Fund Information

Fund Name
Public Asia Ittikal Fund (PAIF)

Fund Type
Capital Growth

Fund Category
Equity (Shariah-compliant)

Fund Investment Objective

To achieve capital growth over the medium to long term period by investing
in a portfolio of investments in domestic and regional markets that complies
with Shariah requirements.

Fund Performance Benchmark

The benchmarks of the Fund and their respective percentages are 70%
S&P Shariah BMI Asia Ex-Japan Index, 15% customised index by S&P Dow
Jones Indices, LLC based on top 20 constituents by market capitalisation of
the S&P BMI Shariah Japan Index and 15% FTSE Bursa Malaysia Hijrah
Shariah Index.
The customised benchmark index for PAIF is a product of S&P Dow Jones Indices LLC (SPDJI),
and has been licensed for use by Public Mutual Berhad. Standard & Poors and S&P are
registered trademarks of Standard & Poors Financial Services LLC (S&P); Dow Jones is a
registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); Standard & Poors,
S&P and Dow Jones are trademarks of the SPDJI; and these trademarks have been licensed for
use by SPDJI and sublicensed for certain purposes by Public Mutual Berhad. Public Mutual Berhads
PAIF is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective
affiliates and none of such parties make any representation regarding the advisability of investing
in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the
customised benchmark index for PAIF.
The PAIF is not in any way sponsored, endorsed, sold or promoted by FTSE International Limited
(FTSE) or by Bursa Malaysia Berhad (BURSA MALAYSIA) or by the London Stock Exchange
Group companies (the LSEG) and neither FTSE nor BURSA MALAYSIA nor LSEG makes any
warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained
from the use of the FTSE BURSA MALAYSIA HIJRAH SHARIAH INDEX (the Index), and/or the
figure at which the said Index stands at any particular time on any particular day or otherwise. The
Index is compiled and calculated by FTSE. However, neither FTSE nor BURSA MALAYSIA nor
LSEG shall be liable (whether in negligence or otherwise) to any person for any error in the Index and
neither FTSE nor BURSA MALAYSIA nor LSEG shall be under any obligation to advise any person
of any error therein.
FTSE, FT-SE and Footsie are trade marks of LSEG and are used by FTSE under licence.
BURSA MALAYSIA is a trade mark of BURSA MALAYSIA.

Fund Distribution Policy

Incidental

Breakdown of Unitholdings of PAIF as at 31 October 2016

Size of holdings No. of % of No. of units
unitholders unitholders held (million)
5,000 and below 2,572 8.88 9
5,001 to 10,000 4,825 16.66 35
10,001 to 50,000 15,560 53.72 376
50,001 to 500,000 5,854 20.21 638
500,001 and above 154 0.53 159
Total 28,965 100.00 1,217

Note: Excluding Managers Stock.

Public Asia Ittikal Fund

Fund Performance Fund Performance
For the Financial Year Ended 31 October 2016 For the Financial Year Ended 31 October 2016

Average Total Return for the Following Years Ended Distribution and Unit Split
31 October 2016
Financial year 2016 2015 2014
Average Total Date of distribution 31.10.16 30.10.15 31.10.14
Return of PAIF (%)
Distribution per unit
1 Year 2.79
Gross (sen) 1.00 1.00 1.00
3 Years 10.31
5 Years 11.13 Net (sen) 1.00 1.00 1.00
Unit split - - -
Annual Total Return for the Financial Years Ended 31 October
Impact on NAV Arising from Distribution (Final) for the
Year 2016 2015 2014 2013 2012 Financial Years
PAIF (%) 2.79 20.57 5.68 7.12 10.99 2016 2015 2014
The calculation of the above returns is based on computation methods of Lipper. Sen Sen Sen
per unit per unit per unit
Notes:
Net asset value before distribution 33.20 33.30 28.62
1. Total return of the Fund is derived by this formulae:
Less: Net distribution per unit (1.00) (1.00) (1.00)

( End of Period FYCurrent Year NAV per unit

End of Period FYPrevious Year NAV per unit )
(Adjusted for unit split and distribution paid out for the period)
-1 Net asset value after distribution 32.20 32.30 27.62

Past performance is not necessarily indicative of future performance and unit

prices and investment returns may go down, as well as up.
The above total return of the Fund was sourced from Lipper.

