IS JAPAN ‘BACK’?
Japan Society of Northern California/Federal Reserve Bank of San Francisco, May 9th 2013 SOME PRELMINARY OBSERVATIONS
2 Keynes, speaking of Keynes, speaking .” .”
is the one sphere lifeof and activity where victory, security and
find any one agreeing with you, change your mind 1937 Investment, “It “It is alwaysto success the minority and never to the majority. youWhen 5/8/2013 SUMMARY o Causes of Japan’s “Lost Decades” o First – Strategic irrelevance post-1989 o Second – early ‘90s headwinds strong in proportion to the size of the bubble o Third - 1997-2012- persistent macro-economic policy mistakes. o No insuperable “structural problems o Last headwinds dropped to nothing in 2009 o Senkaku spat marks Japan’s recovery of a strategic role o “Abe-nomics” represents reversal of the mistakes of 1997-2012 o Anyway, monetary policy has actually been loose since 3/11 o Deflation may already be over o PM Abe may just be “in the right place at the right time” o Both the initial, long period of error and its reversal echo the ‘30s.
5/8/2013 3
WHAT ACTUALLY HAPPENED?
Is Real Life lived in Real or Nominal Numbers?
Year Nominal GDP Population Nominal GDP/head Real GDP Real GDP/head (Y mil) (Thou) (Y mil) (Y mil) (Y mil) 1995 501,707 125,570 4.00 455,460 3.63 2000 509,860 126,926 4.02 474,847 3.74 2005 503,903 127,768 3.94 503,921 3.94 2010 482,384 128,057 3.77 512,364 4.00 2011 470,623 127,799 3.68 509,450 3.99
Period Nominal GDP per Capita Real GDP per Capita Change 1995-2011 -7.8% 9.9% 2000-2011 -8.3% 6.6%
Note: GDP for Fiscal Years, Seasonally Adjusted; Population estimates as of October 1st
Source: Econostats, Statistics Bureau, Milestone Asset Management
5/8/2013 4 WHAT ACTUALLY HAPPENED?
Policy the Key to the Story of the Bubble Topix 3,500
1989: BoJ hikes 3 times in one year Bubble bursts (12/31/89) 3,000
BoJ's 3rd rate hike 1990: BoJ hikes twice more (12/25/89)
2,500 "Black Monday"
Consumption tax increase 2,000 from April '97 decided
1,500 BoJ cuts
Pre"Bubble" BoJ at last starts to cut export-driven 1,000 bull market 1991: BoJ cuts 3 times begins Yen/US$ goes to 88; 1986: BoJ cuts 4 1992: BoJ cuts twice International agreement times in one year 1993: BoJ cuts twice to weaken it Fiscal/Monetary policy 1995: BoJ cuts twice easing in response to 500 Q1CY86 Asian Financial Crisiss The"Bubble" begins 23/9/85 Plaza Agreement - Japan accepts massive revaluation of Y/US$ rate in order to correct Japan's "excessive" bilateral trade surplus with the US
0 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
Source: Bloomberg. Milestone Asset Management
5/8/2013 5 WHAT ACTUALLY HAPPENED?
Policy Error the Key to the Story after the Bubble Topix 2,000 BoJ begins to drain Feb 2000: US credit FX Intervention Ended; "excess" reserves spreads start to widen; genuine easing stops 1,800 Internet bubble bursts The BoJ ends Earthquake/Tsunami ZIRP forces genuine easing on the BoJ 1,600 New Financial Minister Takenaka ventilates possibility of total loss for bank shareholders in context of bank resolutions. Market tanks. 1,400 BoJ tightens
1,200
1,000 "QE" instituted Partial Nationalisation of Resona proves not to involve total loss for shareholders. Market 800 rallies
QE+FX intervention = genuine easing 600 Gov Kuroda BoJ eases; pledges unlimited Fiscal policy easing loosens 400
26/9/2006: 200 PM Koizumi 26/4/2001: Koizumi becomes PM. leaves office. Topix 1366 14/4/2003: Topix 770 Topix 1610 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source: Bloomberg. Milestone Asset Management
5/8/2013 6 WHAT ACTUALLY HAPPENED?
