For Professional Investors onlyBaring Asset                          Baring ASEAN Frontiers FundManagement Limited155 Bish...
Why ASEAN?MSCI South East Asia has outperformed the region during 2008 crisis,since crisis and 2011!                      ...
Baring ASEAN Frontiers FundInvestment Universe                       Singapore  Core ASEAN Markets                        ...
Baring ASEAN Frontiers FundPeer ranking(as at 31st March 2012)                                                            ...
Barings Asian Investment TeamTeam structure                                                                      WILFRED S...
Investment Process       TOP DOWN INPUTS Strategic Policy Group   Top-down global asset class preferences   Country, secto...
What do we look for in a stock?Stock Research Framework      G                                  L                         ...
Quantitative Inputs and Risk Management Process and Tools                                    QUANTITATIVE                 ...
BAM Proprietary Quant ScreenComplements qualitative screening & also used as cross check on existing holdingsAsia Ex Japan...
Style Exposure Analysis & Style VaRThe Style Analysis & Style VaR provides a bottom-up based view of the portfolio’s relat...
Implied Alpha AnalysisThe Implied Alpha Analysis is based on the concept of reverse portfolio optimisation and provides a ...
Investment Philosophy and ProcessAn exampleGLCMV Research framework                                                       ...
ASEAN – Association of South East Asian NationsPopulation in millions, 2011                                               ...
DemographicsRising IncomeGrowth in middle-class and nominal                               Middle class in ASEAN and as % o...
ASEAN: Deleveraging over last 10 yearsIndonesia: Posterchild of ASEANIndonesia: Public Debt to GDP                        ...
2012 Investment Outlook Positives -   Strong domestic demand suggest better ability to mitigate Developed Economies     sl...
ASEAN:Exposure to Global Cyclicals versusDomestics2012 earnings weights by markets and macro slices                       ...
Indonesia: Underperformed YTD over Fuel Price HikeConcerns                                             March 1, 2005      ...
Key Investment Themes ASEAN Healthcare -   Hospitals both domestic secular growth and medical tourism play Consumer / Mode...
ASEAN HospitalsDefensive growthGlobal medical tourist expenditures                                  SE and South Asia medi...
ASEAN HospitalsDefensive GrowthThai healthcare expenditure                                     Bangkok Dusit Medical Servi...
ASEAN Modern RetailersA Secular Growth ThemeRetail space per thousand population No. of F&B outlets per million           ...
Fund Holding Stock ExampleMitra Adiperka (MAPI)Price performance         IDR                                              ...
ASEAN InfrastructureMultiyear Growth Thematic2010-2014 PPP Book                                                        Inf...
Fund Holding Stock ExampleJASA Marga (JSMR)Price performance                                                              ...
Baring ASEAN Frontiers FundCountry and Sector Allocation Strategy(as at 31st March 2012)                                  ...
Baring ASEAN Frontiers FundPortfolio Characteristics (as at 31st March 2012)Portfolio Characteristics                     ...
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Baring asset management

