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Fund Information

Fund Name
Public China Ittikal Fund (PCIF)

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 Shariah-compliant investments in the greater China region
and the balance in the domestic market.

Fund Performance Benchmark


The benchmarks of the Fund and their respective percentages are 50% S&P
Shariah BMI Hong Kong and China H Shares Index, 30% S&P Shariah
BMI Taiwan Index and 20% FTSE Bursa Malaysia Hijrah Shariah Index.
The S&P Shariah BMI Hong Kong and China H Shares Index and S&P Shariah BMI Taiwan
Index are products of S&P Dow Jones Indices LLC (SPDJI), and have 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 PCIF 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 S&P Shariah BMI Hong Kong and China H Shares Index
and S&P Shariah BMI Taiwan Index.
The PCIF 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 PCIF as at 30 November 2016


Size of holdings No. of % of No. of units
unitholders unitholders held (million)
5,000 and below 9,144 24.10 34
5,001 to 10,000 6,827 17.99 51
10,001 to 50,000 16,322 43.01 392
50,001 to 500,000 5,550 14.62 635
500,001 and above 106 0.28 110
Total 37,949 100.00 1,222

Note: Excluding Managers Stock.


Public China Ittikal Fund
Fund Performance Fund Performance
For the Financial Year Ended 30 November 2016 For the Financial Year Ended 30 November 2016

Average Total Return for the Following Years Ended Distribution and Unit Split
30 November 2016
Financial year 2016 2015 2014
Average Total Date of distribution 30.11.16 30.11.15 28.11.14
Return of PCIF (%)
1 Year 8.83 Distribution per unit
3 Years 11.53 Gross (sen) 0.30 - -
5 Years 12.09 Net (sen) 0.24 - -
Unit split - - -
Annual Total Return for the Financial Years Ended 30 November
Year 2016 2015 2014 2013 2012 Impact on NAV Arising from Distribution (Final) for the
PCIF (%) 8.83 10.23 12.25 14.35 4.22 Financial Years
The calculation of the above returns is based on computation methods of Lipper. 2016 2015 2014
Sen Sen Sen
Notes: per unit per unit per unit
1. Total return of the Fund is derived by this formulae: Net asset value before distribution 26.61 24.45 22.18

( 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
Less: Net distribution per unit
Net asset value after distribution
(0.24)
26.37
-
24.45
-
22.18

Past performance is not necessarily indicative of future performance and


The above total return of the Fund was sourced from Lipper.
unit prices and investment returns may go down, as well as up.
2. Average total return is derived by this formulae:
Asset Allocation for the Past Three Financial Years
Total Return
As at 30 November
Number of Years Under Review
(Per Cent of Net Asset Value)
Other Performance Data for the Past Three Financial Years 2016 2015 2014
Ended 30 November % % %
2016 2015 2014
EQUITY SECURITIES
Unit Prices (MYR)* Quoted
Highest NAV per unit for the year 0.2661 0.2600 0.2219
Malaysia
Lowest NAV per unit for the year 0.2172 0.2122 0.1890
Basic Materials 0.9 - -
Net Asset Value (NAV) and Units in Communications 3.1 2.3 6.8
Circulation (UIC) as at the End of Consumer, Non-cyclical 2.5 1.5 0.8
the Year Diversified 0.6 - 1.0
Total NAV (MYR000) 322,314 337,938 362,503 Energy - - 2.0
UIC (in 000) 1,222,423 1,381,977 1,634,442 Financial - - 0.4
NAV per unit (MYR) 0.2637 0.2445 0.2218
Industrial 0.7 0.6 0.8
Total Return for the Year (%) 8.83 10.23 12.25 Utilities 3.2 2.0 4.6
Capital growth (%) 8.67 9.56 11.59
Income (%) 0.15 0.61 0.59 11.0 6.4 16.4

Management Expense Ratio (%) 1.76 1.76 1.77 Outside Malaysia


Portfolio Turnover Ratio (time) 0.41 0.46 0.44 Hong Kong
* All prices quoted are ex-distribution.
Communications 19.8 19.3 10.4
Consumer, Cyclical 3.8 10.3 7.2
Notes: Management Expense Ratio is calculated by taking the total management expenses
expressed as an annual percentage of the Funds average net asset value. Consumer, Non-cyclical 2.1 4.3 5.5
Portfolio Turnover Ratio is calculated by taking the average of the total acquisitions and
Energy - 5.5 9.1
disposals of the investments in the Fund for the year over the average net asset value Financial 2.3 4.4 2.6
of the Fund calculated on a daily basis. Industrial 9.2 8.3 5.1
The Portfolio Turnover Ratio for the financial year 2016 dropped to 0.41 time from 0.46
time in the previous financial year on account of lower level of rebalancing activities
performed by the Fund during the year.