Another, very different, Narrative – All about Strategic Position
Topix 3,500 9th November 1989 - Berlin Wall opened. Market peaks 8 weeks later 3,000
2,500
2,000
1,500
1,000
500 11th September 2012 China makes a fuss about the Senkaku Islands. Market breaks out in November
0 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Bloomberg. Milestone Asset Management
5/8/2013 7 MONETARY AND FISCAL POLICY Keynes,
8 ”
Money, 1936 probabilities. a spontaneous urge to
– apart from the instabilitydue to speculation, there is the instability
General Theory of Employment, Interest Employment, Interest and Theory of General
of quantitative benefits multiplied by quantitative The Most, probably, of our decisionsto do something positive, the full consequencesbeof willwhich drawn out over many days to come, can only be taken as the result of animal spirits action rather than inaction,and not as the outcome of a weighted average due to the characteristic of human nature that a large proportion of our positiveactivities depend on spontaneousoptimism rather than mathematical expectations,whether moral or hedonistic or economic. “Even 5/8/2013 WHAT IS “ABE-NOMICS” o Do we know what it is? o Not really, but the fact that it is seen as a “-nomics” is an unconscious admission that it is relevant to the economy o Contrast with Koizumi – who was of no relevance o Could it be an “cover band, reprising the LDP’s greatest hits”? o No. Something new, but echoes of the past are strong o Is it any more than a currency policy? o Yes, but not much more o Isn’t that enough? o Yes it is, so let’s forget irrelevant chit-chat about “reform” o But isn’t it also little more than a case of “political luck” o Largely, but not entirely so.
5/8/2013 9 BANK RESERVES HEADING FOR DOUBLE THEIR 2007 PEAK
Easing has its Roots in Tragedy - the Tohoku Tsunami. Just as in 2003-7 real effects lagged…
Y bn 70,000
60,000
50,000
40,000
30,000
20,000 Current Account Balances
10,000
Excess Reserves 0 Jan-09 Nov-09 Sep-10 Jul-11 May-12 Feb-13
Source: BoJ, Bloomberg, Milestone Asset Management
5/8/2013 10 “TRIED AND FAILED” – AUSTERITY FAILED, NOT SPENDING
Proactive Fiscal Policy used only Twice – and it “worked” when tried
13%
12%
11%
10%
9%
8%
7%
Estimate of 'Managed' Expenditure as % of Nominal GDP
6% 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Source: MoF, HM Treasury, Milestone Asset Management
5/8/2013 11 4% OF GDP ‘MONEY PRINTING’ GAVE US THE ’05 RECOVERY
Monetary policy works with long and variable lags
Y tril 60
50
40
30
20
10
0 01 02 03 04 05 06 07 08 09 10 11 12
Source: BoJ, Bloomberg, Milestone Asset Management
5/8/2013 12 THE YEN IS KEY
Yen over/under-valuation vs OECD Purchasing Power Parity Estimate
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
-10.0%
Jan-12
Jan-92
Jan-96
Jan-84
Jan-04
Jan-88
Jan-80 Jan-08 Jan-00
-20.0%
-30.0%
Source: OECD, Bloomberg, Milestone Asset Management
5/8/2013 13 INFLATION COULD BE EASY TO PRODUCE
Labour costs competitive: US and Japan now the cheap, developed, places to produce
Minimum Wages (per hour) In USD Shanghai 2.28 (actual) HK 3.87 (actual) US 9.00 (proposed) UK 9.50 (actual) France 12.35 (actual)
Japan ¥744 (nationwide average) US$7.67 (at current FX)
Source: National labour data, OECD, Bloomberg, Milestone Asset Management
5/8/2013 14 OLD INFRASTRUCTURE = MORE SPENDING = HIGHER WAGES
One third of construction workers now over 55
Source: Ministry of Land , Infrastructure and Transport
5/8/2013 15 INFLATION-ADJUSTED JGBS THINK DEFLATION IS OVER
