eastspring investments asia pacific equity my fund · [email protected]. dear valued investor,...

FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019

INTERIM REPORT

EASTSPRING INVESTMENTSASIA PACIFIC EQUITY MY FUND

Eastspring Investments Berhad 200001028634 (531241-U)

Level 22, Menara Prudential, Persiaran TRX Barat55188 Tun Razak Exchange, Kuala LumpurT: (603) 2778 3888 F: (603) 2789 7220eastspring.com/my

Client ServicesT: (603) 2778 1000 [email protected]

Dear Valued Investor,

Greetings from Eastspring Investments Berhad!

First and foremost, we would like to take this opportunity to thank you for choosing to invest with Eastspring Investments Berhad.

We are pleased to enclose a copy of the Annual/Interim/Quarterly Fund Reports of Eastspring Investments Berhad’s fund(s) for the reporting period ended 30 September 2019.

You may also download these reports from our website at www.eastspring.com/my

Should you require any assistance, please do not hesitate to contact our Client Services at 03-2778 1000.

Yours sincerely,

Raymond Tang Chee Kin Non-Independent, Executive Director and Chief Executive Officer

TABLE OF CONTENTS

Fund Information 1

Key Performance Data 3

Manager’s Report 6

Market Review 9

Rebates and Soft Commissions 10

Statement by the Manager 12

Trustee’s Report to the Unit Holders of

Eastspring Investments Asia Pacific Equity MY Fund 13

Unaudited Statement of Comprehensive Income 14

Unaudited Statement of Financial Position 15

Unaudited Statement of Changes in Equity 16

Unaudited Statement of Cash Flows 17

Summary of Significant Accounting Policies 18

Notes to the Unaudited Financial Statements 26

Corporate Directory 73

FUND INFORMATION

Name of Fund Eastspring Investments Asia Pacific Equity MY Fund (the “Fund”)

Fund Category/ Type

Equity/growth

Fund Objective The Fund seeks to provide a medium to long-term capital growth.

ANY MATERIAL CHANGES TO THE FUND’S OBJECTIVE WOULD REQUIRE UNIT HOLDERS’ APPROVAL.

Performance Benchmark

The performance benchmark of the Fund is the Morgan Stanley Capital International All Country Asia Pacific ex Japan Index (“MSCI AC APxJ Index”).

Source: www.msci.com

Note: The risk profile of the Fund is different from the risk profile of the performance benchmark.

Fund Income Distribution Policy

Incidental

1Client Services : 03-2778 1000

Interim Report

FUND INFORMATION (CONTINUED)

Breakdown of Unit Holdings by Size

As at 30 September 2019, the size of Eastspring Investments Asia Pacific Equity MY Fund stood at 95.705 million units.

Fund Size

Breakdown of Unit Holdings

Unit Holdings

No. of Unit

Holders %

No of Units* (‘000) %

5,000 units and below 354 18.66 881 0.92

5,001 to 10,000 units 217 11.44 1,623 1.70

10,001 to 50,000 units 1,132 59.67 23,858 24.93

50,001 to 500,000 units 169 8.91 16,500 17.24

500,001 units and above 25 1.32 52,842 55.21

Total 1,897 100.00 95,704 100.00

* excludes units held by the Manager.

Un

its

(Mill

ion

)

100

80

60

40

20

0Aug2019

Sep2019

Apr2019

May2019

Jun2019

Jul2019

Client Services : 03-2778 10002

Eastspring Investments Asia Pacific Equity MY Fund

Category 30.9.2019 30.9.2018 30.9.2017

(%) (%) (%)

Quoted securities

Consumer Discretionary 6.03 6.23 6.42

Consumer Staple 1.48 2.78 2.76

Energy 5.45 6.96 5.08

Financial 34.99 39.54 40.55

Industrial 9.81 11.30 11.23

Information Technology 24.59 25.92 23.89

Material 4.97 5.60 4.47

Real Estate 2.55 0.48 -

Telecommunication Services 1.40 1.66 1.61

Utilities 1.10 1.24 1.89

92.37 101.71 97.90

Cash and other assets 7.63 (1.71) 2.10

Total 100.00 100.00 100.00

KEY PERFORMANCE DATAFOR THE FINANCIAL PERIOD ENDED


Interim Report

Category 30.9.2019 30.9.2018 30.9.2017

Net Asset Value (NAV) (RM'000) 66,202 70,131 83,409

Units In Circulation (Units '000) 95,705 92,526 108,677

Net Asset Value Per Unit (RM) 0.6917 0.7580 0.7675

Highest Net Asset Value Per Unit (RM) 0.7627 0.7919 0.7920

Lowest Net Asset Value Per Unit (RM) 0.6600 0.7288 0.7207

Total Return (%)

- Capital Growth (4.32) 1.85 3.26

- Income Distribution - - -

Total Return (%) (4.32) 1.85 3.26

Gross Distribution Per Unit (RM) - - -

Net Distribution Per Unit (RM) - - -

Management Expense Ratio (MER) (%)* 1.19 1.15 1.05

Portfolio Turnover Ratio (PTR) (times)^ 0.32 0.17 0.18

* There were no significant changes to the MER during the period under review.

^ There were no significant changes to the PTR during the period under review.

KEY PERFORMANCE DATA (CONTINUED)



KEY PERFORMANCE DATA (CONTINUED)

1 year1.10.2018 to

30.9.2019

3 years1.10.2016 to

30.9.2019

5 years1.10.2014 to

30.9.2019

(%) (%) (%)

Average total return (8.75) 3.43 4.51

Year ended1.4.2018 to

31.3.20191.4.2017 to

31.3.20181.4.2016 to

31.3.20171.4.2015 to

31.3.20161.4.2014 to

31.3.2015

(%) (%) (%) (%) (%)

Annual total return (2.86) 0.12 35.94 (13.47) 18.76

Source: The above total return of the Fund was sourced from Lipper for Investment Management.Source: The above total return of the Fund was sourced from Lipper for Investment Management.

Bases of calculation and assumptions made in calculating returns:

Percentage growth =

NAVt = NAV at the end of the period

NAV0 = NAV at the beginning of the period Performance annualised = (1 + Percentage Growth)1/n - 1

Adjusted for unit split and distribution paid out for the period

n = Number of years

Past performance is not necessarily indicative of future performance and unit prices and investment returns may go down, as well as up.

NAVt -1NAV0


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MANAGER’S REPORT

Fund Performance Over the 5-year period, the Fund recorded a return of 24.68%, underperforming the benchmark return of 57.91% by 33.23%.

For the period under review, the Fund registered a return of -4.32%, underperforming the benchmark return of -0.59% by 3.73%.

Looking at the Fund’s performance from a sector level, the stock selection in Information Technology and the decision not to own Healthcare stocks benefitted the Fund on a six-month view. Positions in Financials and Real Estate, which led to an overweight position in those sectors weighed on performance. From a country perspective, our underweight position in Taiwan and being overweight Singapore added value while being underweight Australia and overweight China weighed somewhat.

The performance is calculated on NAV-to-NAV basis with gross income or dividend reinvested. Benchmark: Morgan Stanley Capital International All Country Asia Pacific ex Japan Index (“MSCI AC APxJ Index”). Source: Lipper for Investment Management andwww.msci.com, as at 30 September 2019. Past performance of the Fund is not necessarily indicative of its future performance.

Eastspring Investments Asia Pacific Equity MY Fund Benchmark

5 Y

ears

% C

han

ge

Eastspring Investments Asia Pacific Equity MY Fund- 5 Years Return Vs Benchmark

-20%

0%

20%

40%

60%

80%

-20%

0%

20%

40%

60%

80%

Sep2014

Jan2015

May2015

Sep2015

Jan2016

May2016

Sep2016

Jan2017

May2017

Sep2017

Jan2018

May2018

Sep2018

Jan2019

May2019

Sep2019



MANAGER’S REPORT (CONTINUED)

Analysis of Fund Performance

For the financial period ended 30 September 2019:

Income Return

Capital Return*

Total Return

Total Return of Benchmark

(%) (%) (%) (%)

0.00 (4.32) (4.32) (0.59)

* Capital return components (NAV per unit to NAV per unit).

