Corporate Directory. ii Directory of Manager s Offices. iii Fund Information 1 Manager s Report 2-3 Fund Performance 4-5 Financial Statements 6-12

Transcription

1 KENANGA CASH fund quarterly REPORT 31 JANUARY 2018

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3 KENANGA CASH FUND Contents Page Corporate Directory ii Directory of Manager s Offices iii Fund Information 1 Manager s Report 2-3 Fund Performance 4-5 Financial Statements 6-12

4 CORPORATE DIRECTORY Manager: Kenanga Investors Berhad (Company No P) Registered Office Level 17, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur, Malaysia. Tel: Fax: Board Of Directors Datuk Syed Ahmad Alwee Alsree (Chairman) Syed Zafilen Syed Alwee (Independent Director) Peter John Rayner (Independent Director) Imran Devindran bin Abdullah (Independent Director) Dato Bruce Kho Yaw Huat Ismitz Matthew De Alwis Business Office Level 14, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur, Malaysia. Tel: Fax: Website: Investment Committee Dato Bruce Kho Yaw Huat (Chairman) Syed Zafilen Syed Alwee (Independent Member) Peter John Rayner (Independent Member) Imran Devindran bin Abdullah (Independent Member) Ismitz Matthew De Alwis Company Secretary: Norliza Abd Samad (MAICSA ) Level 17, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur, Malaysia Trustee: CIMB Commerce Trustee Berhad (Company No A) Registered Office Level 13, Menara CIMB Jalan Stesen Sentral 2 Kuala Lumpur Sentral Kuala Lumpur. Tel: Fax: Website: Business Office Level 21, Menara CIMB Jalan Stesen Sentral 2 Kuala Lumpur Sentral Kuala Lumpur. Tel: Fax: Auditor: Ernst & Young (AF: 0039) Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Kuala Lumpur. Tel: Fax: Tax Adviser: Ernst & Young Tax Consultants Sdn Bhd (Company No K) Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Kuala Lumpur. Tel: Fax: Membership: Federation Of Investment Managers Malaysia (FIMM) , 6th Floor, Wisma Tune, 19, Lorong Dungun, Damansara Heights, Kuala Lumpur, Malaysia. Tel: Fax: Website: ii Kenanga Cash Fund Quarterly Report

5 DIRECTORY OF MANAGER S OFFICES Regional Branch Offices : Kuala Lumpur Level 13, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur, Malaysia. Tel: Fax: Melaka No. 25-1, Jalan Kota Laksamana 2/17 Taman Kota Laksamana, Seksyen Melaka Tel: / Fax: Klang No. 12, Jalan Batai Laut 3, Taman Intan Klang, Selangor Darul Ehsan Tel: / Fax: Penang 5.04, 5th Floor, Menara Boustead Penang No. 39, Jalan Sultan Ahmad Shah Penang. Tel : Fax : Miri 2nd Floor, Lot 1264, Centre Point Commercial Centre, Jalan Melayu, Miri, Sarawak Tel: Fax: Seremban 2nd Floor, No. 1D-2, Jalan Tuanku Munawir Seremban, Negeri Sembilan Tel: Fax: Johor Bahru Lot 11.03, 11th Floor, Menara MSC Cyberport No. 5, Jalan Bukit Meldrum Johor Bahru, Johor Tel: / 4798 Fax: Kuching 1st Floor, No 71 Lot 10900, Jalan Tun Jugah Kuching, Sarawak Tel: Fax: Kuantan No. B8, Ground Floor, Jalan Tun Ismail Kuantan Pahang. Tel : Fax : Ipoh Suite 1, 2nd Floor, No. 63, Persiaran Greenhill, Ipoh, Perak, Malaysia Tel: / 7570 / 7575 Fax: Kota Kinabalu A-03-11, 3rd Floor Block A, Warisan Square Jalan Tun Fuad Stephens Kota Kinabalu, Sabah Tel: / Fax: Petaling Jaya 44B, Jalan SS21/35 Damansara Utama Petaling Jaya, Selangor Tel: Fax: Kenanga Cash Fund Quarterly Report iii

6 1. FUND INFOATION 1.1 Fund Name Kenanga Cash Fund (KCF or the Fund) 1.2 Fund Type / Category Income / Money Market 1.3 Investment Objective The Fund seeks to provide investors with a regular income stream while maintaining capital stability. 1.4 Investment Strategy The Fund seeks to achieve its objective by investing in deposits and money market instruments. The investment strategy will involve actively managing the maturities of each investment to the extent possible to enhance the returns of the Fund. The Fund will also be actively managed to meet potential liquidity requirements of the Fund. 1.5 Asset Allocation The Fund will invest up to 100% of the Fund s NAV in deposits and money market instruments, with at least 70% of the NAV placed in deposits and/or money market instruments that have a remaining maturity of 365 days or less. 1.6 Duration The Fund was launched on 22 March 2013 and shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unit holders for it to continue. 1.7 Performance Benchmark Maybank Overnight Repo Rate. 1.8 Distribution Policy Subject to the availability of income, distribution of income will be done on a monthly basis. 1 Kenanga Cash Fund Quarterly Report