Implied break-even inflation rate (5-year) on Inflation-adjusted JGBs 2.00
1.50
1.00
0.50
0.00
-0.50
-1.00
-1.50
-2.00
-2.50 Jun-09 Jun-10 Jun-11 Jun-12 Source: Bloomberg, Milestone Asset Management
5/8/2013 16 HOW MUST STIMULATION WORK? KALECKI SHOWS US HOW
Kalecki’s Profit Equation: Total profits = the sum of the consumption of capitalists & net investment & the public deficit & the net external surplus minus the savings of workers 35 Household Savings (-) External Surplus Government Savings (-)
30 Net investment (+) Dividends (+) Profits
25
20
15
10
5
Percent of GDP % GDPof Percent 0
-5
-10
-15
1972
1976
1974
1978
1970
1992
1964 1966 1994 1996
1982
1968 1986 1998
1984
1990
1988
1980
2010
2002
2006 2004
2008 2000 Source: BoJ, MoF, Morgan Stanley, Milestone Asset Management
5/8/2013 17 HOW MUST STIMULATION WORK? KALECKI SHOWS US HOW
Kalecki’s Profit Equation: Total profits = the sum of the consumption of capitalists & net investment & the public deficit & the net external surplus minus the savings of workers
If it isn’t the interest rate alone that equilibrates savings and investment there is a function for other factors
This opens up a role for, for instance, Tobin’s ‘Q’ arbitrage and for “animal spirits”
In Japan’s case, net investment (investment less capital consumption (economic depreciation)) has fallen consistently since the onset of deflation and is now negative
A rise in investment is actually a ‘good thing’ when your starting point is capital consumption (let’s glide over the data quality complications…)
Raising dividends would also be a ‘good thing’ for profits because it would increase the income of capitalists
Implication is that ‘Abe-nomics’ will really work by stimulating the non-salariman portion of the country – it is inherently redistributionist.
The issue is how long the essentially non-capitalist salariman will consent to give up the gains he has made in relative terms over the past 16 years.
5/8/2013 18 IMAGINARY “STRUCTURAL PROBLEMS”
19 , , The General Keynes .” .”
Money
is astonishing whatis astonishing foolish things one can temporarily believe if one
Theory of Employment, Interest and Theory of “It “It thinks too longalone, particularly in economics 5/8/2013 DO RATINGS AGENCIES HAVE ANYTHING TO SAY?
Or Are They Inadvertently Admitting that Deflation, Not Spending, is the Issue?
Credit rating JGB yield; % 1.5
1.9
2.0 1.7
2.5 1.5
1.3 3.0
1.1
3.5
0.9
4.0 0.7 Average credit rating
10yr bond yield (RHS)
4.5 0.5
Dec '11 Dec
Dec '12 Dec
Dec '01 Dec '10 Dec
Dec '07 Dec
Dec '99 Dec
Dec '05 Dec
Dec '03 Dec
Dec '02 Dec
Dec '06 Dec '09 Dec
Dec '04 Dec
Dec '08 Dec Dec'00 Source: CLSA , Milestone Asset Management
5/8/2013 20 JAPANESE ARE NOW `POOR`
A “Salariman’s” “Pocket Money” has halved in 20 years (JPY/month) 80,000
73,858
70,000
66,527 66,633
60,603 60,000 60,861 58,593 53,582 56,837 53,532 54,691 55,455 52,579 54,706 49,657 53,000 48,703 50,000 49,609 46,116 46,394 45,445 45,104 42,958 41,302 40,000 40,641 37,786 37,546 39,603 38,377 36,647 32,885 30,000 29,480
20,000 79 81 83 85 87 89 92 96 98 00 02 04 06 08 10 05
Source: Shinsei Bank , Milestone Asset Management
5/8/2013 21 WHAT MIGHT HAVE BEEN……
110 Trillion Yen of GDP Gone Missing = Depressed Tax Collections
650 Assume 1% nominal growth since 1997 600
550
500
450 Actual GDP in Nominal Terms 400
350
300
250
200 1980 1985 1990 1995 2000 2005 2010 2015
Source: Morgan Stanley, Milestone Asset Management
5/8/2013 22 DID JAPANESE SUDDENLY BECOME “TAX CHEATS” IN ‘96?