Distribution/ Unit Split

No distribution or unit split were declared for the financial period ended 30 September 2019.

Investment Strategy During the Period Under Review

Asian equities are trading well below their long-term averages and are very cheap relative to the developed markets of the west. Investors have continued to pay a very high price for growth and quality stocks while ignoring most value stocks. This has created a large valuation anomaly within Asian equity markets which the Fund is well positioned to capture.

While equity market volatility has been elevated due to concern surrounding ongoing trade dialogue and moderating global growth, we still see a backdrop of long-term structural economic growth across Asia and a diverse corporate sector which offers us many investment opportunities over the long-term.


Interim Report

MANAGER’S REPORT (CONTINUED)

Asset Allocation

Asset Allocation30-Sep

201931-Mar

2019 Changes

(%) (%) (%)

Quoted securities 92.37 98.21 (5.84)Cash and other assets 7.63 1.79 5.84

Asset Allocation as at 30 September 2019

There were no significant changes in asset allocation of the Fund for the period under review.

State of Affairs ofthe Fund

There have been neither significant change to the state of affairs of the Fund nor any circumstances that materially affect any interests of the unit holders during the period under review.

Quoted securities 92.37%

Cash and other assets 7.63%



MARKET REVIEW

Global equity markets in the review period of 1 April to 30 September 2019 were notable for their increased volatility with an accelerated divergence in the performance between Developed Markets and Emerging Markets. For the period, the MSCI AC World index rose 3.9% and the United States 5.9%, while the Emerging Markets index fell 3.4% and the Asia Pac ex Japan region fell 3.1%. The principle drivers included newsflow on the US-Sino trade dispute, weakening economic data out of Asia and especially China (and in contrast to the strong data out of the US), and increasing geo-political tensions.

In Asia Pacific, Australia and New Zealand markets once again led, returning 5.9% and 1.1% respectively with the former being powered by a surprise win for its incumbent centre-right party in the general elections there. The other country to show a gain was Taiwan that rose 7% as chip prices staged a recovery and iPhone-related orders appear better than expected, both of which boosted the large technology sector there.

Thailand also showed a modest positive return of 3.0% as the new government showed signs of stability and enticed retail investors back into the market while Singapore’s banks led that market to a 0.8% gain as trade tensions eased.

But elsewhere, Asia markets were lower. The MSCI China index fell 8.4% with economic data increasingly pointing to the trade dispute having a greater impact on its broader economy, and despite Beijing introducing several easing measures. Hong Kong fell 11% as social unrest in the territory gathered pace and by the end of the reporting period was beginning to be felt in the island’s economy, especially in the real estate and tourism sectors.

Another market that saw a heavy fall was Korea which saw its MSCI index drop 5.3% largely because its own economic data continued to weaken but also as its biggest trading partner China saw its economy struggle. Late in the reporting period, a jump in chip prices led to a bounce in tech names, which, along with central bank interest rate cuts, gave the broader market some support.

India also tracked the region lower despite the return of the incumbent BJP to power in the country’s general elections. It too saw a surge in September after the new government surprised the market with a sweeping cut to corporate taxes. Meanwhile, south east Asia was mixed with Indonesia and the Philippines reacting well to central bank interest rate cuts but Malaysia underperformed and fell 5.2% as the economy there continued to weaken.


Interim Report

REBATES AND SOFT COMMISSIONS

During the period under review, the Manager and its delegates (if any) did not receive any soft commissions from stockbrokers.



EASTSPRING INVESTMENTS ASIA PACIFIC EQUITY MY FUNDUNAUDITED FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019


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STATEMENT BY THE MANAGER

We, Tang Chee Kin and Iskander Bin Ismail Mohamed Ali, being two of the Directors of Eastspring Investments Berhad, do hereby state that, in the opinion of the Manager, the accompanying unaudited financial statements set out on pages 14 to 72 are drawn up in accordance with the provisions of the Deed and give a true and fair view of the financial position of the Fund as at 30 September 2019 and of its financial performance, changes in equity and cash flows for the six months financial period ended on that date in accordance with the Malaysian Financial Reporting Standards and International Financial Reporting Standards.

For and on behalf of the Manager,EASTSPRING INVESTMENTS BERHAD

TANG CHEE KINExecutive Director/Chief Executive Officer

ISKANDER BIN ISMAIL MOHAMED ALIIndependent, Non-Executive Director

Kuala LumpurDate: 22 November 2019


Interim Report

TRUSTEE’S REPORT TO THE UNIT HOLDERS OF EASTSPRING INVESTMENTS ASIA PACIFIC EQUITY MY FUND

We have acted as Trustee for Eastspring Investments Asia Pacific Equity MY Fund (the “Fund”) for the financial period ended 30 September 2019. To the best of our knowledge, for the financial period under review, Eastspring Investments Berhad (the “Manager”) has operated and managed the Fund in accordance with the following:-

a. limitations imposed on the investment powers of the Manager under the Deed(s), the Securities Commission’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 and other applicable laws;

b. valuation and pricing for the Fund is carried out in accordance with the Deed(s) of the Fund and any regulatory requirements; and

c. creation and cancellation of units for the Fund are carried out in accordance with the Deed(s) of the Fund and any regulatory requirements.

For Deutsche Trustees Malaysia Berhad

Ng Hon Leong Richard Lim Hock Seng

Head, Trustee Operations Chief Executive Officer

Kuala LumpurDate: 22 November 2019



UNAUDITED STATEMENT OF COMPREHENSIVE INCOMEFOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019

Note

6-monthsfinancial

period ended30.9.2019

6-monthsfinancial


RM RM

INVESTMENT (LOSS)/INCOMEInterest income from financial assets measured at fair value through profit or loss (“FVTPL“) 2,243 4,346Gross dividend income 1,523,899 1,659,921Net (loss)/gain on foreign currency exchange (14,320) 82,150Net (loss)/gain on financial assets at fair value through profit or loss 6 (3,363,228) 489,816

(1,851,406) 2,236,233

EXPENSESManagement fee 3 (452,961) (551,575)Trustee fee 4 (21,138) (25,740)Custodian fee (54,261) (11,488)Audit fee (3,900) (4,211)Tax agent fee (1,700) (24,814)GST charges (484) (12,515)Other expenses (186,001) (213,572)

(720,445) (843,915)

(LOSS)/PROFIT BEFORE TAXATION (2,571,851) 1,392,318

TAXATION 5 (115,109) (134,001)

(LOSS)/PROFIT AFTER TAXATION AND TOTAL COMPREHENSIVE (LOSS)/INCOME (2,686,960) 1,258,317

(Loss)/profit after taxation is made up of the following: Realised amount 649,631 1,617,953 Unrealised amount (3,336,591) (359,636)

(2,686,960) 1,258,317

The accompanying summary of significant accounting policies and notes to the unaudited financial statements form an integral part of these unaudited financial statements.


Interim Report

UNAUDITED STATEMENT OF FINANCIAL POSITIONAS AT 30 SEPTEMBER 2019

Note 2019 2018

RM RM

ASSETSCash and cash equivalents 7 3,315,386 1,148,645Amount due from Manager 5,831,631 2,194Amount due from brokers 2,348,768 46,470Dividends receivable 207,681 252,023Tax recoverable 903 903Financial assets at fair value through profit or loss 6 61,140,400 71,354,027TOTAL ASSETS 72,844,769 72,804,262

LIABILITIESAmount due to Manager 5,972,389 2,531,558Amount due to brokers 564,440 22,889Accrued management fee 73,639 88,463Amount due to Trustee 3,436 4,128Other payables and accruals 28,387 26,648TOTAL LIABILITIES 6,642,291 2,673,686

NET ASSET VALUE OF THE FUND 66,202,478 70,130,576

EQUITYUnit holders’ capital 57,311,277 55,111,746Retained earnings 8,891,201 15,018,830

NET ASSET ATTRIBUTABLE TO UNIT HOLDERS 66,202,478 70,130,576

NUMBER OF UNITS IN CIRCULATION 8 95,705,397 92,526,472

NET ASSET VALUE PER UNIT (RM) 0.6917 0.7580




UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019

Unit holders’

capitalRetainedearnings

Total

RM RM RM

Balance as at 1 April 2019 48,505,322 11,578,161 60,083,483

Movement in unit holders’ contribution:Creation of units from applications 30,172,179 - 30,172,179Cancellation of units (21,366,224) - (21,366,224)Total comprehensive loss for the financial period - (2,686,960) (2,686,960)

