PRUasia pacific equity fund

Transcription

1 Interim Report PRUasia pacific equity fund Interim Report For the 6-month period ended 30 September 2008

2 PRUasia pacific equity fund Interim Report For the 6-month period ended 30 September

3 Contents A Note from PRU 4 Nota daripada PRU 12 Fund Information 5 Maklumat Dana 13 Fund Performance 6 Prestasi Dana 14 Manager's Report 8 Laporan Pengurus 16 Market Review and Market Outlook 10 Kajian dan Tinjauan Tahunan Pasaran 19 Rebates and Soft Commissions 11 Rebat dan Komisen Ringan

4 PRUasia pacific equity fund Interim Report Statement By The Manager 28 Trustee s Report To The Unitholders of PRUasia pacific equity fund 29 Unaudited Income Statement 30 Unaudited Statement Of Assets And Liabilities 31 Unaudited Statement Of Changes In Net Assets Attributable To Unitholders 32 Unaudited Cash Flow Statement 33 Summary Of Significant Accounting Policies 34 Notes To The Unaudited Financial Statements 39 Corporate Directory 71 The full interim report is available upon request and without charge. Please call to request for a copy or log on to to download an e-report

5 A Note from PRU Dear Investor, The tumultuous rides of economic fundamentals seen in the last 12 months have without doubt trigger investors worst nightmares and created unprecedented chaos in the financial world globally. One wonders what would be the next bombshell that will further rock the economy. Investors remain cautious and market players are swamped with streamlining measures that could hinder further economic destructions. As your entrusted fund manager, we are optimistic that the current economic landscape made valuations of stock even more attractive i.e. much cheaper than it used to be. Therefore this down cycle provides golden opportunity for you to widen your investments horizon at a bargain. Do shop for the best investment products that meet your appetites and remember that unit trusts investment is a long-term commitment hence riding short-term volatilities is just a customary challenge. We would like to take this opportunity to thank you for staying with us. With this, we present you the PRUasia pacific equity fund Interim Report

6 Fund Information PRUasia pacific equity fund Interim Report Name of Fund Fund Category/ Type Fund Objective Fund Benchmark Fund Income Distribution Policy Breakdown of Unitholdings by Size Prudential Asia Pacific Equity Fund Equity / Growth The investment objective of this Fund is to seek to provide medium to long-term capital growth. Note: we regard 3-5 years as medium-term and anything more than 5 years as long-term. MSCI AC Asia Pacific Ex-Japan (obtainable from Incidental, on a best effort basis only As at 30 September 2008, the size of PRUasia pacific equity fund stood at million units. 50 FUND SIZE Units (Million) Apr 2008 May 2008 Jun 2008 Jul 2008 Aug 2008 Sept 2008 Breakdown of Unitholdings No. of No. of Units* Unitholdings Unitholders % ( 000) % 5,000 units and below ,139-5,001 to 10,000 units , ,001 to 50,000 units 3, , ,001 to 500,000 units , ,001 units and above , Total 5, , * exclude units held by the Manager

7 Fund Performance The following information is for the financial year ended Category 31 March 31 March 31 March % % % Quoted Securities Airlines Auto Parts Banking Chemicals Commercial Service Computers & Computer Services Computers & Office Equipment Conglomerate Construction Consumer Product Containers Diversified Electronics - Electrical Energy Financial Service Food Processing Food, Beverage and Tobacco Food & Staples Retailing Gaming Industrial Product Infrastructure Insurance Leisure Time Metal / Mining Media Manufacturing Oil & Oil-Gas Drilling Pharmaceuticals Real Estate Real Estate - Consumer Durables & Apparel Real Estate Development and Mgmt Real Estate Investment Trusts Retailing Semiconductors & Semiconductor Equipment Technology Hardware & Equipment

8 PRUasia pacific equity fund Interim Report Category 31 March 31 March 31 March % % % Quoted Securities (Continue) Telecommunications Transportation Utilities - electric Equities Cash and liquid assets Total Net Asset Value (RM'000) 160,402 96, ,259 Units In Circulation (Units '000) 302, , ,730 Net Asset Value Per Unit (RM) Manager's Highest NAV (RM) Manager's Lowest NAV (RM) Total Return (%) - Capital Growth Income Distributions Total Return (%) Annual Total Return since inception (%) Average Total Return (%) - One year Three Years Five Years Gross Distribution Per Unit (sen) Net Distribution Per Unit (sen) Management Expense Ratio (%)* Portfolio Turnover Ratio (times)^ * There is no significant change to the MER in year2008 when compared to year ^ The Fund chartered a lower PTR in 2008 when compared to 2007 due to a decrease in fund size. The unit prices of the Fund may go down as well as up and the past performance figures shown are not indicative of future performance

9 Manager's Report Fund Performance For the financial period under review from 1 April to 30 September 2008, the PRUasia pacific equity fund registered a negative return of 15.18% (NAV per unit to NAV per unit), outperformed the benchmark return of %. For the longer period since inception, the Fund posted a positive return of 5.85%, underperformed the benchmark return 12.80%. PRUasia pacific equity fund vs MSCI Asia Pac Ex-Japan SI % Change (10) (10) Aug 2005 Oct 2005 Dec 2005 Feb 2006 Apr 2006 Jun 2006 Aug 2006 Oct 2006 Dec 2006 Feb 2007 Apr 2007 Jun 2007 Jul 2007 Sep 2007 Nov 2007 Jan 2008 Mar 2008 May 2008 Jul 2008 Sep 2008 Date PRUasia pacific equity fund MSCI Asia Pac Ex-Japan (GDUECAPF) Source: Lipper Hindsight 5 and MSCI AC Asia Pacific Ex-Japan, 30 September 2008 Past performance is no indication of the future performance of the Fund. Analysis of Fund Performance For the period from 1 April 2008 to 30 September 2008 Income Capital Total Total Return Return (%) Return* (%) Return (%) of Benchmark (%) 0.00 (15.18) (15.18) (21.83) * Capital return components: 1) Equities 2) Cash and cash equivalents

