEAN peers. As at end June, the Fund was 96.87% invested. In terms of markets, the Fund s allocation stood at Singapore (34.45%), Thailand (20.47%), Malaysia (17.88%), Indonesia (15.59%) and Philippines (8.48%), with the remainder in cash (3.13%). In terms of sectors, the Fund s allocation stood at Financials (41.35%), Consumer Discretionary (10.20%), Real Estate (9.89%), Industrials (8.60%), Consumer Staples (7.94%), Telecommunication Services (6.17%), Materials (4.97%), Energy (4.64%) and others (3.11%), with the remainder in cash (3.13%). Economic and Market Review Despite a strong start in January, equity markets in Asia underperformed their global counterparts as risk sentiment dampened. Asian markets erased gains made from 2017 as volatility levels spiked beginning -2-

5 A) Fund Performance (continued) in February with the corrections griping the entire market. A wave of concerns surfaced during the period; an escalation of trade spats between the US and China, an emerging markets rout which threatened to spread to Asia, fears of normalising US interest rates that would encourage outflows from the region. 10-year US Treasury yields rose significantly during the period as the US Federal Reserve (Fed) raised interest rates twice (in March and June) with a new Fed Chairman who voiced a preference for communicating better guidance for the markets. With the exception of the Japanese Yen and Malaysian Ringgit, the US dollar strengthened against nearly all Asian currencies. The Indian Rupee and Philippine peso lost the most against the greenback. In the commodities market, metals climbed-copper, aluminium, gold and zinc rallied. Higher oil prices also weighed on Asian markets. Oil sustained gains after a series of Organisation of the Petroleum Exporting Countries (OPEC) made efforts at production cuts to drain a global glut of supply. Prices rose amid escalating geopolitical tensions and fears of supply disruptions in the energy rich Middle East. The earnings revision for Asian markets which was strong at the start of has trailed global markets, largely due to moderating export growth momentum. Southeast Asia witnessed the brunt of the selloff despite stronger FX reserves and corporate balance sheets as compared to the broader Emerging markets, in particular, Indonesia and Philippines with twin deficits and lower foreign currency (FX) reserve coverage were the hardest hit. Closer to home, South East Asia markets lagged behind their counterparts in North Asia. Singapore and Malaysia were the best performing markets. In Singapore, the environment of rising interest rates proved to be beneficial to the three local banks which recorded stronger net interest margins. The recovery in the oil price also helped to alleviate investor concerns on the banks loan exposure to the depressed offshore and marine sector. Despite an increase in transaction volumes and prices, Singapore s listed real estate developers failed to outperform as concerns grew that the government could introduce more property cooling measures. Over in Malaysia, a new government was elected to replace the incumbent party during the General Elections in May. Certain sectors such as the infrastructure and construction sectors were negatively affected after the new government announced wide ranging reviews and delays or cancellations of major projects. However the broader market still outperformed. The Philippines registered the biggest losses. Headwinds from a peso depreciation and a record trade deficit spooked investors. Meanwhile, the Indonesia market saw little reason to cheer as its trade balance fell into a deficit on rising oil and gas imports. After initial gains in the first two months, Thailand reversed its performance despite growing domestic demand and accelerating export growth. Outlook and Fund Strategy The earnings revision in ASEAN that was strong at the beginning of has trailed global markets, largely due to moderating export growth momentum. Despite this, earnings revisions remain positive and market valuations are still relatively reasonable. -3-

6 A) Fund Performance (continued) Despite improved underlying economic fundamentals in ASEAN, market performance has been impacted by heavy foreign selling. The US dollar strength and the emerging market (EM) contagion triggered by Turkey and Argentina has resulted in capital flight from ASEAN, especially from Indonesia and the Philippines. On the US and China trade war, while we assess the growth and earnings impact on the market is muted, a long drawn out trade war and escalating retaliation beyond trade is damaging for both countries and all market participants. Our base case remains that there should not be a full blown trade war, and there should be some negotiated settlement assuming rationality from both sides. Nonetheless, we acknowledge that trade tensions may persist for some time and will be an overhang on the ASEAN markets in the near term. In ASEAN, we favour countries with stable currencies, current account surpluses and positive earnings revisions. The main risks are trade wars, spikes in 10-year UST yields, a strengthening US dollar and geopolitical challenges that would derail global growth momentum. We continue to remain constructive on ASEAN given the backdrop of still healthy global GDP growth, the region s continued positive earnings revisions and the robust longer term growth drivers of positive demographics and consumption. -4-

