Transcript (Relative) – June 2009

Rexiter Capital Management Limited
Asia ex-Japan – A Perspective
July 2009
Adrian Cowell
www.rexiter.com
1
“I have only told the half of what I saw”
Epitaph of Marco Polo
Marco Polo
1254-1324
The Mongol Empire
The First Asia ex-Japan
Kublai Khan
1215-1294
“For ye shall find therein all kinds of wonderful
things, and the divers histories of the Great
Hermenia, and of Persia, and of the land of the
Tartars, and of India….”
Marco Polo
2
Ibn Battuta, 1304-1368(9)
Moroccan scholar and
traveler
“Rihla” or Voyage 1325-1354,
75k miles, 44 countries,
the Muslim world
3
Which is why Christopher Columbus tried to short cut the other way round …
… with this result …
Christopher Columbus, 1451-1506
…but…
4
Admiral Zheng He 1371-1433
Seven huge expeditions 1405-1433
Wu Bei Zhi chart
West India, Ceylon
and East Africa
Kangido Map 1402
Fra Mauro Map 1420
Zheng He’s Treasure Ships
China’s first blue water
capability
Giraffe, 1414
5
The Silk Road
Cloves and Nutmeg
The Spice Trade
6
•In the first millennium,
India accounted for 30%
of global GDP
•By 1500 China had
surpassed India
• Until 1850, China and
India alternated as No1
and No2 by GDP
• source Wikipedia
•In 2008, nominal World
GDP was US$60.689tr
•In 2008 nominal Asia
Pacific GDP was
US$16.774tr
• World ranking; China 3rd
US$4.4tr, India 12th
US$1.2tr, Korea 15th
US$947bn, Indonesia 19th
US$511bn
• 2009 estimates are
World US$54.863tr and
Asia Pacific US$16.437tr
• source IMF
7
Asia Today
8
“Demography is Destiny”
Auguste Comte, 1798-1857
French philosopher, mathematician and sociologist
9
From the Great Wall … to Shanghai … and Beijing 2008
The Han River, Korean War … the 2002 Seoul World Cup Stadium …
and Pyongyang, DPRK
10
Asia Market Capitalisation by Index
MSCI AC World
+7.6%
20,094
8.4%
7.1%
31-Dec-08 31-Dec-03
227.683
251.131
-9.3%
18,479
6.6%
5.5%
Performance
Free Float Adj. Market Cap. (USD bn)
-Asia ex Japan
-4 Biggest Asian Markets
(China/Korea/Taiwan/India)
400
350
300
18,243
3.4%
2.6%
250
200
150
567.042
+34.3%
+28.1%
2,408
57.4%
51.0%
1,747
55.7%
49.2%
442.778
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-90
761.295
Jan-93
100
(China/Korea/Taiwan/HK/India)
MSCI Emerging Markets Index
450
Jan-92
Performance
Free Float Adj. Market Cap. (USD bn)
-Asia ex Japan
-5 Biggest Asian Markets
30-Jun-09
244.905
Jan-91
(Price, USD)
MSCI AC World Index
MSCI EM
1500
1300
826
54.0%
44.0%
1100
900
700
500
300
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
MSCI AC Asia ex Japan
700
600
500
400
300
200
11
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
100
Jan-94
625
77.1%
10.4%
24.1%
16.1%
19.0%
7.5%
Jan-93
+12.8%
1,213
83.7%
26.2%
19.6%
15.7%
12.9%
9.4%
Jan-91
+34.0%
1,695
84.3%
27.6%
17.5%
16.7%
11.9%
10.7%
255.318
Jan-92
288.109
Jan-91
Performance
Free Float Adj. Market Cap. (USD bn)
-5 Biggest Asian Markets
China
Korea
Taiwan
HK
India
386.043
Jan-90
MSCI AC Asia ex Japan Index
Jan-90
100
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
12
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 – KazakhChina 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
13
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 12th 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
14
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 2 nd 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
15
India – In Context
India
The world’s largest democracy, independent since 15th 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
16
India – In Context
India

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 31 st 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
17
India – In Context
India