7 2. MANAGER S REPORT 2.1 Fund performance vs benchmark performance 1 month (31 Dec Jan 2018) 3 months (31 Oct Jan 2018) 6 months (31 July Jan 2018) 1 year (31 Jan Jan 2018) 3 years (31 Jan Jan 2018) Since Launch (22 March Jan 2018) Kenanga Cash Fund 0.26% 0.75% 1.50% 2.75% 9.59% 15.21% Maybank Overnight Rate 0.15% 0.44% 0.89% 1.77% 5.78% 9.50% Source: Lipper For the financial period under review, the Fund registered a return of 0.75% against its benchmark return of 0.44%, outperforming its benchmark return by 31 bps. The outperformance was mainly due to our active management of the maturities of each investment to enhance the returns to the Fund, while meeting the liquidity requirements of the Fund. 2.2 The Fund s asset allocation as at 31 January 2018 and comparison with the previous financial period Asset 31 Jan Jan 17 Short term deposits and cash 100.0% 100.0% 2.3 Market Review and Strategy On 8 November 2017, Bank Negara Malaysia (BNM) continued to maintain its Overnight Policy Rate (OPR) unchanged in the final Monetary Policy Committee (MPC) meeting of the year. Moving into the year 2018, BNM increased the OPR by 25 basis points (bps) to 3.25% in the MPC meeting held on 25 January 2018, as part of monetary policy normalization as economy is firmly on a steady growth path. The MPC will continue to assess the balance of risks surrounding the outlook for domestic growth and inflation. The 25bps OPR hike at the first MPC meeting of the year sent the overnight money market rates higher between %. Malaysia s Gross Domestic Product (GDP) grew 6.2% year-on-year in third quarter of 2017 (from 5.8% in previous quarter), driven by strong domestic demand, particularly the private sector spending. Given the continued strong performance in the third quarter, the Malaysian economy is expected to register a GDP growth closer to the upper range of the official projection of 5.2%-5.7% in Meanwhile, Consumer Price Index (CPI) continued to ease for a second consecutive month from 4.3% in September 2017 to 3.7% in October 2017 and 3.4% in November In December 2017, CPI rose to 3.5%, mainly on costlier transport besides food and non-alcoholic drinks. The Fund will continue to seek to achieve its objective by investing in deposits and money market instruments. The investment strategy will also continue to involve active management of the maturities of each investment to the extent possible to enhance the returns of the Fund. The Fund will also continue to be actively managed to meet potential liquidity requirements of the Fund. Kenanga Cash Fund Quarterly Report 2

8 2.4 Market Outlook We expect the OPR to remain at this level through the rest of this year based on our expectations of more moderate GDP growth and inflation of a respective 5.2% and 2.5% in Although monetary tightening risk still remains, BNM s future actions on OPR are envisaged to be data-dependent going forward. Another rate hike may be warranted if GDP growth surprises on the upside and inflationary risk heightens. 2.5 Distribution For the financial year under review, the Fund has declared the following income distributions: Gross distribution () Net distribution () Ex-NAV per unit () 30 November ,481 14, December ,306 10, January ,474 13, ,261 39, Rebates & Soft commission Any rebates received are channeled back to the Fund. On the other hand, commissions received from the stockbrokers for goods and services such as technical analysis software, fundamental database, financial wire services, stock quotation system and portfolio management software incidental to investment management of the Fund shall be retained by the Manager. For the financial period under review, the Manager did not receive any rebates or commissions from stockbrokers 3 Kenanga Cash Fund Quarterly Report

9 3. FUND PERFOANCE 3.1 Details of portfolio composition of the Fund for the financial period as at 31 January 2018 against the last three financial years as at 31 October are as follow: a. Distribution among industry sectors and category of investments: As at % FY 2017 % FY 2016 % FY 2015 % Short term deposits and cash Note: The above mentioned percentages are based on total investment market value plus cash. b. Distribution among markets The Fund invests in short term deposits and cash only. Kenanga Cash Fund Quarterly Report 4