10 PRUasia pacific equity fund Interim Report Distribution/ unit splits Investment Strategy During Period Under Review No distributions or unit splits were declared for the financial period ended 30 September The Fund stepped up its already defensive posture and adopted a cautious approach in the period amid unprecedented market volatility. Its underlying strategy and allocation continued to be driven by the dividend yield dynamics in the region. The Fund manager consolidated the portfolio in the period in an aim to reduce risk. Despite the high yields offered in New Zealand, the exposure to the market was sold down to zero on macroeconomic concerns. This was not possible in the larger Australian market, where instead, the manager gradually reduced exposure throughout the period and adjusted the holdings to limit exposure to the deterioration in the Australian dollar and adopted a more defensive position. Proceeds were invested in the Philippines and Indonesia where the larger population base could underpin domestic demand in the face of slowing exports. The sharp correction provided an opportunity to purchase stocks at attractive levels and the preference was in selected telecom and financial stocks in these markets. During the financial period under review, the manager also gradually trimmed down exposure to Korea owing to concerns over the deteriorating domestic economy where private debt accounts for 180% of GDP. Korea stands as the Fund s largest underweight country position. Proceeds were used to build exposure to China. For the first time since the inception of the Fund, the current market conditions have allowed the manager to identify yield candidates in the market. The Fund maintained a relatively large exposure to Taiwan, where the average level of dividend yield was greater than the region. In Taiwan, the manager also switched exposure to defensive telecoms from banks owing to the fragmented nature of the market and low sustainable rates of return. Asset Allocation Asset Allocation 30 September March 2008 Changes (%) (%) (%) Equities (0.01) Cash and cash equivalents There have been no significant changes to the asset allocation since the Fund s last report. State of Affairs of the Fund There have been neither significant change to the state of affairs of the Fund nor any circumstances that materially affect any interests of the unit holders during the financial period under review (1 April September 2008)

11 MARKET REVIEW AND MARKET OUTLOOK The Asia ex-japan markets ended the period under review sharply lower. Over the six months investor worries shifted from intensifying inflation pressures to slower global growth and then the escalating global financial contagion. The MSCI Asia Pacific ex- Japan index fell 37.2% in the year-to-30 September, with investor confidence all but wiped out as more beleaguered financial institutions in the US and beyond faced either bankruptcy, government takeover or complete restructuring. Credit markets came to a standstill, investors fled to the safety of US treasuries whilst the US dollar strengthened against most currencies. Asia is now trading at historic lows at 1.1xP/B - levels seen in the financial crisis of 1982 and Asia's dividend yield stands at 4.8%. Although the recent correction has brought valuations to historic lows, we are of the view that earnings estimates for 2009 still appear too optimistic. We expect further volatility in the markets as investors digest further earnings downgrades. Nevertheless, we continue to believe that the long-term outlook for Asia is strong, although the region s economic growth will likely slow as downturns in the West eat into Asia s exports to some of its largest customers. We are adhering to our investment focus on cash flow and long-term valuations. We believe that Asian valuations have again become cheap and that attractive buying opportunities are emerging. We see promise among companies that serve domestic demand, particularly in China and Indonesia. As we seek buying opportunities we strongly focus on the companies' cash positions in the current environment of credit crunch. The manager's preference remains for larger companies that are able to maintain a stable dividend policy

12 PRUasia pacific equity fund Interim Report REBATES AND SOFT COMISSIONS The Manager, our delegates and the Trustee are not entitled to any rebates or to share in any commission from any broker in consideration for direct dealings in the investments of the Funds. Accordingly, any rebates and shared commissions are directed to the account of the relevant Funds. During the period under review (1 April September 2008), the manager has received soft commissions from stockbrokers in the form of computer hardware and software which are incidental to the investment management of the Fund. The Manager and the Trustee have not received any rebates or shared any commissions from any broker during the same period under review. Notwithstanding the aforesaid, the Manager may receive goods or services by way of soft commissions provided always that the goods or services are of demonstrable benefit to the Funds and that the execution of a transaction is consistent with the best execution standards. In case of discrepancy between the English, Chinese and Bahasa Malaysia versions of this report, the English version shall prevail

13 Nota daripada PRU Kepada pelabur, Tidak dapat dinafikan lagi,keadaan ekonomi yang tidak menentu pada 12 bulan yang lepas telah mencetuskan mimpi ngeri kepada para pelabur dan telah mengakibatkan keadaan kelam-kabut yang belum pernah dilihat dalam pasaran kewangan global. Ada yang tertanya-tanya apakah kejutan lain yang mungkin berlaku yang boleh menggegarkan lagi ekonomi. Para pelabur mengambil langkah berhati-hati dan peserta pasaran pula mengambil pelbagai langkah penyelarasan untuk mengelakkan kemusnahan ekonomi yang lebih teruk. Sebagai pengurus dana yang boleh dipercayai, kami yakin bahawa arus persekitaran ekonomi masa kini membuatkan penilaian saham menjadi lebih menarik iaitu ia menjadi lebih murah daripada sebelumnya. Oleh itu kitaran menurun ini menyediakan peluang keemasan untuk anda meluaskan ufuk pelaburan anda pada harga yang menarik. Pilihlah produk pelaburan yang terbaik untuk anda dan ingat bahawa pelaburan dalam unit amanah adalah komitmen jangka panjang dan keadaan turun naik jangka pendek merupakan satu kelaziman dalam pelaburan. Kami ingin mengambil kesempatan ini untuk mengucapkan ribuan terima kasih kerana anda masih bersama kami. Dengan itu, terimalah Laporan Tahunan Dana PRUasia pacific equity