  1. 1. For Professional Investors onlyBaring Asset Baring ASEAN Frontiers FundManagement Limited155 Bishopsgate,London EC2M 3XY Citywire MontreuxTel +44 (0)20 7628 6000Fax +44 (0)20 7638 7928www.barings.com April 2012
  2. 2. Why ASEAN?MSCI South East Asia has outperformed the region during 2008 crisis,since crisis and 2011! MSCI Index Performance In U.S. Dollar44 3 Year 2008 2012 2008 Annualised 2011 2010 2009 Crisis YTD Crisis1 Return Recovery237 AC Asia ex JP 13.2 (17.1) 19.9 72.5 (63.2) 130.530 South East Asia 13.7 (6.1) 32.4 75.0 (56.5) 187.9 Indonesia 4.1 6.5 34.6 127.6 (63.9) 312.323 Malaysia -EM 8.5 0.1 37.0 52.1 (42.7) 141.216 Philippines 21.6 0.1 35.5 68.0 (53.5) 183.49 Singapore 19.3 (17.9) 22.2 74.0 (61.0) 158.5 Std Dev Thailand 21.1 (2.4) 56.3 77.3 (57.3) 275.52 12 15 18 21 24 27 30 Baring ASEAN Frontiers A EUR Amundi Fds Eq ASEAN AU-C China 9.9 (18.2) 4.8 62.6 (65.4) 79.0 Fidelity ASEAN A-USD Invesco ASEAN Equity" JF ASEAN Equity A (acc) - EUR India 20.1 (37.2) 20.9 102.8 (69.4) 125.7 Peer Group: Open End Funds - Europe/HKG/TWN/SGP – Asia-Pacific ex-Japan Equity … attractive risk – return proposition vs Asia Source: Factset as at 31 March 2012 Source: Morningstar Direct, Barings as at 31 March 2012 1 Market peak to bottom (29/10/2007 – 3/3/2009) 2 Market bottom to end Feb 2012 (3/3/2009 – 31/3/2012) 1
  3. 3. Baring ASEAN Frontiers FundInvestment Universe Singapore Core ASEAN Markets Vietnam Malaysia Markets Frontier Sri Lanka 70% Core Frontier Indonesia Bangladesh ASEAN Markets And Thailand Markets** Laos, etc Others Philippines Others ASEAN to be at least 70% Source: Barings * As there are no stock markets in Laos and Cambodia, exposure to these economies is gained by investing in companies active in these countries but listed elsewhere. ** At least 70% of the Fund will be invested in Core ASEAN markets. 2
  4. 4. Baring ASEAN Frontiers FundPeer ranking(as at 31st March 2012) Aug 2008 – Since 2012 YTD 2011 2010 2009 Dec 2008 Inception*Quartile (Peer) 2nd (3/6) 3rd (4/5) 1st (1/5) 1st (1/5) 2nd (3/5) 1st (1/5)RankingFund Performance 13.4 -11.6 37.4 86.3 -42.7 47.1Index** 13.7 -6.3 32.2 74.6 -39.0 50.1 *Cumulative, Inception date: 1 August 2008. **MSCI South East Asia Total Net Return Index Fund performance numbers are bid to bid, with gross income reinvested, US$. Transactions in derivatives, warrants and forward contracts and other fund derivatives instruments may be used for the purpose of meeting the investment objective of the Fund. The Net Asset Value of the Fund Morningstar Overall Ratings may have a high volatility due to these instruments and techniques being included in its scheme property and may involve a greater degree of risk. Standard & Poor’s Fund Management Rating Past performance is not an indication of future performance. Source: Barings/Morningstar-quartile ranking is customised. 3
  5. 5. Barings Asian Investment TeamTeam structure WILFRED SIT Total Headcount: 20 Chief Investment Officer, Asia AGNES DENG COLIN NG AJAY ARGAL KHIEM DO TBA Head of HK China Equities Head of Asian Equities Head of Indian Equities Head of Asian Multi-Asset Head of Asian Debt WILLIAM FONG HYUNG JIN LEE MANOJ SHROFF DAVID LEUNG HK China Korea India Quantitative Analyst JIM CHEN SOO HAI LIM HK China ASEAN / Australia WINSTON KE KAI YANG LEE HK China ASEAN DERICK LEUNG TIE BIN LIU HK China ASEAN ZHI ZHI TAN EUNICE HONG HK China Taiwan / Korea LIN TANG NICOLA LAI HK China Taiwan MULTI ASSET FIXED INCOME QUANT (LONDON) (LONDON) (LONDON) As at December 2011 4
