WEEKLY COMMENTARY 4 APRIL 2011

Asian Weekly

Overview

 Asian markets rose last week as confidence in the global recovery improved amid signs that
China’s pace of manufacturing was stabilising and news that some Japanese companies had
resumed production.

 Japan’s manufacturing output contracted in March, underscoring the economic impact of the
disaster. Meanwhile, the struggle to halt the Fukushima radiation leaks continued.

 Elsewhere, Asian economies remained resilient. Exports from India, Indonesia, South Korea
and Thailand were robust, while Australia’s retail sales grew. Sri Lanka’s economy expanded
by a brisk 8% in 2010 as consumer demand and investment strengthened further.

 Inflation accelerated in Malaysia, South Korea, Sri Lanka and Thailand but slowed in
Indonesia. Taiwan’s central bank hiked interest rates.

 Indian police charged former telecommunications minister and company executives from
Reliance Telecom, Unitech Wireless and Swan Telecom over the sale of 2G licences.

Corporate News

Australia: After failing to secure a controlling stake in Riversdale, Rio Tinto extended its takeover
offer but waived the condition that it must gain majority control. BHP Billiton announced approval
for the Escondida Ore Access project, which will provide better quality ore and support higher output
from 2013.

China/Hong Kong: Our holdings reported generally good results. Giordano’s profits were boosted by
lower costs and the wholesale business to mainland franchisees. Asia Satellite also did well thanks to
improved satellite utilisation rates as well as contributions from its associates. Huaxin Cement
benefited from better cement pricing that was driven by demand and operational efficiency; the
company is emerging stronger from sector consolidation in central China. ENN Energy’s net profits
were affected in part by lower wholesale margins and the time lag in passing on higher costs to
residential customers.

India: Switzerland’s Holcim continued to increase its stake in Ambuja Cements by another 1% to
47%. Piramal Healthcare completed its share buyback but retains a large net cash position following
last year’s sale of its domestic formulations business to Abbott Laboratories.

Indonesia: Unilever Indonesia’s full-year results were solid, underpinned by its food and beverage
segment though the overall pace of sales growth slowed notably from previous years. Nonetheless,
the company’s margins remained stable and the balance sheet strong.

Japan: Many corporates are continuing to resume operations. Canon is targeting to reopen its main
camera lens facility in Utsunomiya by mid-April. Honda Motor is restarting operations at its affected
plants although parts shortages will slow production. East Japan Railway plans to restore the Tohoku
Shinkansen Line to full service from late April. Mitsubishi Estate is setting up a ¥30 billion private
real estate fund with its assets and will take a 25% stake in a Singapore condominium development
with CapitaLand. Takeda Pharmaceutical and Dainippon Sumitomo Pharma will jointly develop and
license two drugs.

Meanwhile, Kansai Paint will post an extraordinary gain of ¥4 billion this year from the sale of
properties; separately, it may have to make concessions after South African regulators opposed its
acquisition of Freeworld Coatings on antitrust grounds. Parco rejected the proposed overhaul of its
operations by two of its largest shareholders. Asahi Intecc may improve profitability as it switches
the distribution channel for part of its key products from wholesale to direct sales.

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Asian Weekly

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Korea: Shinsegae plans to list Shinsegae International, a majority-owned subsidiary that imports and
distributes luxury products, as the retail group continues to restructure. Busan Bank was renamed BS
Financial Group following its transformation into a financial holding company.

Malaysia: Star Publications’ subsidiary Cityneon Holdings incorporated a wholly owned subsidiary in
Ho Chi Minh City, which will serve as a springboard for expansion into Vietnam. Khazanah shortlisted
DRB-HICOM, Nationwide Express Courier Services and a joint venture between Amanah Reit and
Malaysia Pacific Corp to buy its 32% stake in POS Malaysia. United Malacca’s nine-month results
were aided by higher prices. Lafarge raised cement prices to offset increases in coal costs; Tasek is
expected to follow suit. Maxis marked its entry into the fixed line market with the launch of its home
services campaign, as it transitions into an integrated service provider.

Philippines: Jollibee Foods increased its stake in US-based restaurant operator Chow Fun Holdings
from 12% to 81% as it aims to boost its US presence in the US.

Singapore: UOB’s S$1 billion bond issue to finance outstanding debt in the second half of the year
will help lower interest costs. Sembcorp Marine won two deals worth US$427 million and separately
signed a long-term alliance contract with Canada’s Teekay Marine Services, which will boost and
diversify its revenue sources. A consortium formed by City Developments, Hong Leong Holdings and
TID topped the bidding for a local residential site. ComfortDelGro will expand its outdoor advertising
business into Sydney through its subsidiary Moove Media.

Thailand: Ratchaburi Electricity Generating Holding made an A$373 million bid to acquire 80-
85% of Australia’s second-largest wind energy provider Transfield Services Infrastructure Fund.

We hold all the above companies highlighted.

Asian Fixed Income

Asian bond yields generally rose last week as inflation and policy rate risks returned to focus. In
currency markets, the won and Taiwan dollar made notable gains against the US dollar. Other
currency returns were muted, while the baht, peso and Singapore dollar depreciated slightly.

Indices Performance Table

WOW YTD WOW (US$) YTD (US$) 01/04/2011

Australia All Ords 2.36% 2.22% 3.64% 3.71% 4,954.60
Hang Seng 2.78% 3.33% 2.98% 3.25% 23,801.90
MSCI China (US$) 3.35% 4.25% 3.35% 4.25% 69.13
MSCI Zhong Hua (US$) 3.11% 2.78% 3.11% 2.78% 365.72
India NSE50 3.04% -5.03% 3.24% -4.78% 5,826.05
Indonesia JCI 2.78% 0.11% 3.16% 3.57% 3,707.49
Japan Topix 0.61% -4.03% -2.70% -6.79% 862.62
Korea KOSPI 3.26% 3.41% 5.48% 7.48% 2,121.01
FTSE Bursa Malaysia KLSE 2.63% 2.40% 2.65% 4.35% 1,555.38
New Zealand 50 1.87% 4.32% 3.44% 2.57% 3,452.14
Pakistan KSE100 2.90% -1.13% 2.54% -0.66% 11,887.13
Philippines PCOMP 6.55% -1.70% 6.49% -0.68% 4,129.54
Straits Times Index 1.62% -2.18% 1.73% -0.39% 3,120.47
Taiwan TWSE 1.10% -2.98% 1.91% -3.24% 8,705.13
Thailand SET 2.57% 3.06% 2.57% 2.65% 1,064.35
Sri Lanka 1.89% 11.17% 1.85% 11.76% 7,377.22
US DJ 1.28% 6.90% 1.28% 6.90% 12,376.72
UK FTSE 100 1.85% 1.86% 2.40% 5.27% 6,009.92
Nasdaq Composite 1.70% 5.15% 1.70% 5.15% 2,789.60

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Asian Weekly

Asian Weekly
MSCI AC AP Free X Japan (US$) 3.35% 2.40% 3.35% 2.40% 490.35
MSCI AC Asia Pac X Japan Small Cap (US$) 2.71% -1.00% 2.71% -1.00% 1,063.26
Merrill Lynch Asian US Dollar Bond 0.25% 0.82% 0.25% 0.82% 301.80
JPM Singapore Govt Bonds -0.53% 1.67% -0.42% 3.53% 157.21

Source: Aberdeen Asset Management Asia Limited, Bloomberg, Reuters, IRESS, 1 Apr 11

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