7 B) Investments at fair value and as a percentage of net asset value ( NAV ) as at under review classified by i) Country Fair Value (S$) % of NAV Indonesia 11,550, Malaysia 13,241, Philippines 6,284, Singapore 25,517, Thailand 15,166, Portfolio of investments 71,760, Other net assets/(liabilities) 2,316, Total 74,077, ii) Industry Fair Value (S$) % of NAV Consumer Discretionary 7,559, Consumer Staples 5,883, Energy 3,435, Financials 30,632, Health Care 1,065, Industrials 6,369, Materials 3,680, Real Estate 7,325, Telecommunication Services 4,573, Utilities 1,235, Portfolio of investments 71,760, Other net assets/(liabilities) 2,316, Total 74,077,

8 B) Investments at fair value and as a percentage of net asset value ( NAV ) as at under review classified by (continued) iii) Asset Class Fair Value (S$) % of NAV Quoted Equities 71,760, Other net assets/(liabilities) 2,316, Total 74,077, iv) Credit rating of quoted bonds N/A C) Top Ten Holdings 10 largest holdings as at Fair Value (S$) Percentage of total net assets attributable to unitholders % DBS GROUP HOLDINGS LTD 5,588, UNITED OVERSEAS BANK LTD 4,248, OVERSEA-CHINESE BANKING CORP LTD 3,201, BANK CENTRAL ASIA TBK PT 3,044, KEPPEL CORP LTD 2,502, SINGAPORE TELECOMMUNICATIONS LTD 2,156, BANK MANDIRI PERSERO TBK PT 1,955, AYALA LAND INC 1,936, CIMB GROUP HOLDINGS BHD 1,840, UOL GROUP LTD 1,828,

9 C) Top Ten Holdings (continued) 10 largest holdings as at 2017 Percentage of total net assets attributable to Fair Value unitholders (S$) % UNITED OVERSEAS BANK LTD 5,104, TELEKOMUNIKASI INDONESIA PERSERO TBK PT 4,361, DBS GROUP HOLDINGS LTD 3,940, ASTRA INTERNATIONAL TBK PT 3,227, SINGAPORE TELECOMMUNICATIONS LTD 3,112, UOL GROUP LTD 2,979, BANK MANDIRI PERSERO TBK PT 2,963, OVERSEA-CHINESE BANKING CORP LTD 2,913, MALAYAN BANKING BHD 2,718, BANK CENTRAL ASIA TBK PT 2,493, D) Exposure to derivatives i) Fair value of derivative contracts and as a percentage of NAV as at N/A ii) There was a net realised loss of SGD 6,218 on derivative contracts during the financial period from 1 January to. iii) Net gains/(losses) on outstanding derivative contracts marked to market as at N/A E) Amount and percentage of NAV invested in other schemes as at N/A F) Amount and percentage of borrowings to NAV as at N/A -7-

10 G) Amount of redemptions and subscriptions for the financial period from 1 January to Total amount of redemptions SGD 11,016,065 Total amount of subscriptions SGD 1,978,481 H) The amount and terms of related-party transactions for the financial period from 1 January to i) As at, the Fund maintained current accounts with its related parties as follows: State Street Bank and Trust Company, Singapore Branch Cash and bank balances SGD 3,023,734 United Overseas Bank Limited Margin accounts SGD 136,350 ii) Investment in Initial Public Offerings managed by UOB Group N/A iii) As at, the brokerage income earned by UOB Kay Hian Pte Ltd was SGD 10,

11 I) Expense ratios 2017 $ $ Total operating expenses 1,144, ,247 Average daily net asset value 87,366,246 89,731,700 Expense ratio 1.31% 1.10% Note: The expense ratio has been computed based on the guidelines laid down by the Investment Management Association of Singapore ( IMAS ). The calculation of the Fund s expense ratio at was based on total operating expenses divided by the average net asset value respectively for the financial period. The total operating expenses do not include (where applicable) brokerage and other transaction costs, performance fee, interest expense, distribution paid out to unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received. The Fund does not pay any performance fee. The average net asset value is based on the daily balances. J) Turnover ratios 2017 $ $ Lower of total value of purchases or sales 27,008,718 22,180,931 Average daily net assets value 83,947,339 90,942,422 Turnover ratio 32.17% 24.39% Note: The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The calculation of the portfolio turnover ratio was based on the lower of the total value of purchases or sales of the underlying investments divided by the average daily net asset value. K) Any material information that will adversely impact the valuation of the scheme such as contingent liabilities of open contracts N/A L) For schemes which invest more than 30% of their deposited property in another scheme, the following key information on the second-mentioned scheme ( the underlying scheme ) 1 should be disclosed as well i) Top 10 holdings at fair value and as percentage of NAV as at and 2017 N/A ii) Expense ratios for the financial period ended and 2017 N/A -9-