  6. 6. Investment Process TOP DOWN INPUTS Strategic Policy Group Top-down global asset class preferences Country, sector and currency preferences BOTTOM UP INPUTS RISK MANAGEMENT Company meetings PORTFOLIO Tracking error concentration Onsite Research visits CONSTRUCTION 90/120 Forward P/E guideline Local contacts and newsflow Style exposure – growth/value/ Interaction with Global Sector and GEM Asia ex Japan team momentum/size teams Hong Kong China team Stock score monitoring Stocks scored 1 - 5 India team Active weights – stock/country/ sector BAM PROPRIETARY Portfolio Liquidity QUANTITATIVE INPUTSQuantitative team Stock screens Implied alpha Portfolio style Value at Risk Macro sensitivities 5
  7. 7. What do we look for in a stock?Stock Research Framework G L C M VGROWTH LIQUIDITY CURRENCY MANAGEMENT VALUATIONPace and duration Capital structure FX make-up of assets and Clear, credible strategy EV/EBITDA*Competitive position Interest costs and liabilities Company culture Price/cash flowOpportunities for real coverage FX make-up of revenues and Corporate governance Price/earningsgrowth Cashflow generation costs Demonstrable track record Asset undervaluationQuality of earnings and usage Likely direction of currency Acquisitions and disposals Sector/market/cross borderCulture of innovation Future direction of Effect of currency moves on comparison interest rates competitive position Unrecognized Ability to finance Sensitivity to Credible Favorable growth growth currency management risk/reward*Enterprise Value/Earnings Before Interest, Tax, Depreciation and Amortization 6
  8. 8. Quantitative Inputs and Risk Management Process and Tools QUANTITATIVE RISK RISK AND ANALYTICS MANAGEMENT QUANTITATIVE TOOLS M. Valensise J. Burns Executive Risk Reports CIO COOINDEPENDENT Risk Implied Alpha & Risk Budgeting Management Giuseppe Tedone Rob Chambers Macroeconomic Sensitivities Head of Head of Quantitative Style Exposure Analysis Quantitative Research Risk Management Research Style VaR Portfolio Managers Portfolio Managers Portfolio Risk Analysis Tools: Detailed monthly and ad hoc RiskMetrics Ex-ante and proactive use of quantitative tools risk analysis Northfield Risk Models Monthly meetings with IMs on Regular monitoring of internal Style Research quant input guidelines and regulatory limits Barings Proprietary Tools Monthly meeting with CIO Independent Risk Management Source: Barings 7
  9. 9. BAM Proprietary Quant ScreenComplements qualitative screening & also used as cross check on existing holdingsAsia Ex Japan Screen - ASEAN*Decile 1 stock are the most attractive and Decile 10 stocks are the least attractive 30 Mar 2012 Rank Fund Weight Growth Factors (45%) Value Factors (55%) Rank 1-Month VaR Liquidity BAM MSCI SE Active EPS Rev EPS Mom ROA 1Yr Earnings Cash Dividend Cash ID Name Ranked since Value Growth ASEAN ROE Change return Mom $m Score Asia Weight FY1 NTM Chg Yld Flow Yld Yld Flow ROIDecile 1 8.96 8.08 0.88 Consumer Discretionary633156 Berjaya Sports Toto 30 Dec 11 0 -0.23% 0.84 1.52 1 3 0.20 -0.20 11.44 0.00 18.3 7.10 8.35 5.72 81.60 0.72 Consumer StaplesB2927P First Resources Lt Npv 30 Mar 12 2 4.09% 4.28 2.33 4 1 1 1.20 1.20 7.69 0.00 10.1 8.45 9.45 1.62 22.20 0.19653567 Pp London Sumatra Idr100.00 30 Sep 11 0 8.49% 2.87 3.44 3 1 2 0.94 0.94 6.67 0.00 38.8 8.66 8.85 0.00 32.74 0.46 EnergyB1359K Ptt Exploration & Prod 30 Mar 12 2 -5.42% 1.19 22.45 2 3 1.27 -1.27 16.14 0.00 -12.5 7.72 16.43 3.09 22.37 0.31 3,200 3700642038 Ptt 31 Jan 12 0 -2.48% 1.88 44.43 IDR 2 2 2 1.90 Bought in Feb 1.86 -1.90 MYR 2.24 0.00 12.7 10.43 17.30 3.04 18.94 0.22642039 Ptt Public Company Thb10(Alien Mkt) 30 Sep 11 0 -3.40% 1.06 3,000 0.01 