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Shariah Investing Resilience: A Value Proposition for Thailand

Shariah Investing Resilience: A Value Proposition for Thailand. IFN Roadshow 2011. Datuk Noripah Kamso Chief Executive 29 June 2011 - Thailand. Global Industry Landscape. Malaysia Leading in Sukuk Growth. 2007. Dec 06 - Dec 07. 2008. Dec 07 - Dec 08. 2009. Dec 08 - Dec 09.

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Shariah Investing Resilience: A Value Proposition for Thailand

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  1. Shariah Investing Resilience: A Value Proposition for Thailand IFN Roadshow 2011 Datuk Noripah Kamso Chief Executive 29 June 2011 - Thailand

  2. Global Industry Landscape

  3. Malaysia Leading in Sukuk Growth 2007 Dec 06 - Dec 07 2008 Dec 07 - Dec 08 2009 Dec 08 - Dec 09 SUKUK BY COUNTRY SUKUK BY COUNTRY SUKUK BY COUNTRY Malaysia captured the biggest market share in 2008 at 39.9% Malaysia captured the biggest market share in 2008 at 66.7% Malaysia captured the biggest market share in 2008 at 46.6% 4

  4. Led by Malaysia & Saudi: Country-Domiciled Islamic Funds Ireland US$ 0.23b 24 Malta* - - Bahrain US$ 2.15b 47 Dubai (UAE) US$ 0.58b 12 Luxembourg US$ 0.58b 35 Malaysia US$ 5.1b 184 Cayman Islands US$ 4.63b 63 Saudi Arabia US$ 22.7b 174 Mauritius US$ 0.12b 3 Singapore US$ 0.76b 13 5 Source: E&Y

  5. Global mutual funds AUM reached US$ 22 trillion in 2009 and exhibited signs of recovery from the lows of 2008 In contrast, the global Islamic fund management industry growth remained flat, with AuM of US$ 52 billion 60, 000 Funds 700 Funds Islamic Funds Playing Catch Up Source: E&Y • ISLAMIC = Broad: Across Asset Classes 6

  6. Case for Islamic Asset Management

  7. Do you know that… ISLAMIC EQUITY INDICES TEND TO OUTPERFORM CONVENTIONAL INDICES OVER LONG-TERM PERIOD? • Comparable risk-returns 8 8

  8. Shariah Investment Approach • Integration: Qualitative and Quantitative Investment Process • Qualitative • Step 1 • Gambling, Financials, Pornography, Liquor, Pork • Screen out • Quantitative • Step 2: • High Debt, High Receivables, Unproductive cash, Tolerance Level • Financial Screening • Equity Investment Process • Investment Approach has merit even through a strong bull market

  9. Why Invest in Shariah? 1. Exercise Prudence Elimination of investible companies that carry unacceptable debt. 2. Provide A Choice Ability for a wider choice. Not exclusive for faith investing. 3. SRI Angle It substitutes a choice, alternatives or compliments the ethical way. 4. Value-Based Focus on social justice but with the same Risk-Reward potential. 5. Lowly Leveraged Assets Investing in Assets which are established, well-capitalized, well-managed, lowly leveraged 6. Complement-Diversification to Ethical Investing Combines the virtues of ethical Investing with the advantages of non-correlation with mainstream trends of mainstream equity funds.

  10. Why Invest in Shariah? 7. Move From Free to FAIR Market The structure mitigates the greed behavior because it practices fair distribution of wealth that inhibits ultra profiteering and greed. It goes back to basic.Fundamentally based on tangible and Asset-Backed Transaction. 8. Ethical Investing Combines the virtues of Ethical Investing with the advantages of non-correlation with mainstream trends of mainstream Equity Funds. 9. Faith Investing Besides being faith investing, it is also SAME Returns with the social cause. Investing in lowly leveraged funds with low downside risk in a downtrending market and YET able to invest in faith

  11. Shariah Investing: Through Bull & Bear Market - Comparable returns with Conventional Over the longer term, Shariah is still ahead. Not just one for the credit crisis. Source: Bloomberg *Returns are for price levels of the Dow Jones indexes only and do not include dividend reinvestments 12