2. Average total return is derived by this formulae: Asset Allocation for the Past Three Financial Years
Total Return As at 31 October
Number of Years Under Review (Per Cent of Net Asset Value)
2016 2015 2014
Other Performance Data for the Past Three Financial Years % % %
Ended 31 October
EQUITY SECURITIES
2016 2015 2014 Quoted
Unit Prices (MYR)* Malaysia
Highest NAV per unit for the year 0.3365 0.3330 0.2909 Basic Materials 0.6 - 1.3
Lowest NAV per unit for the year 0.2827 0.2711 0.2645 Communications 1.7 1.7 6.5
Net Asset Value (NAV) and Units in Consumer, Cyclical - - 2.5
Circulation (UIC) as at the End of Consumer, Non-cyclical 1.7 1.4 2.0
the Year Diversified 1.2 - 2.1
Total NAV (MYR000) 396,597 235,731 208,206 Energy - - 2.4
UIC (in 000) 1,231,755 729,838 753,838 Industrial 0.4 0.8 2.4
NAV per unit (MYR) 0.3220 0.3230 0.2762 Utilities 2.9 - 3.7

Total Return for the Year (%) 2.79 20.57 5.68 8.5 3.9 22.9
Capital growth (%) 2.95 20.43 5.26 Outside Malaysia
Income (%) -0.16 0.12 0.40 Hong Kong
Management Expense Ratio (%) 1.77 1.77 1.77 Communications 12.6 11.5 6.0
Portfolio Turnover Ratio (time) 0.68 0.54 0.53 Consumer, Cyclical - 2.4 1.5
Consumer, Non-cyclical 0.5 1.1 2.7
* All prices quoted are ex-distribution. Energy - 2.3 4.7
Notes: Management Expense Ratio is calculated by taking the total management expenses Financial 0.9 0.9 -
expressed as an annual percentage of the Funds average net asset value. Industrial 5.1 2.8 2.3
Portfolio Turnover Ratio is calculated by taking the average of the total acquisitions and Technology 0.4 - -
disposals of the investments in the Fund for the year over the average net asset value Utilities 1.4 0.9 0.8
of the Fund calculated on a daily basis.
The Portfolio Turnover Ratio for the financial year 2016 rose to 0.68 time from 0.54 time 20.9 21.9 18.0
in the previous financial year on acount of higher level of rebalancing activities performed
by the Fund during the year.

Public Asia Ittikal Fund Public Asia Ittikal Fund

Fund Performance Fund Performance
For the Financial Year Ended 31 October 2016 For the Financial Year Ended 31 October 2016

Asset Allocation for the Past Three Financial Years (contd) Asset Allocation for the Past Three Financial Years (contd)
As at 31 October As at 31 October
(Per Cent of Net Asset Value) (Per Cent of Net Asset Value)
2016 2015 2014 2016 2015 2014
% % % % % %
Indonesia United States
Communications 1.6 0.8 0.8 Communications 1.5 3.3 1.8
Consumer, Non-cyclical 1.3 - -
Financial 0.9 0.7 0.7 TOTAL QUOTED EQUITY
Industrial 0.5 0.3 - SECURITIES 79.2 91.8 82.9

4.3 1.8 1.5 COLLECTIVE INVESTMENT FUNDS

Quoted
Japan Outside Malaysia
Basic Materials 1.0 0.9 - Hong Kong
Communications 1.4 1.4 1.1 Financial 1.0 0.7 0.3
Consumer, Cyclical 2.0 2.3 1.0
Consumer, Non-cyclical 4.8 7.0 1.1 Singapore
Industrial 6.0 5.8 2.5 Financial - - 1.3
Technology 1.0 1.5 1.3 TOTAL QUOTED COLLECTIVE
16.2 18.9 7.0 INVESTMENT FUNDS 1.0 0.7 1.6
SHARIAH-BASED PLACEMENTS
Korea
WITH FINANCIAL INSTITUTIONS 19.4 3.9 8.5
Basic Materials 1.3 0.6 1.7
Communications 1.8 2.9 1.5 OTHER ASSETS & LIABILITIES 0.4 3.6 7.0
Consumer, Cyclical 2.2 2.7 2.9
Consumer, Non-cyclical 3.4 4.7 0.8
Industrial 0.9 4.1 -
Technology 1.5 9.6 9.3
11.1 24.6 16.2
Singapore
Communications 1.0 1.3 1.5
Industrial - - 1.0
1.0 1.3 2.5
Taiwan
Basic Materials 0.8 0.5 0.8
Communications 2.8 1.3 0.4
Industrial 2.9 4.9 2.1
Technology 8.0 8.2 7.1
14.5 14.9 10.4
Thailand
Communications - - 1.4
Consumer, Cyclical - 0.5 0.6
Consumer, Non-cyclical 0.7 - -
Industrial 0.5 0.7 0.6
1.2 1.2 2.6