2 2 2 1.86 2.24 0.00 12.7 10.43 17.30 3.04 18.94 0.22B0300P Thai Oil 29 Feb 12 0 -4.61% 2.75 23.15 1 1 2 0.37 -0.37 10.10 0.00 55.7 3500 10.04 18.37 4.11 18.69 0.16 Financials 2,800B29Y9F Alam Sutera Realty Idr100 30 Mar 12 2 8.77% 7.05 2,600 6.46 4 1 1 1.42 1.42 40.00 0.00 59.3 5.43 12.47 0.00 24.33 0.66 3300 IndustrialsB29TTR Sime Darby 29 Feb 12 0 0.52% 2,400 34.47 1.36 4 1 2 1.78 1.66 0.12 10.00 0.00 239.7 7.36 9.46 3.08 17.87 0.14B1VT03 Yangzijiang Shipbuild 30 Mar 12 3 -2.21% 1.65 2,200 22.83 2 2 2 0.49 0.39 0.10 15.79 0.00 3100 4.8 15.56 16.55 4.15 30.65 -0.19 Materials617802 Resource Alam Ind Idr50 30 Sep 11 0 -13.50% 2,000 1.58 8.25 4 1 2 0.50 0.50 33.33 0.00 44.1 6.38 7.04 1.24 93.41 2.14 Decile 1 stock since 2900 Telecommunication Services 1,800641256 Advanced Info Service 30 Sep 11 0 15.00% 6.28 21.08 end3May 2011 1 1 1.03 -1.03 36.67 0.00 30.5 4.07 8.45 5.55 56.60 1.28641259 Advanced Info Serv. Fgn 30 Sep 11 0 14.47% 1,600 0.02 6.20 3 1 1 0.76 0.76 36.67 0.00 2700 30.5 4.07 8.45 5.55 56.60 1.28608624 Digi.Com 30 Mar 12 1 1.00% 3.86 10.24 3 2 0.80 -0.80 8.93 0.00 5.1 3.97 7.67 4.31 88.87 2.35628486 Globe Telecom 30 Mar 12 4 -2.24% 3.14 A pr-1 1.82 1 2 Jul-1 2 1 Oct-1 0.17 1 Jan-1 11.54 -0.17 2 Apr-1 -0.3 0.00 2 6.53 18.80 5.53 20.64 0.32B1CNDB Starhub 31 Jan 12 0 5.44% 1.92 5.45 1 3 0.29 -0.29 2.08 0.00 20.1 5.94 12.00 6.45 1396.02 1.37Decile 2 London Sumatra Indonesia 18.60 15.40 3.19 Crude Palm Oil (RHS) Consumer Staples609249 Astra Agro Lestari 29 Feb 12 0 4.71% 0.93 3.04 2 4 0.19 -0.19 0.83 0.00 2.7 6.54 8.60 4.03 29.55 0.43616447 Golden Agri Resources 30 Mar 12 1 7.53% 2.28 40.32 2 4 1 1.97 0.81 1.16 0.00 0.00 -27.1 16.68 17.92 2.00 15.80 0.08 Energy •Stock upgraded to Decile 1 from 4 in Jun 2011 => potential GARP ideaB29SK7 Indo Tambangraya Megah 29 Feb 12 0 0.23% 0.62 •Top 6.98 down view on6CPO was early 2012 0.36 1 1 1.05 0.69 better entry -2.50 0.00 125.5 9.69 10.57 3.62 42.57 1.22 Financials •Qualitative and Quantitative views aligned by Feb2012 => BUY Source: Barings, Bloomberg, Factset, April 2012 8
  10. 10. Style Exposure Analysis & Style VaRThe Style Analysis & Style VaR provides a bottom-up based view of the portfolio’s relative tilts to the mostimportant style factors; and the risks associated with those exposures Portfolio Relative Value at Risk Breakdown 0.6 0.470.47 0.35 0.39 0.320.36 Style Tilt™ Total Relative VaR 9.4% 18.7% 0.4 0.28 0.15 Tracking Error 4.7% 8.7% 0.2 -0.02 0.04 0 Total Style VaR 4.7% 10.0% -0.2 -0.06 -0.04 -0.08 Momentum VaR 4.2% 7.2% -0.09 -0.12 -0.4 -0.24 Size VaR 1.2% 5.4% -0.6 -0.44 -0.40 EBITDA to IBES 12Mth Market Cap Momentum Momentum IBES Engs Market Beta Book to Price Debt/Equity Rtn on Equity Income/Sales Dividend IBES 1Yr Earnings Sales to Earnings Yld Sales CFlow Yield Growth VaR 0.9% 2.7% Value VaR 0.2%1.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Relative VaR at 84% and 95% Confidence % Weight Portfolio Style Exposures 50 Portfolio Benchmark Coverage Momentum 0.31 40 Size 0.69 - 30 Growth 0.22 20 10 Value 0.35 0 -0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 standard deviations from MSCI AC Asia Pacific Large Value Large Growth Small Value Small Growth Is the portfolio consistent with the Barings GARP investment approach? Source: Barings, MSCI, Style Research, 31 March 2012 9
