Updates and Response to Atlantic Ocean Windstorm
20 March 2010
Investors Meeting
CT&T Capital
CHOO KOON PO | TOR WEI JIAN | TEO GUI XIONG
CONFIDENTIAL
CONFIDENTIAL1
AGENDA
CT&T Capital
1 Introduction
3 Event Analysis
4 Actions Taken
5 Conclusion
6 Appendix
CT&T Capital
2 Background
CONFIDENTIAL2
INTRODUCTION: Recap of Our Investment Strategy
3 Key Investment Themes Target Investors
Theme Funds Selection S$
1 HSBC GIF Climate Change $1m
2ING (L) Invest Middle East &
North Africa$3m
2FORTIS L FUND Bond Best
Selection World Emerging$1m
3DWS Global Agribusiness A2
SGD$1m
3Schroder AS Gold and Metals A
Acc SGD $3m
Investors with high risk appetite seeking
for high returns for an investment time
horizon of 10 years
CT&T Capital
Alternative Energy- Ongoing Climate issue
- Government Stimulus
- Technological Advancement
Frontier Market- Superior Growth Prospect
- Lower valuations in Frontier Market
Commodities- Agriculture: Increasing population and
decreasing arable land
- Metals: Increase urbanization and
construction activities
1
2
3
1
2
3
3
2
CT&T Capital seeks to obtain an attractive rate of return through investing in long
term macro trends and focusing on key geographies and asset classes
217
143
120
113
76
0 100 200 300
US
SE Asia
Germany
China
Japan
Imports
CONFIDENTIAL3
BACKGROUND: US and New York State
CT&T Capital
Top 5 industries of New York State
Description
United States New York State
World imports & exports, USD trillion 2008
World GDP by PPP, 2008
20.4%
11.3%
6.2%
4.9%4.2%
53.0%
US China Japan India Germany Rest of world
Gross GDP of USD 1.14tr in 2008
16th largest economy in the world, 8th highest
per capita income
NYC – largest and most populous city in US
A global, iconic hub for
financial, cultural, transportation and
manufacturing activities
16%
15%
9%
7%10%
42%
Finance and insurance Real estate and rental and leasing
Professional and technical services Health care and social assistance
Government All others
Exports
146
143
141
129
78
- 50 100 150 200
Germany
China
SE Asia
US
Japan
CONFIDENTIAL4
BACKGROUND: Historical Disasters Analysis
Impact on financial markets is driven mainly by investor’s expectation, severity of
disaster and size/significance of the affected region’s economy
Severity of Disaster
CT&T Capital
• Increase severity would lead
to greater disruption and
recovery/rebuilding efforts
•Hurricane Katrina
USD 82 Billion in property
damage and destruction of
state‟s infrastructure
Investor Expectations
• Unexpected events and
mismatch expectations would
increase impact on financial
markets
•Sept 11 Attacks
Unexpected event which cause
huge market fluctuations
Region’s Economy
• Key economic regions will
increase impact to financial
markets
•Hurricane Katrina
Gulf of Mexico contributes to
over 50% of US gasoline
production
Led to rise in oil prices
1 2 3
81.2
35 26.8
78
150
41
109
?
0
50
100
150
200
250
300
350
Hurrican Katrina
Hurrican Ike Sept 11 Attacks
2010 NY Windstorm
Property damages Total economic impact
CONFIDENTIAL5
EVENT ANALYSIS: General
CT&T Capital
Impact on Global Economy
- Key US industries affected
- Contagion effect to rest of world
Impact on Global Financial
Markets
- Capital Markets
- Equities, Bonds
- Currencies and Commodities
1
2
USD bn
Property Damages and Economic Costs Impacts on Global Markets
Hurricane Hurricane
Ike
We expect NY Windstorm to surpass Katrina’s total economic impact
Negative -
• Insurance: Increase liability claims
• Financials: Disruption of operations of major
finance companies and decreasing investor‟s risk
appetites
• Tourism/Entertainment: Drop in tourist arrivals
and hotel occupancy
• Aviation/Shipping: Disruption of airport and
seaport services
CONFIDENTIAL6
EVENT ANALYSIS: Industry Analysis
Construction sector first to benefit from reconstruction efforts
• Construction: Reconstruction efforts and
increase in demand of construction equipments
• Consumer Durables: Restocking by consumers
• Resources Mining: Demand for raw materials
such as base metals for reconstruction
•Transportation: Reconstruction efforts would
involve moving of supplies e.g. trucking companies
CT&T Capital
Positive +
CONFIDENTIAL7
EVENT ANALYSIS: Government Reaction
We expect central banks and governments to react swiftly and decisively
CT&T Capital
Fed funds rate lowered by
175bp over 3 months
Fiscal
Sept 11 attacks 2010 NY WindstormSubprime crisis
Monetary
USD 40bn to fund relief efforts
Further tax cuts and stimulus
bill were made in Q1, 2002
Fed funds rate lowered from
5.25% to range of 0 – 0.25%
Quantitative easing and
extraordinary lending facilities
Fiscal
Monetary
A total of USD 955 bn stimulus
package in 2008/9
TARP fund. USD 700 bn used
specifically for financial
institutions
Fed funds to be maintained at
0 – 0.25%
More special lending facilities
may be created / restarted
Quantitative easing
Fiscal
Monetary
More fiscal stimulus in the form
of tax cuts, government
expenditures etc.