Balance as at 30 September 2019 57,311,277 8,891,201 66,202,478

Balance as at 1 April 2018 59,277,385 13,760,513 73,037,898

Movement in unit holders’ contribution:Creation of units from applications 19,136,359 - 19,136,359Cancellation of units (23,301,998) - (23,301,998)Total comprehensive income for the financial period - 1,258,317 1,258,317

Balance as at 30 September 2018 55,111,746 15,018,830 70,130,576



Interim Report

UNAUDITED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019

Note

6-monthsfinancial


6-monthsfinancial


RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProceeds from sale of investments 14,639,589 12,937,382Purchase of investments (21,932,945) (11,537,270)Dividends received 1,477,592 1,659,588Interest received 2,243 4,346Management fee paid (458,588) (570,781)Trustee fee paid (21,401) (26,637)Custodian fee paid (54,261) (11,488)Payment for other fees and expenses (195,213) (271,990)Net cash (used in)/generated from operating activities (6,542,984) 2,183,150

CASH FLOWS FROM FINANCING ACTIVITIESCash proceeds from units created 24,638,997 20,595,101Payments for cancellation of units (15,857,242) (23,700,277)Net cash generated from/(used in) financing activities 8,781,755 (3,105,176)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 2,238,771 (922,026)

EFFECT OF FOREIGN CURRENCY TRANSLATION (14,320) 82,150

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD 1,090,935 1,988,521

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD 7 3,315,386 1,148,645




The following accounting policies have been used in dealing with items which are considered material in relation to the financial statements.

A. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention in accordance with the Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”), as modified by financial assets at fair value through profit or loss.

The preparation of financial statements in conformity with the MFRS and IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported financial period. It also requires the Manager to exercise their judgment in the process of applying the Fund’s accounting policies. Although these estimates and judgment are based on the Manager’s best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note K to the financial statements.

a. Standards, amendments to published standards and interpretations that are effective:

The Fund has applied the following amendments for the first time for the financial year beginning on 1 April 2019:

• Amendments to MFRS 112 ‘Income Taxes’ (effective from 1 April 2019) clarify that where income tax consequences of dividends on financial instruments classified as equity1 is recognised (either in profit or loss, other comprehensive income or equity) depends on where the past transactions that generated distributable profits were recognised.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019


Interim Report

Accordingly, the tax consequences are recognised in profit or loss when an entity determines payments on such instruments are distribution of profits (that is, dividends). Tax on dividend should not be recognised in equity merely on the basis that it is related to a distribution to owners.

This standard is not expected to have a significant impact on the Fund’s financial statements.

B. INCOME RECOGNITION

Dividend income is recognised on the ex-dividend date, when the right to receive the dividend has been established.

Realised gain or loss on disposal of investments is accounted for as the difference between the net disposal proceeds and the carrying amount of investments, determined on a weighted average cost basis.

C. TAXATION

Current tax expense is determined according to the Malaysian tax laws at the current rate based upon the taxable income during the financial period.

Tax on dividend income from foreign quoted securities is based on the tax regime of the respective countries that the Fund invested in.

D. PRESENTATION AND FUNCTIONAL CURRENCY

Items included in the financial statements of the Fund are measured using the currency of the primary economic environment in which the Fund operates (the “functional currency”). The financial statements are presented in Ringgit Malaysia (“RM”), which is the Fund’s presentation and functional currency.



E. FOREIGN CURRENCY TRANSLATION

Foreign currency transactions in the Fund are translated into the functional currency using the exchange rates prevailing at the transaction dates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income, except when deferred in other comprehensive income as qualifying cash flow hedges.

F. FINANCIAL ASSETS AND FINANCIAL LIABILITIES

i. Classification

The Fund classify its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income (“OCI”) or through profit or loss), and

• those to be measured at amortised cost

The Fund classifies its investments based on both the Fund’s business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Fund is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Fund has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. Consequently, all investments are measured at fair value through profit or loss.

The Fund classifies cash and cash equivalents, dividends receivable, amount due from brokers and amount due from Manager as financial assets at amortised cost as these financial assets are held to collect contractual cash flows consisting of the amount outstanding.

The Fund’s classifies amount due to Manager, amount due to brokers, accrued management fee, amount due to Trustee and other payables and accruals as financial liabilities measured at amortised cost.


Interim Report

ii. Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade date, the date on which the Fund commits to purchase or sell the asset. Investments are initially recognised at fair value and transaction costs are expensed in the statement of comprehensive income.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Fund has transferred substantially all risks and rewards of ownership.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument.

Financial liability is derecognised when the obligation under the liability is extinguished; i.e when the obligation specified in the contract is discharged or cancelled or expired.

Unrealised gains or losses arising from changes in the fair value of the “financial assets at fair value through profit or loss” category are presented in the statement of comprehensive income within “net gain/(loss) on financial assets at fair value through profit and loss” in the period in which they arise. Any unrealised gains however are not distributable.

Dividend income from financial assets at fair value through profit or loss is recognised in the statement of comprehensive income as part of gross dividend income when the Fund’s right to receive payments is established.

In accordance with the Deed, quoted securities in Malaysia are valued at the last done market price quoted on the Bursa Malaysia Securities Berhad (“Bursa Securities”) at the date of the statement of financial position.

Quoted securities outside Malaysia are valued at the market last done prices quoted of the respective foreign stock exchanges as at the date of the statement of financial position.



If a valuation based on the market price does not represent the fair value of the securities, for example during abnormal market conditions or when no market price is available, including in the event of a suspension in the quotation of the securities for a period exceeding 14 days, or such shorter period as agreed by the Trustee, then the securities are valued as determined in good faith by the Manager, based on the methods or bases approved by the Trustee after appropriate technical consultation.

Foreign exchange gains and losses on the financial instrument are recognised in statement of comprehensive income when settled or at date of the statement of financial position at which time they are included in the measurement of the financial instrument.

Loans and receivables and other financial liabilities are subsequently carried at amortised cost using the effective interest rate method.

iii. Impairment for assets carried at amortised costs

The Fund measures credit risk and expected credit losses using probability of default, exposure at default and loss given default. Management considers both historical analysis and forward looking information in determining any expected credit loss. Management consider the probability of default to be close to zero as these instruments have a low risk of default and the counterparties have a strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been recognised based on 12 months expected credit losses as any such impairment would be wholly insignificant to the Fund.

Significant increase in credit risk

A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due.

Definition of default and credit-impaired financial assets

Any contractual payment which is more than 90 days past due is considered credit impaired.


Interim Report

Write-off

The Fund writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to repay the amount. The Fund may write-off financial assets that are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in impairment gains. There are no write-offs/recoveries during the financial year.

G. CASH AND CASH EQUIVALENTS

For the purpose of the statement of cash flows, cash and cash equivalents comprise bank balances that is readily convertible to known amounts of cash and which is subject to an insignificant risk of changes in value.

H. UNIT HOLDERS’ CAPITAL

The unit holders’ contributions to the Fund meet the criteria to be classified as equity instruments under MFRS 132 “Financial Instruments: Presentation”. Those criteria include:

• the units entitle the holder to a proportionate share of the Fund’s net assets value; • the units are the most subordinated class and class features are identical;• there is no contractual obligations to deliver cash or another financial asset other than the obligation on the Fund to repurchase; and• the total expected cash flows from the units over its life are based substantially on the profit or loss of the Fund.

The outstanding units are carried at the redemption amount that is payable at each financial year if unit holder exercises the right to put the unit back to the Fund.

Units are created and cancelled at prices based on the Fund’s net asset value per unit at the time of creation or cancellation. The Fund’s net asset value per unit is calculated by dividing the net assets attributable to unit holders with the total number of outstanding units.



I. AMOUNT DUE FROM/(TO) BROKERS

Amount due from and to brokers represent receivables for securities sold and payables for securities purchased that have been contracted for but not yet settled or delivered on the statement of financial position date respectively.

