HwangDBS Kicks Off 2008 With Income Distributions For Their HwangDBS Select Income Fund, HwangDBS Select Bond Fund
Kuala Lumpur, 9 January 2008 – HwangDBS Investment Management Berhad (Formerly known as Hwang-DBS Investment Management Berhad) (“HwangDBS IM” or the Company) kicked off the year 2008 with good news for its investors. The Company declared interim and annual income distributions for two of their fixed income funds namely, the HwangDBS Select Bond Fund (SBoF) and the HwangDBS Select Income Fund (SIF) respectively.
For SBoF, HwangDBS IM declared a gross interim income distribution of 1.00 sen for the financial year ending 30 June 2008. The distribution translates to a 1.86 per cent1 return on the net asset value per unit (“NAV/Unit”) and all unit holders registered as at 7 January 2008 are eligible to receive the income allotment. This income distribution represents SBoF’s fifth income distribution since its inception on 28 July 2003. The performance of SBoF from December 2006 to November 2007 has been favourable having chartered a 5.43 per cent1 growth, outperforming its Maybank 12-month Fixed-Deposit (FD) benchmark by 1.73 per cent1. To date, the total growth of this fund since inception stands at 23.70 per cent1.
On the other hand, a final gross annual income distribution of 2.00 sen for the financial year ending 31 December 2007 was declared for SIF. The distribution translates to a 3.72 per cent1 return on the NAV/ Unit and all unit holders registered as at 27 December 2007 were eligible to receive the income allotment. This income distribution represents the fund’s second income distribution for 2007 and the fifth since its inception on 6 January 2005. For the period from December 2006 to November 2007, SIF registered a 9.44 per cent1 growth and outperformed its benchmark, the KLCI / Maybank 12-month Fixed-Deposit (FD) rate weighted 20:80, by 0.54 per cent2. The total growth of the fund since inception stands at 26.78 per cent1.
Teng Chee Wai, Chief Executive Officer and Executive Director of HwangDBS IM commented, “With the uncertainty of the US sub-prime mortgage issue persisting into the new year, we are definitely expecting a volatile year ahead. However, as the saying goes, each coin has two sides. In this case, we interpret this situation as a blessing in disguise for us in Asia. From an optimist point of view, this is an opportunity for foreign direct investments (FDI) to focus their attention on the Asian region especially on economies such as China, India, the Middle-East, Singapore and Malaysia. These economies have featured highly on the foreign investors’ radar due to several factors unique to the geographies such as the advancing infrastructure and crude oil in the Middle-East and nearer to home, the Singapore property industry has been enjoying brisk business as with China and India.”
Despite having breached the USD100 per barrel mark on 3 January 2008, the crude oil price is forecasted to rise as demands are expected to rise by 1.51 million barrels, or 1.8 percent, to 87.2 million barrels a day3 in 2008. Meanwhile, the stimulus for the Malaysian economy will continue to be the Ninth Malaysian Plan (9MP) – which includes East Coast Economic Region (ECER), Iskandar Development Region (IDR) and Northern Corridor Economic Region (NCER). The 9MP is supported by the 2008 budget, whereby under the nation’s development category, the allocation for development expenditure for 2008 has been raised to RM48.1 billion4, compared to RM46.5 billion5 in the year 2007.
SIF and SBoF are designed for relatively conservative investors who wish to receive a steady and regular income stream over the medium to long term. Both funds are suited for investors of a low to medium risk appetite. SIF invests between 69.8 per cent to 99.8 per cent of its NAV in fixed-income instruments. The balance are allocated to equity investments subject to a limit of 30 per cent of the fund’s NAV, while SBoF invests 80 per cent of the fund’s NAV in medium to long-term government bond, private debt securities and other fixed income securities. The balance will be held in cash deposits and short-term money market instruments.
1 Source: As at 30 November 2007
2 Source: Lipper Hindsight as at 30 November 2007
3 Source: Bloomberg as at 11 September 2007
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=atzBaPxSRXJw
4 Source: The Malaysia Government’s Official Portal, The 2008 Budget Speech
http://www.gov.my/MyGov/Forms/Announcements/bs08.pdf
5 Source: Bank Negara Malaysia, The 2007 Budget Speech
http://www.bnm.gov.my/files/budget2007.en.pdf