  11. 11. Implied Alpha AnalysisThe Implied Alpha Analysis is based on the concept of reverse portfolio optimisation and provides a usefulguide to the strength of the bet taken on individual stocks, countries and sectors within the portfolio 40.0% Active Wgt % Cont. to TE 35.0% 30.0% 25.0% 20.0% Check that the portfolio 15.0% 10.0% 5.0% reflects the portfolio 0.0% -5.0% manager views-10.0%-15.0% T le m u ica n H a C re Fin cials C n m rS p s tilities Ee y e n lo y M te ls fo a n ls iscre n ry e co m n tio o su e ta le n rg T ch o g Cn mr In rm tio a ria e lth a d stria o su e tio a an U s In u S rvice Learn about risk/return e D trade-offs Beta to Analyst % contrib Implied Name Sector Country benchmark Score to trk err. AlphaAlam Sutera Realty Financials Indonesia 1.589 1 6.80% 11.22% Risk budgeting atSingapore Telecommunications Ltd. Telecommunication Services Singapore 0.697 1 5.98% -3.66%Alliance Global Group Inc.DMCI Holdings Inc. Industrials Industrials Philippines Philippines 1.346 1.520 1 2 4.38% 4.17% 7.51% 8.35% Country, Sector andSummarecon AgungFirst Resources Ltd. Consumer Discretionary Consumer Staples Indonesia Singapore 1.361 1.534 1 1 4.06% 3.70% 7.87% 7.22% stock levelIndoFood Sukses Makmur Consumer Staples Indonesia 1.584 #N/A -1.46% 7.65%Keppel Land Ltd. Financials Singapore 1.847 #N/A -1.58% 9.37%Bumi Resources Energy Indonesia 2.266 #N/A -3.93% 11.98%Baring China A-Share X USD [UNASSIGNED] Ireland 0.720 #N/A -4.49% -3.07%U.S. Dollar [CASH] [Cash] 0.000 #N/A -7.49% -7.90% Is the portfolio well diversified and efficient? Source: Barings, MSCI, Northfield System, 31 March 2012 10
  12. 12. Investment Philosophy and ProcessAn exampleGLCMV Research framework Indo Tambangraya Megah Growth (+) : volume + price Liquidity (+) : net cash balance sheet Historical performance Currency (-) : marginally negative 65,000 IDR M 90 Management (+) : good track record 80 55,000 Valuation (+) : 7x PER in 7% dividend 70 yield in March 45,000 60 50 35,000 40Conviction to Add in Mar 09 trough 25,000 Added 30SPG Asian Team 15,000 20 10 MATERIALS: positive Govt small mines secular view, Score (2) closure in China 5,000 0 in March 2009 Chinese coal imports Jul-08 Jun-09 May-10 Apr-11 Mar-12 Volume (M) - RHS Price (IDR) - LHS growth sustainable Performance Source: Factset as at 14 March 2012, please see Important Information 11
  13. 13. ASEAN – Association of South East Asian NationsPopulation in millions, 2011 ASEAN population and five-year1,600 historical CAGR Population millions, 20111,200 2010 pop. 5-yr CAGR GDP per Country (m) (%) capita (US$) 800 Brunei 0.4 1.9 36521 400 Singapore 5.2 3.3 50714 0 India Russia Euro EU27 Asean China USA Brazil area Laos 6.3 1.5 1204 Cambodia 14.3 1.1 912GDP in USD billion, 2011 Malaysia 28.9 1.7 86178,000 GDP (USD bn, 2011) USD 15,065bn Myanmar 48.3 0.7 8046,0004,000 Thailand 69.5 0.7 52812,000 Vietnam 88.8 1.1 1362 0 Philippines 94.9 1.7 2255 India Japan Italy Russia China Asean France Brazil Germany UK US Indonesia 242.3 1.1 3469 A diverse group, commonality of superior growth prospects Source: UBS as at April 2012 12
  14. 14. DemographicsRising IncomeGrowth in middle-class and nominal Middle class in ASEAN and as % ofdiscretionary spending power, 2010- population2015CL Middle Class population in million as % of population Indonesia 2010 2015 CAGR(%) 2010 2015 Brunei 0.4 0.4 1.5 100 100Philippines Cambodia 0.6 0.8 7.1 4.0 5.3 Indonesia 37.2 68.4 12.9 16 28 Thailand Laos 0.3 0.4 7.1 5.0 6.7 Malaysia 14.8 18.9 5 53 63 Malaysia Myanmar 2.2 3.1 7.1 4.5 6.1 Philippines 13.1 20.3 9.2 14 20 Singapore (% ) Singapore 4.8 5.1 0.9 100 100 0 5 10 15 20 Thailand 24.5 32.2 5.6 36 46 Nominal discretionary spending power Vietnam 5.3 7.4 7.1 6.0 8.2 Middle class ASEAN 103 157 8.8 17.7 25.6 Exponential rise in consumption Source: CLSA as at March 2012 13