These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment for amount due from brokers. A provision for impairment of amount due from brokers is established when there is objective evidence that the Fund will not be able to collect all amounts due from the relevant broker. Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount due from brokers is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Fund estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.

J. SEGMENTAL INFORMATION

Operating segments are reported in a manner consistent with the internal reporting used by chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Investment Committee of the Fund’s Manager that undertakes strategic decisions for the Fund.


Interim Report

K. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS IN APPLYING ACCOUNTING POLICIES

The Fund makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Funds’ results and financial position are tested for sensitivity to changes in the underlying parameters.

Estimates and judgments are continually evaluated by the Manager and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In undertaking any of the Fund’s investment, the Manager will ensure that all assets of the Fund under management will be valued appropriately, that is at fair value and in compliance with Securities Commission Guidelines on Unit Trust Funds.

However, the Manager is of the opinion that in applying the accounting policies, no significant judgment was required.



1. INFORMATION ON THE FUND

Eastspring Investments Asia Pacific Equity MY Fund (the “Fund”) was constituted pursuant to the execution of a Deed dated 15 July 2005 as modified by a Supplemental Deed dated 27 July 2007 and the Second Supplemental Deed dated 30 November 2009 entered into between Eastspring Investments Berhad (the “Manager”) and Mayban Trustees Berhad (”Mayban Trustees”). The Fund replaced Mayban Trustees with Deutsche Trustees Malaysia Berhad (the “Trustee”) effective 1 October 2010. A Supplemental Master Deed (“Deed”) was entered into between the Manager and the Trustee on 30 July 2010 to effect the change of trustee from Mayban Trustees to the Trustee, followed by Second Supplemental Master Deed dated 28 January 2011, Third Supplemental Master Deed dated 9 March 2011, Fourth Supplemental Master Deed dated 20 January 2012, Fifth Supplemental Master Deed dated 26 March 2014, Sixth Supplemental Master Deed dated 2 January 2015, Seventh Supplemental Master Deed dated 11 July 2016, Eighth Supplemental Master Deed dated 25 January 2017, Ninth Supplemental Master Deed dated 11 December 2017 and Tenth Supplemental Master Deed dated 4 June 2018 (collectively referred to as the “Deed”).

The Fund was launched on 21 July 2005 and will continue its operations until terminated by the Trustee or the Manager as provided under Part 12 of the Deed.

The Fund invests primarily in local and Asia Pacific ex-Japan equities, and equity-related securities with good capital growth potential. All investments will be subjected to the Securities Commission (the “SC”) Guidelines on Unit Trust Funds, the Deed except where exemptions or variations have been approved by the SC, internal policies and procedures and the Fund’s objective.

The Fund is seeks to provide investors with medium to long term capital growth.

The Manager is a company incorporated in Malaysia and is related to Prudential Plc., a public listed company in the United Kingdom. The principal activity of the Manager is the establishment and management of unit trust funds and asset management.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTSFOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019


Interim Report

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks, which include market risk (inclusive of price risk and foreign exchange/currency risk), liquidity risk, credit/default risk, fund management risk, non-compliance risk and capital risk.

Financial risk management is carried out through internal control processes adopted by the Manager and adherence to the investment restrictions as stipulated in the Deed.

Financial instruments of the Fund are as follows:

Note

Financial assets at

amortised cost

Financialassets at fair

value throughprofit or loss Total

RM RM RM

2019Cash and cash equivalents 7 3,315,386 - 3,315,386Amount due from Manager 5,831,631 - 5,831,631Amount due from brokers 2,348,768 - 2,348,768Dividends receivable 207,681 - 207,681Quoted securities 6 - 61,140,400 61,140,400

11,703,466 61,140,400 72,843,866

NoteLoans and

receivables

Financialassets at fair

value throughprofit or loss Total

RM RM RM

2018Cash and cash equivalents 7 1,148,645 - 1,148,645Amount due from Manager 2,194 - 2,194Amount due from brokers 46,470 - 46,470Dividends receivable 252,023 - 252,023Quoted securities 6 - 71,354,027 71,354,027

1,449,332 71,354,027 72,803,359

All liabilities are financial liabilities which are carried at amortised cost.



Market risk

i. Price risk

This risk refers to changes and developments in regulations, politics and the economy of the country. The very nature of a Unit Trust Fund, however, helps mitigate this risk because a Fund would generally hold a well-diversified portfolio of securities from different market sectors so that the collapse of any one of the security or any one market sector would not impact too greatly on the value of the Fund. The table below shows assets of the Fund as at 30 September which are exposed to price risk:

2019 2018

RM RM

Quoted securities designated at fair value through profit or loss 61,140,400 71,354,027

The following table summarises the sensitivity of the Fund’s (loss)/profit after tax and net asset value to movements in prices of quoted securities at the end of the reporting period. The analysis is based on the assumptions that the market price of the quoted securities increased by 5% and decreased by 5% with all other variables held constant. This represents management’s best estimate of a reasonable possible shift in the quoted securities, having regard to the historical volatility of the prices.

% Change in price Market Value

Increase/(decrease)in (loss)/profit after

tax and net asset value

RM RM

2019

+5% 64,197,420 3,057,020-5% 58,083,380 (3,057,020)

2018

+5% 74,921,728 3,567,701-5% 67,786,326 (3,567,701)


Interim Report

ii. Foreign exchange/currency risk

As the Fund may invest its assets in securities denominated in a wide range of currencies other than Ringgit Malaysia, the net asset value of the Fund expressed in Ringgit Malaysia may be affected favourably or unfavourably by exchange control regulations or changes in the exchange rates between Ringgit Malaysia and such other currencies. The risk is minimised through investing in a wide range of foreign currencies denominated assets and thus, diversifying the risk of single currency exposure.

In the normal course of investment, the Manager will usually not hedge foreign currency exposure. The Manager may however depending on prevailing market circumstances at a particular point in time, choose to use forward or option contracts for hedging and risk reduction purposes.

The following table sets out the foreign exchange/currency risk concentrations and counterparties of the Fund.

Financialassets at

fair valuethroughprofit or

loss

Amountdue from

brokers

Cash andcash

equivalentsDividendsreceivable Total

RM RM RM RM RM

2019

AUD 9,055,570 416,573 52,143 15,516 9,539,802HKD 21,906,891 1,400,452 17,644 81,509 23,406,496IDR 1,114,565 9,729 233 - 1,124,527INR 3,641,473 - 1,809 - 3,643,282KRW 8,938,765 409,764 - - 9,348,529NZD - - 77 - 77SGD 3,957,036 67,546 30,931 36,920 4,092,433THB 1,144,463 - - - 1,144,463TWD 6,394,286 - 2,783 67,690 6,464,759USD 3,824,822 44,704 3,013,292 6,046 6,888,864

59,977,871 2,348,768 3,118,912 207,681 65,653,232



Financialassets at

fair valuethroughprofit or

loss

Amountdue from

brokers

Cash andcash

equivalentsDividendsreceivable Total

RM RM RM RM RM

2018

AUD 10,135,391 - 135,215 37,629 10,308,235HKD 24,031,532 - 44,801 106,612 24,182,945IDR 1,794,342 - - - 1,794,342INR 4,611,062 46,470 158,561 5,573 4,821,666KRW 10,527,375 - - - 10,527,375NZD - - 81 - 81SGD 2,915,956 - 592 29,983 2,946,531THB 1,203,048 - - - 1,203,048TWD 9,298,522 - 147,481 36,945 9,482,948USD 5,102,947 - 471,824 5,480 5,580,251

69,620,175 46,470 958,555 222,222 70,847,422


Interim Report

The table summarises the sensitivity of the Fund’s financial assets fair value to changes in foreign exchange movements at the end of the reporting period. The analysis is based on the assumption that the foreign exchange rate changes by 5% with all variables remain assumption that the foreign exchange rate changes by 5%, with all variables remain constants. This represents management’s best estimate of a reasonable possible shift in the foreign exchange rate having regard to historical volatility of this rate.

Disclosures below are shown in absolute terms, changes and impacts could be positive or negative.