What changed was Deflation, not “Tax Evasion”
% of Corporate Sector's Sales represented by Loss-making Companies
50
45
40
35
30
25
20
15
10 Onset of Deflation
5
0 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006
Source: NTA, Morgan Stanley, Milestone Asset Management
5/8/2013 23 LOSSES OF LOSS-MAKING COMPANIES 4% OF GDP
Profits of Profitable Companies Essentially Unchanged post-1996
70 (Y Tril） 60
50
40
30
20
10
0
-10
-20
-30
-40 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Source: NTA, Morgan Stanley, Milestone Asset Management
5/8/2013 24 12% DECLINE IN WAGES LEADS TO 40% DROP IN TAX
Income Tax Withheld at Source on Regular Wages
14 (Y Tril） 250
12 200
10
150 8
6 100
4
50 2 Income Tax Withheld（LHS） Total Wages（RHS）
0 0 72 77 82 87 92 97 02 07
Source: NTA, Morgan Stanley, Milestone Asset Management
5/8/2013 25 CRUMMY ECONOMY = SPENDING UP & TAXES CRUSHED
FY 2011– Spending at deflationary period highs, revenues at secular lows
% of Nom inal GDP, Fiscal Years 1997-2011 Last y ear A v erage High Low A ct u al Total Expenditure (As declared) 1 7 .6 0% 2 1 .3 0% 1 5 .3 0% 2 1 .3 0% of w h ich : Interest Payment 1 .7 0% 2 .1 0% 1 .4 0% 1 .7 0% Social welfare 4 .3 0% 6 .3 0% 3 .00% 6 .3 0% Local Gov . Tax Grants, Special Grants and others 3 .3 0% 4 .1 0% 2 .6 0% 4 .1 0% All Other Expenditures 8.3 0% 1 0.1 0% 7 .2 0% 9 .2 0% Actual Total Expenditure less Interest Costs 15.90% 19.70% 13.20% 19.60%
Tax and Other Revenue in Total 9 .4 0% 1 0.5 0% 8.2 0% 9 .1 0% of w h ich : In com e Tax 3 .1 0% 3 .7 0% 2 .7 0% 2 .80% Corporate Tax 2 .2 0% 2 .9 0% 1 .3 0% 2 .00% Consumption Tax 2 .00% 2 .2 0% 1 .80% 2 .2 0% Other revenues 2 .00% 2 .3 0% 1 .9 0% 2 .1 0%
Re-Stated Central Gov ernment Surplus/Deficit -1 0.5 0%
Source: MoF, Milestone Asset Management
5/8/2013 26 BETTER ECONOMY = SPENDING DOWN & TAXES UP
Let’s remember that just as inflation is a “tax increase” so deflation is a “tax cut”
Hy pot h et ical Case "Reflat ion Works"
Total Expenditure (As declared) A ssu m pt ion A ssu m pt ion of w h ich : Interest Payment 3 .4 0% Double FY2011 4 .00% 2.35x FY2011 Social welfare 4 .5 0% Return to Mean 3 .00% Fall to lows Local Gov . Tax Grants, Special Grants and others 3 .5 0% Return to Mean 2 .6 0% Fall to lows All Other Expenditures 8.7 5 % Return to Mean 7 .2 0% Fall to lows Actual Total Expenditure less Interest Costs 20.15% 16.80%
Tax and Other Revenue in Total 1 3 .00% 1 6 .5 0% of w h ich : In com e Tax 4 .6 0% Pre-deflation Average 5 .80% Rise to pre-deflation highs Corporate Tax 3 .5 0% Pre-deflation Average 4 .80% Rise to pre-deflation highs Consumption Tax 2 .00% Average post-1997 2 .2 0% Rise to pre-deflation highs Other revenues 2 .9 0% Pre-deflation Average 3 .7 0% Rise to pre-deflation highs
Re-Stated Central Gov ernment Surplus/Deficit -7 .1 5 % -0.3 0%
Source: MoF, Milestone Asset Management
5/8/2013 27 SOCIAL SPENDING: NO LINK WITH “DEMOGRAPHICS”
Year-on-year (FY) Change in Central Government “Social Welfare Expenditure”
50%
40%
30%
20%
10%
0%
-10% 67 70 73 76 79 82 85 88 91 94 97 00 03 06 09 12
Source: MoF, Milestone Asset Management
5/8/2013 28 THE GROWTH PROBLEM IS NOT “DEMOGRAPHICS”
Growth and Population Change in 147 countries over the last 30 years - No Relationship 8% r2 = 4%
7%
19 6% 417
5%
4%
3%
2% Population growth Population
1%
0% -10% -5% 0% 5% 10% 15% 20%
-1% 2 20
-2% GDP CAGR Source: IMF, CLSA , Milestone Asset Management
5/8/2013 29 RELAXING OR LAID OFF? BECOMING A “NORMAL” COUNTRY
Japanese Working Hours – Steep post-Bubble Decline; Now at OECD Average
2,300 Hours per year
2,200
2,100
2,000
1,900
1,800
1,700 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: OECD, JP Morgan , Milestone Asset Management
5/8/2013 30 NUCLEAR POWER – SCARE STORIES TO BE IGNORED
Conventional sources of generation more or less cover Japanese power needs
Output (mn kWh) Total Nuclear Thermal Hy dro Purchase Peak non-nuclear pre-quake 77,431 25,967 52,7 98 7 ,837 1 6,7 97 post-quake 90,344 17,083 64,445 7 ,239 1 8,660 Assumptions : Output roughly = demand < supply capacity
peak demand 96,173 Aug-07
Pre-quake nuclear peak 25,967
Peak demand less non-nuclear supply 5,829 Probable need for nuclear/nuclear capacity 22% (= peak demand minus post-quake non-nuclear supply as a % of pre-quake nuclear output)
Source: METI, BAML, Milestone Asset Management
5/8/2013 31 LIMITATIONS OF BIG-COMPANY MANAGEMENT
32
5/8/2013 HAS THE EARNINGS UP-SHIFT ALREADY OCCURRED?