Public Asia Ittikal Fund Public Asia Ittikal Fund

Statement Of Distribution Of Returns Managers Report
For the Financial Year Ended 31 October 2016

Sen Per Unit Overview

Gross Distribution 1.0000 This Annual Report covers the financial year from 1 November 2015 to
Net Distribution 1.0000 31 October 2016.
Total Returns 0.9000
Public Asia Ittikal Fund (PAIF or the Fund) seeks to achieve capital growth
over the medium to long term period by investing in a portfolio of investments
Effects of Distribution on NAV per unit before and after
in domestic and regional markets that complies with Shariah requirements.
Distribution:
For the financial year under review, the Fund registered a return of +2.79% as
Before After compared to its Benchmarks return of +3.38%. The Funds Shariah-compliant
Distribution Distribution equity portfolio registered a return of +5.61% while its Islamic money market
NAV per unit (MYR) 0.3320 0.3220 portfolio registered a return of +3.09% during the financial year under review.
A detailed performance attribution analysis is provided in the sections below.
For the five financial years ended 31 October 2016, the Fund generated a
return of +55.71% as compared to the Benchmarks return of +66.34% over
the same period. The Funds Benchmark was lifted by the rise in prices of
lower liner stocks listed on regional markets, which the Fund does not focus
on over the review period. Nevertheless, it is the opinion of the Manager that
the Fund has met its objective to achieve capital growth over the said period.

Performance of PAIF
from 31 October 2011 to 31 October 2016
80%

PAIF BENCHMARK
60%

Returns from Start of Period

40%

20%

0%

-20%
2011 2012 2013 2014 2015 2016

Prior to 30 April 2013, the Funds Benchmark was a composite index of

70% S&P Shariah BMI Asia Ex-Japan Index and 30% FTSE Bursa Malaysia
Hijrah Shariah Index.
Effective from 30 April 2013, the Funds Benchmark was changed to a
composite index of 70% S&P Shariah BMI Asia Ex-Japan Index, 15% FTSE
Bursa Malaysia Hijrah Shariah Index and 15% customised index by S&P Dow
Jones Indices, LLC based on the top 20 constituents by market capitalisation
of the S&P BMI Shariah Japan Index.

Income Distribution and Impact on NAV Arising from Distribution

The gross distribution of 1.00 sen per unit (tax-exempt) for the financial year
ended 31 October 2016 had the effect of reducing the Net Asset Value (NAV)
of the Fund after distribution. As a result, the NAV per unit of the Fund was
reduced to RM0.3220 from RM0.3320 after distribution.

Public Asia Ittikal Fund Public Asia Ittikal Fund

Managers Report Managers Report

Effect of Distribution Reinvestment on Portfolio Exposures Country Allocations

31-Oct-16 In terms of country allocation within the Shariah-compliant equity portfolio, the
Before Distribution After Distribution Funds Shariah-compliant equity investment in Malaysia accounted for 8.5%
Reinvestment* Reinvestment* of the NAV of the Fund. Other than Malaysia, the top 5 countries account for
68.0% of the NAV of the Fund and 84.8% of the Funds Shariah-compliant
Shariah-compliant Equities 80.2% 77.7% equity portfolio. The weightings of the top 5 countries excluding Malaysia are
Islamic Money Market 19.8% 22.3% in the following order: Hong Kong (21.9%), Japan (16.2%), Taiwan (14.5%),
Korea (11.1%) and Indonesia (4.3%).
* Assumes full reinvestment.