Changein price

Impact onloss

after taxImpact on net

asset value

% RM RM

2019

AUD 5 476,990 476,990HKD 5 1,170,325 1,170,325IDR 5 56,226 56,226INR 5 182,164 182,164KRW 5 467,426 467,426NZD 5 4 4SGD 5 204,622 204,622THB 5 57,223 57,223TWD 5 323,238 323,238USD 5 344,443 344,443

3,282,661 3,282,661



Changein price

Impact onprofit

after taxImpact on net

asset value% RM RM

2018

AUD 5 515,412 515,412HKD 5 1,209,147 1,209,147IDR 5 89,717 89,717INR 5 241,083 241,083KRW 5 526,369 526,369NZD 5 4 4SGD 5 147,327 147,327THB 5 60,152 60,152TWD 5 474,147 474,147USD 5 279,013 279,013

3,542,371 3,542,371

Liquidity risk

Liquidity risk is the risk that the Fund will encounter difficulty in meeting its financial obligations. Generally, all investments are subject to a certain degree of liquidity risk depending on the nature of the investment instruments, market, sector and other factors. For the purpose of the Fund, the Manager will attempt to balance the entire portfolio by investing in a mix of assets with satisfactory trading volume and those that occasionally could encounter poor liquidity. This is expected to reduce the risks for the entire portfolio without limiting the Fund’s growth potentials.

The Fund maintains sufficient level of liquid assets, after consultation with the Trustee, to meet anticipated payments and cancellations of units by unit holders. Liquid assets comprise bank balances and other instruments which are capable of being converted into cash within 7 days.


Interim Report

The table below summarises the Fund’s financial liabilities into relevant maturity groupings based on the remaining period as at the statement of financial position date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows.

Less than 1 month

Between 1 monthto 1 year Total

RM RM RM

2019

Amount due to Manager 5,972,389 - 5,972,389Amount due to brokers 564,440 - 564,440Accrued management fee 73,639 - 73,639Amount due to Trustee 3,436 - 3,436Other payables and accruals - 28,387 28,387Contractual cash outflows 6,613,904 28,387 6,642,291

2018

Amount due to Manager 2,531,558 - 2,531,558Amount due to brokers 22,889 - 22,889Accrued management fee 88,463 - 88,463Amount due to Trustee 4,128 - 4,128Other payables and accruals - 26,648 26,648Contractual cash outflows 2,647,038 26,648 2,673,686



Credit/Default risk

Credit/default risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Fund.

For amount due from brokers, the settlement terms are governed by the relevant rules and regulations as prescribed by respective stock exchange.

The credit/default risk is minimal as all transactions in quoted securities are settled/paid upon delivery using approved stockbrokers. The settlement terms of the proceeds from the creation of units receivable from the Manager are governed by the SC’s Guidelines on Unit Trust Funds.

The following table sets out the credit risk concentrations and counterparties of the Fund.

Cash and cash

equivalentsDividends receivable

Amount due from

brokers

Amount due from Manager Total

RM RM RM RM RM

2019

Consumer Discretionary

- NR - 11,713 - - 11,713Financial- AA1 3,315,386 98,641 - - 3,414,027Industrial- NR - 21,796 - - 21,796Real Estate- NR - 7,841 - - 7,841Information Technology

- NR - 67,690 - - 67,690Other- NR - - 2,348,768 5,831,631 8,180,399

3,315,386 207,681 2,348,768 5,831,631 11,703,466


Interim Report

Cash and cash

equivalentsDividends receivable

Amount due from

brokers

Amount due from Manager Total

RM RM RM RM RM

2018

Financial- AA1 1,148,645 - - - 1,148,645Consumer Discretionary- NR - 30,358 - - 30,358Consumer Staple- NR - 8,483 - - 8,483Energy- NR - 11,409 - - 11,409Financial- NR - 107,809 - - 107,809Industrial- NR - 36,565 - - 36,565Information Technology- NR - 36,945 - - 36,945Material- NR - 20,454 - - 20,454Other- NR - - 46,470 2,194 48,664

1,148,645 252,023 46,470 2,194 1,449,332

None of these assets are past due or impaired.



Fund management risk

There is the risk that the management company may not adhere to the investment mandate of the respective Fund. With close monitoring by the investment committee, back office system being incorporated with limits and controls, and regular reporting to the senior management team, the management company is able to manage such risk. The Trustee has an oversight function over management of the Fund by the management company to safeguard the interests of unit holders.

Non-compliance risk

Non-compliance risk arises when the Manager and others associated with the Fund are not compliant to the rules set out in the Fund’s constitution or the law that governs the Fund or applicable internal control procedures, or act fraudulently or dishonestly.

The non-compliance may expose the Fund to higher risks which may result in a fall in the value of the Fund which in turn may affect its investment goals. However, the risk can be mitigated by the internal controls and compliance monitoring undertaken by the Manager.

Capital risk

The capital of the Fund is represented by equity consisting of unit holders’ capital of RM57,311,277 (2018: RM55,111,746) and retained earnings of RM8,891,201 (2018: RM15,018,830). The amount of equity can change significantly on a daily basis as the Fund is subject to daily subscriptions and redemptions at the discretion of unit holders. The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue as a going concern in order to provide returns for unit holders and benefits for other stakeholders and to maintain a strong capital base to support the development of the Shariah-compliant investment activities of the Fund.


Interim Report

Fair value estimation

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price).

The fair value of financial assets traded in active market (such as trading securities) are based on quoted market prices at the close of trading on the period end date. The Fund utilises the last traded market price for financial assets where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not within the bid-ask spread, the Manager will determine the point within the bid-ask spread that is representative of the fair value.

An active market is a market in which transactions for the asset take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

The fair value of financial assets that are not traded in an active market is determined by using valuation techniques.

Fair value hierarchy

i. The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

• Level 3 : Inputs for the asset and liability that are not based on observable market data (that is, unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.



Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgment by the Fund. The Fund considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following table analyses within the fair value hierarchy the Fund’s financial assets (by class) measured at fair value:

Level 1 Level 2 Level 3 Total

RM RM RM RM

2019Financial assets at fair value through profit or loss: Quoted securities 61,140,400 - - 61,140,400

2018Financial assets at fair value through profit or loss: Quoted securities 71,354,027 - - 71,354,027

Investments whose values are based on quoted market prices in active markets, and are therefore classified within Level 1, include active quoted securities. The Fund does not adjust the quoted prices for these instruments. The Fund’s policies on valuation of these financial assets are stated in Note F to the financial statements.

ii. The carrying value of cash and cash equivalents, amount due from Manager, amount due from brokers, dividends receivable and all liabilities are a reasonable approximation of their fair values due to their short term nature.


Interim Report

3. MANAGEMENT FEE

In accordance with the Deed, the Manager is entitled to a management fee at a rate not exceeding 2.00% per annum on the net asset value of the Fund accrued on a daily basis.

For the financial period ended 30 September 2019, the management fee is recognised at a rate of 1.50% (2018: 1.50%) per annum on the net asset value of the Fund, calculated on daily basis.

There will be no further liability to the Manager in respect of the management fee other than the amounts recognised above.

4. TRUSTEE FEE

In accordance with the Deed, the Trustee is entitled to a fee at a rate not exceeding 0.20% per annum on the net asset value of the Fund, accrued on a daily basis subject to a minimum fee of RM18,000 per annum.

For the financial period ended 30 September 2019, the Trustee fee is recognised at a rate of 0.07% (2018: 0.07%) per annum on the net asset value of the Fund, excluding of foreign custodian fees and charges, calculated on daily basis.

There will be no further liability to the Trustee in respect of the trustee fee other than the amounts recognised above.