Public China Ittikal Fund Public China Ittikal Fund


Fund Performance Statement Of Distribution Of Returns
For the Financial Year Ended 30 November 2016 For the Financial Year Ended 30 November 2016

Asset Allocation for the Past Three Financial Years (contd) Sen Per Unit

As at 30 November Gross Distribution 0.3000


(Per Cent of Net Asset Value) Net Distribution 0.2385
Total Returns 2.1600
2016 2015 2014
% % %
Effects of Distribution on NAV per unit before and after
Hong Kong (contd) Distribution:
Technology 0.5 0.7 -
Utilities 2.8 1.5 2.1 Before After
Distribution Distribution
40.5 54.3 42.0
NAV per unit (MYR) 0.2661 0.2637
Taiwan
Basic Materials 1.8 1.3 1.0
Communications 5.1 3.9 3.0
Consumer, Cyclical 1.8 1.0 -
Industrial 5.8 7.5 2.9
Technology 11.1 12.3 10.5
25.6 26.0 17.4
United States
Communications 3.5 6.8 3.5
TOTAL QUOTED EQUITY
SECURITIES 80.6 93.5 79.3
COLLECTIVE INVESTMENT FUNDS
Quoted
Outside Malaysia
Hong Kong
Financial 2.1 2.2 1.8
TOTAL QUOTED COLLECTIVE
INVESTMENT FUNDS 2.1 2.2 1.8
SHARIAH-BASED PLACEMENTS
WITH FINANCIAL INSTITUTIONS 5.2 2.7 9.3

OTHER ASSETS & LIABILITIES 12.1 1.6 9.6

Public China Ittikal Fund Public China Ittikal Fund


Managers Report Managers Report

Overview Effect of Distribution Reinvestment on Portfolio Exposures


This Annual Report covers the financial year from 1 December 2015 to 30-Nov-16
30 November 2016. Before Distribution After Distribution
Reinvestment* Reinvestment*
Public China Ittikal Fund (PCIF or the Fund) seeks to achieve capital growth
over the medium to long-term period by investing in a portfolio of Shariah- Shariah-compliant Equities 82.7% 82.0%
compliant investments in the greater China region and the balance in the Islamic Money Market 17.3% 18.0%
domestic market. * Assumes full reinvestment.
For the financial year under review, the Fund registered a return of +8.83%
as compared to its Benchmarks return of +9.17%. The Funds Shariah-
Change in Portfolio Exposures from 30-Nov-15 to 30-Nov-16
compliant equity portfolio registered a return of +12.32% while its Islamic Average
money market portfolio registered a return of +3.16% during the financial 30-Nov-15 30-Nov-16 Change Exposure
year under review. A detailed performance attribution analysis is provided
Shariah-compliant Equities 95.7% 82.0% -13.7% 86.04%
in the sections below.
Islamic Money Market 4.3% 18.0% +13.7% 13.96%
For the five financial years ended 30 November 2016, the Fund registered a
return of +60.49% as compared to the Benchmarks return of +78.87% over Returns Breakdown by Asset Class
the same period. The Funds holdings of selected stocks were adversely Market /
affected by the volatility in greater China markets in the second half of 2011 Returns On Benchmark Benchmark Average Attributed
and 2012 following Chinas monetary tightening measures and concerns Investments Returns Index Used Exposure Returns
over the sovereign debt crisis in the developed economies. Nevertheless, it
is the opinion of the Manager that the Fund has met its objective to achieve Shariah-
capital growth over the said period. compliant
Equities 12.32% 9.17% Benchmark 86.04% 10.60%
Islamic Money
Performance of PCIF Market 3.16% 3.53% 1M-IIMMR 13.96% 0.44%
from 30 November 2011 to 30 November 2016 less:
80%
Expenses -2.21%
PCIF BENCHMARK
Total Net
60%
Return for
the Year 8.83%
Returns from Start of Period