Change in Portfolio Exposures from 31-Oct-15 to 31-Oct-16 Islamic Money Market Portfolio Review
During the financial year under review, the Funds Islamic money market
Average
portfolio, which was invested primarily in Islamic deposits, yielded a return of
31-Oct-15 31-Oct-16 Change Exposure
+3.09%. In comparison, the 1-Month Islamic Interbank Money Market Rate
Shariah-compliant Equities 89.8% 77.7% -12.1% 82.32% (1M-IIMMR) registered a return of +3.55% over the same period.
Islamic Money Market 10.2% 22.3% +12.1% 17.68%
During the financial year under review, the Funds exposure to Islamic money
market investments increased from 10.2% to 22.3% following the disposal of
Returns Breakdown by Asset Class
selected Shariah-compliant equity investments and inflows of new monies
Market / into the Fund. Based on an average exposure of 17.68%, the Islamic money
Returns On Benchmark Benchmark Average Attributed market portfolio is estimated to have contributed +0.55% to the Funds overall
Investments Returns Index Used Exposure Returns returns for the financial year under review.

Shariah- Stock Market Review

compliant
Equities 5.61% 3.38% Benchmark 82.32% 4.62% Commencing the financial year under review at 12,392.83 points, the FTSE
Islamic Money Bursa Malaysia EMAS Shariah (FBMS) Index trended lower in November
Market 3.09% 3.55% 1M-IIMMR 17.68% 0.55% 2015 due to expectations of an increase in U.S. interest rates in December
2015. The Index subsequently rebounded in late December 2015 in tandem
less: with global equity markets.
Expenses -2.38%
The retracement in regional and global markets as well as crude oil prices
Total Net falling below US$40/barrel caused the FBMS Index to retrace to a 4-month
Return for low of 12,105.60 points in mid-January 2016. The revised 2016 budget
the Year 2.79% announcement on 28 January coupled with reduced volume of foreign selling
helped to lift market sentiment in February 2016. The Index continued its
1M-IIMMR = 1-Month Islamic Interbank Money Market Rate uptrend in March 2016 in tandem with higher regional markets and firmer
global sentiment.
Shariah-compliant Equity Portfolio Review
Following declines in the regional markets, the FBMS Index retraced
For the financial year under review, the Funds Shariah-compliant equity towards late April 2016 and continued to be sold down in May 2016 due to
portfolio registered a return of +5.61% and outperformed its equity weaker-than-expected corporate earnings for the first quarter of 2016. The
Benchmarks return of +3.38%. The Fund outperformed its equity Benchmark Index was further dampened by uncertainties arising from the Brexit vote
as it was overweighted in selected Taiwan and China stocks which
in June 2016.
outperformed the regional markets during the financial year under review.
Subsequently, the FBMS Index rose in July 2016 amid buoyant global
The Fund commenced the financial year under review with a Shariah-
markets and Bank Negara Malaysias (BNM) unexpected move to reduce
compliant equity exposure of 89.8% and this was reduced to below 80% in
the Overnight Policy Rate (OPR) by 25 basis points (bps). The Index
January 2016 to weather the consolidation phase in domestic and regional
continued to rise in August 2016 amid higher oil prices and firmer regional
markets. The Funds Shariah-compliant equity exposure was increased
to above 85% in July 2016 to capitalise on Shariah-compliant investment markets to touch a high of 12,596.80 points in mid-August. The FBMS Index
opportunities in the domestic and regional markets. The Fund subsequently subsequently eased on the back of lacklustre global sentiment and weak
reduced its Shariah-compliant equity weight to lock in profits for distribution corporate earnings for the second quarter of 2016. Profit-taking activities
and ended the financial year under review with a Shariah-compliant continued into September 2016 and the market remained in a tight trading
equity exposure of 77.7%. Based on an average Shariah-compliant equity range in October 2016. The FBMS Index closed at 12,384.01 points and
exposure of 82.32%, the Shariah-compliant equity portfolio is deemed to registered a marginal decline of 0.07% for the financial year under review.
have registered a return of +4.62% to the Fund as a whole for the financial
year under review. A full review of the performance of the equity markets is
tabled in the following sections.
Public Asia Ittikal Fund Public Asia Ittikal Fund
Managers Report Managers Report

