IPP Financial Advisers Pte Ltd Copy Right

1. WORLD IN PERSPECTIVE PG 2
POTENTIAL RISKS PG 2
US UPDATE PG 3
INTHISISSUE
During a crisis, investors will take their eyes
away from the fundamentals and focus on
the crisis instead. Once the crisis is over, the
focus will return to the fundamentals. While
geopolitical risks in Ukraine- Crimea and
Russia persist,it is safe to say that the chances
of the crisis degenerating into a full blown
Russia-NATO confrontation have declined
to a large extent. Germany has rejected
calls to permanently expel Russia from the
G8. Note that Germany relies heavily on
Russian energy supplies and France is still
proceeding with the US$1.6 billion sale of
two Mistral-class assault vessels to Russia.
In the end, it is still all about business and
economics.
As for the global economy, there is clear
evidence of resynchronized growth among
most developed nations. The US economy
remains on a path of economic growth
with the strengthening of the job market.
The situation in the Eurozone is slowly
improving, as evidenced by the upswing
recorded in the Purchasing Managers Index.
China is going through the process of
creative destruction where the government
will allow companies that are badly run
to be pushed out of the market. At the
same time, the government will support
companies that serve a real need to prosper.
While the financial community has turned
bearish on Chinese growth, it is important
to note that China has ample fiscal and
monetary flexibility with their substantial
foreign reserves and large current account
surplus to steer the economy in any direction.
However, any hope of long-term gains
should be tempered with the expectation of
short-term pain.
In Japan, we are concerned about the impact
of the increase in sales tax from 5% to 8%
which is scheduled for the first of April.
While we expect to see a boost in consumer
spending just before the tax increase is
implemented, we are concerned that this
may affect consumer expenditure in the
long term. This may have a negative impact
on the effectiveness of the third arrow of
Abenomics, namely structural reform in
Japan.
Overall, we maintain a positive outlook
on the long term prospects of the global
economy.
UK & EUROPE UPDATE PG 4
ASIA AND EMERGING
MARKETS UPDATE PG 5
ISSUE 64 | APR 2014
Albert Lam
Investment Director
IPP Financial Advisers Pte Ltd
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2. With the formal annexation of Crimea by Russia,
the question in every mind is how the West will
respond. The primary concern is that Russia will
proceed by moving into East Ukraine, triggering a
fresh round of conflict and the possibility that the
world may witness another Cold War.
Until some certainty is achieved in this issue,
investors will be watching developments in the
region very closely.
POTENTIAL
RISKS
APR 20142
WORLD IN
PERSPECTIVE
RUSSIA - UKRAINE: WHAT'S NEXT?
FACEBOOK ACQUIRES OCULUS FOR $2BIL
Facebook announced on 26 March that it would
be acquiring Oculus VR for US$2Bil. Oculus is
a leader in the field of virtual technology and
successfully developed the Oculus Rift gaming
headset. The terms of the deal include $400 million
in cash and 23.1 million shares of Facebook stock.
Facebook CEO Mark Zuckerberg has termed
the Oculus acquisition as a “long-term bet that
immersive VR is the future.”
IPPFA'S OUTLOOK.
• Economic growth in the US and Europe might be more
sluggish than initially expected. Non-Farm payrolls data
released on 7 February came in at 129k, versus the consen-
sus estimate of 185k. The unemployment rate released in
March came in at 6.7%, higher than the consensus forecast
of 6.6%. In addition, the European Central Bank opted in
March to maintain its benchmark rate at 0.25%, signalling
that the economy may not be ready for the withdrawal of
liquidity from the system. It is possible that a slow recovery
in the US and in Europe may weigh on global equities.
• Capital flight from Emerging Markets: As the Fed pur-
sues its policy of withdrawing monetary stimulus from the
system; investors remain concerned about the associated
risks of capital flight from Emerging markets such as Brazil
and China. The Brazilian stock market reached its eighth-
month low in mid-March, with the Bovespa reaching a low
of 45,632.17. The index has tumbled 19% from its high
attained in October last year. Downside risks remain for EM
equities and investors should brace themselves for significant
volatility in the near-term.