Specific programs for property
and business owners
CONFIDENTIAL8
EVENT ANALYSIS: Immediate Impact
Analysis of past disasters – Sept 11 Attacks and Hurricane Katrina
CT&T Capital
80
85
90
95
100
105
110
S&P 500 MSCI World MSCI Emerging Metals Gold Oil
Year
2001
Sept 11 Attacks
95
100
105
110
115
120
Year
2005
Hurricane Katrina
Equities went
down an
average 5%
globally when
US Markets
first open on
17 Sept
Oil suffers a
large drop in
the aftermath
of event
Gold rose
4.2% from 10-
17 Sept
Equities
remains
stable
Oil went up
3% from 23-28
Aug
Gold remains
stable
Metals went
up 10% in 4
weeks after 23
Aug
Market closes from 11-16 Sep 200123 Aug 2005: Hurricane struck Bahamas
28 Aug 2005: Hurricane struck Louisiana
CONFIDENTIAL9
EVENT ANALYSIS: Immediate Impact
Market volatility increases, gold has upside potential whereas broad equities
indices and oil fall
CT&T Capital
Commodities Impact Reasons/ Market Speculations
Gold Flight to safety
Oil Slow down of US economy
Base Metals Reconstruction efforts
Equities Impact
US Equities
Global Equities
Emerging/Frontier Equities
Currency Impact
US Dollar Index
Fixed Income Impact
US Treasuries NA
Global Treasuries NA
Market Volatlity Impact
VIX Index
Reasons
US economic impact spreads globally
Reasons
Selling of US assets, economic growth stalls
Reasons
Historically not closely correlated
Reasons
Market volatility increases due to uncertainty
CONFIDENTIAL10
ADDITION #1: Fullerton Global Bond Fund (FGLOB)
Source: Fund Factsheet (Dec 2009)
CT&T Capital
The Fund has the flexibility to invest in sovereign bonds, corporate bonds, REITs and other fixed
income instruments. The Fund Manager may invest in futures and derivatives for hedging purposes
and efficient portfolio management.
Lowest Annual Expense RatioThe fund has the lowest annual
expense ratio (0.36%) among its 12
peers (average of 5.8%)
Low Risk48% of portfolio in AAA rating bonds
Relatively low exposure to USD•Only 24.4% in USD (Rare for low risk
bond denominated funds)
1
2
3
Fund description
Asset Allocation – Credit Ratings
Currency exposure
Offers a great hedge to our current
portfolio amid volatile period
Reasons for Inclusion
CONFIDENTIAL11
ADDITION #2: Global Construction Portfolio
4 stocks to invest to capitalize on the reconstruction efforts
CT&T Capital
• Relevant experience as the only
construction company working at
both the Pentagon and WTC disaster
sites during 9/11
• Debt free
• Good long-term relationships with
governments and contractors
• Ability to take on contract risks and
stress test projects
• Debt-free
• World„s 8th largest construction
company
• Key markets in US
• Low debt/equity level (c.15%) and
High ROE (c.18.4%)
• World's largest manufacturer of
construction equipment
• Strong business model, consistent
positive free cash flow
1
2
3
4
CONFIDENTIAL12
SUMMARY OF IMMEDIATE ACTIONS TAKEN
We seek to take advantage of event-driven opportunities
Theme Funds Selection CurrentImmediate
Action
Alternative
EnergyHSBC GIF Climate Change $2m $0.5m
Frontier Markets
(Equities)ING MENA $3m $1.5m
Frontier Markets
(Bonds)FORTIS Emerging Bond $1m $0.5m
Commodities
(Agriculture)DWS Global Agribusiness $1m $1m
Commodities
(Gold & Metals) Schroder Gold and Metals $3m $4.5m
Safe Assets
(NEW)Fullerton Global Bond - $1m
Construction
Equities (NEW)
4 Global Construction
Companies - $1m
CT&T Capital
Portfolio Allocation
CONFIDENTIAL13
EVENT ANALYSIS: Med to Long Term Impact
V-shape RecoveryEmerging Markets to recover faster than US
US Government increase fiscal spending US Government to issue more debt to fund reconstruction, stimulate economy
Downside pressure on US dollars
Commodities – Gold to correct, demand for base metals strongGold prices to correct as market conditions stabilize
Base metal fundamentals to be strong due to emerging market growth
1
2
3
We are positive on the economic recovery story as markets stabilize
CT&T Capital
CONFIDENTIAL14
EVENT ANALYSIS: Med to Long Term Impact on Funds
Our portfolio would revert largely to our original 3 key investment themes
CT&T Capital
1 HSBC GIF Climate Change
2 ING MENA
3 FORTIS Emerging Bond
4 DWS Agribusiness
5 SCHRODER Gold & Metals
We expect lesser climate change
commitments from Gov‟t
Emerging markets to recover faster
Agriculture fundamentals remain intact
Industrialization & Urbanization gather
momentum
CONFIDENTIAL15
SUMMARY OF POST EVENT ACTIONS TAKEN
We seek to maximise returns on long term macro trends
Theme Funds Selection CurrentImmediate
ActionPost Event
Alternative
EnergyHSBC GIF Climate Change $2m $0.5m $1m
Frontier Markets
(Equities)ING MENA $3m $1.5m $3m
Frontier Markets
(Bonds)FORTIS Emerging Bond $1m $0.5m $2m
Commodities
(Agriculture)DWS Global Agribusiness $1m $1m $1m
Commodities
(Gold & Metals) Schroder Gold and Metals $3m $4.5m $3m
Safe Assets
(NEW)Fullerton Global Bond - $1m -
Construction
Equities (NEW)
4 Global Construction
Companies - $1m -
CT&T Capital
Portfolio Allocation
0
1
2
3
4
5
6
Pre-Event Reaction Market Stabilise
Agriculture
Metals & Gold
Frontier
Climate
Treasuries
Construction
CONFIDENTIAL16
CONCLUSION
We adopt an opportunistic approach in the immediate aftermath of the windstorm
CT&T Capital
Investment Theme
Pre-Event Reaction Market Stabilize
Ride on Economic
recovery especially
on Emerging
economies
Capitalize on
reconstruction
efforts
Underweight on
Global Equities
Overweight on
Metals & Gold
Economic recovery
story continues in
Emerging Market
S$‟m Portfolio Allocation*
*Our present portfolio allocation is based on our base case scenario analysis
High potential returns from low
base, low PE
CONFIDENTIAL17
Agriculture and Metals
CONCLUSION
3 investment themes for the next decade
High potential returns from
rising urbanization and
population
Frontier Markets
High potential returns from
increasing investments and
government support in
