49.00%15.00%14.00%11.00%6.00%5.00%

MARKET UPDATEGlobal economic data releases in the second quarter remain mixed but not overly supportive for acceleration in global GDP growth into the second half of the year. The US economy is slowing, albeit in line with expectations. Consumer confidence is relatively buoyant supported by continued improvement in house sales and prices. However, the manufacturing sector remains under pressure and fiscal consolidation remains a drag on growth. Europe is still in recession but is showing signs of stabilising with PMIs (purchasing managers index) gradually improving and business and consumer confidence selectively ticking upwards. Japanese economic momentum continues to build in response to expansionary monetary and fiscal policy. However, the risks of growth disappointments in the Chinese economy have clearly risen as policy measures to reign in credit growth are likely to have a negative impact on the real economy.

Global equity markets exhibited no discernible trends in June until the Federal Reserve confirmed that tapering will likely occur this year and the asset purchase program will cease when the US unemployment rate hits 7% - likely sometime in 2014. However, equally as important for equity markets was the significant rise in Chinese interbank rates, as the Chinese central bank sent a clear signal that it would not continue to countenance aggressive credit growth by banks who believed they would be bailed out if conditions started to deteriorate. The move to withdraw liquidity from the interbank market signals a far less accommodative stance by the monetary authorities in China and could lead to a faster deceleration in growth in the Chinese economy.

PORTFOL IO PERFORMANCEAfter a strong performance in May the portfolio had a disappointing June, falling 1.4% as the NZ dollar continued to depreciate against major currencies.

SECTOR SPL IT as at 30/06/13 GEOGRAPHICAL SPL IT as at 30/06/13

34% Industrials 23% Healthcare 22% Information Technology 13% Consumer Discretionary 8% Other

49% Europe 15% US 14% Asia 11% Japan 6% Latin America 5% Other

PERFORMANCE to 30/06/13

Since 1 Month 3 Months 6 Months 1 Year 3 Years Inception (accumulated)

MLN Adjusted NAV* -1.4% +5.2% +10.5% +10.4% +4.3% +17.6%

Relative Performance

MSCI Global Small Cap Gross Index (in NZ dollar terms) +0.4% +8.2% +18.3% +26.4% +36.8% +13.1%

Total Shareholder Return* -0.4% +2.4% +11.2% +12.2% +14.9% -2.2%

*Adjusted NAV and Total Shareholder Return assume all dividends are reinvested, but exclude imputation credits.NB: NAV and Adjusted NAV are net of fees and tax, and include the dilution effect of warrants exercised.

AT A GLANCE as at 30/06/13

MLN NAV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$0.88

Share Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$0.71

Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19.5%

JUNE’S B IGGEST MOvERS

EnergyIndu 34.00%health Care 23.00%Techology 22.00%Consumer 12.00%Other 8.00%

Energy  

Indu  

health  Care  

Techology  

Consumer  

Other  

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+14% Biotest

+11% Brembo

-15% Mills Estruturas

-16% Ports Design

-22% China Automation Group

At a sector level, healthcare stocks made a small contribution to overall return due largely to positive performances from Icon and Qiagen. Consumer discretionary stocks made a small negative contribution, with a strong performance in Brembo being more than offset by weak returns from Ports Design, Tom Tailor and Volkswagen. In the industrial sector, the emerging market stocks in the portfolio corrected strongly with China Automation Group, Mills and Valid together detracting over 1% to performance. Sarin continued to be a major positive contributor in this sector. Within the technology sector, Wasion and Autodesk were the key detractors. Overall it was a frustrating month where most of the stocks in the portfolio outperformed their relative indices but the more severe nature of the falls in the emerging market stocks in the portfolio more than offset this.

June is typically a light month for corporate reporting before we head into a heavy second quarter reporting season in July and August. Manuel Greenland and Roger Garrett took advantage of this quiet period to visit a number of UK and European portfolio companies. Overall the meetings went well and they came away with no major concerns over the STEEPP compliance of any of the companies that they met. In fact, the meetings have given them confidence to use the recent weakness in markets to selectively add to a small number of stocks.

Gameloft is one of the few companies that generates healthy profits in the highly competitive mobile gaming business. Gameloft have exposure to strong growth trends in smartphones and have developed a business over the last 10 years which is now very difficult to replicate. Key economic moats are their global reach and a superior brand which gives them strong access to new games from the media companies. They operate in a competitive environment but are now at a stage in their business development where they should really start to leverage past high levels of investment through improving margins and profitability.

Volkswagen (VW) is a premium player in a difficult market. VW have remained cautious about the overall economic environment for the last two to three quarters but we now detect a softening in their cautious

At $0.71 Marlin currently trades at a discount to NAV of 19.5%. The discount could provide value, as investors are able to purchase a portfolio with a NAV of $0.88 per share for only $0.71 per share.