40%
1M-IIMMR = 1-Month Islamic Interbank Money Market Rate
20%
Shariah-compliant Equity Portfolio Review
For the financial year under review, the Funds Shariah-compliant equity
0%
portfolio registered a return of +12.32% and outperformed its equity
Benchmarks return of +9.17%. The Funds Shariah-compliant equity
-20% portfolio outperformed the equity Benchmark as the Funds holdings of
2011 2012 2013 2014 2015 2016
selected stocks in the Industrial and Communications sectors outperformed
the broader market during the financial year under review.
The Funds Benchmark is a composite index of 50% S&P Shariah BMI The Fund commenced the financial year under review with a Shariah-
Hong Kong and China H Shares Index, 30% S&P Shariah BMI Taiwan compliant equity exposure of 95.7% and the Fund gradually reduced its
Index and 20% FTSE Bursa Malaysia Hijrah Shariah Index. Shariah-compliant equity exposure to below 80% in May 2016 to weather
the consolidation phase in the greater China and domestic markets. The
Income Distribution and Impact on NAV Arising from Distribution Funds Shariah-compliant equity exposure was subsequently increased
to capitalise on Shariah-compliant investment opportunities in the greater
The gross distribution of 0.30 sen per unit (net distribution of 0.24 sen per unit) China and domestic markets. The Fund ended the financial year under
for the financial year ended 30 November 2016 had the effect of reducing the review with a Shariah-compliant equity exposure of 82.0%. Based on
Net Asset Value (NAV) of the Fund after distribution. As a result, the NAV per an average Shariah-compliant equity exposure of 86.04%, the Shariah-
unit of the Fund was reduced to RM0.2637 from RM0.2661 after distribution. compliant equity portfolio is deemed to have registered a return of +10.60%
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 China Ittikal Fund Public China Ittikal Fund
Managers Report Managers Report

Country Allocations
S&P Shariah BMI Hong Kong & China H Shares Index
In terms of country allocation within the Shariah-compliant equity portfolio, (30 November 2015 - 30 November 2016)
the Funds Shariah-compliant equity investment in Malaysia accounted 85

for 11.0% of the NAV of the Fund. Other than Malaysia, the remaining 3
countries accounted for 71.7% of the NAV of the Fund and 86.7% of the 80

Funds Shariah-compliant equity portfolio. The weightings of the 3 countries


excluding Malaysia are in the following order: Hong Kong (42.6%), Taiwan 75
(25.6%) and United States (3.5%).

Index
70
Islamic Money Market Portfolio Review
During the financial year under review, the Funds Islamic money market 65

portfolio, which was invested primarily in Islamic deposits, yielded a return


of +3.16%. In comparison, the 1-Month Islamic Interbank Money Market 60

Rate (1M-IIMMR) registered a return of +3.53% over the same period. Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16

During the financial year under review, the Funds exposure to Islamic
Commencing the financial year under review at 3,226.32 points, the S&P
money market investments increased from 4.3% to 18.0% following the Taiwan Shariah Index (S&P TSI) eased due to a reduction of Taiwans
disposal of selected Shariah-compliant equity investments. Based on weighting in MSCIs indices. The Index subsequently rebounded in
an average exposure of 13.96%, the Islamic money market portfolio is tandem with global equity markets following the U.S. Federal Reserves
estimated to have contributed +0.44% to the Funds overall returns for the interest rate hike in mid-December 2015. Uncertainties ahead of the
financial year under review. Taiwan presidential elections caused the Index to decline in January
2016. The Index subsequently rebounded in mid-March 2016 in tandem
Stock Market Review with global equity markets as concerns over weak commodity prices as
well as weakness in Chinas equity markets and currency eased. Weaker-
Commencing the financial year under review at 74.25 points, the S&P than-expected demand for consumer electronics negatively impacted the
Hong Kong and China H Shares Shariah Index (S&P HKCSI) entered a technology sector, causing the Index to decline in April and early May 2016
consolidation phase in January 2016 due to Renminbi devaluation and before rebounding in mid-May 2016 amid positive sentiment following the
increased uncertainties in the global economy. The Index rebounded in new Taiwan presidents inauguration.
March 2016 on the back of a stabilised Renminbi, better-than-expected The Index traded range-bound in June due to uncertainties arising
Chinese economic data and diminishing concerns on further capital outflow from Britains referendum to exit the European Union (EU). The Index
from China. In May 2016, the Index weakened and entered a consolidation subsequently rebounded in July due to strong foreign inflows, underpinned
phase due to disappointing macro indicators and Brexit concerns. by expectations of strong demand for Apple iPhones as well as Taiwanese
companies attractive dividend yields, as most of the big-cap companies
The Index began to rebound in July 2016 when stronger-than-expected were in net cash position.
consumption and economic data was announced. The Index was further
supported when the Shenzhen-Hong Kong Stock Connect was approved The Index traded range-bound in August and September due to Taiwan
in August 2016. central banks decision to keep interest rates unchanged. The Index rose
higher in October 2016 amid strong foreign inflows. However, the Index
In November 2016, the Index experienced a correction following the subsequently eased in November 2016 in tandem with the overall global
unexpected result of the U.S. presidential election. The S&P HKCSI closed markets following Trumps victory in the U.S. presidential elections amid
at 76.74 points to register a gain of 3.34% (+8.24 in Ringgit terms) for the fears of a likely disruption to the Asian technology supply chain. The S&P
financial year under review. TSI closed at 3,625.34 points in November to register a gain of 12.37%
(+21.03% in Ringgit terms) for the financial year under review.
Commencing the financial year under review at 12,506.87 points, the FTSE
Bursa Malaysia EMAS Shariah (FBMS) Index rebounded in late December
2015 in tandem with global equity markets. However, the Index retraced
to a 4-month low of 12,105.60 points in mid-January 2016 following the
retracement in regional and global markets as well as lower crude oil prices,
which fell below US$40/barrel. The revised 2016 budget announcement
on 28 January coupled with reduced volume of foreign selling in February
2016 helped to lift market sentiment. The FBMS Index continued its uptrend
in March 2016 in tandem with higher regional markets and firmer global
sentiment.