alternative energies
Climate Change
MPT + Optimize Sharpe ratio
Fund with strong capability and potential of generating the alpha performance in the next decade
CT&T Capital
CT&T Capital
Q&A
The alpha to your investment needs
CT&T Capital
CT&T Capital
CONFIDENTIAL18
CONFIDENTIAL19
Appendix
Event
CT&T Capital
CT&T Capital
CONFIDENTIAL20
SCENARIO ANALYSIS: Immediate Actions
We seek to maximise returns on long term macro trends
Theme Funds Selection Pessimistic Base Optimistic
Alternative
EnergyHSBC GIF Climate Change - $0.5m $1m
Frontier Markets
(Equities)ING MENA - $1.5m $3m
Frontier Markets
(Bonds)FORTIS Emerging Bond - $0.5m $1m
Commodities
(Agriculture)DWS Global Agribusiness $1m $1m $1m
Commodities
(Gold & Metals) Schroder Gold and Metals $4m $4.5m $3m
Safe Assets
(NEW)Fullerton Global Bond $5m $1m -
Construction
Equities (NEW)
4 Global Construction
Companies - $1m S1m
CT&T Capital
Portfolio Allocation
CONFIDENTIAL21
SCENARIO ANALYSIS: Med to Long Term
We seek to maximise returns on long term macro trends
Theme Funds Selection Pessimistic Base Optimistic
Alternative
EnergyHSBC GIF Climate Change - $1m $2m
Frontier Markets
(Equities)ING MENA $1m $3m $3m
Frontier Markets
(Bonds)FORTIS Emerging Bond $1m $2m $1m
Commodities
(Agriculture)DWS Global Agribusiness $1m $1m $1m
Commodities
(Gold & Metals) Schroder Gold and Metals $4m $3m $3m
Safe Assets
(NEW)Fullerton Global Bond $3m - -
Construction
Equities (NEW)
4 Global Construction
Companies - - -
CT&T Capital
Portfolio Allocation
_____ CONFIDENTIAL22
New York State
Gross GDP of USD 1.14tr in 2008
16th largest economy in the world, 8th highest
per capita income
Projected state deficit of USD 8.2bn in
2010/2011
Demographics and Social Economic
New York City
3rd most populous state in the US, estimated
pop. of 19.5m as of July 2009
Highly urbanised. 92% of residents living in
urban areas
Profile
Geographically largest city in the state and
most populous in the US
A global hub for
financial, cultural, transportation and
manufacturing activities
Location of the NYSE, largest stock
exchange in the world
Top five industries as percent of GDP, 2008
16%
15%
9%7%10%
43%
Finance and insurance Real estate and rental and leasing
Professional and technical services Health care and social assistance
Government All others
Source: Bureau of Economic Analysis, US Department of Commerce
_____ CONFIDENTIAL23
United States
Largest national GDP in the world –
USD14.4 trillion
Largest importer of goods and 3rd largest
exporter in the world
Services contribute 67.8% of GDP in 2009
3rd largest producer of oil in the world and
largest importer
World‟s top producer of corn and soybeans
NYSE – world‟s largest by dollar volume
Budget deficit of 9.8% of GDP
Gross national debt in 2009: 83.4% of GDP
GDP in PPP and nominal $ Economic
Global exports
Profile
[ ]
23%
7%
8%5%6%
51%
US China Japan France Germany Rest
20%
11%
6%
5%4%
54%
US China Japan India Germany Rest
Current USD PPP
9.2%10.2%
5.6%
4.3%
10.3%60.5%
US China Japan France Germany Rest
CONFIDENTIAL24
Hurricane Katrina
What Happened?
Hurricane Katrina (Aug 2005) - 4th most severe hurricane and greatest economic damage
CT&T Capital
• Worst affected states in US: Louisiana (Ranked
24th in Gross State Product in US), Mississippi
(Ranked 35th), Alabama (Ranked 25th)
•Total Fatalities: 1,836 confirmed, 705 missing
• Total Damage to Property: USD 81.2 Billion
•Total Economic Impact: Up to USD 150 Billion
• Industries Affected (Immediate):
•Oil Production in the Gulf Coast (over 50% of
US gasoline production)
• Shipping (Bulk of US agriculture shipped
from the Gulf)
•Forestry (about USD 2 Billion loss)
CONFIDENTIAL25
9/11 – September 11th Attacks
What Happened?
September 11th 2001 - Most deadly attack on US soil since Pearl Harbor
CT&T Capital
• Main Cities Affected: New York City (GDP: Over
USD 1trillion)
•Total Fatalities: 2,973 victims
•Total economic Impact:
• GDP Declined in NYC: USD 27.3 Billion
• Insurance lost: up to USD 40 Billion
• Industries Affected (Immediate):
• Finance
• NYSE, NASDAQ, NYMEX, bond
market cease trading
• Tourism
• Airlines/Aviation
CONFIDENTIAL26
NY State Disaster 2010
What Happened?
Worst Wind Storm to hit New York State
CT&T Capital
• Main Areas Affected: New York State
•Total Fatalities: Minimal
•Total economic Impact (Estimated):
• Damage to property: Over 100 USD Billion
• GDP decline: ??
• Industries Affected (Immediate):
• Finance
• NYSE, NASDAQ, NYMEX, bond
market cease trading
• Transport
•Airlines
•Shipping
•Tourism
•
• Main Areas Affected: New York State
• Property:
• NYC: $796.6 billion (2010)
• Major Airports Affected:
1. John F. Kennedy International Airport
2. LaGuardia Airport
3. Newark Liberty International Airport
4. Stewart International Airport,
5. Teterboro Airport
• Major Port Affected:
1. Auto Marine Terminal
2. Brooklyn Port Authority Marine Terminal
3. Howland Hook Marine Terminal
4. Port Newark-Elizabeth Marine Terminal
CONFIDENTIAL27
NY State Disaster 2010 – Damage to Infrastructure
Heavy damage to property, major sea ports and airports
CT&T Capital
Sichuan Earthquake (May 2008) Case Study
• 80,000 dead, almost apocalyptic devastation in China
• Massive rebuilding effort and billions of dollars it would pump into the Chinese economy would far
outweigh the economic losses from the quake
• Bump up national economic growth by 0.3 percent
Other Studies
•Studies have found that earthquakes in California and Alaska helped spur economic activity there, and
that countries with more hurricanes and storms tend to see higher rates of growth. Some of the most
recent studies have found a link between disasters and subsequent innovation.
• Possible long term economic growth after initial destruction
CONFIDENTIAL28
Natural Disasters and Economic Growth
Natural Disasters: Short term economic pain but long term growth?