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
18
Jeter + Woods
=
Smith + Clooney
=
Sachin Tendulkar
Shahrukh Khan
Cricket Superstar
Bollywood A List Film Star
19
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
20
China – In Context
China

The world’s largest country, communist, established People’s Republic of China 1 st 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
21
China – In Context
China

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?
22
Michael
+
Jordan
Gong Li
=
=
Yao Ming
Gong Li
Superstar
Film Star
23
Political Challenges in Asia
24
North Korea – Missile & Fissile Encounters
The Democratic Peoples’ Republic of Korea (DPRK)
Dear Leader health and succession concerns, desperately seeking attention!
Propensity to test bombs and missiles
Version 2007 vs 2009
Kim Jong-Il’s “Rodong 1” Missiles … outgoing ….
DPRK Missile Arsenal “as reported”;
vs
….. President Obama’s incoming “Rodham 1”!
Euna Lee//Laura Ling incarceration for 12 years hard labour
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
… and now virtual cyber attacks?
25
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
26
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
27
Comments on Recent Performance
of the Rexiter Asia ex-Japan Strategy
28
Asia ex Japan Performance (USD) – Q2 2009
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
Relative performance has improved with the recovery in markets.
The portfolio was positioned for recovery from the end of 2008.
29
Asia ex Japan Performance (USD) – Q2 2009



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).
30
Comments on Recent Activity and Positioning
31
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
Country and sector bets have fallen, reflecting profit-taking in areas where
we have been overweight and which have done particularly well.
32
Rexiter Asia ex Japan – Country Exposures (Relative) – June 2009
Rexiter Asia ex Japan - Country Exposures
Taiw an
Malaysia
Singapore
Korea
Hong Kong
Pakistan
Indonesia
China
Philippines
Thailand
India
-5.0%
-
-
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
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%

-
-3.0%
Exposure to China has fallen by 3% this quarter.