Public China Ittikal Fund Public China Ittikal Fund


Managers Report Managers Report

Following declines in the regional markets, the FBMS Index retraced Chinas manufacturing Purchasing Managers Index (PMI) edged up to 50.2
towards late April 2016 and continued to be sold down in May 2016 due points in the first eleven months of 2016 from 49.9 points in 2015 amid
to weaker-than-expected corporate earnings for the first quarter of 2016. higher new orders. Meanwhile, Chinas fixed asset investments expanded
The Index was further dampened by uncertainties arising from the Brexit at a slower pace of 8.3% in the first ten months of 2016 versus 10.0% in
vote in June 2016. 2015.
Subsequently, the FBMS Index rose in July 2016 amid buoyant global Led by lower demand from the U.S. and Asia, Chinas exports contracted
markets and the unexpected move by Bank Negara Malaysia (BNM) to by 8.2% in the first ten months of 2016 compared to a decline of 2.9% in
reduce the Overnight Policy Rate (OPR) by 25 basis points (bps). The Index 2015. Meanwhile, imports declined by 7.5% in the first ten months of 2016
continued to rise in August 2016 amid higher oil prices and firmer regional due to a moderation in domestic demand. Chinas cumulative trade surplus
markets to touch a high of 12,596.80 points in mid-August. The Index narrowed to US$433 billion in the first ten months of 2016 from US$485
subsequently eased on the back of lacklustre global sentiment and weak billion in the same period last year.
corporate earnings for the second quarter of 2016. Profit-taking activities
continued in September 2016 and the market remained in a tight trading In a move to allow the Yuan to depreciate further, the Peoples Bank of China
range in October 2016. Investor sentiment turned cautious ahead of the (PBoC) increased the Yuans daily reference rate to 6.5646 per U.S. Dollar
U.S. presidential election in November 2016. Despite the initial concerns on 7 January 2016 from 6.4713 per U.S. Dollar on 25 December 2015.
over a Trump presidency, Donald Trumps victory sent the U.S. market to a The Yuan is allowed to trade within a daily trading band of 2.0% above or
rally on expectations that the president-elect will deliver on his pledges of below the reference rate.
fiscal stimulus and deregulations of the financial market. For the Malaysia To support Chinas economic activities and ease credit conditions, the
market, foreign fund outflow continued in November 2016 amid anticipation PBoC trimmed the lending rate to 4.35% on 24 October 2015. This was
of a rising interest rate environment in the U.S. going forward. The FBMS the sixth rate cut since November 2014. To inject liquidity into the banking
Index closed at 11,901.19 points and registered a decline of 4.84% for the system, the Chinese central bank lowered the required reserve ratio by 50
financial year under review. bps to 17.0% with effect from 1 March 2016 following a 250 bps cut in 2015.