CT&T Capital
CONFIDENTIAL29
New Fund – Fullerton Global Bond Fund (FGLOB)
Fund description
Source: Fund Factsheet (Dec 2009)
The Fund has the flexibility to invest in sovereign bonds, corporate bonds, REITs and other fixed
income instruments. The Fund Manager may invest in futures and derivatives for hedging purposes
and efficient portfolio management.
CT&T Capital
Asset Allocation – Credit Ratings
Geographical exposure Currency Exposure
1 As of 19 March 2010
Peer comparison
Relative lower
exposure to USD
currency compared
to other low risk
bond denominated
funds
The fund has the lowest annual expense ratio
(0.36%) among its 12 peers (average of 5.8%)
The fund has the 3rd highest 1-year return (12.3%)
among its peers (average of 5.38%)1
CONFIDENTIAL30
The Fund has the flexibility to invest in sovereign bonds, corporate bonds, REITs and other fixed
income instruments. The Fund Manager may invest in futures and derivatives for hedging purposes
and efficient portfolio management.
CT&T Capital
Description Details
Currency SGD
Manager Fullerton Fund Management
Launch 16 November 2009
Management Fee 0.75% (Annual)
Fundsupermart
Risk Rating2- Low Risk
Fund Description
Top 5 Positions % portfolio
France Government 4.25%
Oct 20232.2%
Bank Nederlandse
Gemeenten 4.125%
Jun 2016
2.0%
Korea Treasury Bond 5.75%
Sep 20181.9%
US Government 2.75%
Feb 20191.9%
Bundes Republick
Deutschland 5.625%
Jan 2028
1.9%
New Fund – Fullerton Global Bond Fund (FGLOB)
Source: Fund Factsheet (Feb 2010)
DJ Home Construction Index vs S&P500, post 9/11
_____ CONFIDENTIAL31
Construction sector outperformed S&P500 strongly post 9/11 attacks
CONFIDENTIAL32
Caterpillar Inc.
Caterpillar Inc.. The Group's principal activities are
designing, manufacturing and marketing construction
machinery and engines. The Group operates through
three business segments: Machinery, Engines and
Financial Products. Machinery segment designs,
manufactures and markets construction, mining and
forestry machinery and related parts. Engines segment
designs, manufactures and markets electric power
generation systems, on-highway vehicles and
locomotives, marine, petroleum, industrial, agricultural
and related parts. Financial Products segment provides
financing to customers and dealers for the purchase and
lease of equipment, offers operating and finance leases,
installment sale contracts, wholesale financing plans
and insurance services. The Group's products are sold
under the brand names Caterpillar, Cat, Solar Turbines,
MaK, Perkins, FG Wilson and Olympian. It operates in
the United States, Europe, Africa, Middle East, Asia
Pacific, Latin America and North America.
Source: Worldscope.
CT&T Capital
CONFIDENTIAL33
AMEC
AMEC p.l.c.. The Group's principal activity is providing
consultancy, engineering and project management
services to the energy, power and process industries. It
designs, delivers and maintains strategic and complex
assets for its customers. The Group operates through
four businesses. Natural Resources designs, manages,
maintains and upgrades production assets for a range
of oil and gas companies globally. Power and Process
designs, enhances and maintain electricity and gas
infrastructure in the United Kingdom, and power and
industrial plant in selected markets in North America.
Earth and Environmental provides environmental,
geotechnical, materials and water fields services.
Investments and others focuses on identifying sites,
undertaking environmental studies and developing
planning applications, site engineering and design,
economic modelling. In Nov 2008, the Group acquired
OEST Associates, Inc.
Source: Worldscope.
CT&T Capital
CONFIDENTIAL34
KBR
Kbr, Inc.. The Group's principal activity is to provide
engineering, construction services, supporting the
energy, petrochemicals, government services and civil
infrastructure sectors. The Group provides wide range of
services through six business segments, Upstream,
Services, Downstream, Technology Ventures and
Government and Infrastructure. The Upstream
Downstream and Technology segment designs and
constructs energy and petrochemical projects, including
large, technically complex projects in remote locations
around the world. The Government and Infrastructure
segment delivers on-demand support services across
the full military mission cycle from contingency logistics
and field support to operations and maintenance on
military bases.
Source: Worldscope.
CT&T Capital
CONFIDENTIAL35
SKANSKA
Skanska AB. The Group's principal activity is to provide
construction services related to building and civil
projects and in-house project development. The Group's
operations are carried out in four segments,
Construction, Residential Development, Commercial
Development and Infrastructure Development. The
Construction segment refers to building construction
(both non-residential and residential) and civil
construction. The Residential Development segment
develops residential projects for immediate sale.
Commercial Development segment initiates, develops,
leases and divests commercial property projects.
Infrastructure Development segment develops and
invests in privately financed infrastructure projects such
as roads, hospitals and power generation plants. The
Group operates in Sweden, Other Nordic countries,
Other Europe, the United States and Other markets.
The Group acquired Tekri Oy in 2008.