5. TAXATION

6-months financial

period ended 30.9.2019

6-months financial


RM RM

Tax charged for the financial period: Current taxation-Foreign 115,109 134,001

The numerical reconciliation between (loss)/profit before taxation multiplied by the Malaysian statutory tax rate and tax expense of the Fund is as follows:

6-months financial


6-months financial


RM RM

(Loss)/profit before taxation (2,571,851) 1,392,318

Tax at Malaysian statutory rate of 24% (617,244) 334,156

Tax effect of: Investment loss not deductible for tax purpose/ (investment income exempt from tax) 444,337 (536,696) Expenses not deductible for tax purposes 63,260 69,151 Restriction on the tax deductible expenses for Unit Trust Funds 109,647 133,389 Foreign income subject to different tax rate 115,109 134,001

Taxation 115,109 134,001


Interim Report

6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

2019 2018

RM RM

Designated at fair value through profit or loss: Quoted securities 61,140,400 71,354,027

Net (loss)/gain on financial assets at fair value through profit or loss: Realised (loss)/gain on disposals (25,729) 859,507 Change in unrealised fair value loss (3,337,499) (369,691)

(3,363,228) 489,816



Name of counter QuantityAggregate

cost

Fair value as at

30.9.2019

Percentage of net

asset value of the Fund

Units RM RM %

Local

Malaysia Security

FinancialCIMB Group Holdings Berhad 231,119 1,270,282 1,162,529 1.76

Total Malaysia Security 231,119 1,270,282 1,162,529 1.76

Foreign

Australia Securities

EnergyOrigin Energy Limited 35,084 827,773 789,058 1.19Whitehaven Coal Limited 96,622 1,062,508 847,965 1.28Woodside Petroleum Limited 11,469 1,155,886 1,047,958 1.58

143,175 3,046,167 2,684,981 4.05

FinancialAustralia and New Zealand Banking Group Limited 24,737 2,054,924 1,990,848 3.01National Australia Bank Limited 13,313 1,188,270 1,115,768 1.69QBE Insurance Group Limited 23,168 808,953 821,145 1.24

61,218 4,052,147 3,927,761 5.94


Interim Report


cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Australia Securities (continued)

IndustrialQantas Airways Limited 66,755 1,044,281 1,184,885 1.79

MaterialBHP Billiton Limited 5,734 554,302 594,158 0.90

Telecommunication ServicesTelstra Corporation Limited 67,016 711,426 663,785 1.00

Total Australia Securities 343,898 9,408,323 9,055,570 13.68

Bermuda Security (Listed in United States)

IndustrialJardine Matheson Holdings Limited 3,181 769,054 712,218 1.08

Total Bermuda Security (Listed in United States) 3,181 769,054 712,218 1.08




cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Hong Kong Securities

Consumer DiscretionaryChina Yongda Automobiles Services Holdings Limited 187,500 769,525 648,245 0.98Dongfeng Motor Group Company Limited 194,000 825,508 772,310 1.17Nexteer Automotive Group Limited 154,000 880,671 532,425 0.80Sands China Limited 36,800 680,224 698,087 1.05

572,300 3,155,928 2,651,067 4.00

Consumer StapleTingyi (Cayman Islands Holding Corp 146,000 874,030 861,302 1.30


Interim Report


cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Hong Kong Securities (continued)

FinancialBank of China Limited 832,400 1,511,520 1,369,986 2.07 China Construction Bank Corporation 786,000 2,605,970 2,511,638 3.79 China Merchants Bank Co., Limited 60,219 836,514 1,200,261 1.81 China Overseas Land & Investment Limited 98,000 1,325,030 1,290,852 1.95 PICC Property and Casualty Company Limited 219,000 1,115,729 1,070,776 1.62 Sino Land Company Limited 79,743 506,187 501,962 0.76Standard Chartered Plc 33,436 1,387,583 1,182,785 1.79Sun Hung Kai Properties Limited

4,300

247,452

259,186

0.39

The Wharf (Holdings) Limited 138,000

1,829,513 1,260,981 1.90

2,251,098 11,365,498 10,648,427 16.08

IndustrialChina Merchants Holdings (International) Co., Limited 131,633 1,326,304 830,004 1.25China State Construction International Holdings Limited 174,000 735,069 685,252 1.04CK Hutchison Holdings Limited 36,500 1,665,655 1,349,685 2.04

342,133 3,727,028 2,864,941 4.33




cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)


Information TechnologyAAC Technologies Holdings Inc. 14,500 331,342 321,551 0.49

Lenovo Group Limited 188,000 525,510 525,403 0.79 Tencent Holdings Limited 14,400 2,071,012 2,540,814 3.84

216,900 2,927,864 3,387,768 5.12

MaterialChina Resources Cement Holdings Limited 112,000 304,942 470,407 0.71 Nine Dragons Paper (Holdings) Limited 188,000 635,912

663,033 1.00

300,000 940,854 1,133,440 1.71

Real EstateCifi Holdings (Group) Co. Limited 147,075 387,801 359,946 0.54

Total Hong Kong Securities 3,975,506

23,379,003

21,906,891 33.08


Interim Report


cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

India Securities

EnergyIndian Oil Corpn. Limited 106,158 949,583 927,110 1.40

FinancialAxis Bank Limited 9,564 321,844 388,160 0.59Rural Electrification Corporation Limited 136,798 1,178,418 998,149 1.51

146,362 1,500,262 1,386,309 2.10

Information TechnologyInfosys Limited 27,822 974,148 1,328,054 2.01

Total India Securities 280,342 3,423,993 3,641,473 5.51




cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Indonesia Securities

Consumer StaplePT Salim Ivomas Pratama Tbk 1,214,600 296,114 118,121 0.18

FinancialPT Bank Negara Indonesia (Persero) Tbk 264,200 528,088 572,269 0.86

Real EstatePT Bumi Serpong Damai TBK 1,035,500 455,909 424,175 0.64

Total Indonesia Securities 2,514,300 1,280,111 1,114,565 1.68


Interim Report


cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Republic of Korea Securities

Consumer DiscretionaryHyundai Motor Company Limited 2,872 1,536,689 1,343,158 2.03

FinancialHana Financial Group Limited 7,128 947,089 876,930 1.32

IndustrialLG Corporation 3,619 921,436 884,147 1.34

Information TechnologyLG Display Co., Limited 6,645 613,214 328,163 0.50Samsung Electronics Co Limited 18,775

2,789,204 3,214,081 4.85

25,420 3,402,418 3,542,244 5.35

MaterialHyundai Steel Company 5,861 1,104,214 795,718 1.20 Lotte Chemical Corporation 930 951,440 766,007 1.16

6,791 2,055,654 1,561,725 2.36

UtilitiesKorea Electric Power Corporation 8,082 1,164,125 730,561 1.10

Total Republic of Korea Securities 53,912

10,027,411 8,938,765 13.50




cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Singapore Securities

FinancialDBS Group Holdings Limited 14,677 929,101 1,110,242 1.68Oversea-Chinese Banking Corporation Limited 50,919

1,755,782

1,673,208 2.53

65,596 2,684,883 2,783,450 4.21

Real EstateCity Developments Limited 30,500 850,358 906,257 1.37

Telecommunications ServicesSingapore Telecommunications Limited 28,500 275,610 267,329 0.40

Total Singapore Securities 124,596 3,810,851 3,957,036 5.98


Interim Report


cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Taiwan Securities

FinancialCTBC Financial Holding Company Limited 236,000 639,827 654,901 0.99

Information TechnologyCatcher Technology Company Limited 37,000 1,388,323 1,171,295 1.77Taiwan Semiconductor Manufacturing Company Limited 96,000 2,325,815 3,517,521 5.31United Microelectronics Corp. 582,000 1,148,868 1,050,569 1.59

715,000 4,863,006 5,739,385 8.67

Total Taiwan Securities 951,000 5,502,833 6,394,286 9.66

Thailand Security

FinancialKasikornbank Public Company Limited 53,300 1,294,050 1,144,463 1.73

Total Thailand Security 53,300 1,294,050 1,144,463 1.73




cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

United States Securities

IndustrialHollysys Automation Technologies Limited 7,996 674,022 508,307 0.77

Information TechnologyAlibaba Group Holding Limited 1,626 1,206,580 1,137,968 1.72 Baidu, Inc. 2,644 1,953,797 1,137,054 1.72

4,270 3,160,377 2,275,022 3.44

Total United States Securities 12,266 3,834,399 2,783,329 4.21

Hong Kong Security (Listed in United States)

IndustrialHongkong Land Holdings Limited 14,000 333,718 329,275 0.50

Total Hong Kong Security (Listed in United States) 14,000 333,718 329,275 0.50


Interim Report


cost

Fair value as at

30.9.2019

Percentage of net


Units RM RM %

Foreign (continued)