-
-4.0%
Reduction to Public Bank. Purchase of POSCO (steel)
In other countries, absolute exposure is little changed. Changes to relative exposure reflect relative
performance.
Changes in We
weighting
determined
principally
byto
bottom
upJuly.
considerations
have started
reducing
exposure
India in
33
Rexiter Asia ex Japan – Sector Exposures (Relative) – June 2009
Rexiter Asia ex Japan - Sector Exposures
Energy
Utilities
Non-Banking Financials
Transport/Ports
IT
Consumer Durables
Banks
Non-Oil Commodities
Cap Gds/Construction
Consumer Staples
Conglos
Telecoms
Real Estate
-2.5%
-
-
-
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
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%
Overall
sector aggression
eased slightly
in the
Changes
in weighting
determined has
principally
by bottom
up quarter.
considerations
34
Rexiter Asia ex Japan Portfolio – Country/Sector Matrix
REXITER ASIA EX JAPAN PORTFOLIO VS MSCI ASIA EX JAPAN INDEX
INTEREST RATE/CREDIT SPREAD SENSITIVE
Banks
Non Banking
DEFENSIVE
Real Estate
Telecoms
DISCRETIONARY SPENDING
Utilities
Financials
CHINA
Bank of
2.5 Ping An
China
HONG KONG
2.0 China
Insurance
CCB
2.5 China Life
CMB
1.2
Hang Seng
1.5
2.4 China Mobile
2.2 China
Resources Land
Consumer Staples Media
Consumer
& Healthcare
Durables
1.0 China
Resources Power
1.6
0.6
Resources Ent.
Hengan Int'l
0.5
Ch'ng Kong
1.6
Hang Lung
1.1
HEAVY CYCLICALS
Transport, Ports
Cap Gds /
Energy
OTHER
Commodities
Conglomerates
REXITER
& Comm Services Construction
Belle Int'l
0.6
New World
0.5
China
1.7 China Railwy
Merchants Hldg
Dept Store
CTRIP
Bank
TRADE
IT
1.4 CNOOC
1.8
China
2.2
28.5
27.3
1.2
10.9
11.6
-0.7
14.2
10.7
3.5
2.9
2.4
0.5
16.7
17.7
-1.0
1.5
4.1
-2.6
0.0
0.0
0.0
2.1
0.6
1.5
4.1
6.5
-2.4
12.7
17.1
-4.4
1.7 Shenhua Energy
1.1
SINOPEC
Techtronic
Difference
Asia Ex Jpn
Construction
Anhui Conch
MSCI AC
1.0
0.8
Hutchison
1.8
Whampoa
Props
INDIA
HDFC
1.8
IDFC
2.2
Bank Rakyat
0.5
Bank Mandiri
0.5
SHK Props
2.1
Wharf Hldgs
2.0
Bharti Airtel
1.9
Zee Ent
1.4
Tata Cons.
Deccan
0.9
Services
2.3
Larsen
2.5
Sesa Goa
1.2
& Toubro
Chronicle
INDONESIA
KOREA
Perusahaan
1.9
Gas
Samsung
1.6 Hyundai
Fire & Marine
0.9 SK Telecom
Development
LG Dacom
1.3
Shinsegae
1.9
LG Display
1.9
Hyundai
1.7
Orion Corp
0.6
Samsung
2.6
Steel
Electronics
POSCO
0.7
2.3
LG Electronics 1.2
MALAYSIA
Public Bank
0.7
Resorts
0.8
World
PAKISTAN
PHILIPPINES
Robinsons
0.5 PLDT
1.6
Land
SINGAPORE
TAIWAN
SingTel
Chinatrust
1.2
2.0
Financial
Venture
1.7
Hon Hai
1.9
TSMC
1.7
Mediatek
1.4
SPIL
1.7
Keppel Corp
1.2
Asia
1.2
Cement
Taiwan
0.7
Cement
Taiwan
2.1
Fertiliser
THAILAND
REXITER
MSCI AC Asia X Jpn
Difference
Aggression
SCB
1.4
KBank
0.7
PTT
17.5
18.0
-0.5
5.2
6.5
-1.3
0.6
10.6
8.2
2.4
9.9
8.4
1.5
2.9
4.4
-1.5
-0.4
3.6
3.2
0.4
2.3
0.0
2.3
-0.8
3.0
6.1
-3.1
16.4
17.2
-0.8
-1.7
1.7
2.6
-0.9
1.7
7.6
7.4
0.2
6.7
8.6
-1.9
-1.9
8.2
8.4
-0.2
1.8
0.9
0.9
TOTAL
3.8
1.9
1.9
97.4
99.9
-2.5
97.4
99.9
-2.5
-4.2
35
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
36
and Australian operations is about 1SD below the long term average.
Comments on the Investment Outlook
37
Investment Outlook



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”
We have taken a little risk off the table in recent weeks.
38
Asia ex Japan Equities – Earnings in Previous Global Downturns
Peak to Peak Earnings Cycles in Asia ex Japan
25.0
Apr 82
May 90
Aug 96
Mar 00
Earnigs Integer
20.0
15.0
10.0
5.0
0
12
24
36
Months
48
60

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.
39
Source for Charts: MSCI/Citi (Earnings derived from the reciprocal of the trailing PER)
Investment Outlook



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”
We have taken a little risk off the table in recent weeks.
40
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.

Protectionism pressures to build the longer recovery is delayed
This is potentially very positive for asset prices.
Preference for countries with the resources to combat external weakness

China.