Islamic Money Market Review Chinas inflation rate rose to 2.0% in the first ten months of 2016 from 1.4%
in 2015 due to higher food and housing costs. Led by property easing
The 1M-IIMMR eased from 3.58% to 3.49%, averaging at 3.52% during the measures, residential property prices, as measured by the average sales
financial year under review following the 25 bps cut in OPR. price indices of new homes in 70 large and medium-sized cities, rose by
5.3% in the first ten months of 2016 as compared to a decline of 3.8% in
Economic Review 2015.
Chinas GDP growth slowed from 6.9% in 2015 to 6.7% in the first three To prevent overheating of property prices in selected cities such as
quarters of 2016 amid a moderation in the services sector. After registering Shanghai and Shenzhen, the Chinese government implemented tightening
a growth of 8.3% in 2015, growth in the services sector eased to 7.6% in the measures in March 2016. These tightening measures were further
first three quarters of 2016 as financial services growth decelerated from expanded to more provincial cities and other smaller cities from late August
15.9% to 6.3% over the same period. to November 2016.
At the Fifth Plenum of the 18th National Party Congress Central Committee
Chinas GDP Growth in late October 2015, Chinas one-child policy was abolished with couples
12.0 allowed to have up to two children to address Chinas ageing population
and the decline in labour force growth. The Chinese Yuan was included in
10.0 9.5
the International Monetary Funds Special Drawing Rights (SDR) basket
8.0 7.7 7.7 effective 1 October 2016.
7.3
6.9 6.7 6.4
% 6.0 Hong Kongs GDP growth moderated from 2.4% in 2015 to 1.4% in the
first three quarters of 2016 due to lower consumer and investment
4.0 spending. Meanwhile, Hong Kongs inflation rate edged down from 3.0%
in 2015 to 2.7% in the first ten months of 2016 amid moderating food and
2.0
housing costs. To curb elevated residential property prices, Hong Kongs
0.0
government introduced more tightening measures in February 2015.
2011 2012 2013 2014 2015 2016F 2017F Consequently, property prices rose by a smaller magnitude of 4.4% in the
first ten months of 2016 compared to an increase of 5.2% in 2015.
Source: Bloomberg

Public China Ittikal Fund Public China Ittikal Fund


Managers Report Managers Report

Taiwans GDP growth increased from 0.7% in 2015 to 1.0% in the first three Global and regional markets generally closed higher in 3Q 2016 amid
quarters of 2016 amid higher public spending and export growth. Taiwans expectations of fresh monetary and fiscal easing around the world following
inflation rate increased from -0.3% in 2015 to +1.3% in the first ten months the Brexit outcome. However, renewed concerns over the timing of the
of 2016 on the back of higher food prices. On 30 June 2016, the Bank of Federal funds rate hikes weighed on global markets in October 2016.
Taiwan reduced its discount rate from 1.5% to 1.375% to support domestic Following the U.S. election on 8 November 2016, global markets generally
demand. trended higher on optimism that the U.S. economy will benefit from the
fiscal stimulus policies of the new U.S. administration.
Malaysias GDP growth moderated from 5.0% in 2015 to 4.2% in the first
three quarters of 2016 on the back of slower investment spending and Looking ahead, the performance of equity markets will depend on the
export growth. Growth in the services sector rose from 5.1% in 2015 to economic growth momentum in the U.S., Europe and Asia Pacific region.
5.6% in the first three quarters of 2016. Meanwhile, the pace of construction
sector activities was sustained at 8.2% over the same period. Malaysias U.S. economic growth is projected to gain pace from 1.6% in 2016 to 2.2%
inflation rate was sustained at 2.1% in the first ten months of 2016 in 2017 amid a recovery in investment spending.
compared to a similar rate in 2015 as firmer food prices were offset by
In the Eurozone, economic growth is envisaged to ease from 1.6% in 2016
lower transportation costs. BNM reduced the OPR by 25 bps to 3.00% in
to 1.3% in 2017 amid the potential impact of Brexit on various Eurozone
July 2016 for the first time in seven years, on concerns that uncertainties in
economies.
the global environment could dampen Malaysias growth.
Chinas GDP growth is estimated to ease from 6.7% in 2016 to 6.4% in 2017
On the international front, U.S. GDP growth eased from 2.6% in 2015
as economic growth continues to moderate. The government is committed
to 1.5% in the first three quarters of 2016 amid slower consumer and
to enhancing the role of the services sector to support Chinas growth in the
investment spending. Consumer spending growth moderated from 3.2%
years ahead. Consumer spending is expected to be underpinned by the
to 2.6% over the same period. Meanwhile, investment spending contracted
by 2.2% in the first three quarters of 2016 compared to a growth of 5.0% in governments ongoing policies to boost household incomes, which include
2015 due to lower investment in the industrial sector. the lowering of import tariffs on popular consumer goods.