12 L) For schemes which invest more than 30% of their deposited property in another scheme, the following key information on the second-mentioned scheme ( the underlying scheme ) 1 should be disclosed as well (continued) iii) Turnover ratios for the financial period ended and 2017 N/A 1 Where the underlying scheme is managed by a foreign manager which belongs to the same group of companies as, or has a formal arrangement or investment agreement with, the Singapore manager, the above information should be disclosed on the underlying scheme. In other cases, such information on the underlying scheme should be disclosed only if it is readily available to the Singapore manager. M) Soft dollar commissions/arrangements UOB Asset Management has entered into soft dollars arrangements with selected brokers from whom products and services are received from third parties. The products and services relate essentially to computer hardware and software to the extent that they are used to support the investment decision making process, research and advisory services, economic and political analyses, portfolio analyses including performance measurements, market analyses, data and quotation services, all of which are believed to be helpful in the overall discharge of UOB Asset Management s duties to clients. As such services generally benefit all of UOB Asset Management s clients in terms of input into the investment decision making process, the soft credits utilised are not allocated on a specific client basis. The Manager confirms that trades were executed on a best execution basis and there was no churning of trades. N) Where the scheme offers pre-determined payouts, an explanation on the calculation of the actual payouts received by participants and any significant deviation from the pre-determined payouts N/A -10-

13 STATEMENT OF TOTAL RETURN For the half year ended (Un-audited) 2017 $ $ Income Dividends 1,533,457 1,456,675 Interest 85 7 Total 1,533,542 1,456,682 Less: Expenses Management fee 416, ,885 Less: Management fee rebate 316 (14,672) Trustee fee 14,489 16,884 Audit fee 9,968 9,247 Registrar fee 7,459 7,490 Custody fee 28,021 17,337 Transaction costs 258, ,061 Other expenses 76,874 18,854 Total 811, ,086 Net income/(losses) 721, ,596 Net gains/(losses) on value of investments and financial derivatives Net gains/(losses) on investments (7,735,589) 7,390,230 Net gains/(losses) on financial derivatives (6,218) (1,111) Net foreign exchange gains/(losses) 9,694 (60,489) (7,732,113) 7,328,630 Total return/(deficit) for the period before income tax (7,010,559) 8,135,226 Less: Income tax (103,460) (127,507) Total return/(deficit) for the period (7,114,019) 8,007,

14 STATEMENT OF FINANCIAL POSITION As at (Un-audited) 31 December 2017 $ $ Assets Portfolio of investments 71,760,838 88,516,302 Sales awaiting settlement - 2,879,969 Receivables 129, ,014 Cash and bank balances 3,023, ,345 Margin accounts 136, ,640 Financial derivatives at fair value Total assets 75,050,343 91,800,849 Liabilities Purchases awaiting settlement 525,564 - Bank overdrafts - 743,106 Payables 447, ,529 Financial derivatives at fair value - 4,326 Total liabilities 973,058 1,571,961 Equity Net assets attributable to unitholders 74,077,285 90,228,

15 STATEMENT OF MOVEMENTS OF UNITHOLDERS FUNDS For the half year ended (Un-audited) 31 December 2017 $ $ Net assets attributable to unitholders at the beginning of the financial period/year 90,228,888 87,355,347 Operations Change in net assets attributable to unitholders resulting from operations (7,114,019) 16,482,843 Unitholders contributions/(withdrawals) Creation of units 1,978,481 6,102,777 Cancellation of units (11,016,065) (19,712,079) Change in net assets attributable to unitholders resulting from net creation and cancellation of units (9,037,584) (13,609,302) Total increase/(decrease) in net assets attributable to unitholders (16,151,603) 2,873,541 Net assets attributable to unitholders at the end of the financial period/year 74,077,285 90,228,

16 STATEMENT OF PORTFOLIO As at (Un-audited) Holdings at Fair value at $ Percentage of total net assets attributable to unitholders at % By Geography - Primary Quoted Equities INDONESIA ASTRA INTERNATIONAL TBK PT 2,700,000 1,695, BANK CENTRAL ASIA TBK PT 1,490,000 3,044, BANK MANDIRI PERSERO TBK PT 3,000,000 1,955, GUDANG GARAM TBK PT 135, , INDOFOOD CBP SUKSES MAKMUR TBK PT 900, , MITRA ADIPERKASA TBK PT 12,000,000 1,027, PT BANK RAKYAT INDONESIA (PERSERO) TBK. 1,500, , SEMEN INDONESIA PERSERO TBK PT 550, , TELEKOMUNIKASI INDONESIA PERSERO TBK PT 4,000,000 1,427, TOTAL INDONESIA 11,550, MALAYSIA ALLIANCE BANK MALAYSIA BHD 500, , CAHYA MATA SARAWAK BHD 600, , CIMB GROUP HOLDINGS BHD 1,000,400 1,840, DENKO INDUSTRIAL CORP BHD 1,400, , GENTING BHD 380,000 1,078, GENTING MALAYSIA BHD 950,000 1,564, MALAYAN BANKING BHD 530,000 1,610, MALAYSIA AIRPORTS HOLDINGS BHD 250, , PUBLIC BANK BHD 50, , RHB BANK BHD 800,000 1,474, TENAGA NASIONAL BHD 250,000 1,235, TOP GLOVE CORP BHD 260,000 1,065,