14 Maklumat Dana PRUasia pacific equity fund Interim Report Nama Dana Kategori/ Jenis Dana Objektif Dana Tanda Aras Dana Polisi Pengagihan Pendapatan Dana Huraian Pegangan Unit Mengikut Saiz Dana Dana Prudential Asia Pacific Equity Ekuiti/ Pertumbuhan Objektif pelaburan Dana ini ialah untuk menyediakan pertumbuhan modal bagi tempoh masa sederhana hingga panjang. Nota: Kami menyifatkan 3 5 tahun sebagai tempoh masa sederhana dan tempoh melebihi 5 tahun dianggap tempoh yang panjang. MSCI AC Asia Pacific Ex-Japan (diperolehi daripada Sampingan, berdasarkan prestasi Dana. Pada 30 September 2008, saiz Dana PRUasia pacific equity ialah juta unit. SAIZ DANA Unit (Juta) Apr 2008 Mei 2008 Jun 2008 Jul 2008 Ogos 2008 Sept 2008 Huraian Pegangan Unit Jumlah Jumlah Unit* Pegangan Unit Pemegang Unit % ( 000) % 5,000 unit ke bawah ,139-5,001 hingga 10,000 unit , ,001 hingga 50,000 unit 3, , ,001 hingga 500,000 unit , ,001 unit ke atas , Jumlah 5, , * tidak termasuk unit yang dipegang oleh Pengurus

15 Prestasi Dana Maklumat berikutan adalah untuk tahun kewangan berakhir 31 Mac Kategori 31 Mac 31 Mac 31 Mac % % % Ekuiti Tersenarai Penerbangan Peralatan auto Perbankan Bahan kimia Perkhidmatan perdagangan Komputer dan perkhidmatan komputer Komputer dan perlatan pejabat Konglomerat Pembinaan Produk-produk pengguna Kontena Pelbagai Elektronik - Electrikal Kuasa Perkhidmatan kewangan Pemprosesan makanan Makanan, minuman dan tembakau Makanan runcit Perjudian Produk-produk industri Infrastruktur Insurans Hiburan Metal / Perlombongan Media Pembuatan Minyak & Carigali Minyak-Gas Farmasi Hartanah Hartanah - barangan pengguna dan pakaian Pembangunan dan pengurusan hartanah Amanah saham dalam pelaburan hartanah Sektor peruncitan Semikonduktor dan peralatan semikonduktor Perkakasan teknologi dan peralatan

16 PRUasia pacific equity fund Interim Report Kategori 31 Mac 31 Mac 31 Mac % % % Ekuiti Tersenarai (sambung) Telekomunikasi Pengangkutan Utiliti - elektrik Ekuiti Tunai dan kesetaraan tunai Jumlah Nilai Aset Bersih (RM'000) 160,402 96, ,259 Unit Dalam Pusingan (Unit '000) 302, , ,730 Nilai Aset Bersih (NAB) Seunit (RM) NAB Tertinggi Pengurus (RM) NAB Terendah Pengurus (RM) Jumlah Pulangan (%) - Pertumbuhan Modal Agihan Pendapatan Jumlah Pulangan (%) Jumlah Pulangan Sejak Diterbitkan (%) Purata Pulangan Tahunan (%) - Satu Tahun Tiga Tahun Lima Tahun Agihan Kasar Seunit (sen) Agihan Bersih Seunit (sen) Nisbah Perbelanjaan Pengurusan (%)* Nisbah Pusing Ganti Portfolio (kali)^ * Tiada perubahan ketara pada Nisbah Perbelanjaan Pengurusan 2008 berbanding ^ Dana merekodkan Nisbah Pusing Ganti Portfolio lebih rendah dalam 2008 bila dibandingkan dengan 2007 disebabkan pengecutan dalam saiz Dana. Harga unit Dana boleh naik atau turun dan prestasi masa lalu bukanlah petunjuk prestasi masa depan

17 Laporan Pengurus Prestasi Dana Untuk tempoh di bawah tinjauan dari 1 April hingga 30 September 2008, dana PRUasia pacific equity mencatatkan pulangan negatif sebanyak 15.18% (NAB seunit ke NAB seunit), mendahului pulangan penanda aras iaitu %. Bagi tempoh yang lebih panjang semenjak dilancarkan, Dana merekodkan pulangan positif sebanyak 5.85%, membelakangi pulangan penanda aras iaitu 12.80%. Dana PRUasia pacific equity berbanding MSCI Asia Pac Ex-Japan % Perubahan Semenjak Diterbitkan (10) (10) Ogos 2005 Okt 2005 Dis 2005 Feb 2006 Apr 2006 Jun 2006 Ogos 2006 Okt 2006 Dis 2006 Feb 2007 Apr 2007 Jun 2007 Tarikh Jul 2007 Sep 2007 Nov 2007 Jan 2008 Mac 2008 Mei 2008 Jul 2008 Sep 2008 Dana PRUasia pacific equity MSCI Asia Pac Ex-Japan (GDUECAPF) Sumber: Lipper Hindsight 5 dan MSCI AC Asia Pacific Ex-Japan, 30 September Prestasi masa lalu Dana ini tidak mencerminkan prestasi masa depannya. Analisis Prestasi Dana Untuk tempoh bermula 1 April 2008 sehingga 30 September 2008 Pulangan Pulangan Jumlah Jumlah Pulangan Pendapatan (%) Modal* (%) Pulangan (%) Tanda Aras (%) 0.00 (15.18) (15.18) (21.83) * Komponen Pulangan Modal: 1) Ekuiti 2) Tunai dan kesetaraan tunai