Trailing 10-year Average Real EPS since 1980
Source: Morgan Stanley, Milestone Asset Management
5/8/2013 33 20 YEAR DELEVERAGING REDUCES ROE
Deflation = Deleveraging
8 (x) Total Assets/Net Assets
7
6
5
4
3
2
1 1963Q3 1975Q3 1987Q3 1999Q3 2011Q3
Source: Ministry of Finance, Morgan Stanley, Milestone Asset Management
5/8/2013 34 20 YEAR DELEVERAGING REDUCES CAPITAL EFFICIENCY
Renewed Rise in Leverage & Asset Turnover Requires the End of Deflation
1960s 1970s 1980s 1990s 2000s 2010s A v erage A v erage A v erage A v erage A v erage A v erage
ROE (%) 7 .85 8.7 9 8.4 0 4 .9 8 6 .01 4 .88
Net Margin (%) 1 .7 1 .2 1 .4 1 .4 2 .5 3 .3 Asset Turnover 111 1 2 0 1 2 9 97 89 78 Leverage Ratio 4 .2 5 .1 4 .7 3 .6 2 .7 2 .4
Scenario Analysis A ssu m e Net Margin 3.30% Norm ROE Asset Turnover 90% 95% 100% 105% 110% 115% 120% Leverage (x) 2 .7 5 8.1 7 % 8.6 2 % 9 .08% 9 .5 3 % 9 .9 8% 1 0.4 4 % 1 0.89 % 3 .00 8.9 1 % 9 .4 1 % 9 .9 0% 1 0.4 0% 1 0.89 % 1 1 .3 9 % 1 1 .88% 3 .2 5 9 .6 5 % 1 0.1 9 % 1 0.7 3 % 1 1 .2 6 % 1 1 .80% 1 2 .3 3 % 1 2 .87 % 3 .5 0 1 0.4 0% 1 0.9 7 % 1 1 .5 5 % 1 2 .1 3 % 1 2 .7 1 % 1 3 .2 8% 1 3 .86 % 3 .7 5 1 1 .1 4 % 1 1 .7 6 % 1 2 .3 8% 1 2 .9 9 % 1 3 .6 1 % 1 4 .2 3 % 1 4 .85 % 4 .00 1 1 .88% 1 2 .5 4 % 1 3 .2 0% 1 3 .86 % 1 4 .5 2 % 1 5 .1 8% 1 5 .84 % 4 .2 5 1 2 .6 2 % 1 3 .3 2 % 1 4 .03 % 1 4 .7 3 % 1 5 .4 3 % 1 6 .1 3 % 1 6 .83 %
Source: Morgan Stanley, Milestone Asset Management
5/8/2013 35 BIG COMPANIES DO NOT USUALLY EARN A RETURN
The “Good News” is that Returns should go back towards the 2006/7 level; the “Bad News” is that that will still only equal the Cost of Capital
Source: Bloomberg, Morgan Stanley , Milestone Asset Management
5/8/2013 36 PRODUCTIVITY REMAINS A MACRO PROBLEM…
Relative Labour Productivity and the Stock Market
300 1.20
1.15
250 1.10
1.05 200
1.00
150 0.95
0.90
100 0.85
0.80 50 Nikkei in US$ 0.75 Relative Labour Productivity
0 0.70
Mar-12
Mar-72
Mar-10
Mar-74 Mar-76
Mar-78
Mar-70
Mar-92
Mar-94 Mar-96
Mar-82
Mar-84 Mar-86 Mar-98
Mar-02
Mar-90 Mar-04 Mar-06
Mar-88
Mar-80 Mar-08 Mar-00
Source: Bloomberg, Mitsubishi UFJ Morgan Stanley , Milestone Asset Management
5/8/2013 37 …WITH MICRO ROOTS - BLOATED WORKFORCES
FY 2011 FY 2000 Workers Sales/Worker Workers Sales/Worker (no.) (Ymn) (no.) (Ymn)