At the Federal Open Market Committee (FOMC) meeting in mid-December Meanwhile, Chinas inflation rate is projected to inch up from 2.0% in 2016
2015, the U.S. Federal Reserve raised the Federal funds rate for the first to 2.1% in 2017 due to higher food prices. The Chinese central bank has
time in nearly a decade to a target range of 0.25%-0.50% from 0.00%-0.25% the flexibility to further cut the one-year lending rate to support domestic
previously. At the FOMC meeting in November 2016, the Federal Reserve demand. In addition, the Chinese government may unveil more stimulus
kept the Federal funds rate unchanged at a range of 0.25%-0.50%. Based measures such as further fiscal spending in the event the economy grows
on the FOMC participants projections, the Federal funds rate may be raised at a weaker-than-expected pace.
by 25 bps before the end of the year. Over the longer term, the PBoCs move towards a more flexible currency
The Eurozones GDP growth eased from 1.9% in 2015 to 1.7% in the exchange regime is expected to enhance the international profile of the
first three quarters of 2016 amid slower export growth. At its monetary Renminbi.
policy meeting held on 10 March 2016, the European Central Bank (ECB) Hong Kongs GDP growth is projected to gain pace from 1.3% in 2016 to
reduced its main refinancing rate by 5 bps to 0.00% while the deposit rate
1.7% in 2017 amid a moderate firming of domestic demand. Going forward,
was reduced by 10 bps to -0.40%. The ECB also increased the pace of its
the Hong Kong government is anticipated to maintain its existing tightening
asset-buying program from 60 billion to 80 billion with effect from April
stance on the residential property market. However, ample liquidity, demand
2016 to improve the regions economic recovery and combat deflation.
for better living standards and resilient economic growth will lend support to
In a referendum held on 23 June 2016, British voters voted in favour of Hong Kongs property market over the long term.
exiting the EU. Upon the United Kingdom (U.K.) governments formal
Meanwhile, Taiwans GDP growth is projected to strengthen from 1.0% in
notification of an exit from the EU, the U.K. has a two-year period to
2016 to 1.8% in 2017 as exports and investment spending are envisaged
negotiate new trade treaties with the EU.
to recover. The Taiwanese economy is highly dependent on exports which
accounts for about 74% of GDP. Thus, its growth outlook would depend on
Outlook and Investment Strategy
the strength of the recovery in its key export markets such as China, U.S.
After closing on a mixed note in 2015, global and regional equity markets and Europe.
generally trended lower in the first two months of 2016 amid continued
Malaysias GDP growth is expected to edge up from 4.1% in 2016 to 4.2%
concerns over the global economic outlook for 2016, continued weakness
in 2017 amid an anticipated strengthening of domestic demand. This will
in Chinese manufacturing output and the Yuans depreciation. Global and
be supported by sustained consumer and investment spending amid
regional markets rebounded in March 2016 amid firmer energy prices but
government measures to increase disposable incomes and the ongoing
subsequently traded on a mixed note in 2Q 2016 on the back of renewed
implementation of infrastructure projects.
global economic concerns and the potential impact of Brexit on the
European economy.

Public China Ittikal Fund Public China Ittikal Fund


Managers Report Statement Of Assets And Liabilities
As at 30 November 2016

The budget deficit is projected to widen to RM40.3 billion (3.0% of GDP) in 2016 2015
2017 from RM38.7 billion (3.1% of GDP) estimated for 2016 with revenue MYR000 MYR000
expanding by 3.4% to RM219.7 billion. Meanwhile, operating expenditure
Assets
and net development expenditure will see a growth of 3.7% to RM214.8
Investments 266,603 323,349
billion and 2.4% to RM45.3 billion in 2017 respectively.
Due from brokers/financial institutions,
Based on closing prices at the end of November 2016, China H shares net - 2,594
were trading at an estimated P/E ratio of about 8.8x as compared to its Due from the Manager, net 399 -
10-year average of 11.0x. Meanwhile, the Malaysia and Taiwan markets Other receivables 232 379
were trading at prospective P/E ratios of 16.3x and 14.9x respectively Shariah-based placements with financial
versus their 10-year averages of 15.9x and 15.5x. institutions 16,776 9,108
Cash at banks 44,194 3,614
Given the above factors, the Fund will continue to rebalance its investment
portfolio according to its objective of achieving capital growth over the 328,204 339,044
medium to long-term period by investing in a portfolio of Shariah-compliant Liabilities
investments in the greater China region and the balance in the domestic Due to brokers/financial institutions, net 2,860 -
market. Due to the Manager, net - 991
Note: Q = Quarter Due to the Trustee 16 18
Other payables 98 97
Policy on Soft Commissions Distribution payable 2,916 -