Korea challenged by high levels of household debt
India less exposed to external demand, but fiscally constrained. Indonesia.
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 needs
41
to stimulate domestic demand. How effective will its policies be ?
The US is Still in the Mire (and so is Europe)
Change in US Fed Liabilities Since March 2009
Commercial Paper Outstanding ($bn)
120
2400
100
2200
80
2000
1800
60
1600
40
1400
20
1200
0
Currency in Circulation
-20
Deposits from US
Treasury
Deposits from
Commercial Banks
Total
1000
Nov-05
May-06
Breakeven Inflation Curve
Nov-06
May-07
Nov-07
May-08
Nov-08
May-09
US High Yield Spreads over Investment Grade
3.5
18
3.0
16
2.5
14
2.0
12
1.5
10
1.0
8
0.5
6
0.0
Current
-0.5
- 1 month
-1.0
- 2 months
-1.5
2009E
2010E
2011E
2012E
2013E
4
2
0
9-Apr
9-Jun
9-Aug
9-Oct
9-Dec
9-Feb
9-Apr
9-Jun
Source for Charts: Nomura Int’l.
The money multiplier is still not functioning. The banks are unwilling to
lend. No improvement in yield spreads in Q2. Inflation expectations falling.
42
A Couple of Positives - Inventories and Liquidity
ISM Mftg Report on Business Inventory YoY
Taiwanese Inventory YoY
30%
25%
20%
20%
10%
15%
0%
10%
5%
-10%
0%
-20%
-5%
-30%
-10%
-40%
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Hong Kong Base Money YoY
-15%
Jan-00
Source for Charts: UBS
Sep-01
Sep-02
Sep-03
Sep-04
Sep-05
Sep-06
Sep-07
Sep-08
Jan-06
Jan-07
Jan-08

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.
0%
Sep-00
Jan-05
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
40%
Sep-99
Jan-04

60%
-20%
Jan-03
There was a huge inventory shock in H2 2008 and
Q1 2009
80%
20%
Jan-02

120%
100%
Jan-01
Jan-09
China is worried about social stability and will seek to avoid the consequences of an
asset bubble bust, but we doubt it will turn hawkish in the short term. 43
Asia ex Japan – Positive Comparisons with the West
………….. the banking system is working….....
The balance sheets of the commercial banks are
much stronger ………….
17
150%
140%
US money multiplier
Loans to deposit ratio
15
130%
120%
80%
70%
Chinese nominal retail sales, y /y , %
19%
broad money / narrow money
13
90%
US nominal retail sales, y /y , %
24%
China money multiplier
14%
110%
100%
…. Chinese retail sales have decoupled (even if
exports have not) …………
11
9%
9
4%
7
-1%
5
-6%
60%
50%
China
Japan
NJA
EMEA
US
Latam
UK
Europe
ex UK
………government finances are in much better
shape (i) ………..
3
1997
-11%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
………government finances are in much better
shape (ii) …….
3%
160
140
Government debt, % of GDP
1997
1999
2001
2003
2005
2007
2009
………and exchange rates are attractive
(though FX appreciation is likely to be capped)
95
NJA REER
Long Term average
0%
120
90
-3%
100
80
-6%
60
-9%
40
20
-12%
85
Budget Balance, % of GDP
US
NJA
China
80
Source for Charts: Credit Suisse/Datastream
China
EMEA
NJA
LatAm
US
UK
Eurozone
Japan
0
-15%
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
75
1990
1993
1996
1999
2002
2005
2009
44
Asia ex Japan - Some Possible Negative Risks
………… inflation (and spending power) is
sensitive to rising food prices ……….
Asia is a consumer of commodities, not an
exporter …………………
40%
60.0
Net comm odity Ex ports % GDP
9%
40.0
30.0
20.0
20%
4%
40.0
10.0
10%
30.0
0%
-1%
0.0
-10%
20.0
02
03
04
Source for Charts: Credit Suisse/Datastream
05
06
07
08
09
Indonesia
China
Thailand
Malaysia
Colombia
Argentina
Chile
Turkey
India
Japan
Hong Kong
Poland
S. Africa
Taiwan
Singapore
Brazil
Mexico
Korea
Europe
US
Australia
Philippines
10%
100
5%
0.6
0.5
0.4
0.3
0.2
110
120
0%
-5%
0.1
0
130
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
-10%
45
Jul 08
01
90
Rolling 4-week net flows into Asia ex-Japan
equity funds as a % of assets
Jul 07
00
2008
Jul 06
99
80
15%
Jul 05
98
2006
Jul 04
97
2004
Jul 03
1
20%
Jul 02
Electricity output, y/y%, 3mma, rhs
70
Jul 01
China GDP, y/y%
0.7
2002
Funds flow into Asian (and GEM) equities has
been strongly positive.
0.9
0.8
2000
Jul 00
last data point
5
USD TWI (rhs, inverted)
1998
Jul 99
7
NJA price rel. (local currency, lhs)
-40%
1996
Jul 98
9
1
-11%
1994
Jul 97
11
3
Asian equities tend to do better with the USD is
weak.
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
-12%
-30%
NJA exports, y/y, %
0.0
Jul 96
13
-20%
US nominal retail sales, y/y, 6m lead
Jul 95
… and, whilst the PMI is positive, Chinese
electricity output is still down YoY.
-6%
10.0
UK
Singapore
H ong Kong
J apan
India
C hina
Sw itz erland
Italy
Greec e
U nited Kingdom
F ranc e
Sw eden
U nited States
Spain
Germ any
C anada
Braz il
M ex ic o
Saudi Arabia
N orw ay
-20.0
R us s ian F ederation
M alay s ia
Aus tralia
-10.0
96
30%
Emerging markets much more exposed to a
bout of food price inflation
50.0
Jul 09
50.0
… exports, Asia’s traditional driver, remain weak
......
The Outperformance of Cyclicals in Context
Asia ex Japan Cyclicals vs Defensives - Price Perf
160
Asian Telecom Sector vs MSCI Asia ex Japan
Asia ex Japan - Cyclicals vs Defensives Rel P/BV
150
0.85
150
140
130
Oct-90
Sep-98
Apr-03
Oct-08
120
110
0.80
Oct-90
Sep-98
0.75
Apr-03
Oct-08
140
130
0.70
0.65
120
0.60
110
0.55
100
100
0.50
90
0.45
80
0.40
0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360