Starting the financial year under review at 83.99 points, regional equity Following a growth of 1.6% in 2015, Malaysias export growth moderated to
markets as proxied by the S&P Shariah BMI Asia Ex-Japan (S&P SAEJ) Index 0.9% in the first eight months of 2016 mainly due to slower exports of electrical
eased in mid-November as stronger-than-expected U.S. job market data gave and electronic products. Import growth rose to 0.9% in the first eight months
rise to increased expectations of a U.S. interest rate hike in December 2015. of 2016 from 0.4% in 2015. Malaysias cumulative trade surplus widened to
RM52.2 billion in the first eight months of 2016 compared to RM51.3 billion in
The S&P SAEJ Index continued to retrace until mid-January in tandem
the same period last year. Due to capital inflows, Malaysias foreign reserves
with low oil prices. The Index subsequently rebounded in February and
increased to US$97.7 billion as at end of September 2016 compared to
March 2016 on the back of the European Central Banks (ECB) rate cut
US$93.3 billion a year ago.
and expectations that the increase in U.S. interest rates would be delayed.
The Index traded range-bound in April and May 2016 as the U.S. Federal Compared to 2.1% in 2015, Malaysia registered an average inflation rate of
Reserves decision to keep interest rates unchanged was within market 2.2% in the first nine months of 2016 amid higher food and housing costs.
expectations. BNM reduced the OPR by 25 bps to 3.00% in July 2016 for the first time
The S&P SAEJ Index rallied in the third quarter of 2016 on improving in seven years, on concerns that uncertainties in the global environment
economic momentum in China and expectations of further delays in U.S. could dampen Malaysias growth. Loans growth moderated to 5.9% in the
interest rate hikes. Regional markets retraced marginally in October on first nine months of 2016 from 9.0% in 2015 on lower demand from the
concerns of Chinese Renminbi weakness and closed at 88.63 points to household sector.
register an increase of 5.53% (+3.05% in Ringgit terms) for the financial Due to increased government spending, the Federal governments budget
year under review. deficit for 1H 2016 rose to RM32.8 billion (5.6% of GDP) from RM15.6 billion
Regional markets, namely the Indonesia, Taiwan, Japan, Thailand, Hong (2.8% of GDP) in 1H 2015. The 1H 2016 budget deficit has exceeded the
Kong, Singapore and Korea markets registered returns of +26.53%, +15.11%, 2016 target of 3.1% of GDP projected by the Ministry of Finance (MOF).
+9.55%, +0.44%, -5.08%, -6.23% and -9.72% (in Ringgit terms) respectively On the regional front, Singapores GDP growth eased from 2.0% in 2015
for the financial year under review.
to 1.5% in the first three quarters of 2016 amid slower growth in services
activities. After registering an inflation rate of -0.5% in 2015, Singapore
S&P Shariah BMI Asia Ex-Japan Index recorded an inflation rate of -0.7% in the first nine months of 2016 on the
(31 October 2015 - 31 October 2016) back of lower housing and transportation costs.
95
Indonesias economic growth inched up from 4.8% in 2015 to 5.0% in
90 1H 2016 on the back of higher investment spending. The inflation rate slowed
from 6.4% in 2015 to 3.6% in the first nine months of 2016 amid moderating
85
housing and transportation costs. To support domestic economic activities,
Bank Indonesia (BI) reduced its new benchmark interest rate (BI 7-day
Index

Reverse Repo Rate) by 25 bps to 4.75% on 20 October 2016.

80

Thailands GDP growth gained pace from 2.8% in 2015 to 3.4% in 1H 2016
75 amid higher consumer spending and export growth. Thailands inflation rate
registered a flat growth in the first nine months of 2016 compared to -0.9% in
70 2015 due to higher food prices. The Bank of Thailand maintained its policy
Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16
interest rate of 1.50% to support economic growth.

Islamic Money Market Review South-East Asias GDP Growth

8.0
The 1M-IIMMR eased from 3.58% to 3.49%, averaging at 3.53% during the 7.0
financial year under review following the 25 bps cut in OPR. 6.0
5.0
Economic Review 4.0
% 3.0
Malaysias GDP growth moderated from 5.0% in 2015 to 4.1% in 1H 2016 2.0
on the back of slower investment spending and export growth. Growth 1.0
in the services sector edged up from 5.1% in 2015 to 5.4% in 1H 2016. 0.0

Meanwhile, the pace of construction sector activities firmed from 8.2% in -2.0

2015 to 8.4% in 1H 2016. -4.0 Malaysia Singapore Indonesia Thailand

-6.0
2011 2012 2013 2014 2015 2016F 2017F

Source: Bloomberg

Public Asia Ittikal Fund Public Asia Ittikal Fund

Managers Report Managers Report

In North Asia, Chinas GDP growth slowed from 6.9% in 2015 to 6.7% in
the first three quarters of 2016 amid a moderation in the services sector. North Asias GDP Growth
After registering a growth of 8.3% in 2015, growth in the services sector 12.0
eased to 7.6% in the first three quarters of 2016 as financial services growth 10.0
decelerated from 15.9% to 6.3% over the same period. Chinas inflation rate 8.0
rose to 2.0% in the first nine months of 2016 from 1.4% in 2015 due to higher 6.0
food and housing costs. % 4.0