Source: Worldscope
CT&T Capital
CONFIDENTIAL36
Appendix
Fund Selections
CT&T Capital
CT&T Capital
CONFIDENTIAL37
Global economic recovery is off to a strong start
• Following the deepest global downturn recent history, global economic growth has returned to nearly pre-crisis levels,
largely led by key emerging economies in Asia
• Global production and trade have bounced back, largely driven by the turn in inventory cycle in advanced economies and
normalization of global trade. Leading indicators such as PMI and ISM have all registered accelerating growth recently
• Financial markets have also recovered faster than expected. Money markets have stabilized and the tightening of bank
lending standards has moderated. Equity markets and corporate bond issuance have surged since the 2009Q1
• IMF expects GDP of most emerging and developing economies to rise about 6 percent in 2010 and a further acceleration in
2011. Growth will be largely driven by strong economic frameworks and buoyant internal demand
• Fiscal and monetary policies in advanced economies are expected to remain accommodative due to the still-low levels of
capacity utilization and low inflation expectations
• The strong revival of commodity prices is further evidence of the global economic recovery. Global demand, particularly
from emerging economies, will help support growth in commodity producers, for example GCC countries, Australia, Canada,
Russia and Brazil
• The high-upside potential underscores our recommendation in a high-risk, high-return fund
Global GDP growth Global production and trade
-10
-5
0
5
10
2006Q1 2007Q1 2008Q1 2009Q1 2010Q1 2011Q1
%, qoq, annualized
World
Emerging and
developing economies
Advanced economies
-35
-25
-15
-5
5
15
25
2005 2006 2007 2008 2009
-80
-60
-40
-20
0
20
40
60
80
2005 2006 2007 2008 2009
Advanced
economies
Emerging and
developing economies
World
Advanced
economies
Emerging and
developing economiesWorld
Source: IMF, World Economic Outlook update, Jan 2010
Annualized %,
change of 3-
month moving
average
Annualized %,
change of 3-
month moving
average
Industrial
production
Merchandise
exports
CT&T Capital
CONFIDENTIAL38
Introduction
CT&T Capital seeks to obtain an attractive rate of return through investing in long
term macro trends and focusing on key geographies and asset classes
Asset and Geographical Allocation Target Investors
Funds Selection Amount
1 DWS Global Agribusiness A2 SGD $1m
2 Schroder AS Gold and Metals A
Acc SGD
$3m
3 ING (L) Invest Middle East & North
Africa
$3m
4 FORTIS L FUND Bond Best
Selection World Emerging
$1m
5 HSBC GIF Climate Change $2m
Investors with high risk appetite seeking
for high returns for an investment time
horizon of 10 years
CT&T Capital
*
* Excludes Holdings on Schroder AS Gold and Metals
CONFIDENTIAL39
Investment Strategy
Alternative Energy - Inevitable Climate ChangeThe ongoing climate issue and eventual regulation on emission levels would lead to
substantial growth in industries involved with Climate Change. Government stimulus and
technological advancement will continue to make this investment attractive.
Frontier Market – The Next Emerging MarketEmerging Market will enjoy a superior growth rate compared to develop market in the next
decade. With BRIC equities looking increasingly expensive, we believe that the lower base
and lower valuations in the frontier market will be the best bet for high returns.
Commodities – The Rising Asset ClassWe are positive with the outlook of agriculture and metal commodities due to the increase
in population coupled, decrease in arable land and increasing urbanization trend.
1
2
3
3 Major macro trends which shaped our investment strategy
CT&T Capital
CONFIDENTIAL40
Alternative Energy - Inevitable Climate Change
Climate Change debate is gaining momentum leading to strong growth for clean energy
Source: New Energy Finance
•Climate Change Heating Up. Climate Change
debate is gaining momentum. Inroads were made
in Copenhagen Summit and more commitments
expected to be achieve in upcoming summits.
•Strong Government Stimulus. Governments
allocated more than US$ 430 billion in fiscal
stimulus globally to “climate change themes” and
US$ 177 billion of stimulus to clean energy in 2009.
•Advancement in Clean Energy Technology. In
the past 18 months, price of clean energy has
dropped significantly. Government stimulus and
increased R&D efforts would make clean energy
more viable.
CT&T Capital
Source: New Energy Finance
CONFIDENTIAL41
Alternative Energy - Nuclear Energy
President Obama‟s efforts to promote nuclear
energy would be a strong boost to the industry.
The recent US$8bn in loan guarantees for the first
nuclear power plant to be built in three decades in
the United States was “only the beginning” as up
to US$54 in loan guarantees is included in 2011
budget request
In addition, countries such as France, Japan and
especially China have increased their investments
in nuclear energy
9.4% of fund invested in nuclear energy related
companies and 3rd highest holding of fund is in
Exelon
Strong Growth Expected for Nuclear Energy
0
20
40
60
80
100
120
140
2006 2015 2030
Gig
aw
att
s
Source: Energy Information Administration
World Nuclear Generating Capacity by Region, 2006, 2015, 2030
OECD Europe
OECD North AmericaOECD Asia
Non-OECD Europe/EurasiaChina
India
Rest of World
0
10
20
30
40
50
60
70
2000 2001 2002 2003 2004 2005 2006 2007 2008
China’s Nuclear Electricity Power Generation in
kilowatt-hours
Source: EIU
CT&T Capital
CONFIDENTIAL42
Alternative Energy - Government Stimulus
Clean Energy Stimulus might decrease significantly after 2011
Almost every major government worldwide
announced a fiscal stimulus package with
significant portion earmarked for „green‟
initiative
The flow of stimulus spending will strengthen
to around US$ 60 billion during 2010 and
drive overall investment in clean energy into
record territory as much as US$ 200 billion
Clean energy stimulus projected to decrease
sharply after 2011
However, with increasing political will on
climate change and more legislative action,
continual government support is very likely
Expected Clean Energy Stimulus Spending by Year,
US$ billions (% of total)Year, US$ billions (% of
total)
CT&T Capital
Industry Allocation
CONFIDENTIAL43
Fund 1 – HSBC GIF Climate Change
Fund description Fund analysis
Risk analysis
Geographical Allocation
Source: Fund Factsheet (Dec 2009)
• Focus on Alternative Energy. Over 50% of fund
invested in clean energy and nuclear energy
production
• Exposure in key geographical areas. Main
investments in countries with strong growth in
climate change industries
The fund seeks long term capital growth by investing in a diversified portfolio of
equities of companies’ developing activities related to climate change
• Reduction in government stimulus.
