Microequities Asset Management Group Ltd. · ASX:MAM
Microequities Asset Management — Investor Presentation (April 2010)
17 slides from Microequities Asset Management's investor presentation, Apr 23, 2010
Slide 1: Deep Value Microcap Fund Presentation
DEEP VALUE MICROCAP FUND PRESENTATION Four Seasons Hotel, Sydney Friday 23rd April 2010
Slide 2: Disclaimer
DISCLAIMER Microequities Asset Management Pty Ltd ABN 96 134 984 768 (also referred to in this document as “Microequities Asset Management”, “the Trustee”, “the Manager”, “us”, “we” and “our”) is the trustee and investment manager of the Microequities Deep Value Microcap Fund (“the Fund”) ABN 20 869
Slide 3: What Has Happened in the Market
WHAT HAS HAPPEND IN THE MARKET GFC Period (October 2007-March 2009) GFC created a binomial market scenario Near systemic collapse of financial system Panic spread, bank run in some countries Forced selling by fund managers Highly depressed pricing Compelling long term value opportunities 23/04/2010
Slide 4: Macroeco. Impact of GFC
MACROECO. IMPACT OF GFC Year 2009: All advanced economies go into deep recession, with one exception… Australia avoids recession Country 2009 Real GDP Unemployment Rate France -2.4% 9.5% Germany -5.3% 8.0% Japan -5.4% 5.4% UK -4.4% 7.6% US -2.7% 9.3% Australia +0.8% 6.0% * Source IMF 23/04/2010 5
Slide 5: Why Australia Avoided a Recession
WHY AUSTRALIA AVOIDED A RECESSION Not because of Kevin Rudd’s stimulus package Top 4 export markets (54%) for Australia are in Asia More than 70% of Australian exports go to Asian economies, Australia is an Asian play. Destination of Australia’s exports Rest of World China India UK Korea 4% 21% 32%
Slide 6: GDP Growth of Our Export Partners
GDP GROWTH OF OUR EXPORT PARTNERS How our top 4 trading partners faired Growth Accelerating into FY10-11 Country 2009 GDP 2010(F) GDP 2011(F) GDP Japan -2.4% +1.7% +2.4% China +8.5% +9.0% +9.7% Korea -1.0% +3.5% +5.2% India +5.3% +5.1% +7.3% * Source IMF 23/04/2010 7
Slide 7: Paradigm Shift, Here and Now
PARADIGM SHIFT, HERE and NOW China, and (to a lesser extent) India are the game changers for the world, and Australia. China’s average Real GDP growth rate of 7.8% since what year? In 2000, China’s GDP was equivalent to 12.3% of US GDP. By 2014 China’s GDP is expected to be 84.5% of US GDP (under PP
Slide 8: Australia, Right Place to Invest, Right Time in History
AUSTRALIA, RIGHT PLACE TO INVEST, RIGHT TIME IN HISTORY Right export mix composition Leveraged to resource boom Population of approx 22m to capture a 20+ year structural change in world economic history Fast advanced economy population growth rate End effect: Higher prosperity for Australians Superi
Slide 9: And Additionally…
AND ADDITIONALLY… Risk of Political Global Corporate Instability (Rank) Governance Ratings 1. Finland 9.90 1. Ireland 7.44 2. Australia 9.54 2. UK 7.36 3. Denmark 9.49 3. Canada 7.35 4. Switzerland 9.33 4. Australia 7.32 5. New Zealand 9.27 5. US 7.18 6. Sweden 9.21 6. Netherlands 6.60 7. Norway 9.0
Slide 10: So Where Are We Now?
SO WHERE ARE WE NOW? World Regional Prospects Slow recovery in progress World economic recovery • With exception of Germany & UK facing structural starting to gather momentum competitive challenges • Growth to resume, but below world pace Asia leading the world Recovery, Australia highly Confidence
Slide 11: So Where Are We Now?
SO WHERE ARE WE NOW? Australia All Ords Market Index at approx 4950 points (20/04/2010) Needs to rise 37% to match 1st November 2007 level Domestic Unemployment has peaked at 5.8% We expect 3.5% - 4.0% 2011 GDP Growth for Australia Expect economy to surprise on the upside Tight supply, labour market
Slide 12: Back to Our Fund: Quick Overview
BACK TO OUR FUND Quick Overview Long term investment philosophy Three core values; Growth We don’t pay fair value Management: Competency & Integrity/Trust Currently 17 stocks, high conviction, long term Good businesses, growing, undervalued and managed by good management No debt, no derivatives, cas
Slide 13: Back to Our Fund: Update
BACK TO OUR FUND Update Portfolio structure reconfigured Set to maximise operating leverage to fast expanding domestic economy 0.0% Cash 9.0% 3.9% Software & Services 4.6% Telecommunications Services 36.4% Food Products 9.7% Hotels Restaurants & Leisure Consumer Durables Apparel 4.5% Media Capital G
Slide 14: Back to Our Fund: Buying Opportunities
BACK TO OUR FUND Buying Opportunities Over the last three months, Fund accumulating 3 new positions IT Services company at below 8.0X Historical PE, double digit Gross Yield IT Software company with favourable long term structural change in its core industry (valued at 70% premium to current share p
Slide 15: Back to Our Fund: Prospects
BACK TO OUR FUND Prospects Value and growth opportunities remain compelling Corporate earnings growth to resume Early stages of economic boom World economic structural shift highly favourable for Australia Attractive Gross Dividend Yield in the Portfolio (currently 6.0%) We will be making our first
Slide 16: Summary
SUMMARY Economic growth visibility a lot better Clear world economic recovery under way Risks? Australia highly leveraged to superior Asian growth Our Deep Value Fund prospects: Double digit returns? Opportunity train has not left the station Higher prosperity for Australians Superior economic growt
Slide 17: Thank You!
THANK YOU! Contacts Carlos Gil Chief Investment officer 02-92316169 [email protected] Sam Gutman Senior Advisor 02-92327494 [email protected] 23/04/2010 18
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