Total Foreign Securities 8,326,301 63,063,746 59,977,871 90.61

TOTAL QUOTED SECURITIES 8,557,420

64,334,028

61,140,400 92.37

ACCUMULATED UNREALISED LOSS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (3,193,628)

FAIR VALUE OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 61,140,400




cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Local

Malaysia Securities

Consumer DiscretionaryGenting Malaysia Berhad 160,700 768,637 801,893 1.14

FinancialCIMB Group Holdings Berhad 155,068 902,628 931,959 1.33

Total Malaysia Securities 315,768 1,671,265 1,733,852 2.47

Foreign

Australia Securities

EnergyOrigin Energy Limited 18,902 509,793 467,314 0.67Whitehaven Coal Limited 83,986 888,657 1,367,499 1.95Woodside Petroleum Limited 11,324 1,159,233 1,307,625 1.86

114,212 2,557,683 3,142,438 4.48

FinancialAustralia and New Zealand Banking Group Limited 24,433 2,079,390 2,060,815 2.94National Australia Bank Limited 13,147 1,244,425 1,094,331 1.56QBE Insurance Group Limited 32,264 1,120,817 1,073,852 1.53

69,844 4,444,632 4,228,998 6.03


Interim Report


cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

Australia Securities (continued)

IndustrialQantas Airways Limited 53,797 790,905 950,017 1.35

MaterialBHP Billiton Limited 15,151 1,385,382 1,570,417 2.24

Telecommunication ServicesTelstra Corporation Limited 25,505 330,396 243,521 0.35

Total Australia Securities 278,509 9,508,998 10,135,391 14.45

Bermuda Security (Listed in United States)

IndustrialJardine Matheson Holdings Limited 3,181 750,015 825,777 1.18

Total Bermuda Security (Listed in United States) 3,181 750,015 825,777 1.18




cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

China Securities (Listed in Hong Kong)

Consumer DiscretionaryChina Yongda Automobiles Services Holdings Limited 176,500 782,462 656,471 0.94

Consumer StaplesHengan International Group Company Limited 14,000 548,560 534,788 0.76

Information TechnologyFIH Mobile Limited 563,000 707,846 268,081 0.38Tencent Holdings Limited 17,200 2,147,010 2,941,135 4.19

580,200 2,854,856 3,209,216 4.57

FinancialChina Merchants Bank Co., Limited 124,219 1,371,399 2,089,923 2.98Guangzhou R&F Properties Co., Limited 64,400 511,373 489,959 0.70PICC Property And Casualty Company Limited 221,000 1,166,706 1,080,387 1.54

409,619 3,049,478 3,660,269 5.22

Total China Securities (Listed in Hong Kong) 1,180,319 7,235,356 8,060,744 11.49


Interim Report


cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

China Securities (Listed in United States)

IndustrialHollysys Automation Technologies Limited 8,046 705,159 711,328 1.01

Information TechnologyAlibaba Group Holding Limited 795 596,402 541,882 0.77Baidu, Inc. 2,164 1,794,511 2,047,250 2.92

2,959 2,390,913 2,589,132 3.69

Total China Securities (Listed in United States) 11,005 3,096,072 3,300,460 4.70

Hong Kong Securities

Consumer DiscretionaryDongfeng Motor Group Company Limited 140,000 693,207 597,005 0.85Parkson Retail Group Limited 423,000 552,231 167,848 0.24

563,000 1,245,438 764,853 1.09

Consumer StapleTingyi (Cayman Islands) Holding Corp. 146,000 853,565 1,110,777 1.58




cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)


EnergyCnooc Limited 72,000 412,926 590,445 0.84Kunlun Energy Company Limited 238,000 907,618 1,147,124 1.64

310,000 1,320,544 1,737,569 2.48

FinancialBank of China Limited 655,400 1,192,172 1,206,704 1.72China Construction Bank Corporation 790,000 2,606,607 2,858,896 4.08China Overseas Land & Investment Limited 98,000 1,285,115 1,270,303 1.81Sino Land Company Limited 81,001 494,832 575,120 0.82Standard Chartered Plc 33,686 1,506,364 1,158,452 1.65Sun Hung Kai Properties Limited 24,300 1,332,086 1,465,637 2.09The Wharf (Holdings) Limited 73,000 1,244,235 822,655 1.17 1,755,387 9,661,411 9,357,767 13.34


Interim Report


cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)


IndustrialChina Merchants Holdings (International) Co., Limited 129,569 1,486,675 1,026,900 1.46CK Hutchison Holdings Limited 27,000 1,362,665 1,288,503 1.84 156,569 2,849,340 2,315,403 3.30

MaterialChina Resources Cement Holdings Limited 142,000 307,991 684,419 0.98

Total Hong Kong Securities 3,072,956 16,238,289 15,970,788 22.77




cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

India Securities

FinancialAxis Bank Limited 23,302 709,375 815,356 1.16Indiabulls Housing Finance Limited 17,167 1,000,597 839,297 1.20Rural Electrification Corporation Limited 55,344 483,774 309,150 0.44 95,813 2,193,746 1,963,803 2.80

IndustrialInfosys Limited 51,885 1,630,629 2,161,280 3.08

MaterialVedanta Limited 36,665 499,115 485,979 0.69

Total India Securities 184,363 4,323,490 4,611,062 6.57


Interim Report


cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

Indonesia Securities

Consumer StaplePT Salim Ivomas Pratama Tbk 2,277,600 563,519 309,808 0.44

FinancialPT Bank Negara Indonesia (Persero) Tbk 560,000 1,001,881 1,150,374 1.64

Real EstatePT Bumi Serpong Damai TBK 1,042,200 472,761 334,160 0.48

Total Indonesia Securities 3,879,800 2,038,161 1,794,342 2.56

Republic of Korea Securities

Consumer DiscretionaryHyundai Motor Company Limited 3,581 2,047,722 1,728,496 2.46

FinancialHana Financial Group Limited 7,173 963,377 1,191,085 1.70

IndustrialLG Corporation 3,573 905,551 966,861 1.38




cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

Republic of Korea Securities (continued)

Information TechnologyLG Display Co., Limited 6,560 714,117 467,016 0.67Samsung Electronics Co Limited 18,443 2,613,315 3,193,094 4.55

25,003 3,327,432 3,660,110 5.22

MaterialHyundai Steel Company 5,636 1,165,343 1,186,899 1.69

Telecommunication ServicesKT Corporation 8,196 896,223 921,051 1.31

UtilitiesKorea Electric Power Corporation 7,979 1,315,462 872,873 1.24 Total Republic of Korea Securities 61,141 10,621,110 10,527,375 15.00


Interim Report


cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

Singapore Securities

FinancialDBS Group Holdings Limited 14,777 854,203 1,167,082 1.66Oversea-Chinese Banking Corporation Limited 50,500 1,749,651 1,748,874 2.49

65,277 2,603,854 2,915,956 4.15

Total Singapore Securities 65,277 2,603,854 2,915,956 4.15

Taiwan Securities

FinancialCTBC Financial Holding Company Limited 362,000 984,810 1,129,930 1.61

Information Technology Catcher Technology Company Limited 29,000 1,145,762 1,322,368 1.89 Hon Hai Precision Industry Company Limited 84,198 817,717 904,986 1.29Taiwan Semiconductor Manufacturing Company Limited 129,000 2,781,948 4,595,514 6.55United Microelectronics Corp. 614,000 1,271,326 1,345,724 1.92

856,198 6,016,753 8,168,592 11.65

Total Taiwan Securities 1,218,198 7,001,563 9,298,522 13.26




cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

Thailand Security

FinancialKasikornbank Public Company Limited 43,100 1,051,399 1,203,048 1.72

Total Thailand Security 43,100 1,051,399 1,203,048 1.72

United States Securities

Consumer Discretionary Nexteer Automotive Group Limited 64,000 403,469 419,872 0.60

Information TechnologyLenovo Group Limited 184,000 479,582 556,838 0.79

Total United States Securities 248,000 883,051 976,710 1.39


Interim Report


cost

Fair value as at

30.9.2018

Percentage of net


Units RM RM %

Foreign (continued)

Total Foreign Securities 10,245,849 65,351,358 69,620,175 99.24

TOTAL QUOTED SECURITIES 10,561,617 67,022,623 71,354,027 101.71

ACCUMULATED UNREALISED GAIN OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 4,331,404