80
0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360
A number of leading indicators are now signalling expansion


90
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Source for Charts: UBS/Credit Suisse/MSCI. Cyclicals comprise IT, Industrials, Materials and
Cons. Discretionary. Defensives comprise Cons. Staples, Telecoms, Health Care and Utilities
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.
Whereas in the last 2 quarters we have been actively searching for
cyclical laggards, now we are more open in our approach to sectors.
46
Asia ex Japan – Regional Valuations (June 2009)
MSCI Asia ex Japan - Trailing P/BV vs RoE
3.50
Asia ex Japan - Div Yield-US Corp Bond Yield
16.0%
14.0%
3.00
12.0%
2.50
10.0%
2.00
8.0%
1.50
6.0%
1.00
4.0%
0.50
2.0%
0.00
12/31/95
0.0%
12/31/97
12/31/99
12/31/01
P/BV (LHS)
12/31/03
12/31/05
2
0
Equities Cheap
-2
-4
-6
-8
-10
-12
Equities Ex pensiv e
-14
-16
12/31/07
RoE (RHS)
Jan-73
Jan-77 Jan-81
MSCI Asia ex Japan - Trailing Pre-Exc PER
Jan-85 Jan-89
Jan-93
Jan-97 Jan-01
Jan-05 Jan-09
MSCI Asia ex Japan - Trailing Divided Yield
5.00
40.0
4.50
35.0
4.00
30.0
3.50
25.0
3.00
2.50
20.0
2.00
15.0
1.50
10.0
1.00
5.0
0.50
Valuations back to “average” territory. Earnings progression
increasingly important. Monetary policy settings currently supportive.
47
Jun-09
Jun-08
Source for Charts: MSCI/Credit Suisse. Div Yield-US Corp Bond Yield: UBS
Dec-08
Jun-07
Dec-07
Jun-06
Dec-06
Jun-05
Dec-05
Jun-04
Dec-04
Jun-03
Dec-03
Jun-02
Dec-02
Jun-01
Dec-01
Jun-00
Dec-00
Jun-99
Dec-99
Jun-98
Dec-98
Jun-97
Dec-97
Jun-96
Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun05
06
06
07
07
08
08
09
Dec-96
0.00
Dec- Jun- Dec- Jun03
04
04
05
Dec-95
0.0
Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun99
00
00
01
01
02
02
03
Asia ex Japan – Relative Valuations (June 2009)
Asia ex Japan - P/BV - RoE rel to World
Asia ex Japan Trailing PE rel to World
20%
30%
10%
20%
0%
10%
-10%
0%
-20%
-10%
-30%
-20%
-40%
-30%
-50%
-40%
-60%
-50%
-70%
-60%
01
02
03
04
05
06
07
08
09
90
92
94
Asia ex Japan - Dividend Yield rel to World
96
98
00
02
04
06
08
04
06
08
Asia ex Japan - Price to Cash Flow rel to World
100%
140%
120%
80%
100%
60%
80%
60%
40%
40%
20%
20%
0%
0%
-20%
-20%
-40%
-40%
-60%
90
92
94
96
98
00
02
04
06
08
90
92
94
96
98
00
02
Source for Charts: MSCI/Credit Suisse.
Asian fundamentals are clearly better, but relative valuations are looking more
48
stretched.
Appendices
Rexiter Capital Management
www.Rexiter.com
49
Rexiter Capital Management - Overview
“The Best of Both Worlds”
An investment boutique backed with worldclass resources