2.0
To support Chinas economic activities and ease credit conditions, the
0.0
Peoples Bank of China (PBoC) trimmed the lending rate to 4.35% on 2011 2012 2013 2014 2015 2016F 2017F
-2.0
24 October 2015. This was the sixth rate cut since November 2014. To
-4.0
inject liquidity into the banking system, the Chinese central bank lowered China Hong Kong Taiwan South Korea Japan
-6.0
the required reserve ratio by 50 bps to 17.0% with effect from 1 March 2016
following a 250 bps cut in 2015.
Source: Bloomberg
Hong Kongs GDP growth moderated from 2.4% in 2015 to 1.2% in
On the international front, U.S. GDP growth eased from 2.6% in 2015 to 1.5%
1H 2016 due to lower domestic demand and exports. Meanwhile,
in the first three quarters of 2016 amid slower consumer and investment
Hong Kongs inflation rate edged down from 3.0% in 2015 to 2.8% in the spending. Consumer spending growth moderated from 3.2% to 2.6% over
first nine months of 2016 amid moderating food and housing costs. To curb the same period. Meanwhile, investment spending contracted by 2.1% in
elevated residential property prices, Hong Kongs government introduced the first three quarters of 2016 compared to a growth of 5.0% in 2015 due
more tightening measures in February 2015. Consequently, property prices to lower investment in the industrial sector.
rose by a smaller magnitude of 4.8% in the first nine months of 2016 compared
to an increase of 5.2% in 2015. At the Federal Open Market Committee (FOMC) meeting in mid-December
2015, the U.S. Federal Reserve raised the Federal funds rate for the first
Japans GDP growth slowed from 0.6% in 2015 to 0.5% in 1H 2016 due to time in nearly a decade to a target range of 0.25%-0.50% from 0.00%-0.25%
lower exports. Japan registered an inflation rate of -0.3% in the first nine previously. At the FOMC meeting in September 2016, the Federal Reserve
months of 2016 compared to 0.8% in 2015 amid lower fuel prices. To boost kept the Federal funds rate unchanged at a range of 0.25%-0.50%. The
economic growth and mitigate deflationary pressures, the Bank of Japan cut Federal Reserve noted that job gains have been solid and near-term risks
its interest rate to -0.1% with effect from 16 February 2016. to the economic outlook appear roughly balanced. Based on the FOMC
participants projections, the Federal funds rate may be raised by 25 bps
South Koreas GDP growth rose from 2.6% in 2015 to 2.9% in the first three before the end of the year.
quarters of 2016 on the back of higher domestic demand. The inflation rate
The Eurozones GDP growth eased from 1.9% in 2015 to 1.7% in 1H 2016
in South Korea edged up from 0.7% in 2015 to 0.9% in the first nine months
amid slower investment spending and export growth. At its monetary policy
of 2016 amid smaller declines in transportation and housing costs. To boost
meeting held on 10 March 2016, the ECB reduced its main refinancing rate
economic growth and mitigate deflationary pressures, the Bank of Korea
by 5 bps to 0.00% while the deposit rate was reduced by 10 bps to -0.40%.
reduced its benchmark interest rate by 25 bps to a record low of 1.25% on The ECB also increased the pace of its asset-buying program from 60 billion
9 June 2016 following a reduction of 50 bps in 2015. to 80 billion with effect from April 2016 to improve the regions economic
Taiwans GDP growth increased from 0.6% in 2015 to 0.8% in the first three recovery and combat deflation.
quarters of 2016 amid higher public spending and export growth. Taiwans In a referendum held on 23 June 2016, British voters voted in favour of exiting
inflation rate increased from -0.3% in 2015 to +1.3% in the first nine months of the European Union (EU). Upon the United Kingdom (U.K.) governments
2016 on the back of higher food prices. On 30 June 2016, the Bank of Taiwan formal notification of an exit from the EU, the U.K. has a two-year period to
reduced its discount rate from 1.5% to 1.375% to support domestic demand. negotiate new trade treaties with the EU.

