1 July 2009 July 2009 Adrian Cowell Rexiter Capital Management Limited Asia ex-Japan – A Perspective

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July 2009July 2009

Adrian CowellAdrian Cowell

www.rexiter.comwww.rexiter.com

Rexiter Capital Management LimitedAsia ex-Japan – A Perspective

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““I have only told the half of what I saw”I have only told the half of what I saw”

Epitaph of Marco PoloEpitaph of Marco Polo

The Mongol Empire The The Mongol Empire The First Asia ex-JapanFirst Asia ex-Japan

Marco Polo Marco Polo 1254-13241254-1324

Kublai Khan 1215-Kublai Khan 1215-12941294

““For ye shall find therein all kinds of wonderful things, For ye shall find therein all kinds of wonderful things, and the divers histories of the Great Hermenia, and of and the divers histories of the Great Hermenia, and of Persia, and of the land of the Tartars, and of India….”Persia, and of the land of the Tartars, and of India….”

Marco PoloMarco Polo

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Ibn Battuta, 1304-1368(9) Moroccan scholar and traveler

“Rihla” or Voyage 1325-1354, 75k miles, 44 countries, the Muslim world

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Christopher Columbus, 1451-1506Christopher Columbus, 1451-1506

Which is why Christopher Columbus tried to short cut the other way round … … with Which is why Christopher Columbus tried to short cut the other way round … … with this result …this result …

……but…but…

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Admiral Zheng He 1371-1433

Seven huge expeditions 1405-1433

Kangido Map 1402

Wu Bei Zhi chart West India, Ceylon and East Africa

Fra Mauro Map 1420

Giraffe, 1414

Zheng He’s Treasure ShipsZheng He’s Treasure Ships

China’s first blue water capabilityChina’s first blue water capability

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The Silk RoadThe Silk Road

Cloves and NutmegCloves and Nutmeg

The Spice TradeThe Spice Trade

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•In 2008, nominal World In 2008, nominal World GDP was US$60.689trGDP was US$60.689tr

•In 2008 nominal Asia In 2008 nominal Asia Pacific GDP was Pacific GDP was US$16.774trUS$16.774tr

• World ranking; China 3World ranking; China 3rdrd US$4.4tr, India 12US$4.4tr, India 12thth US$1.2tr, Korea 15US$1.2tr, Korea 15thth US$947bn, Indonesia 19US$947bn, Indonesia 19thth US$511bnUS$511bn

• 2009 estimates are World 2009 estimates are World US$54.863tr and Asia Pacific US$54.863tr and Asia Pacific US$16.437tr US$16.437tr

• source IMFsource IMF

•In the first millennium, In the first millennium, India accounted for 30% of India accounted for 30% of global GDPglobal GDP

•By 1500 China had By 1500 China had surpassed Indiasurpassed India

• Until 1850, China and India Until 1850, China and India alternated as No1 and No2 alternated as No1 and No2 by GDPby GDP

• source Wikipediasource Wikipedia

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Asia TodayAsia Today

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““Demography is Destiny”Demography is Destiny”

Auguste Comte, 1798-1857 French Auguste Comte, 1798-1857 French philosopher, mathematician and sociologistphilosopher, mathematician and sociologist

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From the Great Wall … to Shanghai … and Beijing 2008From the Great Wall … to Shanghai … and Beijing 2008

The Han River, Korean War … the 2002 Seoul World Cup Stadium … and Pyongyang, DPRKThe Han River, Korean War … the 2002 Seoul World Cup Stadium … and Pyongyang, DPRK

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Asia Market Capitalisation by Index

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(Price, USD) 30-Jun-09 31-Dec-08 31-Dec-03MSCI AC World Index 244.905 227.683 251.131Performance +7.6% -9.3%Free Float Adj. Market Cap. (USD bn) 20,094 18,479 18,243 -Asia ex Japan 8.4% 6.6% 3.4% -5 Biggest Asian Markets 7.1% 5.5% 2.6%

(China/Korea/Taiwan/HK/India)

MSCI Emerging Markets Index 761.295 567.042 442.778Performance +34.3% +28.1%Free Float Adj. Market Cap. (USD bn) 2,408 1,747 826 -Asia ex Japan 57.4% 55.7% 54.0% -4 Biggest Asian Markets 51.0% 49.2% 44.0% (China/Korea/Taiwan/India)

MSCI AC Asia ex Japan Index 386.043 288.109 255.318Performance +34.0% +12.8%Free Float Adj. Market Cap. (USD bn) 1,695 1,213 625 -5 Biggest Asian Markets 84.3% 83.7% 77.1% China 27.6% 26.2% 10.4% Korea 17.5% 19.6% 24.1% Taiwan 16.7% 15.7% 16.1% HK 11.9% 12.9% 19.0% India 10.7% 9.4% 7.5%

MSCI EM

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Asia– In Context Asia

A land mass of 44.579 million kmsq (17.212million sq miles), the world’s largest, and most populous continent

A population of 4.162bn or 60% of the world with 7 of the world’s 10 most populous countries; China, India, Indonesia,

Russia, Pakistan, Bangledesh and Japan

UNDP estimates the population increased by a factor of 2.5 from 1950-2000, an absolute 2.2 bn or 1.8% annually

47 countries in distinct regional groupings; East Asia, Central Asia, South East Asia, South Asia, and West Asia

In 2000;

East Asia had a population of 1.4bn, a growth rate of 0.67% annually and life expectancy of 72.1 years

South East Asia had 520m, 1.4% annual growth rate and expectancy of 66.7 years

South Central Asia had 1.4bn, growth of 1.66% and expectancy of 63.2 years

Dramatic improvements in life expectancy drove the population explosion, and are being followed by a dramatic drop in the

fertility rate led by China which will both age and suffer a shortage of brides

UNPD forecasts 1975-2025; China 930m to 1.4bn (median age 39), India 620m to 1.3bn, Vietnam 48m to 105m, Korea 35m

to 50m (median 44) or a unified 75m, Pakistan 70m to 250m which compare to the United States at 385m and Japan at

123m (median 50)

Slum dwelling urban population (World Bank/UN 2005); East Asia 33%, South Asia 59%, West and South East Asia 27%

Population, per capita GDP and potential Consumption, Low level of Public and Private Debt, growing Foreign Reserves

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Asia– In Context

Asia Infrastructure

The ADB estimates that less than 1% of US$1tr Euro-Asia trade is land transported through Central Asia (12 land locked

countries)

China and seven Central Asian countries have agreed to invest US$19.2bn in the 21 st century equivalent of the Silk Road

(supported by ADB, EBRD, Islamic DB, IMF, UNDP, World Bank).

Additional to UN and EU projects to build 140k km roads and 14k km of railways

Central Asian GDP estimated to double by connection to the Trans Siberian Railway and to deep water ports

The Asian Highway – AH1 from Tokyo to Bulgaria; US$25bn in commitments. China is building 12 highways to link

Xingjiang with Central Asia

The Iron Silk Road – four corridors; Northern (Trans Siberian to Korea), ASEAN (Kunming-Singapore etc), Southern (CPIT -

Yunan to Turkey), Europe to the Persian Gulf. Trans Asian Railway Network – 17 Asian nations to serve 13 of the top 20

container ports with 81k km network

Container Ports; Asia has 18 of the world’s top 20 container ports by ‘000 TEU (Singapore, Shanghai, Hong Kong, Shenzen,

Pusan)

Oil and Gas Pipelines; China sources most of its crude from the Middle east but is diversifying into central Asia – Kazakh-

China pipeline. Transneft is building the East Siberian pipeline to China, and phase 2 will deliver to the Pacific coast.

Turkmenistan (via Uzbekistan and kazakhstan) to China gas pipeline under construction

Japan became rich before it became old, Chinese may become old before they become rich

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India – In Context

Indian Infrastructure

India - The Infrastructure Opportunity

Government is targeting US$1.5tr of investment by 2017 versus actual spend of US$200bn in last five years

11th Five Year Plan

Power generation; Capex in 10th Plan (‘03-’07) of US$48bn (vs target US$70.5bn) could rise in 11 th Plan (’08-’12)

to US$108bn (vs target US$150.4bn) and in 12 th Plan (’13-’17) to US$171bn

Roads in 11th US$57bn (up 60% PoP vs target US$76.1bn) – six lane, four lane, expressways, highways and rural

roads

Railways in 11th US$50bn (70% PoP vs target of US$62.2bn) – dedicated freight corridor, 10,300km new track etc

Four large airports (320% PoP for target US$8.5bn), 35 small airports

Port growth of 13 times; add 493million mt in major ports, and 345million in minor ports for target of US$18bn

Build it and Growth will Come

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India – In Context India

A land mass of 3.3 million kmsq, the 7th largest country in the world, and the 2nd largest in Asia, after China

Land boundary of 14,103km with a coastline of 7,517km; 48% of land is arable, 20.6% under forest

As of 2001, population of 1.03bn, 17% of the world population and 2nd largest in the world after China, but growing at

1.45%pa. 1991-2001 population grew by an absolute 21.5% (1.9% CAGR), or 181million over the period.

166million in state of Uttar Pradesh - (6th largest in the world after Brazil)

97million in state of Maharashtra

83million in state of Bihar – (bigger than Germany)

Current assumptions suggest a population of 1.3billion by 2026 (ie adding another “United States”), and by 2050 India

could be the most populous country in the world

Life expectancy is 65.4 years, up from 54.4 in 1981, and literacy rate is 64%, up from 43.6% in 1981

59% of the population is younger than 30 years, 50% is under 25 years, and the labour force will grow at an estimated

1.7-1.8% to 2015. Working population estimated to peak at 60% by 2020 (China peak to be reached around 2010)

36 cities greater than 1m (China has 150 such cities), top 3 cities have a population of 42 million, and the largest,

Mumbai, has a population of 16 million; urban population increased from 23% in 1981 to 28% in 2001 (China 39%)

In 2005 an estimated 300million or 27% of the population still lives below the poverty line (55% in 1974)

Population 17% of World ; LOW DEPENDENCY, Expanding Workforce

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India – In ContextIndia

The world’s largest democracy, independent since 15 th August 1947, founded on socialist, democratic and secular principles

Lok Sabha - Lower House of 543 elected members plus 2 appointed by the President

Rajya Sabha - Upper House of no more than 250 members chosen by elected members of the State Assemblies

The President is the head of State, and the Prime Minister heads the government

Since 1990 the country has been governed by coalition, previously governed by Indian National Congress Party

6 national political parties (criterion is recognition in four or more states), and 47 state parties

In 2004 election, Congress, United Progressive Alliance coalition leader, won 150 seats in its own right and leads a

coalition of 292 seats, and Bharatiya Janata (BJP), leader of the National Democratic Alliance, won 131 seats in its own

right, and led an opposition coalition of 179 seats, with a further 72 seats made up of other parties

Contentious Nuclear Treaty with the United States (civilian nuclear co-operation)/Terrorism

Congress led coalition won the ’09 election winning 206 of 543 seats and its coalition has 262 with others for an

effective majority

Predominantly Hindu

81% Hindu

13% Muslim (second largest Muslim population after Indonesia), 2% Christian, 2% Sikh, 1% Buddhist

22 official languages and 500 tribes; Hindi, the official language is spoken by 40%, English is the predominant business

language – a bank note has its denomination printed in 16 languages

Largest Democracy in the World

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Strong GDP for the past five years; in 2006-7 GDP grew 9.2%. India has joined the US$1trillion GDP club of nations, as of

end 2007 similar in size to Russia and Brazil

GDP breakdown is; Agriculture 18.5%, Industry 26.4% and Services 55.1%

Government target for 11th Five Year Plan is an average growth rate of 9%

Infrastructure spending is 4% of GDP vs 10% in China; target is 9%

Education spending is 1% of GDP vs 10% in China; target is 6%

Agriculture is 18.5% of GDP (55% in 1951); self sufficient since 1970, 60% of population dependent, less than 30% of

land irrigated so the monsoon is critical (this year officially started 31st May 2008)

The world’s 2nd largest apparel producer after China, 3rd largest cotton grower after US and China; textiles 14% of exports at

$14bn

World’s 5th steel producer at 45mtpa with per capita consumption of 44kg vs world average of 150k; huge iron ore reserves,

targets 100mt steel production by 2012

World’s 2nd largest cement producer after China at 160mt (top 2 companies; 40%); adding 90-100mt of capacity over 3 years

In Pharmaceuticals India produces 8% of world bulk, should export US$7bn in ‘08

Huge Resources but Inadequate & Overloaded Infrastructure

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End ’07 recoverable hydrocarbon reserves estimated at 5.5bnbbl and 1,055bcm of gas; import dependence of 75%,

net oil imports are a key drag on economy. New discoveries being made off east coast.

Refining capacity of 150mtpa, is in surplus, and will rise to 215mtpa by 2012

World’s 3rd largest coal producer at 433mtpa after China and US. Estimated reserves of 235bnt

July ’07 installed generating capacity was 135,000MW. Target is to add 160,000MW in ten years. Sources are 66%

thermal, 26% hydro, 3% nuclear, 3% renewable

Country has a power deficit of 9-14%.

Losses in transmissions accounted for up to 30%

Self sufficient in aluminium at 1.2mt, copper at 0.7mt and zinc at 0.4mtpa. World 6 th in bauxite production, 3rd in

chromite, 4th in iron ore

Sensitive to Oil, Food Prices ; GOVERNMENT REFORM, Dynamic Private Sector

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Sachin TendulkarSachin Tendulkar

Cricket SuperstarCricket Superstar

Shahrukh KhanShahrukh Khan

Bollywood A List Film StarBollywood A List Film Star

++

==

++

==

JeterJeter WoodsWoods SmithSmith ClooneyClooney

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China – In Context China

A land mass of 9.5 million kmsq, the largest in Asia

Land boundary of 22,117km with 14 countries (Afganistan, Bhutan, Burma, India, Kazakhstan, DPRK, Kyrgyzstan,

Laos, Mongolia, Nepal, Pakistan, Russia, Tajikistan, Vietnam) with a coastline of 14,500km; 15% of land is arable (but

threatened by erosion and economic development)

As of 2007, estimated population of 1.33bn, the world’s most populous country, but growing at 0.6%pa; labour force is

798mk;43% in agriculture, 25% industry and 32% services

91.9% Han Chinese

Minorities; Zhung, Uygur, Hui, Yi, Tibet, Miao, Manchu, Mongol, Buyi, Korean

Atheist, but historically Taoist and Buddhist; Christian 3-4%, Muslim 1-2%

Mandarin (Putonghwa), Cantonese, Shanghainese, Fuzhou, Hokkien, Xiang, Gan, Hakka, and minority languages

Life expectancy is 73.47 years (m 71.61, f 75.52), and literacy rate is 90.9%, median age 34.1 years

19.8% younger than 15 years, 72.1% between 15-64 years, and 8.1% 65 years and above

150 cities greater than 1m, top 3 cities have a population of 33m; Shanghai 12.7 m, Beijing 10.8m and Tianjin 9.3m;

urban population 43%

Urbanisation, rural poverty (8% below poverty line), aging population and sex imbalances (at birth 1.1 male to female)

are issues

Rapidly Aging Population with Limited Social Welfare Safety Net

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China – In ContextChina

The world’s largest country, communist, established People’s Republic of China 1st October 1947

23 provinces (Taiwan is classified as the 23rd), 5 Autonomous Regions, 4 Municipalities and 2 Special Administrative

Regions

President Hu Jintao (since March 2003) and Vice President Xi Jinping (March 2008) elected by National People’s

Congress, Prime Minister Wen Jiabao and 4 Vice Prime Ministers and State Council appointed by National People’s

Congress

National People’s Congress elected ’07/’08, next election ’12/’13; only Communist Party members and allies may stand

Since 1978 transformation from a centrally planned economy to a more market oriented economy, diversified banking

system, private sector and stock market

Currency pegged to the US dollar until July 2005 when revalued by 2.1%; appreciated by 20% to late 2008

Economy has grown ten fold since 1978

By Purchasing Power Parity 2nd largest in the world US$7.8tr (2007 US$7.1tr, 2006 US$6.5tr)

At official exchange rates, real GDP was US$4.2tr in 2008 with GDP growth of 9.8% (2007 13%, 2006 11.6%),

estimated 2008 per capita GDP US$6,000

2008e GDP is 10.6% agriculture, 49.2% industry, 40.2% services; military expenditure is 4.3% of GDP

Public sector debt is estimated 2008 at 15.7% of GDP, CPI at 5%, market capitalisation US$6.226tr (no 3)

800m Work Force ; ENORMOUS ADDRESSABLE MARKET/Subsidy Programmes

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China – In ContextChina

Exports/Imports

Exports US$1.465tr fob world no 3; Imports US$1.156tr fob; trade balance US$296bn, current account surplus US$271bn

Exports (2007); US 19.1%, HK 15.1%, Japan 8.4%, Korea 4.6%, Germany 4%

Imports (2007); Japan 14%, Korea 10.9%, Taiwan 10.5%, US 7.3%, Germany 4.7%

Trade balance US$296bn, current account surplus US$271bn or 8.4% of P

Foreign exchange reserves; US2.033tr end 2008 (a positive and a negative), external debt US$420.8bn

Power generation and consumption best economic indicators

Per capita income (2007) US$5,420

Challenges

Coastal economic development has prompted 200m relocation

Job creation; new members of work force, and former employees of state enterprises

High savings rate and low levels of consumption (rural/national subsidy)

Minorities

Liberalising command economy

Infrastructure

Correlation? ; Who Dances to Whose Tune … Economically?

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Yao MingYao Ming

SuperstarSuperstar

Gong LiGong Li

Film StarFilm Star

++

== ==

MichaelMichael JordanJordan Gong LiGong Li

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Political Challenges in AsiaPolitical Challenges in Asia

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Kim Jong-Il’s “Rodong 1” Missiles … outgoing …. vs ….. President Obama’s incoming “Rodham 1”!

The Democratic Peoples’ Republic of Korea (DPRK)

Dear Leader health and succession concerns, desperately seeking attention!

Propensity to test bombs and missiles

DPRK Missile Arsenal “as reported”;

600 Scud Missiles with a range of 320-500kms

200 Rodong 1 Missiles with a range of 1,300kms

Taepodong 2 under development with a range of 6,700kms

North Korea – Missile & Fissile Encounters

Euna Lee//Laura Ling incarceration for 12 years hard labourEuna Lee//Laura Ling incarceration for 12 years hard labour

… … and now virtual cyber attacks?and now virtual cyber attacks?

Version 2007 vs 2009Version 2007 vs 2009

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Asian Politics Generally Positively Inclined

China and Hong Kong

Taiwan, but…

Sustainability of a capitalist economy and the current political system/Tibet and other minorities, and

Frontiers with inter alia; India, Bhutan, Spratly Islands, Paracel Islands,

India

Successful democratic election in 2009 won by a Congress led coalition

Malaysia

Repeal of Malay protection law

Indonesia

Likely first round winner re-elected as President

Singapore

Stable

Thailand

Dependent upon the health of the King, but influence of Thaksin could be declining

Philippines

Incumbent President trying to change the constitution

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Politics

Of More Concern

Pakistan

Security

Sri Lanka

Reconciliation/reconstruction

Iran

Aftermath of Presidential election/proliferation

Burma

Human rights

Central Asia – the Stans

Russia

Middle East

Security

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Comments on Recent Performanceof the Rexiter Asia ex-Japan Strategy

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Asia ex Japan Performance (USD) – Q2 2009

Relative performance has improved with the recovery in markets.The portfolio was positioned for recovery from the end of 2008.

April – Composite +17.1% (Benchmark +16.8%).

Positive Contributors: Stocks in India, HK and Singapore

Negative contributors: Stocks in Korea, O/W China and The Philippines

May – Composite +17.0% (Benchmark +16.1%).

Positive contributors: Stocks in HK, India and Taiwan. U/W Korea, Malaysia, O/W India

Negative contributors: Stocks in Korea, China, Singapore. U/W Singapore

June (Prelim) – Portfolio +0.3% (Benchmark -0.5%)

Positive contributors: Stocks in India and Korea. O/W Thailand, China, U/W Taiwan

Negative contributors: Stocks in China, Hong Kong

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Markets turned decisively higher in March and rose by 54% in March to May

Our decision to position the portfolio for recovery (starting in November 2008) has proved to be correct. Markets are up nearly 50% since then.

We further reduced defensive exposure at the end of Q1, after January /February’s weakness.

We managed to recapture our underperformance of March (Resorts World, Public Bank, PLDT) in April-May

India – a strong positive driver of relative performance in the quarter

Positive election surprise – the new government is better placed to drive economic reform forward

Relatively low exposure to international economy; positively leveraged to an improvement in the availability of funds

We started the quarter 1% overweight, with a portfolio positioned for recovery (O/W financials, consumer durables, infrastructure/capital goods)

We remain positive in the medium to long run, but are now cutting back relative exposure towards neutral.

Property – another positive driver

Beneficiary of low interest rates and improving sentiment

Our preference is for HK/China over Singapore, as the supply/demand balance is more supportive

Taiwan fertiliser is an indirect property play on hopes for improving liquidity flows/cross-straits relations

As with India, we have reduced our O/W to the sector a little (Wharf) after recent outperformance

At quarter end, we are starting to take some profits in areas that have done particularly well (India, financials, real estate).

Asia ex Japan Performance (USD) – Q2 2009

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Comments on Recent Activity and Positioning

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Country and sector bets have fallen, reflecting profit-taking in areas wherewe have been overweight and which have done particularly well.

Portfolio Activity – Summary (Q2 2009)

We have selectively added a little more to industrial cyclical exposure, continuing a policy that started

in Q4 2008

Purchases of Techtronic (April), POSCO (May), Sesa Goa (June). Aggregate U/W to industrials has dropped from 4.5% to 2%

IT has moved back to being slightly underweight following profit taking in Hon Hai (June)

Contact with sector management suggests the short term trend is positive. Longer term visibility is low.

We have taken some profits in financials and real estate, capitalising on recent strength

Reductions in IDFC (India), Bank Rakyat (Indonesia, though partly rolled into Mandiri on valuation grounds), China Merchants Bank, Singapore

Exchange and Public Bank. We are now slightly underweight financials for the first time in a while.

Profit-taking in Wharf (80% above the purchase price in March). We remain 2.5% O/W real estate – with a focus on HK and China.

Our overweighting to telecoms has increased slightly, reflecting strong underperformance YTD

Purchase of SingTel out of Singapore Exchange.

Outperformance in India has resulted in an increase in our O/W to 3.5% at quarter end, which we are

now reducing

Our O/W to China has reduced by 3% to 1%. This has been one of the best performing markets in the

last year

Profit taking in China Merchants Bank, New World Department Store, China South Locomotive

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Rexiter Asia ex Japan – Country Exposures (Relative) – June 2009

Changes in weighting determined principally by bottom up considerationsWe have started reducing exposure to India in July.

- Exposure to China has fallen by 3% this quarter. The O/W has fallen from 4.5% to 1%

Profit-taking. China has been one of the best performing markets in the last year and is a consensus O/W.

Sale of China South Locomotive. Reductions in China Merchants Bank, New World Department Store.

- Exposure to India has risen by 4% (O/W +2%), principally as a result of market action and positive stock selection.

Purchase of Sesa Goa (iron ore)

- Exposure to Malaysia has fallen by 1%; exposure to Korea has risen by 1%

Reduction to Public Bank. Purchase of POSCO (steel)

- In other countries, absolute exposure is little changed. Changes to relative exposure reflect relative performance.

Rexiter Asia ex Japan - Country Exposures

-5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0%

India

Thailand

Philippines

China

Indonesia

Pakistan

Hong Kong

Korea

Singapore

Malaysia

Taiw an

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Rexiter Asia ex Japan – Sector Exposures (Relative) – June 2009

Changes in weighting determined principally by bottom up considerationsOverall sector aggression has eased slightly in the quarter.

- c. 3% has been added to non-oil commodities. In aggregate neutral, but still U/W internationally traded commodities

- Purchases of POSCO (steel) and Sesa Goa (iron ore)

- We have limited exposure to chemicals and none to agri-commodities or metals other than steel. Our three Taiwanese holdings are held mostly for local/regional considerations (Chinese cement demand, Taiwanese real estate exposure).

- We have taken profits in financials/real estate. The combined O/W has fallen by 6%, from 7% to 1%

- This has been driven less by macro considerations than a desire to book profits in stocks that had done well and are looking less compelling value

- Sale of Singapore Exchange. Profit taking in China Merchants Bank, IDFC, Wharf. Reduction in Public Bank.

- Telecom valuations looking most attractive amongst the traditionally defensive sectors

- In July, we have added further to SingTel, raising the sector O/W to 2.5%

Rexiter Asia ex Japan - Sector Exposures

-2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Real Estate

Telecoms

Conglos

Consumer Staples

Cap Gds/Construction

Non-Oil Commodities

Banks

Consumer Durables

IT

Transport/Ports

Non-Banking Financials

Utilities

Energy

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Rexiter Asia ex Japan Portfolio – Country/Sector Matrix

REXITER ASIA EX JAPAN PORTFOLIO VS MSCI ASIA EX JAPAN INDEXINTEREST RATE/CREDIT SPREAD SENSITIVE DEFENSIVE DISCRETIONARY SPENDING TRADE HEAVY CYCLICALS OTHER

Banks Non Banking Real Estate Telecoms Utilities Consumer Staples Media Consumer IT Transport, Ports Cap Gds / Energy Commodities Conglomerates REXITER MSCI AC Difference

Financials & Healthcare Durables & Comm Services Construction Asia Ex Jpn

CHINA Bank of 2.5 Ping An 2.0 China 2.4 China Mobile 2.2 China 1.0 China 0.6 Belle Int'l 0.6 China 1.7 China Railwy 1.4 CNOOC 1.8 28.5 27.3 1.2

China Insurance Resources Land Resources Power Resources Ent. New World 0.5 Merchants Hldg Construction China 2.2

CCB 2.5 China Life 1.6 Hengan Int'l 0.5 Dept Store Anhui Conch 1.7 Shenhua Energy

CMB 1.2 CTRIP 1.1 SINOPEC 1.0

HONG KONG Hang Seng 1.5 Ch'ng Kong 1.6 Techtronic 0.8 Hutchison 1.8 10.9 11.6 -0.7

Bank Hang Lung 1.1 Whampoa

Props

SHK Props 2.1

Wharf Hldgs 2.0

INDIA HDFC 1.8 Bharti Airtel 1.9 Zee Ent 1.4 Tata Cons. 2.3 Larsen 2.5 Sesa Goa 1.2 14.2 10.7 3.5

IDFC 2.2 Deccan 0.9 Services & Toubro

Chronicle

INDONESIA Bank Rakyat 0.5 Perusahaan 1.9 2.9 2.4 0.5

Bank Mandiri 0.5 Gas

KOREA Samsung 1.6 Hyundai 0.9 SK Telecom 1.3 Shinsegae 1.9 LG Display 1.9 Hyundai 0.7 16.7 17.7 -1.0

Fire & Marine Development LG Dacom 1.7 Orion Corp 0.6 Samsung 2.6 Steel

Electronics POSCO 2.3

LG Electronics 1.2

MALAYSIA Public Bank 0.7 Resorts 0.8 1.5 4.1 -2.6

World

PAKISTAN 0.0 0.0 0.0

PHILIPPINES Robinsons 0.5 PLDT 1.6 2.1 0.6 1.5

Land

SINGAPORE SingTel 1.2 Venture 1.7 Keppel Corp 1.2 4.1 6.5 -2.4

TAIWAN Chinatrust 2.0 Hon Hai 1.9 Asia 1.2 12.7 17.1 -4.4

Financial TSMC 1.7 Cement

Mediatek 1.4 Taiwan 0.7

SPIL 1.7 Cement

Taiwan 2.1

Fertiliser

THAILAND SCB 1.4 PTT 1.7 3.8 1.9 1.9

KBank 0.7 97.4 99.9 -2.5

REXITER 17.5 5.2 10.6 9.9 2.9 3.6 2.3 3.0 16.4 1.7 7.6 6.7 8.2 1.8 97.4MSCI AC Asia X Jpn 18.0 6.5 8.2 8.4 4.4 3.2 0.0 6.1 17.2 2.6 7.4 8.6 8.4 0.9 99.9Difference -0.5 -1.3 2.4 1.5 -1.5 0.4 2.3 -3.1 -0.8 -0.9 0.2 -1.9 -0.2 0.9 -2.5

Aggression 0.6 -0.4 -0.8 -1.7 -1.9 TOTAL -4.2

36

New Additions to the Portfolio – Q2 2009

Techtronic (HK)

A leading supplier of power tools, outdoor equipment and home care appliances (brands include Ryobi, Milwaukee, Hoover, Dirt Devil and Vax). Techtronic is also a contract manufacturer for Bosch, Philips and Colgate. Strong relationship with Home Depot of the USA. Now returning to a free cash flow positive position, following its Hoover acquisition (2007). Net debt to equity is 60%, but falling, and financing risks are abating.

Acquired at an expected cycle bottom on an estimated 7.5x 2009 PER (6.5x 2010), 0.9x P/BV (RoE 12%), 15% free cash flow yield, 2% dividend yield.

Hengan international (China)

One of China’s top 3 producers of tissues, sanitary napkins and children’s nappies. The company has successfully competed with MNCs such as P&G and Kimberley Clark for 20 years and continues to gain share in a still fragmented market. Strong position in second and third tier cities. Improving product quality has the scope to raise average selling prices and margins. A recent visit with management suggests scope for upside surprise on consensus earnings in the short term.

Acquired on an estimated 21x 2010 PER, 5.4x P/BV (RoE 23%). Net cash. Free cash flow yield of 3%. Earnings growth 30%-40% for 2009/10. The purchase was funded with part of the position in New World Department Store (China) which had recently outperformed other China consumer peers.

Bank Mandiri (Indonesia)

One of the leading banks in Indonesia and a beneficiary of continued buoyant credit market. Formed from a merger of four state-owned banks in 1998, Mandiri has seen steady improvements in the structure of its assets/funding and profitability – a trend that has scope to continue further. We expect RoE to converge with its more expensively rated peers over time. In the shorter term, we believe assets quality concerns are probably overdone and we think there is more upside potential to consensus than for the other leading banks.

The acquisition was funded by profit taking in Bank Rakyat, with a view in part to improving portfolio liquidity. The shares were acquired on an estimated PER for 2009 of 11.5x (9.5x 2010), 2.1x 2009 P/BV (RoE 20%) and a dividend yield of 4.4%. Tier one capital 12.5%, total CAR 15%, 120% loan loss reserves/NPLs (7% gross loans).

Singapore Telecom (Singapore)

SingTel offers diversified exposure to regional telecoms, through its investments in Bharti (India), Telkomsel (Indonesia), Optus (Australia) and AIS (Thailand). This, and an improving performance in Singapore, is expected to drive (10%+) earnings growth for the next two years, which is solid by sector standards. Recent strength in the Australian Dollar/Indonesian Rupiah will also assist in the short term. Earnings expectations are currently low, but have started to improve more than for the sector at large.

Acquired at the lower end of its 12m trading range against the market, the shares are priced on an estimated PER of 11x for March 2010, 2.1x P/BV (RoE 18%) a dividend yield of 5% and a free cash flow yield of 6.5%. Stripping out the value of its listed associates, the implied value of the Singapore and Australian operations is about 1SD below the long term average.

37

Comments on the Investment Outlook

38

Investment Outlook

We have taken a little risk off the table in recent weeks.

Consensus earnings estimates have been rising for the first time in a while

At the end of March, the expectation was for a cumulative decline in Asia X Japan earnings of 39% in 2008/09, with a 31% rise in 2010.

At the end of June, the consensus was for a cumulative decline of 31.5% in 2008/09 earnings, with a rise of 30% in 2010.

Based on consensus, the region trades on 17.6x 2009 PER, 1.7x P/BV with RoE expected to be c.10%. 13.5x 2010 PER, 1.6x P/BV, RoE 11.8%

Investment Positives

Earnings upgrades have been continuing in June (2009E +2.3% after a 1.9% rise in May). The upgrades seem to be broad-based.

The leading indicators are generally sending a positive signal. China’s PMI survey in June rose slightly from May’s level to 53.2.

In the trade-exposed economies, the sequential growth in production in Q2 may well surprise positively. Inventories are still down YoY, but are up QoQ.

Asia is importing the West’s very low level of interest rates, but is not in the same economic mess. This should be positive for asset prices.

Positive political developments in India, Thailand, Malaysia and Indonesia.

Valuations have recovered to “average” territory. The markets are not yet “obviously expensive” – monetary policy settings could send them higher.

Reasons for Caution

The West is still in the mire. Deflation remains a real threat and exports are likely to remain difficult.

Continuing risk of financial default/contagion – leverage and the stock of derivative exposure remains very high.

The speed of the markets’ recovery has been unusually fast.

The cyclical rally is looking somewhat extended vs defensives. The markets have anticipated the inventory cycle – the degree of follow through is

important.

The markets are certainly no longer “cheap”

39

Asia ex Japan Equities – Earnings in Previous Global Downturns

In the 82 (Volcker) recession, USD GDP fell by 2.7%. In 90/91, it contracted by 1%. In the 00/01 recession, USD GDP growth remained positive.

The current consensus for Asia ex Japan is forecasting earnings to decline by 39% over 2008/09. This is enough to take RoE down to c.9% from

end 2007’s 14.5%. On current consensus, earnings in 2010 will be 13% below 2007’s level. EPS is eepected to rise by 17% in 2011

In 1990/91, RoE troughed at c.9.3%. In 2000/01 (the tech wreck) trailing RoE troughed at 7.5% (May 02) – to get there, earnings would have to

decline by about 50% from end January 07 reported levels on the same assumption for the payout. (RoE in 1983 troughed at 8.2% - although

the composition of the index then was very different).

The duration of earnings recessions may be under-estimated. It is true that, in 1990/91, it took only a little over 1 year for earnings to trough

and about 2 years for them to recover to their previous levels. However, in the tech wreck, earnings took almost 2 years to bottom and 4 years

to regain their prior level and, from 1982, they took about 3 ½ years to trough and 5 ½ years to regain their previous peak.

IBES has become much more realistic; however a prediction that earnings would recover their previous peak (August 2008) in c.28 months (ie

by end 2011) would make this one of the shorter earnings cycles in a global downturn.

Source for Charts: MSCI/Citi (Earnings derived from the reciprocal of the trailing PER)

Peak to Peak Earnings Cycles in Asia ex Japan

-

5.0

10.0

15.0

20.0

25.0

0 12 24 36 48 60Months

Earn

igs I

nte

ger

Apr 82 May 90 Aug 96 Mar 00

40

Investment Outlook

We have taken a little risk off the table in recent weeks.

Consensus earnings estimates have been rising for the first time in a while

At the end of March, the expectation was for a cumulative decline in Asia X Japan earnings of 39% in 2008/09, with a 31% rise in 2010.

At the end of June, the consensus was for a cumulative decline of 31.5% in 2008/09 earnings, with a rise of 30% in 2010.

Based on consensus, the region trades on 17.6x 2009 PER, 1.7x P/BV with RoE expected to be c.10%. 13.5x 2010 PER, 1.6x P/BV, RoE 11.8%

Investment Positives

Earnings upgrades have been continuing in June (2009E +2.3% after a 1.9% rise in May). The upgrades seem to be broad-based.

The leading indicators are generally sending a positive signal. China’s PMI survey in June rose slightly from May’s level to 53.2.

In the trade exposed economies, the sequential growth in production in Q2 may well surprise positively. Inventories are still down YoY, but are up QoQ.

Asia is importing the West’s very low level of interest rates, but is not in the same economic mess. This should be positive for asset prices.

Positive political developments in India, Thailand and (probably) Indonesia.

Valuations have recovered to “average” territory. The markets are not yet “obviously expensive” – monetary policy settings could send them higher.

Reasons for Caution

The West is still in the mire. Deflation remains a real threat and exports are likely to remain difficult.

Continuing risk of financial default/contagion – leverage and the stock of derivative exposure remains very high.

The speed of the markets’ recovery has been unusually fast.

The cyclical rally is looking somewhat extended vs defensives. The markets have anticipated the inventory cycle – the degree of follow through is

important.

The markets are certainly now longer “cheap”

41

Themes to Watch For

The shape of the de-leveraging curve in the West.

The leading indicators have troughed, but the recovery will be long and drawn out.

US Quantitative Easing has arguably not yet started

Whither the US Dollar ?

Capital flows to repay liabilities vs the money press. What happens to US treasuries eventually ?

Historically, Asian equities have done better in periods of USD weakness. Repatriation of assets could delay this.

How will Asian governments respond to external weakness ?

Risks to the Asian export model when the West is as leveraged as it is

We assume currencies will not appreciate, but also that competitive devaluation is not likely. This is potentially very positive for asset prices.

Protectionism pressures to build the longer recovery is delayed

Preference for countries with the resources to combat external weakness

China. India less exposed to external demand, but fiscally constrained. Indonesia.

Korea challenged by high levels of household debt

Cash Flow, Working Capital, Leverage

Evidence of being better managed so far, but risks remain

Quality of management will probably still get the benefit of the doubt.

The US is not able to rescue the world economy this time around. Asia needsto stimulate domestic demand. How effective will its policies be ?

42

The US is Still in the Mire (and so is Europe)

The money multiplier is still not functioning. The banks are unwilling tolend. No improvement in yield spreads in Q2. Inflation expectations falling.

Change in US Fed Liabilities Since March 2009

-20

0

20

40

60

80

100

120

Currency in Circulation Deposits from USTreasury

Deposits fromCommercial Banks

Total

Commercial Paper Outstanding ($bn)

1000

1200

1400

1600

1800

2000

2200

2400

Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09

Breakeven Inflation Curve

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2009E 2010E 2011E 2012E 2013E

Current

- 1 month

- 2 months

US High Yield Spreads over Investment Grade

0

2

4

6

8

10

12

14

16

18

9-Apr 9-Jun 9-Aug 9-Oct 9-Dec 9-Feb 9-Apr 9-Jun

Source for Charts: Nomura Int’l.

43

ISM Mftg Report on Business Inventory YoY

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

Taiwanese Inventory YoY

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%


Hong Kong Base Money YoY

-20%

0%

20%

40%

60%

80%

100%

120%

Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08

A Couple of Positives - Inventories and Liquidity

There was a huge inventory shock in H2 2008 and Q1 2009

Sequentially, production has been rising in Q2 as inventories had been so depleted. Annualised sequential growth rates could easily surprise positively when company results/economic data for Q2 is published

BUT inventories are still falling YoY, which is positive looking forward

Liquidity in markets such as HK has exploded. The US Fed is expected to keep interest rates low for a long period. It does not regard it as its problem if its policy settings cause an asset bubble in Asia. Asia could (but probably won’t) allow its currencies to appreciate.

China is worried about social stability and will seek to avoid the consequences of anasset bubble bust, but we doubt it will turn hawkish in the short term.

Source for Charts: UBS

44

Asia ex Japan – Positive Comparisons with the West

-11%

-6%

-1%

4%

9%

14%

19%

24%

1997 1999 2001 2003 2005 2007 2009

US nominal retail sales, y /y , %

Chinese nominal retail sales, y /y , %

75

80

85

90

95

1990 1993 1996 1999 2002 2005 2009

NJA REER

Long Term average

0

20

40

60

80

100

120

140

160

Japa

n

Euro

zone UK

US

LatA

m

NJA

EMEA

Chi

na

Government debt, % of GDP

-15%

-12%

-9%

-6%

-3%

0%

3%

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

US NJA China

Budget Balance, % of GDP

50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

China Japan NJA EMEA US Latam UK Europe

ex UK

Loans to deposit ratio

3

5

7

9

11

13

15

17

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

US money multiplier China money multiplier

broad money / narrow money

The balance sheets of the commercial banks are much stronger ………….

………….. the banking system is working…..... …. Chinese retail sales have decoupled (even if exports have not) …………

………government finances are in much better shape (i) ………..

………government finances are in much better shape (ii) …….

………and exchange rates are attractive (though FX appreciation is likely to be capped)

Source for Charts: Credit Suisse/Datastream

45

Asia ex Japan - Some Possible Negative Risks

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

Saud

i Ara

biaNo

rway

Russ

ian F

eder

ation

Mala

ysia

Aust

ralia

Cana

daBr

azil

Mex

icoUn

ited

King

dom

Fran

ceSw

eden

Unite

d St

ates

Spain

Germ

any

Switz

erlan

dIta

lyGr

eece

Japa

nIn

diaCh

inaSi

ngap

ore

Hong

Kon

g

Net comm odity Ex ports % GDP

0.0

10.0

20.0

30.0

40.0

50.0

60.0

UK USAus

tralia

Korea

Europ

eBra

zilMe

xico

Singap

ore Taiwa

nPol

andS. A

frica

Japan

Hong

Kong Ind

iaChi

leTur

keyCo

lombia

Argent

inaMa

laysia China

Thailan

dInd

onesia

Philipp

ines

Emerging markets much more exposed to a bout of food price inflation

1

3

5

7

9

11

13

96 97 98 99 00 01 02 03 04 05 06 07 08 09-12%-10%-8%-6%-4%-2%0%2%4%6%8%10%12%14%16%18%20%

China GDP, y/y%

Electricity output, y/y%, 3mma, rhs

last data point

-10%

-5%

0%

5%

10%

15%

20%

Jul 9

5

Jul 9

6

Jul 9

7

Jul 9

8

Jul 9

9

Jul 0

0

Jul 0

1

Jul 0

2

Jul 0

3

Jul 0

4

Jul 0

5

Jul 0

6

Jul 0

7

Jul 0

8

Jul 0

9

Rolling 4-week net flows into Asia ex-Japanequity funds as a % of assets

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

70

80

90

100

110

120

130

NJA price rel. (local currency, lhs) USD TWI (rhs, inverted)

Asia is a consumer of commodities, not an exporter …………………

………… inflation (and spending power) is sensitive to rising food prices ……….

… exports, Asia’s traditional driver, remain weak ......

… and, whilst the PMI is positive, Chinese electricity output is still down YoY.

Asian equities tend to do better with the USD is weak.

Funds flow into Asian (and GEM) equities has been strongly positive.

Source for Charts: Credit Suisse/Datastream

-11%

-6%

-1%

4%

9%

1994 1996 1998 2000 2002 2004 2006 2008-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

US nominal retail sales, y/y, 6m lead

NJA exports, y/y, %

46

Asia ex Japan Cyclicals vs Defensives - Price Perf

80

90

100

110

120

130

140

150

160

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360

Oct-90 Sep-98

Apr-03 Oct-08

Asia ex Japan - Cyclicals vs Defensives Rel P/BV

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

0.80

0.85

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360

Oct-90 Sep-98

Apr-03 Oct-08

A number of leading indicators are now signalling expansion

ISM New Orders, China PMI, Singapore PMI, Taiwan Business Climate Index

But, historically, cyclicals relative performance has been less pronounced after ISM New Orders

reach this stage

There has, however, been no pronounced trend of outperformance or underperformance in the months after this point has been

reached.

History also suggests that the largest share of cyclicals’ outperformance is in the first 6 to 7

months after the bottom

Relative valuation: Cyclicals now trading on c.80% of Defensives P/BV – above the average of the

last 15 years (c.65%)

Cyclicals tend to do less well when bond yields are declining.

Source for Charts: UBS/Credit Suisse/MSCI. Cyclicals comprise IT, Industrials, Materials and Cons. Discretionary. Defensives comprise Cons. Staples, Telecoms, Health Care and Utilities

Whereas in the last 2 quarters we have been actively searching forcyclical laggards, now we are more open in our approach to sectors.

The Outperformance of Cyclicals in Context

Asian Telecom Sector vs MSCI Asia ex Japan

80

90

100

110

120

130

140

150

Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

47

Asia ex Japan – Regional Valuations (June 2009)

Valuations back to “average” territory. Earnings progressionincreasingly important. Monetary policy settings currently supportive.

MSCI Asia ex Japan - Trailing Pre-Exc PER

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Dec-99

Jun-00

Dec-00

Jun-01

Dec-01

Jun-02

Dec-02

Jun-03

Dec-03

Jun-04

Dec-04

Jun-05

Dec-05

Jun-06

Dec-06

Jun-07

Dec-07

Jun-08

Dec-08

Jun-09

MSCI Asia ex Japan - Trailing P/BV vs RoE

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

12/31/95 12/31/97 12/31/99 12/31/01 12/31/03 12/31/05 12/31/07

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

P/BV (LHS) RoE (RHS)

MSCI Asia ex Japan - Trailing Divided Yield

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Dec-9

5

Jun-9

6

Dec-9

6

Jun-9

7

Dec-9

7

Jun-9

8

Dec-9

8

Jun-9

9

Dec-9

9

Jun-0

0

Dec-0

0

Jun-0

1

Dec-0

1

Jun-0

2

Dec-0

2

Jun-0

3

Dec-0

3

Jun-0

4

Dec-0

4

Jun-0

5

Dec-0

5

Jun-0

6

Dec-0

6

Jun-0

7

Dec-0

7

Jun-0

8

Dec-0

8

Jun-0

9

Asia ex Japan - Div Yield-US Corp Bond Yield

-16-14

-12-10

-8-6

-4-2

02


Equities Cheap

Equities Ex pensiv e

Source for Charts: MSCI/Credit Suisse. Div Yield-US Corp Bond Yield: UBS

48

Asia ex Japan – Relative Valuations (June 2009)

Asian fundamentals are clearly better, but relative valuations are looking morestretched.

Asia ex Japan - P/BV - RoE rel to World

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

01 02 03 04 05 06 07 08 09

Asia ex Japan Trailing PE rel to World

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

90 92 94 96 98 00 02 04 06 08

Asia ex Japan - Dividend Yield rel to World

-40%

-20%

0%

20%

40%

60%

80%

100%

90 92 94 96 98 00 02 04 06 08

Asia ex Japan - Price to Cash Flow rel to World

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

90 92 94 96 98 00 02 04 06 08

Source for Charts: MSCI/Credit Suisse.

49

Appendices

Rexiter Capital Management

www.Rexiter.comwww.Rexiter.com

50

Rexiter Capital Management - Overview

“The Best of Both Worlds”

An investment boutique backed with world-class resources

* Economic interest

SSgA / ABPJoint Venture

75%

Rexiter Staff 25%

A stable structure. No-one has left the Asian team

since Rexiter was formed in 1997.

SSgA provides IT, dealing, back office, compliance and

risk management as well as marketing support

Managers concentrate on investment

Strong sense of company ownership. Strong support in resources and systems

51A wealth of experience, focused on an attractive balance of risk and reward

Our Company

An investment boutique exclusively focused on Asia and emerging markets

A stable, experienced team owning 25% of the company

USD 4.4bn of AUM at end May (of which c. USD 3.0bn is in Asia ex Japan markets)

Our Process

A disciplined approach – but one that encourages original thinking

Quality and growth, at reasonable valuations. Engagement with management

Control on risk through diversification and an approach of “considered contrarianism”

Rexiter - Summary of Key Points

52

Rexiter - Organisation Chart

Kenneth King*Chairman

Murray Davey*Managing Director

and CIO GEM

Latin American Team

Nicholas Payne*Fund Manager

Guido GiammatteiFund Manager

Arzu Akkemik*Fund Manager

EMEA Team

Lewis JonesResearch Analyst

Fixed Income Team

John Morton*Managing Director and

CIO Fixed IncomeBOSTON

Daniel WoodFund Manager

Mark CapstickFund Manager

Sharon PowerClient Relationship

Manager

Guy JacksonRisk and Compliance

Officer

Gavin MacLachlan*Chief Operating Officer

Finance and Tax

Anna ChoAdministrator

SEOUL

Gayathri RameshkumarManagement Accountant

Sharon LimFinance Manager

SINGAPORE

David LehmanBusiness Manager

Portfolio Administrators (SSgA)

Olivier Mampouya

Emma Cook

Operations and Business

Christopher James*/**Managing Director

SINGAPORE

Asian Team

Adrian Cowell*/**Fund ManagerSINGAPORE

Solim KimResearch AnalystSEOUL

Jamshed Desai**Fund ManagerSINGAPORE

Saiyi HeResearch Analyst

Zhixin ShuSenior Research

Analyst

Non-InvestmentInvestment

Karin ChecksfieldAdministrator / Receptionist

Client Relationship and Marketing

Rebecca MitchellMarketing Executive

Deborah StephensonMarketing Assistant

Ana GohAdministratorSINGAPORE

Administration

Sylvana BillingsChief Financial

Officer

Kyung-Rae MinSenior Research

AnalystSEOUL

Helena Coles*Fund ManagerSINGAPORE

Christopher Vale*/**Managing Director and

CIO Asia

Denotes functional reporting line* Directors of Rexiter Capital Management Limited as at May 2008 ** Directors of Rexiter Capital Management Singapore PTE Limited as at May 2008 Denotes line management

Stuart Butler

Elwyn McDonnell

53

Kenneth KingManaging Director and CIO

BSc Econ. University College LondonMSc Econ. University College London

Kenneth is Managing Director and Chief Investment Officer of Rexiter. Having worked for the Central Reserve Bank of Peru as an economic adviser (1967 to 1969), he returned to England to study at Pembroke College Oxford, where he obtained a Ford Foundation research fellowship on Brazilian Monetary Policy. In 1971, Kenneth became a lecturer at a post graduate research foundation in Rio de Janeiro (the Getulio Vargas Foundation). Between 1973 and 1980, he worked in the Foreign and Commonwealth Office as economic adviser on Latin America and then joined HM Treasury, as economic adviser on monetary policy. He joined NM Rothschild and Sons in 1980,becoming head of international fixed income in 1983. He moved to international equities in 1986, becoming head of international equities in 1987. He joined Kleinwort Benson Investment Management (KBIM) in 1989 as head of international equities and established its emerging markets group as CIO in 1992. Kenneth was founding Managing Director and Chief Investment Officer at Rexiter.

Christopher ValeAsian CIO. Fund Manager. Research for Greater China

BA in Economics and Agricultural Economics, University of Exeter

Chris is Rexiter’s Asian Chief Investment Officer and a Director of Rexiter, based in London. Chris joined KBIM in London in 1985 as a private client portfolio manager, with additional responsibility for UK banking research. In 1989, Chris transferred to the Hong Kong office of KBIM where he spent eight years managing Asian funds. He was made head of KBIM’s Asian team and a Director of KBIM in 1994. He was a founding Director of Rexiter in mid-1997. Chris set up the Rexiter Korean office in Seoul in late 1998 and managed the Arirang Corporate Restructuring fund on behalf of the Korean Government for 3 years. He was also responsible for initially setting up and managing Rexiter’s Korean mid-cap portfolios. Chris returned to London in March 2001.Christopher JamesFund Manager. Research for SE Asia and Pakistan

MA in Classics and Philosophy, Magdalen College, Oxford

Chris is a Director of Rexiter, based in Singapore. Having worked as a fund manager in European and global equities at KBIM from 1989 to 1993, Christopher transferred to KBIM Pacific in Hong Kong in 1994 to manage portfolios in Asia ex Japan, specialising in research on the Indian Subcontinent and Korea, as well as Taiwan. Christopher returned to London as one of Rexiter's founding directors in 1997. In October 2001, he moved from London to Seoul to manage the Mukoonghwa Corporate Restructuring Fund on behalf of the Korean government, assuming responsibility for Rexiter's investments in Korea overall and for Rexiter's Korean mid-cap portfolios from early 2001. In September 2004, Christopher established Rexiter’s new fund management subsidiary in Singapore, from where he co-ordinates Rexiter’s local investment research effort.

Helena Coles, CFAFund Manager. Research for Greater China

BA Hons in Politics and Economics, Durham University

Helena is a director of Rexiter based in London. Following three years experience as a private client manager in Asia, she worked for five years as an equities analyst, latterly at Kleinwort Benson Securities in Hong Kong, covering the consumer and media sectors in the region. In 1996, she transferred to KBIM as an Asian fund manager specializing in China, Hong Kong and Taiwan. Helena joined the Rexiter team upon its inception in mid-1997.

Rexiter - Team Biographies

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Adrian Cowell

Fund Manager. Research on Korea.

BA, Russian and French, University of Exeter

Adrian is a director of Rexiter based in Singapore. Having worked for Sumitomo Bank in London & Tokyo from 1981 to 1984, Adrian moved to Grindlay Brandts/ANZ Merchant Bank where he was assistant manager in capital markets. In 1986, he joined Kleinwort Benson in London where he became an Assistant Director in International Corporate Finance. In 1990, he transferred to Tokyo becoming General Manager in Corporate Finance. In 1992, Adrian moved to Seoul where he was the Kleinwort Benson representative. He opened the Dresdner Kleinwort Benson Branch in Seoul in 1997, where he was Branch Manager and Head of Corporate Finance. In March 2000, Adrian joined Rexiter’s team in Seoul, managing the Arirang Corporate Restructuring Fund from March 2001 to September 2004. After 13 years in Korea, Adrian joined Rexiter’s Singapore subsidiary in September 2005.

Jamshed Desai

Fund Manager. Research on India

BSc, Chemistry, St Xavier’s College, Mumbai

Jamshed was an investment analyst at Tata Investment Corporation from 1993 to 1995, prior to joining Tata Asset Management as senior manager, equities. In this period, to mid-1997, he was the local adviser to the Kleinwort Benson India Fund, managed by Christopher James (above). After periods in equity research at Insight Asset Management and SMIFS Securities, Jamshed was appointed head of institutional research at TAIB Securities (India) at the end of 1999. In 2004, he moved to IL&FS Investsmart, where he was appointed head of institutional research and latterly head of portfolio management. Jamshed joined Rexiter Singapore in May 2006 and is responsible for Rexiter’s investments in India.

Kyung-Rae MinAnalyst, Korean Mid-Caps

Master, Economics, Seoul National University

Following periods in the treasury team at POSCO Engineering and Construction and as a credit analyst at National Information and Credit Evaluation Inc., Kyung-Rae worked for State Street Bank & Trust in Boston (1998-9). He returned to Korea with State Street in 1999, before joining Hansset Global Advisors as an analyst in 2000. In that capacity, Kyung-Rae worked as a full-time secondee with Rexiter in Seoul for four years, working on both the Arirang and Mukoonghwa Corporate Restructuring Funds as well as Rexiter's Korean mid-cap portfolios. In November 2004, Kyung-Rae formally joined Rexiter as an analyst based in Seoul, where – inter-alia - he has a focus on researching and actively engaging with mid-sized companies. Solim Kim, CFAAnalyst, Korean Mid-Caps.

BA, International Economics and Political Science, Seoul National UniversityMSc, Economics, London School of Economics

Solim joined Rexiter’s Korean Representative Office in September 2005. She has worked as an economic consultant at KPMG Sebit (San Tong) Corp and as an associate at Samil Price WaterhouseCoopers in Korea and as a Research Assistant at Credit Suisse First Boston in Seoul, specialising in steel, utilities, construction and tobacco.


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Zhixin Shu, CFA

Senior Analyst, Greater China

BSc, PhD, Chemistry, Imperial College of Science and Technology

MBA, University of Ottawa

Zhixin started work as a NSERC Visiting Fellow at Coal Research Laboratory, Energy, Mines, Resources in Canada (1986-1987), was a research associate at the Ottawa Heart Institute (1989-91) and then a research officer on advanced materials at the National Research Council of Canada (1991-95).

Zhixin was an analyst and director of investment management at Newton Investment Management (1996-2005), focussing on global energy and chemicals and then on global pharmaceuticals and biotech. She worked at Morgan Stanley Investment Management in the UK as a director of the European equity team (2005-2006).

Saiyi He

Analyst, Greater China

M Eng, Electrical and Electronic Engineering with Management, Imperial College of Science and Technology

CFA level II candidate.

Whilst at Imperial College, Saiyi worked for a period as a credit analyst at HSBC’s commercial banking division as well as a member of the credit research team at Merrill Lynch Investment Managers (UK Fixed Income). From June 2005 to June 2006, she was a global fixed income credit portfolio manager at BlackRock/Merrill Lynch Investment Managers in the UK.


Documents

1 July 2009 July 2009 Adrian Cowell Rexiter Capital Management Limited Asia ex-Japan – A Perspective