Page | 1 | PHILLIP SECURITIES RESEARCH (SINGAPORE) MCI (P) 022/11/2014 Ref. No.: SG2015_0065

INDONESIA

RISK IS OPPORTUNITY

MACRO | ECONOMY | EQUITY MARKET

17 February 2015

Maintain Overweight (OW) on positive prospect for Indonesia’s new reform era. Structural reforms, improves tax collection, accelerates infrastructure development and

improves the investment climate – these efforts will boost market confidence in the government and the country’s economic fundamentals.

Bold reforms may prompt a re-rating on Indonesia’s sovereign debt to investment grade. Lower borrowing costs coupled with higher market confidence could attract more capital inflows and boost investment.

Executive Summary Economy growth is waning as the commodity boom era ended. The export-reliant

economy needs a series of growth-enhancing reforms. Headwinds arising from weaker commodity prices, monetary tightening in the US, and

political risk, would continue to hurt the Indonesian economy. They may even trigger capital flight, leading to an Indonesian Rupiah freefall.

But, we see improvements and opportunities at this conjuncture:- The current benchmark interest rate at its four-year high. A higher policy rate hurt

economy growth, but it should help to contain funds outflow, support IDR and thus keeping current account deficit (CAD) at a more sustainable level and guards the country against volatility amid global uncertainties.

We expect some recovery in the economy in 2H2015, with SOEs, construction and infrastructure as the main beneficiaries of Jokowi’s economic programs. Savings from the fuel subsidy reforms provides greater fiscal room for Jokowi’s administration to implement the much needed infrastructure projects.

JCI’s current valuation (P/E at 23.87x) is above its 10-year average P/E of 19.04x, on moderate 4.6% earnings growth expected this year, which translates to a multiple of 15.68x forward P/E. Lack of earnings growth may weigh on the index. Companies would feel a pinch from the higher interest rates and increased minimum wages.

Jakarta Stock Exchange Composite Index (JCI)

Source: Bloomberg, PSR est.

Investment Actions Unit Trusts Aberdeen Indonesia Equity Fidelity Indonesia A USD ETFs Lyxor Indonesia10US$x@ (P2Q.SGX) DBXT MSINDO 10US$x@ (KJ7.SGX) Ishares MSCI Indonesia ETF (EIDO.NYSEARCA) Market Vectors Indonesia Index ETF (IDX.NYSEARCA)

Soh Lin Sin (+65 6531 1516)

sohls@phillip.com.sg

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Economy growth waning, a series of growth-enhancing reforms required Indonesia’s economy hits its slowest growth in five years due to lower exports

and a slowdown in investment growth, underlining challenges that the new President Joko Widodo (a.k.a. “Jokowi”) faces.

Indonesia is a major exporter of commodities such as palm oil, rubber, coal and tin. However, revenues from commodities shipments fell owing to falling prices.

The export-reliant nation can no longer ride on the high prices of its commodities as with the end of commodity boom era. A strong commodity prices recovery in near term is unlikely due to weaker external demand and international commodity supply glut.

Nationalism: Self-inflicting policy Although Indonesian government has loosen its export ban on raw minerals,

but the imposed restrictions would continue to dampen exports growth. Exports and imports should remain lackluster in near term but the dropping oil price would help to rein in current account deficit in 2015.

It has also seen foreign direct investment (FDI) cool because of increasing

nationalism.

Gross domestic product (GDP) +5.02% for 2014 vs +5.58%(R) in 2013,

well below Jokowi’s growth target for his first term

Marked the weakest growth since the Global Financial Crisis

Hurt by falling commodity prices and lower public spending

Exports and imports growth slacken, trade account contracted

Exports and imports should remain lackluster in near term but the dropping oil price would help to rein in current account deficit in 2015.

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Reform for funds and funds to reform Jokowi wants to raise growth to 5.6-5.8% this year and attain 7% growth on

average in his five-year tenure. And to achieve these targets, the new president will need to revive the country's stalled reform process, particularly the poor infrastructure.