Outlook and Investment Strategy

After closing on a mixed note in 2015, global and regional equity markets
generally trended lower in the first two months of 2016 amid continued
concerns over the global economic outlook for 2016, continued weakness
in Chinese manufacturing output and the Yuans depreciation. Global and
regional markets rebounded in March 2016 amid firmer energy prices but
subsequently traded on a mixed note in 2Q 2016 on the back of renewed
global economic concerns and the potential impact of Brexit on the European
economy.

Public Asia Ittikal Fund Public Asia Ittikal Fund

Managers Report Managers Report

Global and regional markets generally closed higher in 3Q 2016 amid At the end of October 2016, the local stock market was trading at a
expectations of fresh monetary and fiscal easing around the world following prospective P/E of 16.7x, which is above its 10-year average P/E ratio of
the Brexit outcome. However, uncertainties concerning the timing of the 15.9x. The markets dividend yield of 3.11% is in line with the 12-Month fixed
Federal funds rate hikes continued to weigh on global markets in late deposit rate of 3.11%.
3Q 2016 and in October. Looking ahead, the performance of equity markets
will depend on the economic growth momentum in the U.S., Europe and At the end of the financial year under review, South-East Asian markets were
Asia Pacific region. generally trading at a premium while North Asian markets were generally
trading at a discount to their historical averages following their respective
U.S. economic growth is projected to gain pace from 1.5% in 2016 to 2.1% performances over the same period.
in 2017 amid a recovery in investment spending.
Given the above factors, the Fund will continue to rebalance its investment
In the Eurozone, economic growth is envisaged to ease from 1.5% in 2016 portfolio accordingly with the objective of achieving capital growth over the
to 1.3% in 2017 amid the potential impact of Brexit on export growth. medium to long term period by investing in a portfolio of investments in
domestic and regional markets that complies with Shariah requirements.
In North Asia, Chinas GDP growth is projected to ease from 6.6% in 2016 to
6.4% in 2017 as economic growth continues to moderate. Meanwhile, Chinas Notes: Q = Quarter
inflation rate is projected to sustain at 2.0% in 2017 compared to a similar H = Half
rate in 2016. The Chinese central bank has the flexibility to further cut the
one-year lending rate to support domestic demand. In addition, the Chinese Policy on Soft Commissions
government may unveil more stimulus measures such as further fiscal
spending in the event the economy grows at a weaker-than-expected pace. The management company may receive goods or services which include
research materials, data and quotation services and investment related
Hong Kongs GDP growth is projected to gain pace from 1.3% in 2016 to publications by way of soft commissions provided they are of demonstrable
1.7% in 2017 amid a moderate firming of domestic demand. Going forward, benefit to the Fund and unitholders.
the Hong Kong government is anticipated to maintain its existing tightening
stance on the residential property market. However, ample liquidity, demand During the financial year under review, PAIF has received data and quotation
for better living standards and resilient economic growth will lend support to services by way of soft commissions. These services were used to provide
Hong Kongs property market over the long term. financial data on securities and price quotation information to the Fund
Manager during the financial year under review.
Japans economic growth is projected to increase from 0.6% in 2016 to 0.8%
in 2017 on the back of higher consumer and investment spending. South
Koreas GDP growth is projected to sustain at 2.7% in 2017 compared to a
similar growth rate in 2016 as higher exports are expected to be offset by
slower domestic demand. Meanwhile, Taiwans GDP growth is projected to
strengthen from 1.0% in 2016 to 1.7% in 2017 as exports and investment
spending are envisaged to recover.
In South-East Asia, Singapores GDP growth is projected to firm from 1.7%
in 2016 to 1.9% in 2017 as fiscal spending and corporate tax rebates should
lend support to domestic demand. Indonesias GDP growth is expected to
expand from 5.0% in 2016 to 5.3% in 2017 amid sustained growth in domestic
demand. Meanwhile, Thailands GDP growth is envisaged to increase from
3.1% in 2016 to 3.3% in 2017 on the back of stable domestic demand.
Malaysias GDP growth is expected to rise from 4.1% in 2016 to 4.4% in
2017 amid an anticipated strengthening of domestic demand. This will be
supported by sustained consumer and investment spending amid government
measures to increase disposable incomes and the ongoing implementation
of infrastructure projects.
The budget deficit is projected to widen to RM40.3 billion (3.0% of GDP)
in 2017 from RM38.7 billion (3.1% of GDP) estimated for 2016 with
revenue expanding by 3.4% to RM219.7 billion. Meanwhile, operating
expenditure and net development expenditure will see a growth of 3.7% to
RM214.8 billion and 2.4% to RM45.3 billion in 2017 respectively.