18 PRUasia pacific equity fund Interim Report Pengagihan/ Pecahan Unit Tiada sebarang agihan diisytiharkan bagi tempoh di bawah kajian berakhir 30 September Strategi Pelaburan Semasa Tempoh Di Bawah Kajian Dana meningkatkan lagi corak bertahannya yang sedia ada dan mengguna pakai pendekatan berjaga-jaga dalam tempoh ini di tengah-tengah turun naik pasaran yang luar biasa. Strategi utama dan peruntukannya terus didorong oleh kadar hasil dividen serantau yang berubah-ubah. Pengurus Dana menyelaraskan portfolio dalam tempoh ini dalam usaha untuk mengurangkan risiko. Walaupun kadar hasil yang tinggi ditawarkan di New Zealand, pendedahan kepada pasaran itu telah dijual sehingga tiada berikutan kebimbangan makroekonomi. Ini tidak mungkin berlaku dalam pasaran Australia yang lebih besar, di mana pengurus sebaliknya telah mengurangkan pendedahan sedikit demi sedikit sepanjang tempoh itu dan menyelaraskan pegangan untuk mengehadkan pendedahan kepada penyusutan dalam dollar Australia dan mengguna pakai corak yang lebih bertahan. Perolehan telah dilaburkan di Filipina dan Indonesia di mana asas populasi yang lebih besar boleh menyokong permintaan domestik sekiranya eksport berkurangan. Pembetulan yang mendadak menawarkan peluang untuk membeli saham pada paras yang menarik dan keutamaan adalah pada saham telekom dan kewangan di pasaran-pasaran ini. Semasa tempoh tinjauan, pengurus juga mengurangkan pendedahan kepada Korea secara beransur-ansur disebabkan kebimbangan ekonomi domestik yang menyusut di mana hutang swasta membentuk 180% daripada KDNK. Korea muncul sebagai negara pada kedudukan pengurangan wajaran dana yang terbesar. Perolehan digunakan untuk meluaskan pendedahan di China. Buat kali pertama sejak Dana dilancarkan, keadaan pasaran semasa telah membolehkan pengurus mengenal pasti pasaran yang boleh memberikan kadar hasil. Dana mengekalkan pendedahan yang agak tinggi di Taiwan, di mana kadar hasil purata dividennya adalah lebih tinggi daripada pasaran serantau. Di Taiwan, pengurus juga menukar pendedahan kepada telekom bertahan daripada bankbank yang menjadi serpihan kepada keadaan pasaran dan kadar pulangan berterusan yang rendah

19 Peruntukan Aset Peruntukan Aset 30 September Mac 2008 Perubahan (%) (%) (%) Ekuiti (0.01) Tunai dan kesetaraan tunai Tiada perubahan ketara dalam peruntukan aset sejak laporan yang lepas. Kedudukan Hal-Ehwal Dana Tiada perubahan ketara terhadap kedudukan hal-ehwal Dana ini mahupun keadaan yang memberi kesan yang besar kepada sebarang kepentingan pemegang unit sepanjang tempoh dalam tinjauan (1 April September 2008)

20 PRUasia pacific equity fund Interim Report SEMAKAN DAN TINJAUAN PASARAN Pasaran Asia kecuali Jepun mengalami penurunan yang mendadak di akhir tempoh di bawah tinjauan. Sepanjang enam bulan kebimbangan para pelabur beralih daripada tekanan inflasi yang memuncak kepada pertumbuhan global yang perlahan dan kemudiannya krisis kewangan global yang menyelubungi hampir keseluruhan pasaran. Indeks MSCI Asia Pasifik kecuali Jepun jatuh 37.2% dalam tahun ini setakat 30 September, dengan keyakinan pelabur telah hilang apabila semakin banyak institusi kewangan bermasalah di AS dan negara-negara lain berdepan sama ada dengan kemuflisan, pengambil alihan oleh kerajaan atau penstrukturan penuh. Pasaran kredit tidak berganjak, pelabur menumpukan kepada kestabilan perbendaharaan AS sementara AS dollar semakin kukuh berbanding kebanyakan mata wang lain. Pasaran Asia kini diniagakan pada tahap terendah 1.1xP/B- tahap seperti mana berlakunya krisis kewangan 1982 dan Kadar hasil dividen Asia kekal pada 4.8%. Walaupun pembetulan baru-baru ini telah menyebabkan penilaian mencapai tahap terendah, kami berpendapat bahawa anggaran perolehan untuk 2009 adalah terlalu optimistik. Kami menjangkakan pasaran akan terus bergolak apabila pelabur mengenal pasti perolehan semakin menurun. Walaupun begitu, kami tetap percaya bahawa prospek jangka panjang Asia adalah kukuh, walaupun pertumbuhan ekonomi serantau mungkin perlahan oleh kerana kemerosotan di Barat akan memberikan kesan kepada eksport Asia kepada sebilangan pelanggan utamanya. Kami berpegang kepada fokus pelaburan kami berkaitan aliran tunai dan penilaian jangka panjang. Kami percaya bahawa penilaian Asia kembali murah dan peluang pembelian menarik adalah semakin berkembang. Kami dapat melihat potensi pada syarikat-syarikat yang memenuhi permintaan tempatan, terutamanya di China dan Indonesia. Ketika mencari peluang-peluang pembelian, kami sentiasa memberikan penekanan kepada keadaan tunai syarikat dalam persekitaran semasa krisis kredit. Pengurus tetap memberikan keutamaan kepada syarikatsyarikat besar yang mampu mengekalkan polisi dividen yang stabil