• The crisis in Ukraine shows no signs of abating. Ever since
Russian forces entered the region of Crimea in Ukraine last
month, Russia and Ukraine have been locked in a bitter
standoff. The autonomous region has seen a new pro-Rus-
sian authority take power, and a referendum for residents to
vote on joining Russia was scheduled on 16 March. Western
nations have imposed wide ranging sanctions, which include
asset freezes and travel bans on key individuals. During this
period, the Russian state-linked gas company Gazprom has
threatened to end the natural gas discounts currently ac-
corded to Ukraine, which resells a portion of the gas to vari-
ous European nations. If tensions escalate futher, there is a
risk to economic growth and social stability in the region. In
addition, there is a remote risk of armed conflict between the
West and Russia which will be unsettling for the markets.
• Venezuela has witnessed a wave of violence and protests
linked to the deteriorating economic situation in the country.
So far, the government has been unable to stem rapid infla-
tion and the rampant shortage of basic goods largely due to
the lack of dollars in the economy. Even though the govern-
ment has announced $5 billion in financing from China
and a potential $2 billion from Russia, these are stop-gap
measures that may just give Venezuela temporary respite. A
financial meltdown in Venezuela will have contagion effects
similar to those witnessed during the Asian Financial Crisis
in the 1990s.
Year-to-date, equities in the developed markets
space have posted mixed returns with the Dow
Jones Industrial Average Index registering a
negative 1% performance while on the other
hand, the S&P gained 1% during the same period.
Similarly in Europe, the major markets registered
returns of between -2% and 1%. Asia under-
performed with the Nikkei falling 11% and the
rest of Asia trading in the red. The divergence
in performance is interesting. In the developed
markets, the positive factors of improving
economic data and liquidity were largely cancelled
out by the negative factors of overbought
conditions and disappointment of rosy economic
expectations. In Asia, domestic issues dominated
market sentiments. Nikkei fell because of fraying
confidence in Abenomics and in the impending
sales tax hike. In China and Hong Kong, banking
and economic worries acted as a drag on the
markets. Over the coming weeks, we expect
overbought conditions to continue to provide a
ceiling to the developed markets while reasonable
valuations and hope of government intervention
will provide a floor to the Asian markets. It will be
prudent to take risk off as we approach the end of
Q1 earnings season and enter into a traditionally
weak Q2 period.

3. APR 20143
Non-Farm payrolls beat esti-
mates by 26k
The Fed maintains its bench-
mark interest rate at 0.25%
Retail Sales come in largely
in line with estimates
MARCH 2014
• The US ISM Manufacturing PMI came in at 53.2, above the consensus estimate
of 52.0. Non-Farm payrolls came in at 175k, which beat the consensus estimate
of 149k by a wide margin. This suggest that the economic recovery in the US is
picking up steam.
• The Fed decided to maintain its benchmark interest rate at 0.25%, signaling its
adherence to its policy of maintaining a low-interest rate environment. However,
investors should expect interest rates to rise sooner rather than later. In a policy
briefing in mid-March, Fed chairperson Janet Yellen indicated that the Fed may
hike interest rates six months after the conclusion of Quantitative Easing.
• The U.S registered an unemployment rate of 6.7%, marginally higher than the
consensus estimate of 6.6%.
• The trade balance was largely in line with expectations, coming in at $-39.10B
compared to the consensus forecast of $-39.00B.
US ISM Manufacturing PMI (Feb) 53.2 52.0
US ISM Non-Manufacturing PMI (Feb) 51.6 53.5
US Nonfarm Payrolls (Feb) 175K 149K
US Unemployment Rate (Feb) 6.7% 6.6%
US Retail Sales (MoM) (Feb) 0.3% 0.2%
US Reuters/Michigan Consumer Sentiment Index (Mar) 79.9 82.0
US Consumer Price Index (YoY) (Feb) 1.1% 1.2%
US Consumer Price Index Ex Food & Energy (YoY) (Feb) 1.6% 1.6%
US Fed Interest Rate Decision 0.25% 0.25%
US Personal Income (MoM) (Jan) 0.3% 0.2%
US ADP Employment Change (Feb) 139K 160K
US Trade Balance (Jan) $-39.10B $-39.00B
Our opinion on the US: Valuations remain reasonable however the huge run up since 2012 has
surpressed the chances of supernormal gains going forward
Data source: FXStreet Economic Calendar
US
ECONOMIC
SNAPSHOT
March YTD
S&P 500 0.84% 0.88%
Dow Jones 0.93% -0.94%
NASDAQ -2.45% -0.02%
KEY ECONOMIC DATA POINTS ACTUAL EXPECTED

4. BoE maintains its bench-
mark interest rate at 0.5%
UK CPI comes in line with
consensus forecast
EMU retail sales beat
estimates
MARCH 2014
• The Bank of England decided to maintain its benchmark interest at the
existing level of 0.5%. In addition, BoE governor Mark Carney announced the
appointment of two new deputy governors.