Marlin Global Limited. PO Box 33 549, Takapuna, Auckland 0740, New Zealand. Phone: +64 9 484 0365 Fax: +64 9 489 7139Email: enquire@marlin.co.nz www.marlin.co.nz

DISCLAIMER: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Marlin Global Limited and its officers and directors make no representation as to its accuracy or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. To the extent that the update contains data relating to the historical performance of Marlin Global Limited or its portfolio companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.

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2A wORD FROM THE MANAGERBefore any turn of the tide, there is a period of little or no movement of tidal water known as slack water or slack tide. It generally follows a strong water current, especially at high or low tide, and it is said that slack tide is when the sea is completely unstressed. Perhaps June was the start of the markets’ slack tide?

While I admit that markets can hardly be described as unstressed right now, June certainly seemed to mark the end of a period of strong current, driven largely by the printing of money and buying of bonds. Last month we discussed Federal Reserve Chairman Ben Bernanke’s comments about tapering the quantitative easing programme, which sent investors into a bit of a lather (or should that be froth?!). Overreactions to his comments led to increased market volatility with re-runs of the ±2% daily movements that we thought we’d long since left behind. The fact that Shinzo Abe, the Japanese Prime Minister, is at the same time experimenting with loosening Japan’s famously tight monetary policy, probably hasn’t helped.

For all the nervousness about the timing and impact of the tapering, share markets haven’t collapsed because there have been other factors at play, not least being the continued release of positive economic and corporate data. I’m reminded a little of Y2K where predictions of widespread computer failures and planes falling out of the sky failed to eventuate. Maybe, just maybe, quantitative easing will be tapered off over the next 12-18 months, and interest rates won’t skyrocket and share markets will find reasons other than quantitative easing to march higher. Maybe a muted (or slack) market reaction might coincide with a gradual economic recovery in the US and beyond, and the next high tide can start building.

Of course, after a slack tide we shouldn’t expect a king tide to emerge straight away. We might just be in for a period of no strong market movement forward or backward, but with an inclination to rise rather than recede. This sort of market would certainly leave me unstressed (relatively speaking!).

That is not to say that we should just hit the snooze button. Slack tides do not excuse slack investing behavior. Those who should be paying particular attention at the moment are investors with fixed interest and other income-oriented investments. You’ve been able to be relatively complacent to date because the bond market has been a one-way thing – interest rates have trended down for years which has led to rising bond values. With this change of tide though, you probably need to pay more attention because competitive returns from fixed interest investments are going to be harder to get. We’ve already seen the tide turn on high dividend-yield stocks in recent weeks.

Carmel Fisher, Managing Director

TOP 5 PORTFOL IO POSIT IONS as at 30/06/13

INVESTING 101Yield and return are two terms often used to describe the performance of an investment . It is important to recognise that they are not one and the same thing .

Return, or total return, expresses what an investor has actually earned on an investment during a particular historical time period. It includes interest, dividends and capital gain (such as an increase in the share price). In other words, return is retrospective, or backward-looking.

It describes what an investment has concretely earned.

Yield, on the other hand, is prospective, or forward-looking. Furthermore, it measures the income, such as interest and dividends, that an investment earns and ignores capital gains. This income is taken in the context of a certain time period and then annualised, with the assumption that the interest or dividends will continue to be received at the same rate in the future.

stance as inventory levels decline, demand for luxury cars remains sound, Porsche continues to outperform and their new production platform gives them the ability to reduce costs and better meet customer needs. The stock is priced for a significantly lower growth environment than we expect and therefore offers strong value.

During the month we added a new investment in L’Occitane International. L’Occitane is a global, natural, organic ingredient-based cosmetics and well-being products manufacturer and retailer with strong regional roots in Provence, France. The group has four brands (L’Occitane, Melvita, Le Couvent des Minimes and Erborian) in its portfolio and is committed to developing and retailing high quality products that are rich in natural and organic ingredients of traceable origins, with respect to the environment. The company has strong

moats arising from a strong brand, vertical integration and global scale. L’Occitane has an enviable track record of strong profitable growth and a healthy balance sheet. They have very good growth prospects with expansion options in fast growing emerging markets. Equally L’Occitane has a relatively defensive product position within the luxury category. The business should demonstrate some cyclicality as end demand is discretionary. However, within the luxury space cosmetics demonstrate relatively high levels of demand elasticity given and high consumer involvement in the purchase and the relatively low average selling price. Consumer credit does not play a critical role in demand, further reducing cyclicality.

Roger Garrett, Senior Portfolio Manager

PORTFOL IO PERFORMANCE CONT INUED

wHAT IS THE D IFFERENCE BETwEEN y IELD AND RETURN?

5%

5%

5%

5%

4%