21 REBAT DAN KOMISEN RINGAN Pengurus dan Pemegang Amanah tidak berhak menerima sebarang rebat atau berkongsi sebarang komisen daripada manamana broker sebagai balasan untuk urus niaga langsung dalam pelaburan Dana-dana. Sehubungan itu, sebarang rebat dan komisen yang dikongsi itu akan dimasukkan ke dalam akaun Dana-dana yang berkaitan. Walau bagaimanapun, Pengurus boleh menerima barangan atau perkhidmatan dalam bentuk komisen ringan selagi barangan dan perkhidmatan itu ternyata bermanfaat kepada Dana-dana dan pelaksanaan sesuatu urus niaga itu adalah selaras dengan piawai pelaksanaan terbaik. Semasa tempoh di bawah tinjauan (1 April September 2008), pengurus telah menerima komisen ringan daripada syarikat broker saham dalam bentuk perisian dan perkakasan komputer yang berkaitan dengan pengurusan pelaburan Dana. Pengurus, delegasi dan Pemegang Amanah kami tidak menerima sebarang rebat atau berkongsi sebarang komisen daripada manamana broker sepanjang tempoh yang sama di bawah tinjauan. Laporan kewangan ini adalah terjemahan dari versi Bahasa Inggeris kepada Bahasa Malaysia. Jika terdapat percanggahan antara versi Bahasa Inggeris dan terjemahan versi Bahasa Malaysia, maka versi Bahasa Inggeris akan diterima pakai

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29 STATEMENT BY THE MANAGER We, Dato Tharmaratnam s/o Kanagaratnam and Mark Toh Chin Hian, two of the Directors of Prudential Fund Management Berhad, do hereby state that, in the opinion of the Manager, the unaudited financial statements set out on pages 30 to 70 are drawn up in accordance with the provisions of the Deed and give a true and fair view of the state of affairs of the Fund as at 30 September 2008 and of its results, changes in net assets attributable to unitholders and cash flows of the Fund for the six months financial period ended on that date in accordance with the Financial Reporting Standards in Malaysia and the Securities Commission s Guidelines on Unit Trust Funds. For and on behalf of the Manager, PRUDENTIAL FUND MANAGEMENT BERHAD DATO THARMARATNAM S/O KANAGARATNAM Director MARK TOH CHIN HIAN Director Kuala Lumpur Date: 25 November

30 PRUasia pacific equity fund Interim Report TRUSTEE S REPORT TO THE UNITHOLDERS OF PRUDENTIAL ASIA PACIFIC EQUITY FUND We have acted as Trustee of Prudential Asia Pacific Equity Fund (the Fund ) for the six months financial period from 1 April 2008 to 30 September In our opinion, Prudential Fund Management Berhad, the Manager, has managed the Fund in the financial period under review: (a) within the limitations imposed on the investment powers of the management company and the trustee under the Deed, other provisions of the Deed, the Securities Commission s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws. (b) the procedures and processes employed by Prudential Fund Management Berhad to value and/or price the units of the Fund are adequate and that such valuation/pricing is carried out in accordance with the Deed of the Fund and relevant regulatory requirements; and (c) the creation and release of units have been carried out in accordance with the Deed and relevant regulatory requirements. For and on behalf of the Trustee, Mayban Trustees Berhad Tracy Hazel Siguji Head, Unit Trust Kuala Lumpur Date: 25 November

31 UNAUDITED INCOME STATEMENT FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER to to Note RM RM INVESTMENT INCOME Gross dividend income 5,547,632 5,489,553 Interest income 10,983 5,929 Net realised (loss)/gain on sale of investment 4 (167,666) 9,287,080 Net foreign exchange loss 5 (318,021) (23,009) 5,072,928 14,759,553 EXPENSES Management fee 6 1,107,469 1,454,234 Trustee s and custodian fee 7 535,025 68,753 Auditors remuneration 18,300 17,000 Administrative expenses 23,574 41,773 1,684,368 1,581,760 NET INCOME BEFORE FINANCE COST AND TAXATION 3,388,560 13,177,793 FINANCE COST 2008: Nil (2007:Net distribution of 2.19 sen (Gross :3.00) sen per unit) 8 - (20,424,650) NET INCOME/(LOSS) BEFORE TAXATION 3,388,560 (7,246,857) TAXATION 9 (377,174) (683,998) INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 3,011,386 (7,930,855) Net income after finance cost and taxation is made up of the following: Realised amount 3,054,653 12,437,968 Unrealised amount (43,267) 55,827 3,011,386 12,493,795 The accompanying summary of significant accounting policies and notes to the unaudited financial statements form an integral part of these unaudited financial statements