  15. 15. ASEAN: Deleveraging over last 10 yearsIndonesia: Posterchild of ASEANIndonesia: Public Debt to GDP Credit penetration is lowest in Core inflation & policy rate – on a the region structural decline % of100% GDP 70% Indonesia, % of GDP 13 % % 1190% 10 60% 1280% 970% 50% 1160% 8 40% 1050% 7 30% 940% 630% 20% 8 520% 10% 7 410% 0% 0% 6 3 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Public Debt: Domestic Public Debt: External Bank Credit:Household Bank Credit:Corporate Policy Rate Core Inflation (RHS) Source: Morgan Stanley as at April 2012 14
  16. 16. 2012 Investment Outlook Positives - Strong domestic demand suggest better ability to mitigate Developed Economies slowdown/recession - ASEAN markets generally have less global cyclical exposure - Fiscally robust enough to pump prime - Valuations still attractive despite strong performance - Monetary easing commenced in Thailand, Indonesia and Philippines Key risks: - External shocks e.g. Europe Sovereign debt concerns? - Policy risks e.g. inflation management; poor execution/implementation on infrastructure - ASEAN markets have outperformed 4 consecutive years*. Crowded trade? - Political – likely elections in Malaysia in 2012, potentially in Thailand? * comparing with MSCI Asia ex Japan, April 2012. 15
  17. 17. ASEAN:Exposure to Global Cyclicals versusDomestics2012 earnings weights by markets and macro slices Commodity Domestic Asset- Sensitive Rate-Sensitive Global Cyclicals Defensives Cyclicals Cyclicals Financials FinancialsAustralia 1% 38% 5% 12% 8% 37%China 5% 22% 14% 15% 8% 36%Hong Kong 10% 0% 16% 13% 41% 20%India 15% 29% 16% 13% 6% 21%Korea 49% 20% 10% 5% 2% 15%Taiwan 44% 15% 22% 5% 4% 10%Singapore 19% 0% 14% 19% 12% 35%Malaysia 8% 5% 22% 30% 5% 30%Philippines 0% 0% 19% 35% 25% 21%Indonesia 4% 18% 20% 27% 0% 32%Thailand 0% 46% 7% 11% 0% 35%MXAPJ 18% 23% 12% 12% 8% 27% ASEAN earnings/markets less vulnerable to global slowdown Sources: Factset, I/B/E/S, MSCI, GS Global ECS Research estimates as at September 2011 16
  18. 18. Indonesia: Underperformed YTD over Fuel Price HikeConcerns March 1, 2005 October 1, 2005 May 25, 2008 April, 2012Price before (after)1 1810 (2400) 2,400 (4500) 4,500 (6000) 4,500 (6000)% Change1 32.60% 87.50% 33.30% 33.30%CPI change (to the peak)2 1.6 ppt 9.3 ppt 3.1 ppt 3ppt (estimated)Policy response (to the peak)2 +0.8ppt +2.75ppt +1.5ppt N/AGDP per capita (US$)2 1300 1300 2237 3469Incremental fuel expense as % of 7.5% (2W) 7.5% (2W) 3.1% (2W) 2.0% (2W)income, for lowest bracketmotorcycle/car owners3 5.1% (4W) 5.1% (4W) 2.5% (4W) 1.8% (4W)GDP growth (yoy) before2 5.96% 5.84% 6.30% 6.39% (e)GDP growth (yoy) 1Q after2 5.87% 5.11% 6.25% N.AMSCI Indo relative 1M before2 -1.30% 1.90% 14.40% -12% (YTD)MSCI Indo relative 3M after2 0.60% 6.10% -0.60% N.A Historical experience suggest limited impact to market performance 1 Source: Citi, as at March 2012 2 Source: Bloomberg, Barings, as at March 2012 3 Source: Deutsche Bank, as at March 2012 17
  19. 19. Key Investment Themes ASEAN Healthcare - Hospitals both domestic secular growth and medical tourism play Consumer / Modern Retailing - Mitra Adiperkasa, Home Product ASEAN Tourism - Genting Singapore, Minor International, AirAsia Infrastructure Plays - Semen Gresik, Indocement, Jasa Marga, DMC Holdings, Sino-Thai Agriculture - Golden Agri, Charoen Pokphand Food, Olam Asset reflation/Rising home ownership from falling interest rates - Summarecon Agung, Ciputra Development, Alam Sutera, Frontier Exposures: Vinamilk (Vietnam), John Keells, Sampath Bank (Sri Lanka) 18