A stable structure. No-one has left the Asian team
since Rexiter was formed in 1997.
Rexiter Staff
25%
SSgA / ABP
Joint Venture
75%

SSgA provides IT, dealing, back office, compliance
and risk management as well as marketing support

Managers concentrate on investment
* Economic interest
Strong sense of company ownership.
Strong support in resources and systems
50
Rexiter - Summary of Key Points
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.

Control on risk through diversification and an approach of “considered contrarianism”
Engagement with management
A wealth of experience, focused on an attractive balance of risk and reward
51
Rexiter - Organisation Chart
Kenneth King*
Chairman
Non-Investment
Investment
Murray Davey*
Managing
Director
and CIO GEM
Nicholas Payne*
Fund Manager
John Morton*
Managing Director and
CIO Fixed Income
BOSTON
Christopher Vale*/**
Managing Director and
CIO Asia
Arzu Akkemik*
Fund Manager
Mark Capstick
Fund Manager
Daniel Wood
Fund Manager
Guy Jackson
Risk and Compliance
Officer
Sylvana Billings
Chief Financial
Officer
Lewis Jones
Research
Analyst
Sharon Power
Client Relationship
Manager
Gavin MacLachlan*
Chief Operating Officer
Rebecca Mitchell
Marketing Executive
Gayathri
Rameshkumar
Management
Accountant
Guido Giammattei
Fund Manager
David Lehman
Business Manager
Christopher
James*/**
Managing
Director
SINGAPORE
Jamshed Desai**
Fund Manager
SINGAPORE
Helena Coles*
Fund Manager
SINGAPORE
Zhixin Shu
Senior Research
Analyst
Saiyi He
Research
Analyst
Adrian Cowell*/**
Fund Manager
SINGAPORE
Kyung-Rae Min
Senior Research
Analyst
SEOUL
Sharon Lim
Finance Manager
SINGAPORE
Karin Checksfield
Administrator /
Receptionist
Olivier
Mampouya
Stuart
Butler
Elwyn
McDonnell
Anna Cho
Administrator
SEOUL
Ana Goh
Administrator
SINGAPORE
Client Relationship and Marketing
Solim Kim
Research
Analyst
SEOUL
EMEA Team
Asian Team
Finance and Tax
Operations and Business
Administration
Fixed Income Team
Directors of Rexiter Capital Management Limited as at May 2008
Emma Cook
Portfolio Administrators
(SSgA)
Latin American Team
*
Deborah Stephenson
Marketing Assistant
**
Directors of Rexiter Capital Management Singapore PTE Limited as at May 2008
Denotes line management
Denotes functional reporting line
52
Rexiter - Team Biographies
Kenneth King
Managing Director and CIO
BSc Econ. University College London
MSc 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 Vale
Asian 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 James
Fund 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, CFA
Fund 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.
53
Rexiter - Team Biographies
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 Min
Analyst, 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, CFA
Analyst, Korean Mid-Caps.
BA, International Economics and Political Science, Seoul National University
MSc, 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.
54
Rexiter - Team Biographies
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.
55