32 PRUasia pacific equity fund Interim Report UNAUDITED STATEMENT OF ASSETS AND LIABILITIES AS AT 30 SEPTEMBER 2008 INVESTMENTS Note RM RM Quoted investments ,096, ,436,035 OTHER ASSETS Receivables 11 4,240,524 9,722,658 Bank balance with licensed banks 12 2,203,390 2,687,496 6,443,914 12,410,154 TOTAL ASSETS 126,540, ,846,189 LIABILITIES Payables 14 2,364,132 9,288,225 LIABILITIES (EXCLUDING NET ASSETS ATTRIBUTABLE TO UNITHOLDERS) 2,364,132 9,288,225 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS 3 124,176, ,557,964 REPRESENTED BY: Fair value of outstanding units ,176, ,557,964 NUMBER OF UNITS IN CIRCULATION ,464, ,672,108 NET ASSET VALUE PER UNIT (EX-DISTRIBUTION) The accompanying summary of significant accounting policies and notes to the unaudited financial statements form an integral part of these unaudited financial statements

33 UNAUDITED STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER to to Note RM RM NET ASSETS ATTRIBUTABLE TO UNITHOLDERS AT THE BEGINNING OF THE FINANCIAL PERIOD 160,403, ,436,035 Movement due to units created and released during the financial period Creation of units 15 3,003,054 43,772,793 Release of units 15 (16,385,556) (32,388,119) (13,382,502) 11,384,674 Net (decrease) / increase in net assets attributable to unitholders during the financial period Net income for the financial period 3,011,386 12,493,795 Net change in fair value reserve (25,855,662) (20,756,540) (22,844,276) (8,262,745) NET ASSETS ATTRIBUTABLE TO UNITHOLDERS AT THE END OF THE FINANCIAL PERIOD ,176, ,557,964 The accompanying summary of significant accounting policies and notes to the unaudited financial statements form an integral part of these unaudited financial statements

34 UNAUDITED CASH FLOW STATEMENT PRUasia pacific equity fund Interim Report FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER to to Note RM RM CASH FLOWS FROM INVESTING AND OPERATING ACTIVITIES Proceeds from sale of investments 51,711,332 11,635,833 Purchase of investments (44,220,399) (515,597) Dividends received 5,709, ,865 Interest received 10,983 5,117 Management s fee paid (1,380,415) (1,454,234) Trustee s fee paid (72,078) (67,864) Payment for other fees and expenses (512,223) (41,773) Payment for capital gains tax (352,067) (13,926) Net realised and unrealised foreign exchange gain/(loss) 551,127 (23,010) Net cash inflow from investing and operating activities 11,446,219 9,656,411 CASH FLOWS FROM FINANCING ACTIVITIES Cash proceeds from units created 2,955,739 43,772,793 Payments for release of units (16,224,113) (32,388,119) Income distribution - (20,424,650) Net cash outflow from financing activities (13,268,374) (9,039,976) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,822,155) 616,435 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD 4,025,545 2,071,061 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD 12 2,203,390 2,687,496 Analysis of cash and cash equivalents comprise: Bank balance with licensed bank 2,203,390 2,687,496 The accompanying summary of significant accounting policies and notes to the unaudited financial statements form an integral part of these unaudited financial statements

35 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2008 The following accounting policies have been used in dealing with items which are considered material in relation to the financial statements. The new standard that has been issued, and effective for accounting period beginning on or after 1 January 2010 is: A (i) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Fund have been prepared under the historical cost convention, unless otherwise indicated, in accordance with the Deeds, the Financial Reporting Standards ( FRS ), and the Securities Commission s ( SC ) Guidelines on Unit Trust Funds. Standards and amendments to published standards and interpretations that are effective B FRS 139 Financial Instruments Recognition and Measurement. The new standard establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Hedge accounting is permitted only under strict circumstances. The Fund will apply this standards when effective. INCOME RECOGNITION The amendments to published standards effective for the Fund s financial period beginning on or after 1 April 2008 are as follows: FRS 124 Related Party Disclosure All changes in accounting policies have been made in accordance with the transitional provisions in the respective standard. The new standard adopted by the fund has been apply retrospectively. Interest income is recognised on the accrual basis. Dividend income is recognised on the exdividend date, when the right to receive the dividend has been established. Realised gain and loss on disposal of quoted investment are accounted for as the difference between the net disposal proceeds and the carrying amount of investments, which is determined on a weighted average cost basis. The adoption of the new standard did not have a material impact on the financial statements of the Fund

36 PRUasia pacific equity fund Interim Report C D TAXATION Current tax expense is determined according to the Malaysian tax laws and includes all taxes based upon the taxable profits. Dividend income from foreign quoted investments is based on the tax regime of the respective countries that the Fund invested in. PRESENTATION AND FUNCTIONAL CURRENCY The financial statements are presented in Ringgit Malaysia, which is the Fund s presentation and functional currency. F Foreign currency RM RM 1 Singapore Dollar US Dollar Hong Kong Dollar Thai Baht Australian Dollar New Zealand Dollar New Taiwan Dollar South Korean Won Indonesian Rupiah Indian Rupee Philippine Peso INVESTMENTS E FOREIGN CURRENCY TRANSLATION Foreign currency transactions in the Fund are translated into the functional currency using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. The principal closing rates used in the translation of foreign currencies were as follows: Investments are initially recorded at cost, which include transaction costs, and subsequently revalued to their fair values as at the date of the statement of assets and liabilities. In accordance with the Deed, quoted investments in Malaysia are valued at the last done market price quoted on the Bursa Malaysia Securities Berhad ( Bursa Securities ) at the date of the statement of assets and liabilities. Quoted investments outside Malaysia are valued at the last done market prices quoted on the respective foreign stock exchanges at the date of the statement of assets and liabilities