10 3.2 Performance details of the Fund for the last three financial years ended 31 October are as follows: Period from to FY 2017 FY 2016 FY 2015 Net asset value ( NAV ) ( Million) Units in circulation (Million) NAV per unit () Highest NAV per unit () Lowest NAV per unit () Total return (%) Capital growth (%) Income growth (%) Gross distribution () Net distribution () Management expense ratio ( MER ) (%) Portfolio turnover ratio ( PTR ) (times) Note: Total return is the actual return of the Fund for the respective financial period/years, computed based on NAV per unit and net of all fees. MER is computed based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. PTR is computed based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis. * Above NAV and NAV per unit are shown as ex-distribution. For details of income distribution, kindly refer to Note 2.5 in manager s report. 1. MER is higher against previous financial year mainly due to decrease in average fund size during the financial period under review. 2. PTR is lower against previous financial year due to shorter reporting period. * Date of distribution is shown in Part Distribution 5 Kenanga Cash Fund Quarterly Report

11 4. FINANCIAL STATEMENTS 4.1 STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2017 TO 31 JANUARY 2018 (unaudited) Note to to INVESTMENT INCOME Interest income 64, ,522 EXPENSES Manager s fee 2 5,554 77,222 Trustee s fee ,498 Auditors remuneration 1,745 1,638 Tax agent s fee 997 1,008 Administration expenses 1,780 6,659 10,447 95,025 NET INCOME BEFORE TAX 54, ,497 Income tax (15,000) - NET INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD 39, ,497 Net income after tax is made up as follows: Realised gain 39, ,497 Distributions for the financial period: Gross distribution () 4 54,261 1,126,938 Net distribution () 4 39,261 1,126,938 Gross distribution per unit (sen) Net distribution per unit (sen) The accompanying notes form an integral part of the financial statements. Kenanga Cash Fund Quarterly Report 6

12 4.2 STATEMENT OF FINANCIAL POSITION AS AT 31 JANUARY 2018 (unaudited) Note ASSETS INVESTMENT Short term deposits 5 6,780,000 13,730,849 OTHER ASSETS Other receivable 27,507 18,902 Cash at bank 34,376 5,852 61,883 24,754 TOTAL ASSETS 6,841,883 13,755,603 LIABILITIES Amount due to Manager 1,672 3,372 Amount due to Trustee Other payables 20,705 14,691 Distribution payable 13,574 - Provision for taxation 15,000 - TOTAL LIABILITIES 51,063 18,295 EQUITY Unit holders contribution 6,786,952 13,718,875 Retained earnings 3,868 18,433 NET ASSET VALUE ( NAV ) ATTRIBUTABLE TO UNIT HOLDERS 6 6,790,820 13,737,308 TOTAL LIABILITIES AND EQUITY 6,841,883 13,755,603 NUMBER OF UNITS IN CIRCULATION 6(a) 6,786,952 13,718,875 NET ASSET VALUE PER UNIT EX DISTRIBUTION () The accompanying notes form an integral part of the financial statements. 7 Kenanga Cash Fund Quarterly Report

13 4.3 STATEMENT OF CHANGES IN NET ASSET VALUE FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2017 TO 31 JANUARY 2018 (unaudited) Note Unit holders contribution Retained earnings Total NAV to At beginning of the financial period 9,453,576 10,064 9,463,640 Total comprehensive income - 39,177 39,177 Creation of units 6(a) 53,827-53,827 Cancellation of units 6(a) (2,770,676) - (2,770,676) Distribution equalisation 6(a) (6,112) - (6,112) Distributions 4 6,112 (45,373) (39,261) Reinvestment of income distributed 6(a) 50,225-50,225 At end of the financial period 6,786,952 3,868 6,790, to At beginning of the financial period 353,380,085 2,044, ,424,154 Total comprehensive income - 298, ,497 Creation of units 6(a) 54,845,214-54,845,214 Cancellation of units 6(a) (396,771,842) - (396,771,842) Distribution equalisation 6(a) (1,197,195) - (1,197,195) Distributions 4 1,197,195 (2,324,133) (1,126,938) Reinvestment of income distributed 6(a) 2,265,418-2,265,418 At end of the financial period 13,718,875 18,433 13,737,308 The accompanying notes form an integral part of the financial statements. Kenanga Cash Fund Quarterly Report 8

14 4.4 STATEMENT OF CASH FLOWS FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2017 TO 31 JANUARY 2018 (unaudited) Note to to CASH FLOWS FROM OPERATING AND INVESTING ACTIVITIES Proceeds from the maturity of investments 4,735, ,392,496 Interest from deposits received 69,699 4,109,477 Trustee s fee paid (400) (13,993) Payment for other fees and expenses (552) (9,819) Manager s fee paid (5,995) (108,208) Purchase of investments (6,780,000) (79,918,363) Net cash (used in)/generated from operating and investing activities (1,981,728) 318,451,590 CASH FLOWS FROM FINANCING ACTIVITIES Cash received from units created 53,898 55,220,202 Cash paid on units cancelled (2,776,900) (399,357,164) Distributions paid - (14,535) Net cash used in financing activities (2,723,002) (344,151,497) NET DECREASE IN CASH AND CASH EQUIVALENTS (4,704,730) (25,699,907) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL PERIOD 5,439,106 32,123,759 CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL PERIOD 734,376 6,423,852 Cash and cash equivalents comprise: Cash at bank 34,376 5,852 Short term deposits 5 700,000 6,418, ,376 6,423,852. The accompanying notes form an integral part of the financial statements. 9 Kenanga Cash Fund Quarterly Report