FAIR VALUE OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 71,354,027



7. CASH AND CASH EQUIVALENTS

2019 2018

RM RM

Bank balances with a licensed bank 3,315,386 1,148,645

The currency exposure profile of cash and cash equivalents is as follows:

2019 2018

RM RM

AUD 52,143 135,215HKD 17,644 44,801IDR 233 -INR 1,809 158,561MYR 196,474 190,090NZD 77 81SGD 30,931 592TWD 2,783 147,481USD 3,013,292 471,824

3,315,386 1,148,645

8. UNITS IN CIRCULATION

2019 2018

No. of units No. of units

At the beginning of the financial period 83,121,122 98,096,586Creation of units arising from applications during the financial period 42,777,607 25,155,312Cancellation of units during the financial period (30,193,332) (30,725,426)

At the end of the financial period 95,705,397 92,526,472


Interim Report

9. TRANSACTIONS WITH BROKERS Details of transactions with the top 10 brokers are as follows:

Name of brokersValue

of trades

Percentageof total trades

Brokerage fees

Percentageof total

brokerage fees

RM % RM %

2019

Merrill Lynch Int Ltd 12,567,784 32.48 5,028 17.29UBS Securities Limited 4,574,658 11.82 3,737 12.85Citigroup Group Markets Inc 3,271,924 8.46 2,704 9.30 Instinet Limited 3,032,573 7.84 1,499 5.16 CLSA Limited 2,920,521 7.55 2,116 7.28Credit Suisse Limited 2,907,870 7.51 2,690 9.25Macquarie Bank Limited 1,977,426 5.11 3,581 12.32 ITG Limited 1,943,703 5.02 1,301 4.47Morgan Stanley and Co 1,675,148 4.33 2,733 9.40 Bank Of America Corporation 1,358,198 3.51 756 2.60Others 2,466,907 6.37 2,932 10.08

38,696,712 100.00 29,077 100.00



Name of brokersValue

of trades

Percentageof total trades

Brokerage fees

Percentageof total

brokerage fees

RM % RM %

2018

Merrill Lynch lnt Ltd 4,765,420 19.43 2,333 11.36Credit Suisse Limited 3,418,392 13.94 2,906 14.14Citigroup Global Markets Inc 3,221,124 13.13 2,287 11.13Macquarie Bank Limited 2,649,436 10.80 2,058 10.02CLSA Limited 2,435,432 9.93 2,850 13.87UBS Securities Limited 1,903,240 7.76 2,318 11.28Goldman Sachs Group 1,564,199 6.38 1,310 6.38Instinet Limited 1,364,334 5.56 667 3.25JP Morgan Securities Inc 809,509 3.30 653 3.18Morgan Stanley and Co 591,717 2.41 1,029 5.01Others 1,802,535 7.36 2,132 10.38

24,525,338 100.00 20,543 100.00

All brokers highlighted above are not related to the Manager.


Interim Report

10. MANAGEMENT EXPENSE RATIO (“MER”)

2019 2018

% %

MER 1.19 1.15

MER is derived from the following calculation:

MER = (A + B + C + D + E)X 100

F

A = Management fee

B = Trustee fee

C = Audit fee

D = Tax agent fee

E = Other expenses

F = Average net asset value of the Fund calculated on a daily basis

The average net asset value of the Fund for the financial period calculated on a daily basis is RM60,392,196 (2018: RM73,339,147).



11. PORTFOLIO TURNOVER RATIO (“PTR”)

2019 2018

PTR (times) 0.32 0.17

PTR is derived from the following calculation:

(Total acquisitions for the financial period + total disposals for the financial period) ÷ 2

Average net asset value of the Fund for the financial period calculated on a daily basis

where:total acquisitions for the financial period = RM22,104,359 (2018: RM11,547,880)total disposals for the financial period = RM16,592,353 (2018: RM12,977,458)

12. UNITS HELD BY THE MANAGER The related party of and its relationship with the Fund is as follows::

Related party Relationship

Eastspring Investments Berhad The Manager

2019 2018

No. of units RM No. of units RM

Eastspring Investments Berhad 1,000 692 1,000 758

The above units were transacted at the prevailing market price.

The units are held legally by the Manager and are within the prescribed limit allowed by SC’s Guidelines on Unit Trust Funds. Other than the above, there were no units held by the Directors or parties related to the Manager.


Interim Report

13. SEGMENTAL INFORMATION

The internal reporting provided to the chief operating decision-maker for the Fund’s assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of MFRS and IFRS. The chief operating decision-maker is responsible for the performance of the Fund and considers the business to have a single operating segment located in Malaysia. Asset allocation decisions are based on a single, integrated investment strategy and the Fund’s performance is evaluated on an overall basis.

The reportable operating segments derive their income by seeking investments to achieve targeted returns consummate with an acceptable level of risk within each portfolio. These returns consist of dividends income earned from investments, foreign exchange gains/losses and gains/losses on the appreciation in the value of investments.

There were no changes in the reportable operating segments during the financial period.

14. MFRS 9 FINANCIAL INSTRUMENTS

The Fund has adopted MFRS 9, which resulted in changes to the accounting policies and adjustments to the financial position. The main changes are as follows.

Transition

In accordance with the transitional provisions provided in MFRS 9, comparative figures have not been restated. The amendments made by MFRS 9 to MFRS 101 introduced the requirement to present ‘interest income calculated using the effective interest rate’ for financial assets that are measured at amortised cost as a separate line item in the statement of comprehensive income.

As a result, the Fund has reclassified comparative profit income from financial assets measured at FVTPL i.e. deposits with licensed financial institutions to ‘interest income from financial assets measured at FVTPL’ line for the financial period ended 30 September 2018.



15. APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved for issue by the Manager on 22 November 2019.


Interim Report

THE MANAGERNAME

EASTSPRING INVESTMENTS BERHAD

COMPANY NO.

200001028634 (531241-U)

REGISTERED OFFICE

Level 25, Menara Hong Leong

No. 6, Jalan Damanlela

Bukit Damansara

50490 Kuala Lumpur

BUSINESS OFFICE

Level 22, Menara Prudential

Persiaran TRX Barat

55188 Tun Razak Exchange

Kuala Lumpur

TELEPHONE NO.

603-2778 3888

FAX NO.

603-2789 7220

EMAIL

[email protected]

WEBSITE

www.eastspring.com/my

TRUSTEENAME

DEUTSCHE TRUSTEES MALAYSIA BERHAD

COMPANY NO.

763590-H

REGISTERED OFFICE & BUSINESS OFFICE

Level 20, Menara IMC

No. 8, Jalan Sultan Ismail

50250 Kuala Lumpur

TELEPHONE NO.

603-2053 7522

FAX NO.

603-2053 7526

SALE & PURCHASE OF UNITSEastspring Investments BerhadLevel 22, Menara Prudential

Persiaran TRX Barat

55188 Tun Razak Exchange

Kuala Lumpur

TELEPHONE NO.

603-2778 1000

CORPORATE DIRECTORY



BRANCHESPetaling JayaEastspring Investments Berhad

A-17-P1 & M

Block A, Jaya One

72A, Jalan Universiti

46200 Petaling Jaya, Selangor

TELEPHONE NO.

603-7948 1288

Kota KinabaluEastspring Investments Berhad

Suite E3, 9th Floor

CPS Tower, Centre Point Sabah

No. 1, Jalan Centre Point

88000 Kota Kinabalu, Sabah

TELEPHONE NO.

6088-238 613

ENQUIRIESCLIENT SERVICES

603-2778 1000

FOR THE SIX MONTHS FINANCIAL PERIOD ENDED 30 SEPTEMBER 2019

INTERIM REPORT

EASTSPRING INVESTMENTSASIA PACIFIC EQUITY MY FUND

Eastspring Investments Berhad 200001028634 (531241-U)

Level 22, Menara Prudential, Persiaran TRX Barat55188 Tun Razak Exchange, Kuala LumpurT: (603) 2778 3888 F: (603) 2789 7220eastspring.com/my

Client ServicesT: (603) 2778 1000 [email protected]

eastspring investments asia pacific equity my fund · [email protected]. dear valued investor,...

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