37 G H Unrealised gain or loss are transferred to the fair value reserve included in the net assets attributable to unitholders and are not distributable. CASH AND CASH EQUIVALENTS For the purpose of the cash flow statement, cash and cash equivalents comprise cash and bank balances and demand deposits that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. CREATION AND CANCELLATION OF UNITS The Fund issues cancellable units, which are cancelled at the unitholder s option and are classified as financial liability. Cancellable units can be put back to the Fund at any time for cash equal to a proportionate share of the Fund s net asset value. The outstanding units is carried at the redemption amount that is payable at the balance sheet date if the holder exercises the right to put the unit back to the Fund. accordance with the SC Guidelines on Unit Trust Funds, investment positions are valued based on the last traded market price for the purpose of determining the net asset value per unit for creations and cancellations. I PROCEEDS AND PAYMENTS ON CREATION AND CANCELLATION OF UNITS J The net asset value per unit is computed for each dealing day. The price at which units are created or cancelled is calculated by reference to the net asset value per unit as at the close of business on the relevant dealing day. Units in the Fund are classified as financial liability in the statement of net assets and liabilities and are stated at fair value representating the price at which unitholders can redeem the units from the Fund. AMOUNT DUE FROM / (TO) STOCKBROKERS Amount due from/(to) stockbrokers is carried at approved transaction amount as stated in the contract notes. Units are created and cancelled at the holder s option at prices based on the Fund s net asset value per unit at the time of creation or cancellation. The Fund s net asset value is calculated by dividing the net assets attributable to unitholders with the total number of outstanding units. In K SEGMENTAL INFORMATION A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from

38 PRUasia pacific equity fund Interim Report L those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments. FINANCIAL INSTRUMENTS Financial instruments comprise financial assets and financial liabilities. Fair value is the amount at which a financial asset could be exchanged or a financial liability settled, between knowledgeable and willing parties in an arm s length transaction. The information presented herein represents the estimates of fair values as at the statement of assets and liabilities date. Where available, quoted and observable market prices are used as the measure of fair values. Where such quoted and observable market prices are not available, fair values are estimated based on a range of methodologies and assumptions regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows and other factors. Changes in the uncertainties and assumptions could materially affect these estimates and the resulting fair value estimates. A range of methodologies and assumptions had been used in deriving the fair values of the Fund s financial instruments as at the statement of assets and liabilities date. The total fair value of each financial instrument is not materially different from the total carrying value. The fair values are based on the following methodologies and assumptions: (a) Quoted investments The estimated fair value is based on quoted and observable market prices. (b)other short term financial instruments Other short term financial instruments comprise dividends receivable, receivables, payables and accruals. The carrying value of these assets and liabilities are assumed to approximate their fair value due to short tenure of less than one year

39 M CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of financial statements in conformity with the Financial Reporting Standards and the SC Guidelines on Unit Trust Funds requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial period. Although these estimates are based on the Manager s best knowledge of current events and actions, actual results could differ from those estimates. Estimates and judgments are continually evaluated by the Manager and the Trustee and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances

40 PRUasia pacific equity fund Interim Report NOTES TO THE UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER INFORMATION ON THE FUND The Unit Trust Fund (the Fund ) was constituted under the name Prudential Asia Pacific Equity Fund pursuant to the execution of a Master Deed dated 15 July 2005 (the Deed ) and Supplemental Deed dated 27 July 2007 entered into between Prudential Fund Management Berhad (the Manager ) and Mayban Trustees Berhad (the Trustee ). The Fund was launched on 21 July 2005 and will continue its operations until terminated by the Trustee or the Manager as provided under Part 12 of the Deed. The Fund invests primarily in global equities and debt obligations of companies and governments worldwide (including Malaysia). To a lesser extent, the Fund also invest in other types of securities, such as preferred stock, securities convertible into common stock and other fixed income securities. All investments will be subjected to the SC Guidelines on Unit Trust Funds, the Deed except where exemptions or variations have been approved by the Securities Commission, internal policies and procedures and the Fund s objective. The main objective of the Fund is to seek medium to long term capital growth through investments in both local and approved foreign markets in Asia Pacific region and equity related securities with consistent or potential increase in dividend yields each at the point of purchase. The Manager is a company incorporated in Malaysia and is related to Prudential Plc., a public listed company in the United Kingdom. The principal activity of the Manager is the establishment and management of unit trust funds and asset management. 2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Fund is exposed to a variety of risks which include market risk, single issuer risk, interest rate risk, liquidity risk, credit/default risk and foreign exchange/currency risk. Financial risk management is carried out through internal control processes adopted by the Manager and adherence to the investment restrictions as stipulated by the SC Guidelines on Unit Trust Funds. Market risk This risk refers to changes and developments in regulations, politics and the economy of the country. The very nature of a unit trust fund, however, helps mitigate this risk because a fund would generally hold a well-diversified

41 portfolio of securities from different market sectors so that the collapse of any one security or any one market sector would not impact too greatly on the value of the fund. Single Issuer risk Any major price fluctuation of a particular security invested by the Fund may affect the Fund s net asset value and thus the prices of units. The single issuer risk is managed by adhering to the investment limits as specified in the SC Guidelines on Unit Trust Funds. Liquidity risk The Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to meet anticipated payments and cancellations of units by unitholders. Liquid assets comprise cash, deposits with licensed financial institutions and other instruments which are capable of being converted into cash within 7 days. The Fund has a policy of maintaining a minimum level of one percent (1%) of liquid assets at all times to reduce the liquidity risk. Interest rate risk The Fund is exposed to interest rate risk. Changes in interest rates will affect the value of the investments and its returns. To manage the risk, investments will be concentrated in investment grade issues by financial institutions and companies determined by the Manager. Interest rate risk is a general economic indicator that will have an impact on the management of the fund regardless of whether it is a Shariah-based fund or otherwise. The reason for this is because a high level of interest rates will inevitably affect corporate profits and this will have an impact on the value of investments