17 STATEMENT OF PORTFOLIO As at (Un-audited) Holdings at Fair value at $ Percentage of total net assets attributable to unitholders at % By Geography - Primary (continued) Quoted Equities MALAYSIA (continued) YINSON HOLDINGS BHD 260, , TOTAL MALAYSIA 13,241, PHILIPPINES AYALA LAND INC 2,000,000 1,936, BANK OF THE PHILIPPINE ISLANDS 460,663 1,041, METROPOLITAN BANK & TRUST CO 876,056 1,642, ROBINSONS RETAIL HOLDINGS INC 370, , WILCON DEPOT INC 3,000, , TOTAL PHILIPPINES 6,284, SINGAPORE CAPITALAND COMMERCIAL TRUST 366, , CITY DEVELOPMENTS LTD 160,000 1,748, COMFORTDELGRO CORP LTD 470,000 1,104, DBS GROUP HOLDINGS LTD 210,000 5,588, GENTING SINGAPORE LTD 1,050,000 1,281, KEPPEL CORP LTD 350,000 2,502, OVERSEA-CHINESE BANKING CORP LTD 275,000 3,201, PROPNEX LTD 800, , SINGAPORE TECHNOLOGIES ENGINEERING LTD 220, , SINGAPORE TELECOMMUNICATIONS LTD 700,000 2,156, UNITED OVERSEAS BANK LTD 158,776 4,248,

18 STATEMENT OF PORTFOLIO As at (Un-audited) Holdings at Fair value at $ Percentage of total net assets attributable to unitholders at % By Geography - Primary (continued) Quoted Equities SINGAPORE (continued) UOL GROUP LTD 240,000 1,828, TOTAL SINGAPORE 25,517, THAILAND ADVANCED INFO SERVICE PCL 130, , AIRPORTS OF THAILAND PCL 500,000 1,296, BANGKOK BANK PCL 100, , CHAROEN POKPHAND FOODS PCL 800, , CP ALL PCL 540,000 1,633, INDORAMA VENTURES PCL 350, , KASIKORNBANK PCL - NVDR 220,000 1,756, PTT EXPLORATION & PRODUCTION PCL 200,000 1,156, PTT GLOBAL CHEMICAL PCL 200, , PTT PCL 620,000 1,224, PTT PCL NVDR 330, , SIAM COMMERCIAL BANK PCL/THE 193, , SUPALAI PCL 700, , THAI BEVERAGE PCL 1,500,000 1,080,

19 STATEMENT OF PORTFOLIO As at (Un-audited) Holdings at Fair value at $ Percentage of total net assets attributable to unitholders at % By Geography - Primary (continued) Quoted Equities THAILAND (continued) THE SIAM CEMENT PCL 45, , TOTAL THAILAND 15,166, Total Equities 71,760, Portfolio of investments 71,760, Other net assets/(liabilities) 2,316, Net assets attributable to unitholders 74,077,

20 STATEMENT OF PORTFOLIO As at (Un-audited) Percentage of total net assets attributable to unitholders at % Percentage of total net assets attributable to unitholders at 31 December 2017 % By Geography - Primary (Summary) Quoted Equities Indonesia Malaysia Philippines Singapore Thailand Portfolio of investments Other net assets/(liabilities) Net assets attributable to unitholders

21 STATEMENT OF PORTFOLIO As at (Un-audited) Fair value at $ Percentage of total net assets attributable to unitholders at % Percentage of total net assets attributable to unitholders at 31 December 2017 % By Industry - Secondary Quoted Equities Consumer Discretionary 7,559, Consumer Staples 5,883, Energy 3,435, Financials 30,632, Health Care 1,065, Industrials 6,369, Information Technology Materials 3,680, Real Estate 7,325, Telecommunication Services 4,573, Utilities 1,235, Portfolio of investments 71,760, Other net assets/(liabilities) 2,316, Net assets attributable to unitholders 74,077,

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