  20. 20. ASEAN HospitalsDefensive growthGlobal medical tourist expenditures SE and South Asia medical tourist expenditures US$ bn US$ bn70 10 9.0 5860 20% CAGR 28% CAGR 85040 35 6 4.230 4 2020 2.0 210 0 0 2006 2009 2012E 2006 2009 2012EMarket share of medical tourism - Southeast and Thailand has competitive pricingSouth Asia Average (‘000 US$) IN TH SG USA India Singapore 19% Heart bypass 10.0 11.5 19.3 125.0 Philippines 33% 8% Heart valve replacement 9.3 10.3 13.0 159.5 Angioplasty 11.0 13.0 13.0 57.5 Malaysia Thailand Hip replacement 9.0 12.0 12.0 43.5 2% 38% Knee replacement 8.5 10.0 12.5 40.5 Spinal fusion 5.5 7.0 9.0 62.5 Medical tourism an ASEAN strength supplementing domestic growth Source: Credit Suisse as at April 2012 19
  21. 21. ASEAN HospitalsDefensive GrowthThai healthcare expenditure Bangkok Dusit Medical Service Bangkok Chain Hospitalper capita (BGH): Price Performance (KH): Price Performance THB BGH Index THB KH Index 120 1050 10 MSCI Thailand 750 MSCI Thailand 700 110 950 9 Took 650 100 850 Bought 600 8 90 some 750 550 80 profit 7 650 500 70 Added 550 6 450 Bought 60 400 50 450 5 350 40 350 4 300 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12Healthcare penetration Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 As the market leader, Bangkok Dusit Medical Bangkok Chain Hospital operates six private Services is well positioned to benefit from the general hospitals and serves patients under increasing spending in private hospital sector. social security scheme. BGH plans to add 270 beds (7% of total) over Public sector hospitals have become 2 years in the Eastern and Southern overburdened due to rapid demand growth provinces. outpacing the supply growth. Given its mid- The company is in a good position to market focus, KH is well positioned for consolidate the smaller player and cement its patients trading-up from overburdened public market leadership hospitals. KH aims to open a new 324 bed premium hospital in 1H 2012, which is a 26% increase to KH’s total beds Source: (Upper) World Health Organisation (WHO), UBS as at April 2012; (Lower) Ministry of Health, Credit Suisse Performance Source: Factset as at 19 April 2012 as at April 2012 20
  22. 22. ASEAN Modern RetailersA Secular Growth ThemeRetail space per thousand population No. of F&B outlets per million population Square4000 meter 503500 45 403000 352500 302000 251500 20 151000 10 500 5 0 - Thailand Thailand Indonesia Philippines Germany Philippines China Hongkong Indonesia Malaysia Australia USA Germany Singapore Canada India China Australia HK USA Singapore Canada Malaysia Starbucks KFC Mcdonalds Multi year growth story for these franchises Source: Euromonitor, Barings, as at March 2012 21
  23. 23. Fund Holding Stock ExampleMitra Adiperka (MAPI)Price performance IDR Index MAPI is the largest lifestyle retailer in Indonesia7,200 10,400 by number of brands, with a portfolio including6,600 department store, fashion goods and F&B. 9,1006,000 It provides a rare direct exposure to the Added5,400 7,800 discretionary consumption growth in Indonesia4,800 due to the rising middle class. Added 6,5004,200 Both revenue and profits are expected to grow at3,600 Bought 5,200 over 20% for the next few years, on the back of3,000 double digit growth in retail space and single 3,900 store sales.2,400 Portfolio includes Starbucks, Zara, Sogo, Seibu,1,800 2,600 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 etc MAPI MSCI Indonesia (RHS) Performance Source: Factset as at 26 April 2012 22