  12. Shariah Resilience: Japan Japan Earthquake & Tsunami European Sovereign Debt Crisis Global Financial Crisis Inflationary Fears Dubai Credit Crisis US Mortgage Crisis & Credit Crunch Middle East & North Africa Unrest / Protest Increasing Oil Price & Inflation Fears

  13. Shariah Resilience: Post 2011 Japan Earthquake Global Europe Asia Pacific ex Japan Japan

  14. No Immunity but Some Shelter: Less volatility Five years (July 2005 – June 2010) Still beating the credit crunch??? • Shariah investments avoids riskier stock constituents; in favour of more defensive stocks • Aversion to debt – good position to avoid credit squeeze • Exclude options, avoid derivatives, deny short-selling, ignore hedge funds Source: Bloomberg 15

  15. Your Enabler: CIMB-Principal Islamic Asset Management

  16. Assets Under Management • Total combined assets under management of $245.9 billion • Total combined Islamic assets under management of $2.7 billion 17 • As of 31 March 2011

  17. Investment Capabilities: shared global resources • Leverages the experience of both Principal Global Investors and CIMB-Principal Asset Management with the objective of delivering top-tier investment capabilities • Offering Global and Regional Equity and Sukuk capabilities to meet client needs • GIPS-compliant Global & Regional Equities Regional Asian Equity Global Sukuk Regional Sukuk 18

  18. CIMB-Principal Islamic Asset Management Awards Best Islamic Fund Manager – CIMB-Principal Islamic Asset Management Most Outstanding Islamic Fund Manager – CIMB-Principal Islamic Asset Management Best Asset Management House – CIMB-Principal Islamic Asset Management Best Islamic Asset Management Company – CIMB-Principal Islamic Asset Management Fund Recognitions Best Asian Equity 1-Year: CIMB Islamic Asia Pacific Equity Best Malaysia 1-Year: CIMB Islamic Equity Aggressive FundBest Malaysia 5-Year: CIMB Islamic Equity Fund Islamic Balanced Fund for the Morningstar Fund Award (Malaysia) 2009: CIMB Islamic Balanced Fund Equity Malaysia – Islamic, 3-Years: CIMB Islamic DALI Equity Growth FundEquity Malaysia – Islamic, 5-Years: CIMB Islamic DALI Equity Fund Islamic Balanced Fund for the Morningstar Fund Award (Malaysia) 2009: CIMB Islamic Balanced Fund 19

  19. Invest beyond the shores of Thailand Thank You Questions?

  20. Datuk Noripah Kamso Chief Executive Phone: +603 2084 2300 E-mail: noripah.kamso@cimb.com Dr Zeid Ayer Chief Investment Officer Phone: +603 2084 2092 E-Mail: zeid.ayer@cimb.com Suhazi Reza Selamat Marketing & Client Servicing Phone: +603 2084 2075 E-Mail: suhazireza.selamat@cimb.com CIMB-Principal Islamic Asset Management Bhd Level 5, Menara Milenium 8, Jalan Damanlela, Bukit Damansara 50490 Kuala Lumpur, Malaysia Please visit us at: www..cimb-principalislamic.com.my Contact us DISCLAIMER All figures shown in this document are in U.S. dollars unless otherwise noted. This document is provided to you for information only and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell securities. It may not be reproduced, distributed or published by any recipient for any other purpose. The information contained herein has been derived from sources believed to be reliable and is current as at the publication date. No representation or warranty is made nor is there acceptance of any responsibility or liability as to its accuracy, completeness or correctness. Expressions of opinion contained herein are those entirely of CIMB-Principal Asset Management Berhad and CIMB-Principal Islamic Asset Management Sdn Bhd only and are subject to change without notice. Persons wishing to rely upon this information should perform their own independent evaluation of risks and benefits or consult directly with the source of information or obtain professional advice. Past performance is not reflective of its future performance. Issued by CIMB-Principal Asset Management Berhad, CIMB-Principal (Singapore) Pte Ltd and CIMB-Principal Islamic Asset Management Sdn Bhd. 21

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