The management company may receive goods or services which include 5,890 1,106
research materials, data and quotation services and investment related Total net assets 322,314 337,938
publications by way of soft commissions provided they are of demonstrable
benefit to the Fund and unitholders. Net asset value (NAV) attributable
to unitholders (Total equity) 322,314 337,938
During the financial year under review, PCIF has received data and
quotation services by way of soft commissions. These services were used Units in circulation (in 000) 1,222,423 1,381,977
to provide financial data on securities and price quotation information to the
NAV per unit, ex-distribution (in sen) 26.37 24.45
Fund Manager during the financial year under review.

Public China Ittikal Fund Public China Ittikal Fund


Statement Of Income And Expenditure Statement Of Changes In Net Asset Value
For the Financial Year Ended 30 November 2016 For the Financial Year Ended 30 November 2016

2016 2015 Unitholders Accumulated


MYR000 MYR000 capital loss Total
MYR000 MYR000 MYR000
Income
Profit from Shariah-based placements 470 540 As at 1 December 2014 594,501 (231,998) 362,503
Dividend income 6,145 8,908 Creation of units 5,464 - 5,464
Dividend income from non-permissible Cancellation of units (65,670) - (65,670)
securities 221 92 Net income after taxation - 35,641 35,641
Net gain from investments 23,644 30,547
Net realised gain on sale of As at 30 November 2015 534,295 (196,357) 337,938
non-permissible securities 58 26
Net realised/unrealised foreign
exchange gain 2,324 4,232 As at 1 December 2015 534,295 (196,357) 337,938
Creation of units 9,448 - 9,448
32,862 44,345
Cancellation of units (47,577) - (47,577)
Less: Expenses Net income after taxation - 25,421 25,421
Trustees fee 197 226 Distribution - (2,916) (2,916)
Management fee 5,406 6,221
Audit fee 7 7 As at 30 November 2016 496,166 (173,852) 322,314
Tax agents fee 3 3
Brokerage fee 956 1,187
Administrative fees and expenses 170 180
Payment to charitable bodies 84 40
6,823 7,864
Net income before taxation 26,039 36,481
Taxation (618) (840)
Net income after taxation 25,421 35,641
Net income after taxation is made up
as follows:
Realised 12,271 38,907
Unrealised 13,150 (3,266)
25,421 35,641
Final distribution for the financial year 2,916 -

Public China Ittikal Fund Public China Ittikal Fund


Statement Of Cash Flows
For the Financial Year Ended 30 November 2016

2016 2015
MYR000 MYR000
Cash flows from operating activities
Proceeds from sale of investments 168,523 163,842
Purchase of investments (83,298) (166,110)
Subscription of rights (236) (233)
Cash received from capital distribution 42 113
Maturity of Shariah-based placements 3,692,600 4,175,787
Shariah-based placements (3,700,268) (4,150,979)
Profit from Shariah-based placements
received 469 549
Net dividend income received 5,927 8,359
Trustees fee paid (199) (226)
Management fee paid (5,459) (6,208)
Audit fee paid (7) (7)
Tax agents fee paid (3) (3)
Payment of other fees and expenses (170) (263)
Payment to charitable bodies (84) (40)
Net cash inflow from operating
activities 77,837 24,581
Cash flows from financing activities
Cash proceeds from units created 8,600 5,464
Cash paid on units cancelled (48,066) (66,275)
Net cash outflow from financing
activities (39,466) (60,811)
Net increase/(decrease) in cash and
cash equivalents 38,371 (36,230)
Effect of change in foreign exchange
rates 2,209 4,082
Cash and cash equivalents at the
beginning of the financial year 3,614 35,762
Cash and cash equivalents at the
end of the financial year 44,194 3,614

Public China Ittikal Fund