Governments face questions on how to stop
stimulus without causing the industry to suffer
• Increasing Interest Rates. For clean energy
industries, bulk of the cost to be borne up-front,
more sensitive to higher net interest than fossil fuels
CT&T Capital
Source: Fund Factsheet (Dec 2009)
CONFIDENTIAL44
Fund 1 – HSBC GIF Climate ChangeThe fund seeks long term capital growth by investing in a diversified portfolio of
equities of companies’ developing activities related to climate change
CT&T Capital
Description Details
Currency SGD
ManagerHSBC Global Asset
Management
Launch 9 November 2007
Management Fee 1.50% (Annual)
Fundsupermart
Risk Rating9-Higher Risk
Peer comparison
1 As of 5 March 2010
* Excludes performance fee of 10% of absolute return subject to a high
water mark
Fund Description
-4.73% -5.02%
-6.61%-8.00%
-6.00%
-4.00%
-2.00%
0.00%
Schroder ISF Gb Climate
HGIF Climate Change
DWS Glb Climate Change
% YTD Returns
1.99%
1.85%
2.00%
1.75%
1.80%
1.85%
1.90%
1.95%
2.00%
2.05%
Schroder ISF Gb Climate
HGIF Climate Change
DWS Glb Climate Change
% Annual Expense Ratio
Middle East & Africa
Bahrain Kuwait Pakistan
Botswana Lebanon Qatar
Ghana Mauritius Saudi Arabia
Jordan Nigeria Tunisia
Kenya Oman UAE
CONFIDENTIAL45
Frontier Market- The Next Emerging Market
Exposure to Frontier Market is recommended for investors seeking high returns
CT&T Capital
List of Frontier Market Countries
Frontier market is a subset of the larger emerging market (EM)
Smaller, less liquid and less developed markets in the EM sphere
Categorized by higher returns, higher risk and lower correlation with the developed markets
Asia
Kazakhstan
Sri Lanka
Vietnam
Americas
Argentina
Jamaica
Eastern Europe
Bulgaria Romania
Croatia Serbia
Estonia Slovenia
Lithuania Ukraine
Source: MSCI Barra (Sept 2009)
CONFIDENTIAL46
Frontier Market- The Next Emerging Market
Source: Bloomberg
CT&T Capital
Best-Performing World Equity Indices (2000-09)
Average PE (2007-2009)
Source: ArabFinance, Bloomberg
Frontier market provides attractive returns with cheaper valuation
•Historical Outperformance in Equity Market
Economic, security and social developments across
these underdeveloped markets pose a great
catalyst to its equities returns
•Lower Correlation with the Developed Market
Strong long-term diversification potential and ability
to hold on its own despite an uncertain recovery of
the developed world
•Lower Valuations than Emerging Markets
Correlation
with
S&P 500
S&P Extended
Frontier 150
Other Developing and
Developed Market Indices
56% 75-95%
Median
Stock
Market
Cap. over
GDP
Frontier
Market
Economies
Emerging
Market
Economies
Developed
Market
Economies
24% 50% 88%
CONFIDENTIAL47
Frontier Market- The Next Emerging Market
Source: Bloomberg
CT&T Capital
Worst-Performing World Equity Indices (2000-09)
Average PE (2007-2009)
Source: ArabFinance, Bloomberg
Frontier market provides attractive returns with cheaper valuation
•Historical Outperformance in Equity Market
Economic, security and social developments across
these underdeveloped markets pose a great
catalyst to its equities returns
•Lower Correlation with the Developed Market
Strong long-term diversification potential and ability
to hold on its own despite an uncertain recovery of
the developed world
•Lower Valuations than Emerging Markets
Correlation
with
S&P 500
S&P Extended
Frontier 150
Other Developing and
Developed Market Indices
56% 75-95%
Median
Stock
Market
Cap. over
GDP
Frontier
Market
Economies
Emerging
Market
Economies
Developed
Market
Economies
24% 50% 88%
CONFIDENTIAL48
Frontier Markets - S&P Extended Frontier 150
Index consists of the 150 largest and most liquid companies from over 30 countries
The index uses a modified market capitalization
scheme to ensure that no country has a weight
greater than 15% in the index and no security is
over 10% of the index
List of Countries
CT&T Capital
ME&A Americas
Asia
Europe
Bahrain
Botswana
Cote d'Ivoire
Ghana
Kenya
Kuwait
Lebanon
Jordan
Oman
Qatar
Pakistan
Namibia
Nigeria
Tunisia
U.A.E
Zimbabwe
Bulgaria
Croatia
Estonia
Georgia
Latvia
Lithuania
Slovak Republic
Slovenia
Romania
Ukraine
Colombia
Ecuador
Jamaica
Panama
Trinidad & Tobago
Bangladesh
Cambodia
Kazakhstan
Mauritius
Sri Lanka
Vietnam
CONFIDENTIAL49
Frontier Markets - MENA
MENA region has the 2nd highest regional GDP growth forecast for the next 5 years
CT&T Capital
World Nominal GDP Growth*
* Measured in USD Terms
Egypt, with its diverse economy and large
population, coupled with minimal penetration
rates across sectors and low levels of leverage,
sets the scene for strong internal growth driving
opportunities
Qatar is the fastest growing economy in the
region with the third largest gas reserves in the
world
Saudi Arabia is one of the strongest domestic
markets with one of the least geared GCC
economies
Oman, with its massive upcoming government
infrastructure projects, is pose to enjoy
stimulated growth in various industries
Industry Allocation
CONFIDENTIAL50
Fund 2 – ING (L) Invest Middle East & North Africa
Fund description Fund analysis
Risk analysis
Geographical Allocation
Source: Fund Factsheet (Jan 2010)
• Well diversified
• Strong catalyst for Internal Growth categorize by
large population (Egypt), low leverage (Egypt and
Saudi) and large government spending in
infrastructure
The fund invests in a diversified portfolio of equities in or with exposure to the Middle
East and North Africa market
• Significant drop in oil price affected GCC
exports. Mitigated by strong Gov‟t reserves and
Gov‟t directives to diversify economy