• The UK Consumer Price Index for February came in at 1.7%, in line with the
consensus forecast of the same figure.
• EMU retail sales grew by 1.3% in January on a year-on-year basis, beating the
consensus estimate of -0.4%.
UK BoE Interest Rate Decision 0.5% 0.5%
UK BoE Asset Purchase Facility (Mar) £375B £375B
UK Core Consumer Price Index (YoY) (Feb) 1.7% 1.6%
UK Consumer Price Index (YoY) (Feb) 1.7% 1.7%
UK Markit Manufacturing PMI (Feb) 56.9 56.5
UK Consumer Credit (Jan) £0.660B £0.700B
UK Mortgage Approvals (Jan) 76.947K 73.500K
EMU ECB Interest Rate Decision (Mar 6) 0.25% 0.25%
EMU Consumer Price Index (YoY) (Feb) 0.7% 0.8%
EMU Consumer Price Index (MoM) (Feb) 0.3% 0.4%
EMU Markit Manufacturing PMI (Feb) 53.2 53.0
EMU Retail Sales (YoY) (Jan) 1.3% -0.4%
Our opinion on the UK & EMU: The possibility of supernormal gains going forward is remote due
to the huge gains achieved so far
Data source: FXStreet Economic Calendar
UK & EMU
ECONOMIC
SNAPSHOT
APR 20144
March YTD
FTSE 100 -2.57% -2.00%
EURO
STOXX 50
0.53% 1.70%
DAX -1.40% 0.04%
CAC 40 -0.23% 2.20%
KEY ECONOMIC DATA POINTS ACTUAL EXPECTED

5. China NBS PMI falls below
expectations
Inflation in Brazil comes in
lower than expected
Russian PMI: In line with
consensus
MARCH 2014
• The February figure for China's NBS manufacturing PMI failed to meet
expectations, with the metric coming in at 50.2, versus the consensus forecast of
50.5.
• The Brazil FIPE IPC inflation rate came in at 0.52%, versus the expected figure
of 0.94%. This suggests that economic growth in Brazil may be more sluggish
than expected.
• The Russian HSBC Manufacturing PMI came in at 48.5, largely in line with the
consensus forecast of 48.0.
China NBS Manufacturing PMI (Feb) 50.2 50.5
China Non-manufacturing PMI (Feb) 55.0 53.4
China HSBC China Services PMI (Feb) 51.0 50.7
China Trade Balance (Feb) $-22.98B $31.86B
China Consumer Price Index (YoY) (Feb) 2.0% 2.5%
China New Loans (Feb) ¥644.5B ¥1,320.0B
China M2 Money Supply (YoY) (Feb) 13.3% 13.2%
Brazil Trade Balance (Feb) -2.125B -4.057B
Brazil Fipe's IPC Inflation (Feb) 0.52% 0.94%
Brazil Industrial Output (MoM) (Jan) 2.9% -3.7%
India FX Reserves, USD $294.36B $293.41B
India WPI Inflation (Feb) 4.68% 5.05%
Russia HSBC Manufacturing PMI 48.5 48.0
Our opinion on Asia & the Emerging Markets: Expect short term pressure in China due to
the rebalancing of the economy; Long term prospects of the EM space remain bright
Data source: Bloomberg
ASIA &
EMERGING
MARKETS
ECONOMIC
SNAPSHOT
APR 20145
March YTD
MSCI Asia
Pacific
ex Japan
1.82% 0.38%
MSCI Emerg-
ing Markets
3.08% -1.27%
Nikkei 225 1.19% -9.17%
Hang Seng -2.64% -5.07%
Shanghai SE
Composite
-1.12% -2.83%
Straits Times 2.72% 0.71%
KEY ECONOMIC DATA POINTS ACTUAL PREVIOUS