  24. 24. ASEAN InfrastructureMultiyear Growth Thematic2010-2014 PPP Book Infrastructure as % of GDP Projects Ready Priority Potential For Offer Projects ProjectsSector / Sub Sector Project Project Project 12.0% QTY Cost QTY Cost QTY Cost (US$mn) (US$mn) (US$mn)Air Transport -- -- -- -- 7 1558 10.0%Land Transport -- -- -- -- 2 274 8.0%Marine Transport 1 36 -- -- 11 2859Railways -- -- -- -- 9 9547 6.0%Toll Road -- -- 18 7592 17 19261Water Resources -- -- -- -- -- -- 4.0%Water Supply -- -- 6 522 18 1328 2.0%Solid Waste/Sanitation -- -- 3 220 3 57Telecommunication -- -- -- -- -- -- 0.0%Power -- -- -- -- 5 4045 2005 2006 2007 2008 2009 2010Oil and Gas -- -- -- -- -- -- Philippines Indonesia India ChinaTotal 1 36 27 8333 72 38929Investment, US$mn 47299 Underinvested and about to take off Source: Deutsche Bank, as at March 2012 Source: Morgan Stanley, CLSA, Barings, as at March 2012 23
  25. 25. Fund Holding Stock ExampleJASA Marga (JSMR)Price performance JSMR is the largest toll road company in Indonesia, controlling total length of 545km or IDR Index 72% of Indonesian toll roads.6,000 8,300 7,800 Organic growth comes from 3-4% traffic volume5,500 7,300 increase per annum and bi-annual tariff5,000 adjustment at inflation rate. 6,8004,500 6,300 JSMR have nine toll road projects totaled 215km Added Added 5,8004,000 in the pipeline, providing significant medium term 5,300 growth.3,500 4,800 Bought3,000 4,300 Indonesia n toll road summary 3,800 No. of Length Investment2,500 No Status 3,300 Sections (km) (US$ m)2,000 2,800 1 Operational 28 751 N.A. Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 2 In the pipeline 57 2,372 28,172 JSMR MSCI Indonesia (RHS) - Under development 25 972 10,797 - Tender 32 1,399 17,375 TOTAL 85 3,123 28,172 Performance Source: Factset as at 26 March 2012 24
  26. 26. Baring ASEAN Frontiers FundCountry and Sector Allocation Strategy(as at 31st March 2012) Weight (%) 2012E (%) Weight (%) 12 monthCountry Positions Bench- forward Bench EPS Sector Positions Portfolio mark PE (x) ROE Portfolio -mark Growth Index* Index*Indonesia 5.7 25.2 19.5 13.4 9.0 25.3 Industrials 4.2 19.9 15.7 [Funds] 3.6 3.6 --Thailand 5.3 20.0 14.7 11.5 13.4 16.6 Materials 3.2 7.9 4.7China 3.4 3.4 -- 9.6 9.8 17.2 [Cash] 2.3 2.3 --Sri Lanka 2.7 2.7 -- -- -- -- Health Care 2.0 2.4 0.4 Consumer Disc 0.7 10.5 9.8[Cash] 2.3 2.3 -- -- -- -- Consumer Staples 0.3 10.4 10.1Vietnam 0.9 0.9 -- -- -- -- Energy -1.0 6.0 7.0Other 0.2 0.2 -- -- -- -- Financials -1.6 35.7 37.3 Real Estate 4.3 10.5 6.2Philippines -1.2 4.3 5.5 15.8 13.4 16.6 Div. Financials -1.3 0.7 2.0Malaysia -8.9 15.1 24.0 15.2 5.6 13.9 Banks -4.6 24.5 29.1 -4.5Singapore -10.4 25.9 36.3 13.0 -0.6 11.8 Utilities -- 4.5 Telecom Services -9.2 1.3 10.5 Underweight Overweight Underweight Overweight Underweight Overweight Source: Barings as at 31 March 2012 *MSCI South East Asia Total Net Return Index 25
  27. 27. Baring ASEAN Frontiers FundPortfolio Characteristics (as at 31st March 2012)Portfolio Characteristics Market Capitalization Comparison Portfolio Benchmark Portfolio Benchmark (%) Index* (%) (%) Index* (%)Forward P/E 12.8x 13.8x Over US$10 bn 42.8 61.8Price/Book 2.2x 2.1x US$1-10 bn 43.9 38.2ROE 21.7% 21.2% Below US$1 bn 11.0 --EPS Growth Weighted Avg (US$ bn) 10.8 14.7 16.6% 10.9%(12 Mth Fwd) Risk Summary Tracking Error vs. Benchmark Index 4.7 Beta vs. Benchmark Index 1.1 Portfolio Risk 29.1 Benchmark Index Risk 26.0 * Benchmark Index: MSCI South East Asia Total Net Return Index. Source : MSCI, Style Research, Barings 26

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