• Dubai Crisis escalating. Mitigated by strong
balance sheet of GCC Gov‟t and its willingness to
intervene in stimulating the economy
CT&T Capital
CONFIDENTIAL51
Fund 2 – ING (L) Invest Middle East & North AfricaThe fund invests in emerging markets fixed-income securities with an emphasis on
long-term strategically driven exposures at the country level
CT&T Capital
Description Details
Currency USD
ManagerING Investment
Management (Dubai) Ltd
Launch 13 January 2008
Management Fee 1.50% (Annual)
Fundsupermart
Risk Rating9-Higher Risk
Peer comparisonFund Description
Equities Sector Holdings
National Shipping Co Energy 5.88%
Ras Al Khaimah
CeramicsIndustrials 4.26%
Oman Telecom Co Telecoms 4.10%
Top 3 Holdings
Source: Fundsupermart
N/A
GDP* Growth (2008-2014)
CONFIDENTIAL52
Fund 3 – FORTIS L World Emerging Bond
Fund description Fund analysis
Risk analysis
Geographical Allocation
Source: Fund Factsheet (Dec 2009)
• Exposure into attractive emerging economies
• EM bonds are less co-related
• Narrowing spreads due to increased investors‟
confidence
• EM currencies upsides due to lower fiscal deficits
and public debt ratios
The fund invests in emerging markets fixed-income securities with an emphasis on
long-term strategically driven exposures at the country level
• Double dip recession. Might cause a flight to
safety assets. Mitigated by recent favorable
economic indicators and the willingness of
governments to intervene
CT&T Capital
* Nominal GDP
# Countries include Kazakhstan,
Argentina, Venezuela, Brazil, Russia,
Indonesia, Peru
Source: IMF (Jan 2010)
Fiscal
Deficits
Emerging Market Developed Market
3% 7-8%
Public Debt
Ratio40% 90%
CONFIDENTIAL53
Fund 3 – FORTIS L World Emerging BondThe fund invests in a diversified portfolio of equities in or with exposure to the Middle
East and North Africa market
CT&T Capital
Description Details
Currency USD
Manager Fortis Investments
Launch 27 May 1998
Management Fee 1.50% (Annual)
Fundsupermart
Risk Rating5-Moderate Risk
Peer comparisonFund Description
Bond Maturity Holdings
Elec De Caracas Fin B
8.5 (Venezuela)04/2018 7.83 %
Argentina 8.28 12/2033 6.90 %
Turanalem Finance Bv
8.25 (Netherlands) 01/2037 5.00 %
Top 3 Holdings
Source: Fundsupermart
N/A
-100%
-50%
0%
50%
100%
150%
200%
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09
Thomson Reuters/Jefferies CRB IndexS&P500 Index
CONFIDENTIAL54
Commodities – The Rising Asset Class
Cumulative returns since Dec 2003
The secular uptrend in commodities is underway
% cumulative change
• Outstanding historical returns.
Commodities have provided outstanding returns as
compared to equities in the last decade
• Secular trend to continue.
Growing demand for commodities, particularly
emerging countries will support this secular trend
• Exposure recommended for target investors.
Investors with greater risk tolerance and long-term
horizon should have exposure to this asset class
• Agriculture and Metals may outperform.
We believe Agriculture and Metals will outperform
other commodity classes.Source: Thomson Reuters/ Jefferies/ Bloomberg
CT&T Capital
1400
1402
1404
1406
1408
1410
1412
1414
2003 2004 2005 2006 2007
CONFIDENTIAL55
Commodities – Global Agriculture
Demand and supply trends
Fundamentals provide strong impetus for global demand boom in agricultural products
• World’s population is expected to increase to
8.01 billion by 2025 from the current 6.91 billion
• Global arable land is shrinking since 2005 due
to rising urbanization
• Global stocks-to-use ratio have held steady,
providing a fundamental support for prices
• Global demand for agri. products will rise.
Demand for this human necessity and key
alternative to energy resource will continue to riseGlobal Stocks-to-Use* ratio in key
agricultural markets
%
Source: World Bank, 2009
World arable land area
Source: Food and Agriculture Organization of the United Nations
Area (million Ha)
*Measures the carryover stock over the amount used in the
past year. Gauges the relative supply/demand balance
CT&T Capital
2.01
3.47
1.58*1.98
0
0.5
1
1.5
2
2.5
3
3.5
4
DWS Global
Agribiz A2 SGD
Schroder Golden
Blossom Fund
DWS Global
Agribiz A2 USD
BNP Paribas
Agriculture (SGD)
Fund
33.51
70.4
0.02
70.9
0
10
20
30
40
50
60
70
80
DWS Global
Agribiz A2
SGD
Schroder
Golden
Blossom
Fund
DWS Global
Agribiz A2
USD
BNP Paribas
Agriculture
(SGD) Fund
1 As of 5 March 2010
* Excludes management fee of 4.1% charged upfront
• Due to the focus on the agricultural sector, fund volatility is
expected to be higher than traditional global equity funds
• The globally-diversified nature of the underlying assets means
that currency risk is mitigated
CONFIDENTIAL56
Fund 4 – DWS Global Agribusiness A2 SGD
Fund description
Source: Fund Factsheet (Jan 2010)
The fund invests in opportunities at various points along the “food chain” ranging from agricultural
commodities to consumer products. Areas include land and plantation, seed and fertiliser, protecting
and irrigation, food processing and manufacturing companies.
CT&T Capital
Sector Allocation
Geographical exposure Risk analysis
1–year return1% Annual expense ratio%
Peer comparison
CONFIDENTIAL57
Fund 4 – DWS Global Agribusiness A2 SGDThe fund invests in opportunities at various points along the “food chain” ranging from agricultural
commodities to consumer products. Areas include land and plantation, seed and fertiliser, protecting
and irrigation, food processing and manufacturing companies
CT&T Capital
Description Details
Currency SGD
Manager DWS Investment S.A.