42 PRUasia pacific equity fund Interim Report As at the date of the statement of assets and liabilities, the net asset value of the Fund can be analysed into interest and non-interest bearing balances, as follows: Up to Over 5 Non-interest 1 year 1-5 years years bearing Total RM RM RM RM RM As at Assets Quoted investment ,096, ,096,782 Bank balance ,203,390 2,203,390 Dividends receivable , ,416 Amount due from stockbrokers ,577,242 3,577,242 Amount due from Manager ,673 94,673 Other receivables ,193 10, ,540, ,540,696 Liabilities Amount due to Trustee ,112 8,112 Amount due to Manager , ,520 Other payables and accruals ,798,500 1,798, ,364,132 2,364,132 Total interest sensitivity gap The fund has no exposure to the interest rate risk for the instruments with more then 1 year maturity

43 2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Interest rate risk (continued) Up to Over 5 Non-interest 1 year 1-5 years years bearing Total RM RM RM RM RM As at Assets Quoted investment ,436, ,436,035 Bank balance ,687,496 2,687,496 Dividends receivable , ,305 Amount due from Manager ,571 3,571 Amount due from stockbrokers ,818,782 8,818, ,846, ,846,189 Liabilities Amount due to Trustee ,957 10,957 Amount due to Manager ,869,936 1,869,936 Other payables and accruals ,407,332 7,407, ,288,225 9,288,225 Total interest sensitivity gap

44 PRUasia pacific equity fund Interim Report Credit/Default risk Credit/default risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Fund. The credit/default risk is minimal as all transactions in quoted investments are settled/paid upon delivery using approved brokers. The following table sets out the credit risk concentrations and counterparties of the Fund. As at 30 September 2008 Bank Amount balance Quoted due from and Dividends Other investments stockbrokers deposits receivable assets Total RM RM RM RM RM RM Malaysia 7,523,190-1,242,411-94,673 8,860,274 Australia 30,284,895 1,791, , ,088-32,925,903 Hong Kong 18,932,932-81,312 54,275-19,068,519 Indonesia 5,817, ,817,198 Korea 6,981, ,981,135 Singapore 15,550,307 1,785, ,304-17,441,116 Thailand 13,002, ,942-13,050,043 Philippines 4,082,154-90, ,172,615 Taiwan 16,797, , ,007,505 United States 1,125,026-91, ,216,277 India New Zealand ,096,782 3,577,242 2,203, ,609 94, ,540,

45 2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Credit/Default risk (continued) As at 30 September 2007 Bank Amount balance Quoted due from and Dividends Other investments stockbrokers deposits receivable assets Total RM RM RM RM RM RM Malaysia 6,208,420 2,288,908 1,446,220-3,571 9,947,119 Australia 75,593,608 3,887, , ,486-81,107,872 Hong Kong 14,329,883-42,755 54,176-14,426,814 Korea 11,599, ,599,089 Singapore 16,853,116 2,514,136 19, ,386,525 Thailand 22,811, , ,952,006 Philippines 3,936, , ,038,463 Taiwan 38,570,060-8,406 85,630-38,664,096 United States 3,897, ,897,696 India New Zealand 3,636, ,386-62,013-3,826, ,436,035 8,818,782 2,687, ,305 3, ,846,189 Foreign exchange/currency risk As the Fund may invest its assets in securities denominated in a wide range of currencies other than Ringgit Malaysia, the net asset value of the fund expresses in Ringgit Malaysia may be affected favourably or unfavourably by exchange control regulations or changes in the exchange rates between Ringgit Malaysia and such other currencies. The risk is minimised through investing in a wide range of foreign currencies denominated assets and thus, diversifying the risk of single currency exposure. In the normal course of investment, the Fund Manager will usually not hedge foreign currency exposure. The Fund Manager may however depending on prevailing market circumstances at a particular point in time, choose to use forward or option contracts for hedging and risk reduction purposes

46 PRUasia pacific equity fund Interim Report 3 NET ASSETS ATTRIBUTABLE TO UNITHOLDERS In accordance with the provisions of the Fund s Deed, quoted investments are stated at the last traded price on the valuation date for the purpose of determining the net asset value per unit for creations and cancellations and for various fee calculation. Net assets attributable to unitholders represent a liability in the balance sheet, carried at the redemption amount that would be payable at the balance sheet date if the unitholder exercised the right to redeem unit of the Fund. 4 NET REALISED (LOSS)/GAIN ON SALE OF INVESTMENT to to RM RM Realised gain on sale of investment - 9,561,209 Realised loss on sale of investment (167,666) (274,129) (167,666) 9,287,080 5 NET FOREIGN EXCHANGE LOSS to to RM RM Realised foreign exchange loss (274,754) (78,836) Unrealised foreign exchange (loss)/gain (43,267) 55,827 6 MANAGEMENT FEE (318,021) (23,009) In accordance with the Deed, the Manager is entitled to a management fee at a rate of 1.50% (2007:1.50%) per annum on the net asset value of the Fund accrued on a daily basis for the financial period. 7 TRUSTEE S AND CUSTODIAN FEE In accordance with the Deed, the Trustee is entitled to a fee at a rate of 0.07% (2007: 0.07%) per annum on the net asset value of the Fund, accrued on a daily basis for the financial period subject to a minimum fee of RM18,000 per annum