Hitachi 350,000 25.75 323,000 24.71 Toshiba 203,000 31.58 191,000 30.12 Mitsubishi Electric 114,000 31.85 117,000 32.37
Panasonic 348,000 22.22 290,000 25.13 Sony 168,000 42.69 190,000 35.25 Sharp 56,000 54.37 50,000 37.28 TDK 88,000 9.97 34,000 19.65
Canon 198,000 17.94 87,000 32.09 Ricoh 109,000 17.81 67,000 21.49
Nissan 159,000 55.03 136,000 43.84 Toyota 318,000 59.78 211,000 61.12 Honda 179,000 49.91 112,000 54.26
NTT 219,000 46.98 224,000 46.53
Kajima 15,000 87.89 19,000 92.23
Fast Retailing 33,323 24.62 1,853 185.74
Shiseido 32,595 20.94 24,495 24.36 Fuji Photo 81,691 26.88 37,151 37.73 Shinetsu Chemical 16,167 64.81 18,754 36.20
Fanuc 5,198 103.60 3,707 56.39 SMC 15,384 22.22 9,891 19.64
Komatsu 44,206 44.83 28,522 37.01 HCM 21814 37.46 9,503 33.85
Source: Bloomberg, Milestone Asset Management
5/8/2013 38 ...AND SPECIFICALLY WHITE-COLLAR OVEREMPLOYMENT
How Gross Cashflow has been Used by Selected Major Consumer Electronics Companies (Averages)
Averaging Other non- Retained Depreciation SG&A R&D Interest Tax Dividend Gross Cash Flow Period Op costs Earnings Panasonic 10 years 11% 58% 21% 1% 7% 4% 2% -3% 100% 3 years 11% 60% 21% 1% 16% 4% 1% -14% 100% Sharp 10 years 33% 28% 25% 1% 8% 5% 3% -3% 100% 3 years 39% 29% 26% 1% 14% 8% 3% -21% 100% Sony 10 years 16% 50% 27% 1% -4% 7% 1% 0% 100% 3 years 16% 52% 26% 1% 1% 15% 2% -14% 100% Philips 10 years 9% 62% 20% 3% -7% 3% 6% 4% 100% 3 years 7% 68% 17% 3% -2% 3% 7% -3% 100% Siemens 10 years 10% 53% 18% 4% -3% 5% 6% 8% 100% 3 years 8% 46% 17% 1% -2% 8% 9% 10% 100% Samsung 10 years 19% 40% 15% 1% -3% 5% 2% 20% 100% 3 years 19% 42% 15% 1% -4% 5% 2% 21% 100% Apple 10 years 3% 25% 8% 0% -2% 18% 0% 48% 100% 3 years 3% 19% 6% 0% -1% 19% 0% 54% 100% Hon Hai 10 years 13% 38% 11% 2% -5% 7% 7% 27% 100% 3 years 14% 42% 3% 1% -5% 6% 5% 23% 100%
Source: Citi Investment Research, Milestone Asset Management
5/8/2013 39 IMPORTANT DISCLOSURES
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(Continued overleaf)
5/8/2013 40 IMPORTANT DISCLOSURES
(Continued…)
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5/8/2013 41 MILESTONE ASSET MANAGEMENT
Enquiries: Alexander Kinmont Tel: 03-5413-4196 Fax: 03-5413-4192 E-mail: [email protected] www.mamj.com
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5/8/2013 42