Launch 15 April 2007
Management Fee 1.50% (Annual)
Fundsupermart
Risk Rating9-Higher Risk
Fund Description
Principal Holdings % Portfolio
Monsanto Co. 6.20%
Viterra Inc. 4.30%
Archer Daniels Midland Co. 3.20%
Agrium Inc. 2.60%
-100%
0%
100%
200%
300%
1996 1999 2002 2005 2008
Global metal stock
Aluminium Copper Lead Nickel Tin Zinc
CONFIDENTIAL58
Commodities – Global Metals
Demand and supply trends of base metals
Base and precious metals display signs of strong demand and weak supply
• Robust demand for base metals, the building
blocks of development, is supported by strong
fiscal stimulus spending on infrastructure as well as
increasing urbanization
• Precious metals seen as a safeguard against
geopolitical risk and are less volatile than most
commodities and equity indices, bringing
diversification benefits to our portfolio
• Downward movement of global stocks of base
metals towards 1996 levels or below it are further
evidence of continued strong demand for base
metals
Source: EIU
0%
30%
60%
90%
1996 1999 2002 2005 2008
Global metal consumption
Aluminium Copper Lead Nickel
Tin Zinc Steel
CT&T Capital
CONFIDENTIAL59
Commodities - Global metals: Gold
Demand and supply trends of gold
Unique properties of gold provide diversification benefits to our portfolio
• Spot gold price has went up by 20.7% over the
past year, surpassing US$1200/oz at one time,
fears of overvaluation of gold is intensifying
• Gold‟s role as a store of wealth and hedge against
financial turmoil has been tested and proven
• For the past 38 years, the world has been
engaged in a monetary system based on a single
currency – the US dollar
• Given the US‟s high budget deficit and debt levels,
more economists and central banks are calling for
the re-look into a new global reserve currency, gold
is the most viable alternative now
• Jewelry currently accounts for up over 60% of total
gold demand. As the economy improves, jewelry
demand will follow suit as wellSource: World Gold Council
CT&T Capital
52.78
36.36
48.78
0
10
20
30
40
50
60
Schroder AS
Gold&Metals A Acc
SGD
United Gold & General
Fund
DWS Noor Prec Metals
CL J SGD
1.912.05
0.4*
0
0.5
1
1.5
2
2.5
Schroder AS
Gold&Metals A Acc
SGD
United Gold & General
Fund
DWS Noor Prec Metals
CL J SGD
• The volatility of this fund is expected to be higher than more
diversified regional/sector equity funds due to the asset class-
focus
• Nonetheless, the mandate for the fund not to employ leverage
or engage in short selling caps the risks for investors
• As most metals are priced in USD, hence the currency
exposure is mainly to the USD. The fund does currency hedging
as well, mitigating foreign exchange risks.
8%
CONFIDENTIAL60
Fund 5 – Schroder AS Gold and Metals A Acc SGD
Fund description
Source: Fund Factsheet (Dec 2009)
The Fund invests predominantly in a range of metal-related derivative instruments, principally
comprising futures and other commodity-linked derivative instruments (e.g. swaps on physical
commodities) and, to a lesser extent equities in metal-related industries.
CT&T Capital
Asset Allocation
Portfolio exposure Risk analysis
1–year return1%
1 As of 5 March 2010
* Excludes performance fee of 10% of absolute return subject to a high water mark
Annual expense ratio%
Peer comparison
CONFIDENTIAL61
Fund 5 – Schroder AS Gold and Metals A Acc SGDThe Fund invests predominantly in a range of metal-related derivative instruments, principally
comprising futures and other commodity-linked derivative instruments (e.g. swaps on physical
commodities) and, to a lesser extent equities in metal-related industries
CT&T Capital
Description Details
Currency SGD
Manager Schroder I.M.
Launch 25 July 2008
Management Fee 1.50%* (Annual)
Fundsupermart
Risk Rating10-Highest Risk
Fund Description
Security exposure % portfolio
Futures 80.13%
Swaps, ETFs 10.68%
Equity 8.68%
Cash 0.51%
Futures 80.13%
* Excludes Performance Fee: 10% of the absolute return subject to a High Water Mark. Administration Fee: 0.4% p.a.
CONFIDENTIAL62
Quantitative Analysis
Methodology
Analyzed the various sub-funds and their relevant
benchmarks‟ historical data
Considered historical returns, volatility and
expense ratio
Sought a composition that gives an exposure to
all our recommended asset classes
High potential of maximizing returns in the future
and low expense ratio
Portfolio allocation
Portfolio statistics
7 years annualized Arithmetic Geometric
Returns (before fees) 16.94% 13.88%
Volatility (Standard
deviation)30.10% 30.10%
Sharpe ratio 0.56 0.46
Management fee* 1.50% + X% 1.50% + X%
Performance chart**
* Excludes Performance Fee of Fund 5, refer to slide [ ] for information ** Based on allocation of funds and weighted historical returns of relevant indexes
10.0%
30.0%
10.0%
30.0%
20.0%
Fortis L Fund Bond Best EM
ING L Invest MENA
DWS Global Agriculture
Schroder AS Gold and Metals
HSBC GIF Climate Change
50
100
150
200
250
300
350
Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10
CT&T Capital
CONFIDENTIAL63
Benchmark selection
HSBC GIF
Climate Change
The pair has a quarterly correlation of +95% in the past 3 months. Similar to the
fund, the benchmark tracks the stock market performance of key companies that
are best placed to profit from the challenges presented by climate change.
Fortis L Fund –
World Emerging
The fund has a sufficiently long history of prices to warrant the use of its actual
historical data, rather than a benchmark proxy
ING (L) Invest
MENA
The pair has a quarterly correlation of only +27% in the past 3 months. The
mandates of the pair are similar. The key difference is in the benchmark‟s
exclusion of Saudi Arabia, resulting in the low correlation in the past 3 months
DWS Global
Agribiz A2 SGD
The pair has a quarterly correlation of +59% in the past 3 months. The benchmark
tracks agriculture price actions while the fund tracks equity prices of companies in
the agricultural supply chain, explaining for the slightly low correlation
Schroder AS
Gold and Metal
Fund
The pair has a quarterly correlation of +70% in the past 3 months. The benchmark
tracks the equity prices of metals producers while the fund reflects the use of
derivatives on the price action of metals. Nonetheless, the correlation is strong
HSBC Global
Climate Change
Benchmark
Fortis L Fund –
World Emerging
S&P MENA BMI
Gross TR USD
Rogers Int.
Commodity Agri
Index TR
Rogers-Van Eck
Metals TR Index
Fund Benchmark
CT&T Capital
6 Months Historical Data
CONFIDENTIAL64
Funds Selection 6 Months Historical Returns
1 DWS Global Agribusiness A2 SGD 15.95%
2 Schroder AS Gold and Metals A Acc SGD 16.44%
3 ING (L) Invest Middle East & North Africa -2.10%
4 FORTIS L FUND Bond Best Selection World Emerging 7.22%
5 HSBC GIF Climate Change 2.42%
CT&T Capital
1 Year Historical Data
CONFIDENTIAL65
Funds Selection 1 Year Historical Returns
1 DWS Global Agribusiness A2 SGD 70.15%
2 Schroder AS Gold and Metals A Acc SGD 48.18%
3 ING (L) Invest Middle East & North Africa -3.20%
4 FORTIS L FUND Bond Best Selection World Emerging 37.99%
5 HSBC GIF Climate Change 20.89%
CT&T Capital