15 4.5 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 1 NOVEMBER 2017 TO 31 JANUARY 2018 (unaudited) 1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES Kenanga Cash Fund ( the Fund ) was constituted pursuant to the executed Deed dated 16 August 2012 (collectively, together with First Supplemental Deed dated 9 October 2013, refer to as the Deed ) between the Manager, Kenanga Investors Berhad, and CIMB Commerce Trustee Berhad ( the Trustee ). The Fund commenced operations on 22 March 2013 and will continue to be in operation until terminated as provided under Clause 11 of the Deed. Kenanga Investors Berhad is a wholly-owned subsidiary of Kenanga Investment Bank Berhad. Prior to 1 November 2016, Kenanga Investment Bank Berhad was a wholly-owned subsidiary of K & N Kenanga Holdings Berhad that was listed on the Main Market of Bursa Malaysia Securities Berhad. Pursuant to an internal reorganisation exercise completed on 1 November 2016, Kenanga Investment Bank Berhad has become the holding company of K & N Kenanga Holdings Berhad. On 2 November 2016, Kenanga Investment Bank Berhad has assumed the listing status of K & N Kenanga Holdings Berhad. All of these companies are incorporated in Malaysia. The principal place of business of the Manager is Level 14, Kenanga Tower, 237, Jalan Tun Razak, Kuala Lumpur. The Fund seeks to provide unitholders with regular income stream while maintaining capital stability. 2. MANAGER S FEE The Manager s fee is calculated on a daily basis at a rate not exceeding 1.00% per annum of the NAV of the Fund as provided under Clause 12.1 of the Deed. The Manager is currently charging Manager s fee of 0.30% per annum of the NAV of the Fund with the effect from 29 November Prior to 29 November 2016, the Manager s fee was calculated at 0.12% per annum of the NAV of the Fund. 3. TRUSTEE S FEE Trustee s fee is calculated on a daily basis at a rate not exceeding 0.02% per annum of the NAV of the Fund as provided under Clause 12.2 of the Deed. The Trustee s fee is currently calculated at 0.02% per annum of the NAV of the Fund for the current and previous financial periods. Kenanga Cash Fund Quarterly Report 10

16 4. DISTRIBUTIONS Distributions to the unit holders were made on the following dates: to to Distributions on: 30 November 2017/30 November ,931 1,126, December , January ,574-39,261 1,126,938 Distributions to unit holders were derived from the following sources: to to Interest income 60, ,089 Distribution out of distribution equalisation (Note 6(a)) (6,112) (1,197,195) Undistributed income brought forward 10,064 2,044,069 64,708 1,221,963 Less: Expenses (10,447) (95,025) Gross distribution for the financial period 54,261 1,126,938 Less: Tax expense (15,000) - Net distribution for the financial period 39,261 1,126,938 Gross distribution per unit (sen) Net distribution per unit (sen) SHORT TE DEPOSITS Short term deposits are held with licensed financial institutions in Malaysia at the prevailing interest rates Short term deposits (tenure: less than 7 days) 700,000 6,418,000 Short term deposits (tenure: more than 7 days) 6,080,000 7,312,849 6,780,000 13,730, Kenanga Cash Fund Quarterly Report

17 6. NET ASSET VALUE ATTRIBUTABLE TO UNIT HOLDERS NAV attributed to unit holders is represented by: Note Unit holders contribution (a) 6,786,952 13,718,875 Retained earnings: Realised reserves 3,868 18,433 6,790,820 13,737,308 (a) Unit holders contribution to to No. of units No. of units At beginning of the financial period 9,453,576 9,453, ,380, ,380,085 Add: Creation of units 53,827 53,827 54,845,214 54,845,214 Less: Cancellation of units (2,770,676) (2,770,676) (396,771,842) (396,771,842) Distribution equalisation - (6,112) - (1,197,195) Distribution - 6,112-1,197,195 Reinvestment of income distributed 50,225 50,225 2,265,418 2,265,418 At end of the financial period 6,786,952 6,786,952 13,718,875 13,718,875 The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad, and parties related to the Manager as at 31 January 2018 were nil (31 January 2017: nil). Kenanga Cash Fund Quarterly Report 12

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20 Investor Services Center Toll Free Line: Fax: investorservices@kenanga.com.my Head Office, Kuala Lumpur Level 14, Kenanga Tower, 237 Jalan Tun Razak, Kuala Lumpur, Malaysia. Tel: Fax: