Upload
others
View
8
Download
0
Embed Size (px)
Citation preview
Quarterly ReportMar 2020
For the Period Ended 31 March 2020
Areca Islamic Cash Fund
QUA RTERLY REPORT MA RCH 2020
Areca Islamic Cash Fund
Contents
CORPORATE DIRECTORY 2
MANAGER’S REPORT
Fund Information, Performance & Review 3
Market Review & Outlook 7
TRUSTEE’S REPORT 8
STATEMENT BY THE MANAGER 8
UNAUDITED FINANCIAL STATEMENTS FOR
Areca Islamic Cash Fund 9
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
2
C O R P O R A T E D I R E C T O R Y
MANAGER
Areca Capital Sdn Bhd
Company No: 200601021087 (740840-D)
107, Blok B, Pusat Dagangan Phileo Damansara 1
No. 9, Jalan 16/11, Off Jalan Damansara
46350 Petaling Jaya, Selangor
Tel: 603-7956 3111, Fax: 603-7955 4111 website: www.arecacapital.com
e-mail: [email protected]
BOARD OF DIRECTORS
Wong Teck Meng
(Chief Executive Officer Non-Independent)
Edward Iskandar Toh Bin Abdullah
(Executive Non-Independent)
Raja Datuk Zaharaton Bt Raja Dato’ Zainal Abidin
(Independent Non-Executive Chairman)
Dr. Junid Saham (Independent Non-Executive)
INVESTMENT COMMITTEE MEMBERS
Dato’ Seri Lee Kah Choon
(Independent Non-Executive)
Raja Datuk Zaharaton Bt Raja Dato’ Zainal Abidin
(Independent Non-Executive Chairman)
Dr. Junid Saham
(Independent Non-Executive)
TRUSTEE
RHB Trustees Berhad (573019-U)
Level 10, Tower 1, RHB Centre
Jalan Tun Razak
50400 Kuala Lumpur
Tel: 03-9280 5933 Fax: 03-9280 5934
AUDITOR PricewaterhouseCoopers
(LLP0014401-LCA & AF1146),
Chartered Accountants
Level 10, 1 Sentral, Jalan Rakyat
Kuala Lumpur Sentral, P O Box 10192
50706 Kuala Lumpur
Tel: 03-2173 1188, Fax: 03-2173 1288
TAX ADVISER
PricewaterhouseCoopers Taxation Services
Sdn Bhd (464731-M) Level 10, 1 Sentral, Jalan Rakyat
Kuala Lumpur Sentral, P O Box 10192 50706 Kuala Lumpur
Tel: 03-2173 1188, Fax: 03-2173 1288
M A N A G E R ’ S O F F I C E A N D B R A N C H E S
HEAD OFFICE
107, Blok B, Pusat Dagangan Phileo Damansara 1, No. 9, Jalan 16/11, Off Jalan Damansara,
46350 Petaling Jaya, Selangor.
Tel: 603-7956 3111, Fax: 603-7955 4111
website: www.arecacapital.com
e-mail: [email protected]
PENANG BRANCH IPOH BRANCH MALACCA BRANCH
368-2-02 Belissa Row 11A, (First Floor) 95A, Jalan Melaka Raya 24
Jalan Burma, Georgetown Persiaran Greentown 5 Taman Melaka Raya
10350 Pulau Pinang Greentown Business Centre 75000 Melaka
Tel : 604-210 2011 30450 Ipoh, Perak Tel : 606-282 9111
Fax: 604-210 2013 Tel : 605-249 6697 Fax: 606-283 9112
Fax: 605-249 6696
KUCHING BRANCH
1st Floor,Sublot3
Lot 7998,Block16
KCLD,Cha YI Goldland
Jalan Tun Jugah/Stutong 93350 Kuching Sarawak
Tel: 6082-572 472
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
3
F U N D I N F O R M A T I O N
Name of the Fund Areca Islamic Cash Fund
Fund Category/
Type
Islamic Fixed Income (Wholesale)/Income
Investment
Objective
Seek to offer investors regular income
Performance
Benchmark
Maybank Islamic 1-month REPO rate
Distribution Policy
of the Fund
At least twice a year, subject to the availability of distributable income. In
the absence of instructions to the contrary from unit holder, the Manager is
entitled to reinvest the income distributed from the Fund in additional units
of that Fund at the NAV per unit at the end of the distribution day (at ex-
distribution price) with no entry fee.
Profile of
unitholdings
* excluding units held
by the Manager
As at 31 March 2020
Size of Holding
(Units)
No. of
accounts %
No. of
units held
‘million
%
Up to 5,000 - - - -
5,001 to 10,000 1 8.33 0.01 0.02
10,001 to 50,000 - - - -
50,001 to 500,000 4 33.33 1.25 2.79
500,001 and above 7 58.34 43.59 97.19
Total* 12 100.00 44.85 100.00
Rebates & Soft
Commissions
The Manager retains soft commissions received from stockbrokers, provided
these are of demonstrable benefit to unitholders. The soft commissions may
take the form of goods and services such as data and quotation services,
computer software incidental to the management of the Fund and
investment related publications. Cash rebates, if any, are directed to the
account of the Fund. During the period under review, the Manager had not
received any soft commissions.
Inception Date 18 June 2015
Initial Offer Price RM 1.0000 per unit during the initial offer period of 1 day
Pricing Policy
Single Pricing – Selling and repurchase of units by Manager are at Net Asset
Value per unit
Financial year end 30 September
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
4
F U N D P E R F O R M A N C E
01 .01.2020
to
31.03.2020
01.10.2019
to
31.12.2019
Net Asset Value (“NAV”)
Total Net Asset Value (RM million) 47.70 34.95
Units in circulation (million units) 44.85 33.00
NAV per unit (RM) 1.0635 1.0591
HIGHEST & LOWEST NAV
Please refer to Note 1 for further information on NAV and pricing policy
Highest NAV per unit (RM) 1.0661 1.0591
Lowest NAV per unit (RM) 1.0591 1.0512
ASSET ALLOCATION % of NAV
Short-term Islamic deposits 93.87 100.10
Collective Investment Schemes 6.11 -
Cash & cash equivalents 0.02 (0.10)
DISTRIBUTION
There was no distribution declared for the financial period under review.
UNIT SPLITS
There was no unit split exercise for the financial period under review.
EXPENSE/ TURNOVER
Management expense ratio (MER) (%)
Please refer to Note 2 for further information
0.12 0.09
Portfolio turnover ratio (PTR) (times)
Please refer to Note 3 for further information
0.34 0.40
TOTAL RETURN
Please refer to Note 4 for further information
Total Return (%) 0.44 0.80
- Capital Return (%) 0.44 0.80
- Income Return (%) - -
Annual Total Return (%) 1.56* 3.05*
Performance Benchmark: Average Maybank’s 1-
month REPO rate (%)
2.56*
2.51*
* Annualised for comparison purpose only
1-yr 3-yrs 5-yrs
Average Total Return per annum (%) 3.03 2.88 N/A
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
5
NOTES:
Note 1: Selling of units by the Management Company (i.e. when you purchase units and invests in the
Fund) and redemption of units by the Management Company (i.e. when you redeem your units and
liquidate your investments) will be carried out at NAV per unit (the actual value of a unit). The entry/ exit
fee (if any) would be computed separately based on your net investment/ liquidation amount.
Note 2: MER is calculated based on the total fees and expenses incurred by the Fund, divided by the
average net asset value calculated on a daily basis.
Note 3: PTR is computed based on the average of the total acquisitions and total disposals of the
investment securities of the Fund, divided by the average net asset value calculated on a daily basis.
Note 4: Fund performance figures are calculated based on NAV to NAV and assume reinvestment of
distributions (if any) at NAV. The total return data and the benchmark data are sourced from Lipper.
Past performance is not necessarily indicative of future performance. Unit prices and
investment returns may go down, as well as up.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
6
F U N D R E V I E W
For the quarter ending 31st March 2020, the Fund posted an annualised return of 1.56%
against the benchmark Maybank Islamic 1 mth Repo of 2.56%. The portfolio underperformed
the benchmark due to its exposure to other Collective Investment Schemes that were
untimely impacted by the momentary spike in domestic secondary market yields caused by
the rush into liquidity at the start of the pandemic. The Fund focuses on high level of liquidity
and invests predominantly in repos and Islamic GIA accounts. It also has a small exposure into other liquid CIS (6.11%) for diversification and liquidity.
We will continue to prioritise liquidity while gaining from the current easy monetary policy.
We will also seek opportunities through other cash fund products under Islamic Principles that
can enhance the performance of the Fund.
Investment Policy and Strategy
The Fund may invest up to 30% of its NAV in Islamic fixed income securities including Ringgit
denominated Sukuk and invest the remaining NAV in short-term Islamic money market
instruments and Islamic deposits and placement with Islamic investment account with
different maturity periods.
NAV per unit as at 31 March 2020 RM1.0635
Asset Allocation/Portfolio Composition as at 31.03.2020 31.12.2019
Short-term Islamic deposits 93.87% 100.10%
Collective Investment Schemes 6.11% -
Cash & cash equivalents 0.02% (0.10)%
Performance of Areca Islamic Cash Fund
for the financial period since commencement to 31 March 2020
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18
/06
/20
15
18
/08
/20
15
18
/10
/20
15
18
/12
/20
15
18
/02
/20
16
18
/04
/20
16
18
/06
/20
16
18
/08
/20
16
18
/10
/20
16
18
/12
/20
16
18
/02
/20
17
18
/04
/20
17
18
/06
/20
17
18
/08
/20
17
18
/10
/20
17
18
/12
/20
17
18
/02
/20
18
18
/04
/20
18
18
/06
/20
18
18
/08
/20
18
18
/10
/20
18
18
/12
/20
18
18
/02
/20
19
18
/04
/20
19
18
/06
/20
19
18
/08
/20
19
18
/10
/20
19
18
/12
/20
19
18
/02
/20
20
Pe
rce
nta
ge
Gro
wth
Total Return of Areca Islamic Cash Fund vs Benchmark
Areca Islamic Cash Fund Maybank Islamic 1 month REPO Rate:14.35 : :12.69
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
7
MARKET REVIEW & OUTLOOK
The quarter initially saw positive developments in the ongoing US-China trade war when the two
nations signed the phase one trade deal in mid-January 2020. In Europe, economic sentiment continued to rise amid waning trade uncertainty. In the UK, the manufacturing Purchasing
Managers’ Index (PMI) expanded for the first time in eight months after the general election
broke the Brexit deadlock. Meanwhile in China, the economy grew by 6.1% y-o-y in 2019, the
slowest pace since 1990 but within the government’s target.
However, the positive sentiment was short lived as investors were rattled by a newly discovered
coronavirus that emerged from the city of Wuhan, in Hubei province. IHS Markit’s flash reading
for the US Composite Output Index registered the steepest contraction in more than six years
amid the COVID-19 outbreak. The worsening pandemic has resulted in governments restricting the movement of its citizens to contain the spread of infection and policymakers unveiling large-
scale stimulus measures to cushion the economic impact of the pandemic.
Some of the stimulus measures included broad Quantitative Easing (QE) programmes with
unlimited commitment to purchase US Treasuries (UST) and Mortgage-Backed Securities (MBS)
by the US Federal Reserve (Fed); EUR870 billion worth of purchases of corporate and government
bonds of the hardest hit Eurozone countries by the European Central Bank (ECB); and the cutting
of interest rates to an all-time low of 0.1% and adding GBP200 billion to its QE programme by the
Bank of England (BoE).
Meanwhile in China, total social financing surged to an all-time high as the government sought to
support the economy suffering from COVID-19. The outbreak took its toll on the Chinese
economy with the PMI for both manufacturing and non-manufacturing sectors plunging amid
factory closures and labour shortages.
FIXED INCOME MARKET REVIEW AND OUTLOOK
In the local fixed income market, total combined outstanding of Malaysian Government Securities
(MGS)/Government Investment Issues (GII) at the end of the quarter rose RM27.80 billion to
RM760.73 billion amid higher gross issuance activity.
In the secondary market, the earlier part of the quarter saw MGS yields falling to their multi-year
lows following Bank Negara Malaysia’s (BNM) Overnight Policy Rate (OPR) cut by 25 bps to 2.75% in January and the worsening COVID-19 outbreak that triggered a global bond rally.
However, MGS yields edged significantly higher from early to mid-March amid aggressive safe
haven bids for USTs by foreign investors and only started to ease in the final week as BNM
introduced various liquidity enhancement measures. BNM slashed the Statutory Reserve Ratio
(SRR) by 100 bps to 2.00% and allowed principal dealers to recognize up to RM1.00 billion worth
of MGS/GII as part of the SRR requirement. As at end of March, MGS yields across the short and
medium curve fell broadly by 10 to 33 basis points (bps) while the longer end of the curve rose
by 2 to 9 bps amid expectations of further cuts in the OPR.
Going forward, we expect gross issuance of MGS and GII for 2020 to be significantly higher than
last year in view of the widening fiscal deficit amid the shortfall in government revenue due to
low crude oil prices and the RM35 billion fiscal injection. However, we also believe that the
increase in excess liquidity as a result of further cuts in the OPR and SRR requirement will be
supportive of the local bond market.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
8
T R U S T E E ’ S R E P O R T
For The Financial Period Ended 31 March 2020
To the Unit holders of Areca Islamic Cash Fund
We have acted as Trustee of Areca Islamic Cash Fund (the “Fund”) for the financial period
ended 31 March 2020. In our opinion and to the best of our knowledge, Areca Capital Sdn Bhd,
the Manager, has operated and managed the Fund in accordance with the following:
(a) limitations imposed on the investment powers of the Manager and the Trustee under the
Deed, the Securities Commission’s Guidelines on Unlisted Capital Market Products under
the Lodge And Launch Framework, the Capital Markets and Services Act 2007 and other
applicable laws;
(b) valuation/pricing is carried out in accordance with the Deed and any regulatory
requirements ;and
(c) creation and cancellation of units are carried out in accordance with the Deed and
relevant regulatory requirements.
For and on behalf of the Trustee
RHB TRUSTEES BERHAD
(Company No: 573019-U)
LEE YIT CHENG
HEAD,TRUSTEES OPERATIONS
MOHD SOFIAN BIN KAMARUDDIN
VICE PRESIDENT
Kuala Lumpur
29 May 2020
S T A T E M E N T B Y T H E M A N A G E R
To the Unit holders of Areca Islamic Cash Fund
We, WONG TECK MENG and EDWARD ISKANDAR TOH BIN ABDULLAH, two of the
Directors of the Manager, Areca Capital Sdn Bhd, do hereby state that in the opinion of the
Manager, the unaudited financial statements give a true and fair view of the financial position of
the Fund as of 31 March 2020, and of its financial performance and cash flows for the period
then ended in accordance with Malaysian Financial Reporting Standards, International Financial
Reporting Standard and the relevant Securities Commission Malaysia’s Guidelines in Malaysia.
For and on behalf of the Manager
ARECA CAPITAL SDN BHD
WONG TECK MENG
CEO/ EXECUTIVE DIRECTOR
EDWARD ISKANDAR TOH BIN ABDULLAH
CIO/ EXECUTIVE DIRECTOR
Kuala Lumpur
29 May 2020
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
9
STATEMENT OF FINANCIAL POSITION
As At 31 March 2020
31.03.2020 31.12.2019 Note RM RM
ASSETS
Cash and cash equivalents 6,567 2,890
Income distribution receivable from
collective investment scheme
18,192
-
Financial assets at fair value through profit
or loss 6 47,689,429 34,987,372
Total Assets 47,714,188 34,990,262
LIABILITIES
Accrued management fee 9,034 9,141
Accrued Trustee's fee 1,506 1,524
Audit fee - 7,500
Tax agent's fee 3,300 6,600
Other payables and accruals 4,398 13,771
Total Liabilities 18,238 38,536
Net Asset Value of the Fund
47,695,950 34,951,726
EQUITY
Unit holders’ capital 45,806,007 33,206,007
Retained earnings 1,889,943 1,745,719
Net Assets Attributable to Unitholders 47,695,950 34,951,726
Number of Units in Circulation (Unit)
44,848,749 33,001,285
Net Asset Value Per Unit (RM) 1.0635 1.0591
The accompanying Notes form an integral part of the Financial Statements.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
10
STATEMENT OF COMPREHENSIVE INCOME
For The Financial Period Ended 31 March 2020 01.01.2020 01.10.2019
to to
31.03.2020 31.12.2019
Note RM RM
INVESTMENT INCOME
Profit income 245,187 289,878
Income distribution from collective
investment scheme 18,192 -
Net gain on financial assets at fair
value through profit or loss
6
(78,533)
19,679
184,846 309,557
EXPENSES
Management fee 4 25,981 27,493
Trustee's fee 5 4,330 4,582
Audit fee 1,509 -
Tax agent’s fee 1,364 -
Other expenses 7,438 1,362
40,622 33,437
NET PROFIT BEFORE TAXATION
144,224 276,120
Taxation - -
NET PROFIT AFTER TAXATION
AND TOTAL COMPREHENSIVE
INCOME FOR THE FINANCIAL
PERIOD
144,224 276,120
Net profit after taxation is made up
of the following:
Realised amount 144,224 276,120
The accompanying Notes form an integral part of the Financial Statements.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
11
STATEMENT OF CHANGES IN EQUITY
For The Financial Period Ended 31 March 2020
Unit holders’
capital
RM
Retained
earnings
Total
RM RM
Balance as at 1 January 2020 33,206,007 1,745,719 34,951,726
Total comprehensive income for the
financial period - 144,224 144,224
Movement in unit holder’s capital:
Creation of units arising from
applications
18,600,000
-
18,600,000 Cancellation of units (6,000,000) - (6,000,000)
Balance as at 31 March 2020 45,806,007 1,889,943 47,695,950
Balance as at 1 October 2019 34,706,007 1,469,599 36,175,606
Total comprehensive income for the
financial period
-
276,120
276,120
Movement in unit holder’s capital:
Creation of units arising from
applications
500,000
-
500,000
Cancellation of units (2,000,000) - (2,000,000)
Balance as at 31 December 2019 33,206,007 1,745,719 34,951,726
The accompanying Notes form an integral part of the Financial Statements.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
12
UNAUDITED STATEMENT OF CASH FLOWS
For The Financial Period Ended 31 March 2020
01.01.2020
to
01.10.2019
to
31.03.2020 31.12.2019
RM RM
Cash Flows From Operating Activities
Placement of short-term Islamic deposits with
licensed financial institutions
(26,610,000)
(14,380,000)
Purchase of unquoted sukuk (4,994,627) (6,980,321)
Proceeds from redemption/maturity of short-term
Islamic deposits with licensed financial institutions
18,802,808
22,410,335
Profit income from short-term Islamic deposits
with licensed financial institutions 266,415
482,687
Management fee paid (26,089) (26,950)
Trustee’s fee paid (4,348) (4,492)
Payment for other fees and expenses (30,482) (1,360)
Net Cash (Used in) / Generated From Operating
Activities
(12,596,323)
1,499,899
Cash Flows From Financing Activities
Proceeds from creation of units 18,600,000 500,000
Payment for cancellation of units (6,000,000) (2,000,000)
Net Cash Generated From/ (Used In) Financing
Activities
12,600,000
(1,500,000)
Net Increase /(Decrease) In Cash And Cash
Equivalents 3,677 (101)
Cash And Cash Equivalents At The Beginning
Of The Financial Period
2,890
2,991
Cash And Cash Equivalents At The End Of
The Financial Period
6,567
2,890
The accompanying Notes form an integral part of the Financial Statements.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
13
NOTES TO THE FINANCIAL STATEMENTS
1 THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES
Areca Islamic Cash Fund (“the Fund”) is a wholesale fund which was established pursuant
to the Trust Deed dated 3 June 2015 (''the Deed'') between Areca Capital Sdn Bhd as the
Manager, RHB Trustees Berhad as the Trustee and all the registered unitholders of the Fund.
The principal activity of the Fund is to invest in investments as defined under Schedule 7 of
the Deed, which include Islamic fixed income securities including Ringgit denominated
Sukuk, short-term Islamic money market instruments and Islamic deposits and placements
with Islamic investment accounts. The Fund commenced operations on 18 June 2015 and
will continue its operations until terminated by the Trustee in accordance with Part 11 of
the Deed. The objective of the Fund is to offer investors regular income.
The Manager of the Fund is Areca Capital Sdn Bhd, a company incorporated in Malaysia. Its principal activities are managing private and unit trust funds.
2 FINANCIAL INSTRUMENTS, RISK MANAGEMENT OBJECTIVES AND POLICIES
Financial instruments of the Fund are as follows:
Financing
assets at
amortised
costs
RM
Financial
assets at fair
value through
profit or loss
RM
Total
RM
31.03.2020
Short-term Islamic deposits
with licensed financial
institutions
-
47,689,429
47,689,429
Income distribution
receivable from collective
investment scheme
18,192
-
18,192
Cash at bank 6,567 - 6,567
24,759 47,689,429 47,714,188
Financing
assets at
amortised
costs
RM
Financial
assets at fair
value through
profit or loss
RM
Total
RM
31.12.2019
Short-term Islamic deposits
with licensed financial
institutions
-
34,987,372
34,987,372
Cash at bank 2,890 - 2,890
2,890 34,987,372 34,990,262
All current liabilities are financial liabilities which are carried at amortised cost.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
14
The Fund is exposed to a variety of risks which include market risk (including interest rate
risk), credit risk, liquidity risk and capital 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
Unlisted Capital Markets Products under the Lodge and Launch Framework.
Market risk
a) Interest rate risk
Interest rate risk arises from the effects of fluctuations in the prevailing levels of
market interest rates on the fair value of assets and liabilities and future cash flows.
The Fund’s exposure to interest rate risk is mainly confined to short term Islamic
deposits with licensed financial institutions. The Manager overcomes this exposure by
way of maintaining short term Islamic deposits with licensed financial institutions.
The Fund’s exposure to interest rate risk associated with Islamic deposits with
licensed financial institutions is not material as the carrying value of the deposits are
held on a short term basis.
Credit risk
Credit risk refers to the ability of an issuer or counterparty to make timely payments of
profit, principals and proceeds from realisation of Shariah-compliant investments. The
Manager manages the credit risk by undertaking credit evaluation to minimise such risk.
Credit risk arising from placements of Islamic deposits in licensed financial institutions is
managed by ensuring that the Fund will only place deposits in reputable licensed financial
institutions.
The settlement terms of the proceeds from the creation of units’ receivable from the
Manager and redemption of units payable to the Manager are governed by the SC
Guidelines on Unlisted Capital Markets Products under the Lodge and Launch Framework.
The following table sets out the credit risk concentrations and counterparties’ ratings of the
Fund:
Cash and
cash
equivalents
Income
distribution
receivable
from
collective
investment
scheme
Financial
assets at
fair value
through profit or
loss
Total
RM RM RM RM
31.03.2020
Finance
AAA 6,567 18,192 47,689,429 47,714,188
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
15
Cash and
cash
equivalents
Income
distribution
receivable
from
collective
investment
scheme
Financial
assets at
fair value
through profit or
loss
Total
RM RM RM RM
31.12.2019
Finance
AAA 2,890 - 34,987,372 34,990,262
All financial assets of the Fund are neither past due nor impaired.
Liquidity risk
Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial
obligations. The Manager manages this risk by maintaining sufficient level of Islamic liquid
assets to meet anticipated payment and cancellations of unit by unitholders. Islamic liquid
assets comprise cash at bank, short-term Islamic deposits with licensed financial
institutions and other Shariah-compliant instruments, which are capable of being converted
into cash within 7 business days.
The table below analyses the Fund's financial liabilities into relevant maturity groupings
based on the remaining period at the statement of financial position date to the contractual
maturity date.
The amounts in the table below are the contractual undiscounted cash flows.
Less than
one
month
Between
one month to
one year
Total RM RM RM
31.03.2020
Accrued management fee 9,034 - 9,034
Accrued Trustee's fee 1,506 - 1,506
Audit fee - -
Tax agent's fee - 3,300 3,300
Other payables and accruals - 4,398 4,398
Contractual undiscounted cash flows 10,540 7,698 18,238
Less
than one
month
Between
one month to
one year
Total
RM RM RM
31.12.2019
Accrued management fee 9,141 - 9,141 Accrued Trustee's fee 1,524 - 1,524
Audit fee - 7,500 7,500
Tax agent's fee - 6,600 6,600
Other payables and accruals - 13,771 13,771
Contractual undiscounted cash flows 10,665 27,871 38,536
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
16
Capital risk
The capital of the Fund is represented by equity consisting of unitholders’ capital and retained earnings. The amount of equity can change significantly on a daily basis as the
Fund is subject to daily subscriptions and redemptions at the discretion of unitholders.
The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue
as a going concern in order to provide returns for unitholders and benefits for other
stakeholders and to maintain a strong capital base to support the development of the
Shariah-compliant investment activities of the Fund.
Fair value estimation
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date (i.e.
an exit price).
The fair value of financial assets traded in active market (such as publicly traded derivatives
and trading securities) are based on quoted market prices at the close of trading on the year
end date. The Fund utilises the last traded market price for financial assets where the last
traded price falls within the bid-ask spread. In circumstances where the last traded price is
not within the bid-ask spread, the Fund Manager will determine the point within the bid-ask
spread that is representative of the fair value.
An active market is a market in which transactions for the asset take place with sufficient
frequency and volume to provide pricing information on an ongoing basis.
The fair value of financial assets that are not traded in an active market is determined by
using valuation techniques.
(i) Fair value hierarchy
The table below analyses financial instruments carried at fair value. The different levels
have been defined as follows:
• Quoted prices (unadjusted) in active market for identical assets or liabilities (Level 1)
• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is,
derived from prices) (Level 2)
• Inputs for the asset and liability that are not based on observable market data (that is, unobservable inputs) (Level 3)
The level in the fair value hierarchy within which the fair value measurement is
categorised in its entirety is determined on the basis of the lowest level input that is
significant to the fair value measurement in its entirety. For this purpose, the
significance of an input is assessed against the fair value measurement in its entirety. If
a fair value measurement uses observable inputs that require significant adjustment
based on unobservable inputs, that measurement is a Level 3 measurement. Assessing
the significance of a particular input to the fair value measurement in its entirety
requires judgment, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgment by the
Fund. The Fund considers observable data to be that market data that is readily
available, regularly distributed or updated, reliable and verifiable, not proprietary and
provided by independent sources that are actively involved in the relevant market.
The following table analyses within the fair value hierarchy the Fund’s financial assets
(by class) measured at fair value:
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
17
Level 1 Level 2 Level 3 Total
RM RM RM RM
31.03.2020
Financial assets at fair
value through profit or
loss:
-Short-term Islamic
deposits with licensed
financial institutions
-
44,773,335
-
44,773,335
Collective investment
scheme - 2,916,094 - 2,916,094
- 47,689,429 - 47,689,429
Level 1 Level 2 Level 3 Total
RM RM RM RM
31.12.2019
Financial assets at fair
value through profit or
loss:
-Short-term Islamic
deposits with licensed
financial institutions
-
34,987,372
-
34,987,372
Financial instruments that trade in markets that are not considered to be active but are
valued based on quoted market prices, dealer quotations or alternative pricing sources
supported by observable inputs are classified within Level 2. This includes short term
Islamic deposits with licensed financial institutions and collective investment schemes.
As Level 2 instruments include positions that are not traded in active markets and/or
are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity
and/or non-transferability, which are generally based on available market information.
(ii) The carrying values of cash equivalents and all current liabilities are a reasonable
approximation of the fair values due to short term nature.
3 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention in
accordance with Malaysian Financial Reporting Standards (“MFRS”) and International
Financial Reporting Standards (“IFRS”), as modified by financial assets at fair value through
profit or loss.
The preparation of financial statements in conformity with the MFRS and IFRS requires the
use of certain critical accounting estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses during the
reported financial period. It also requires the Manager to exercise their judgment in the
process of applying the Fund’s accounting policies. Although these estimates and judgment
are based on the Manager’s best knowledge of current events and actions, actual results
may differ.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
18
4 MANAGEMENT FEE
The 8th Schedule of the Deed provides that the Manager is entitled to an annual management
fee at a rate not exceeding 1.00% per annum computed daily on the net asset value of the
Fund before the deduction of the management fee and Trustee’s fee for the relevant day. The
management fee provided for in the financial statements amounted to 0.75% (31.12.2019:
0.75%) per annum for the financial period.
5 TRUSTEE’S FEE
The 9th Schedule of the Deed provides that the Trustee is entitled to an annual Trustee’s fee
at a rate not exceeding 0.05% per annum computed daily on the net asset value of the Fund
before the deduction of the management fee and Trustee’s fee for the relevant day. The
Trustee’s fee provided for in the financial statements amounted to 0.05% (31.12.2019:
0.05%) per annum for the financial period.
6 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
31.03.2020 31.12.2019
RM RM
Financial assets at fair value through profit or loss
- Short-term Islamic deposits with licensed
financial institutions*
44,773,335
34,987,372
- Collective investment schemes 2,916,094 -
47,773,335
34,987,372
* Includes profit receivable of RM109,972 (31.12.2019:RM131,120).
Net gain on financial assets at fair value through
profit or loss:
- Realised loss on disposals 5,373 19,679 - Unrealised fair value loss (83,906) -
(78,533) 19,679
Weighted average effective profits per annum and weighted average maturity of Islamic
deposits with licensed financial institutions are as follows:
31.03.2020 31.12.2019
% %
Islamic deposits with licensed financial
institutions
2.67
3.21
The Islamic deposits with licensed financial institution have an average maturity of 36 days
(31.12.2019:46 days).
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
19
Name of Counter
Quantity Aggregate
cost
Fair value as at
31.03.2020
Fair value as at
31.03.2020
expressed as
a percentage
of value of the
Fund Units RM RM %
Collective Investment Schemes
Ambon Islam 761,159 1,000,000 940,489 1.97
AmanahRaya Syariah Trust
Fund 1,848,087 2,000,000 1,975,605 4.14
Total collective investment
schemes 2,609,246 3,000,000 2,916,094 6.11
Accumulated unrealised
loss on collective investment
schemes at fair value
through profit or loss
(83,906)
Total collective investment
schemes at fair value
through profit or loss
2,916,094
7 TRANSACTIONS WITH DEALERS
Details of transaction with dealers for the financial period ended 31 March 2020 are as
follows:
Name of dealers
Value
of trade
Percentage
of total
trade
RM %
31.03.2020
BIMB Investment Bank Berhad 16,100,000 56.28
Malayan Banking Berhad 10,500,000 36.71
Kenanga Investment Bank Berhad 997,129 3.49
CIMB Investment Bank Berhad 997,497 3.49 Kuwait Finance House(Malaysia) Berhad 10,000 0.03
28,604,626 100.00
31.12.2019
Malayan Banking Berhad 14,380,000 67.32 Kenanga Investment Bank Berhad 6,980,321 32.68
21,360,321 100.00
8 UNITS HELD BY THE MANAGER AND PARTIES RELATED TO THE MANAGER
The related parties and its relationship with the Fund are as follows:
Related party Relationship
Areca Capital Sdn Bhd The Manager
There were no units held by the Manager during the financial period.
QUARTERLY REPORT MARCH 2020
Areca Islamic Cash Fund
20
9 MANAGEMENT EXPENSE RATIO (“MER”)
31.03.2020 31.12.2019
% %
MER 0.12 0.09
MER is derived from the following calculation:
MER = (A + B + C + D + E) x 100
F
A = Management fee
B = Trustee’s fee
C = Audit fee
D = Tax agent's fee
E = Other expenses
F = Average NAV of the Fund, calculated on a daily basis
The average NAV of the Fund for the financial period calculated on a daily basis is
RM34,736,745 (31.12.2019:RM36,358,571).
10 PORTFOLIO TURNOVER RATIO (“PTR”)
31.03.2020 31.12.2019
PTR (times)
0.34
0.40
PTR is derived from the following calculation:
(Total acquisition for the financial period + total disposal for the financial period) ÷ 2
Average NAV of the Fund for the financial period calculated on a daily basis
where: total acquisition for the financial period = RM4,994,627 (31.12.2019:RM6,980,321)
total disposal for the financial period = RM18,802,808 (31.12.2019:RM22,410,335)
11 QUARTERLY ACCOUNTS
The quarterly accounts for the 3-month period ended 31 March 2020 have not been audited.
Kuching Branch1st Floor, Sublot 3, Lot 7998, Block16 KCLD, Cha Yi Goldland, Jalan Tun Jugah / Stutong93350 Kuching, SarawakT 082 572 472
Pulau Pinang Branch368-2-02 Belisa Row, Jalan Burma Georgetown, 10350 Pulau PinangT 604 210 2011 F 604 210 2013· ·
Ipoh Branch11A, (First Floor), Persiaran Greentown 5Greentown Business Centre, 30450 Ipoh, PerakT 605 249 6697 F 605 249 6696·
Melaka Branch95-A, Jalan Melaka Raya 24Taman Melaka Raya, 75000 MelakaT 606 282 9111 F 606 283 9112·
·
·
·
Cover_QuarterlyReport_Islamic Cash-BW-FADoc1Quarterly Report AICF March 2020Doc1BW_BackC