Public Asia Ittikal Fund Public Asia Ittikal Fund

Statement Of Assets And Liabilities Statement Of Income And Expenditure

2016 2015 2016 2015

MYR000 MYR000 MYR000 MYR000
Assets Income
Investments 317,928 218,135 Profit from Shariah-based placements 679 275
Due from brokers/financial institutions, net 4,898 4,345 Dividend income 3,606 4,755
Due from the Manager, net 11,037 - Dividend income from non-permissible
Other receivables 246 261 securities 162 -
Shariah-based placements with financial Net gain from investments 8,449 40,777
institutions 76,860 9,225 Net realised gain on sale of
Cash at banks 10,549 11,261 non-permissible securities 38 18
Net realised/unrealised foreign exchange
421,518 243,227 (loss)/gain (277) 2,084
Liabilities 12,657 47,909
Due to brokers/financial institutions, net 12,498 -
Due to the Manager, net - 111 Less: Expenses
Due to the Trustee 19 13 Trustees fee 155 141
Other payables 86 74 Management fee 4,274 3,868
Distribution payable 12,318 7,298 Audit fee 7 7
Tax agents fee 3 3
24,921 7,496 Brokerage fee 1,203 803
Total net assets 396,597 235,731 Administrative fees and expenses 142 139
Payment to charitable bodies 42 14
Net asset value (NAV) attributable
to unitholders (Total equity) 396,597 235,731 5,826 4,975

Units in circulation (in 000) 1,231,755 729,838 Net income before taxation 6,831 42,934
Taxation (438) (559)
NAV per unit, ex- distribution (in sen) 32.20 32.30
Net income after taxation 6,393 42,375
Net income after taxation is made up as
follows:
Realised 10,688 8,837
Unrealised (4,295) 33,538
6,393 42,375
Final distribution for the financial year 12,318 7,298

Public Asia Ittikal Fund Public Asia Ittikal Fund

Statement Of Changes In Net Asset Value Statement Of Cash Flows

Unitholders Retained 2016 2015

capital earnings Total MYR000 MYR000
MYR000 MYR000 MYR000
Cash flows from operating activities
As at 1 November 2014 172,291 35,915 208,206 Proceeds from sale of investments 116,704 117,941
Creation of units 12,788 - 12,788 Purchase of investments (197,565) (124,123)
Cancellation of units (20,340) - (20,340) Subscription of rights (68) (102)
Net income after taxation - 42,375 42,375 Cash received from capital distribution 23 63
Distribution - (7,298) (7,298) Maturity of Shariah-based placements 5,348,883 2,120,041
Shariah-based placements (5,416,518) (2,111,497)
As at 31 October 2015 164,739 70,992 235,731 Profit from Shariah-based placements
received 674 274
As at 1 November 2015 164,739 70,992 235,731 Interest received from foreign currency
Creation of units 179,895 - 179,895 accounts 4 1
Cancellation of units (13,104) - (13,104) Net dividend income received 3,354 4,145
Net income after taxation - 6,393 6,393 Trustees fee paid (149) (139)
Distribution - (12,318) (12,318) Management fee paid (4,085) (3,813)
Audit fee paid (7) (7)
As at 31 October 2016 331,530 65,067 396,597 Tax agents fee paid (3) (3)
Taxation paid (2) -
Payment of other fees and expenses (135) (190)
Payment to charitable bodies (44) (15)
Net cash (outflow)/inflow from
operating activities (148,934) 2,576
Cash flows from financing activities
Cash proceeds from units created 168,688 12,419
Cash paid on units cancelled (13,234) (20,651)
Distribution paid (7,298) (7,538)
Net cash inflow/(outflow) from
financing activities 148,156 (15,770)
Net decrease in cash and cash
equivalents (778) (13,194)
Effect of change in foreign exchange
rates 66 2,133
Cash and cash equivalents at the
beginning of the financial year 11,261 22,322
Cash and cash equivalents at the end
of the financial year 10,549 11,261

Public Asia Ittikal Fund Public Asia Ittikal Fund