With budget constraint, Jokowi needs to win support from global investors as he plans to build 25 dams in five years, 24 ports and six mass transport systems.

An early burst of economic reforms in the new Jokowi-led administration could provide a boost to sentiment and help regain the interest of foreign investors. However, the opposition’s control of parliament may make it difficult for Jokowi to pass legislation. While cutting subsidies did not need the support of parliament, moves to free up the labor market or boost spending on roads and ports will require the approval of parliament.

Promising first step on the road to reform: Revamping fuel subsidies Likewise to India’s fuel reforms, in mid-Nov 2014, government increased the

price of subsidized gasoline by 31%, while the price of diesel by 36%. Subsequently, the government stopped subsidizing gasoline prices starting from January 1, 2015.

By scrapping gasoline subsidies and capping government aid on diesel, government will reduce its 2015 fuel subsidy costs by nearly 95%, to as little as 1% of total expenditures. The move is expected to free up 230 trillion rupiah of budget funds. These should provide the necessary fiscal space to fund the reform agenda and tackle the country's twin deficits.

Indonesia’s fuel subsidy bill accounts for around one-fifth of total government spending or equivalent to around 3% of GDP – which leaves the new president a little room to move (budget deficit cannot exceed the constitutional limit of 3% of GDP)

Inflation spike should be short-lived – wear off after about a year later due to base effect. Hence, it would be unlikely for the central bank to hike rates aggressively in response to the inflation until 2H15 – when it is widely expected that US Fed would start raising interest rates then.

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Pre- and Post-fuel reforms To redistribute wealth within the Indonesia population. Higher prices

would reduce consumers’ purchasing power, particularly of the poor, and weighing on consumption. To cushion the impact on the poor, Jokowi launched a system of benefit cards prior to the fuel price hike, which included immediate cash hand-outs.

To utilize the savings from subsidies in growth-enhancement projects. The finance minister has predicted that fuel subsidies in the 2015 budget could be cut significantly from IDR276trn to IDR60trn. If this saving is put into good use, such as higher spending on infrastructure building, social programs and reducing poverty, the subsidy cuts could bolster 2015 growth and even be the trigger for higher long-run growth. The higher public spending should somewhat offset the impact of inflation on consumption.

2015 budget revised in Jan.

Key Forecasts Reviewed: Targets GDP Growth at 5.8% Inflation at 5% Rupiah to average at 12,200/USD, based on the assumption of

crude price at $70/barrel, oil output seen at 849,000bpd, gas lifting at 1.18m oil-equivalent barrels per day

Budget deficit cut to 1.9% if GDP from the initial 2.21%

Interest rate to stay tight but relieving liquidity Within the past two years, Bank Indonesia (BI) has raised borrowing costs by 200

bps in total, to shore up the IDR, rein in CAD as well as to guard against inflation arising from fuel price adjustments.

As high interest rate environment should stay for a while (BI prioritizes macroeconomic stability over growth), tight monetary conditions would be one of the factors holding back investment and consumer spending.

Lending growth should be much greater than in 2014 to achieve the target growth rate of 5.8%. The central bank is targeting loan growth of 15-17% this year, up from an estimated 13-14% rise in 2014.

To free up capital for lending, the Bank Indonesia has relaxed liquidity requirements by revising the definition of assets counted as deposits in the lender’s loan-to-deposit ratio (LDR). Size of assets would expand – bonds and securities issued by banks, alongside deposits, would form the denominator of

Loan-to-deposit ratio briefly spiked in July last year (optimism on presidential election) before falling in September.

Tighter liquidity has dampened credit growth. Bank lending only grew 11.7% y/y in November 2014, a steep drop from 22% growth in the previous year.

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LDR. Although banks can now lend more, but pushing up LDR would threaten their liquidity.

Having said that, higher interest rates (higher financing cost for Indonesian companies), weakening rupiah, inflation risks and a sluggish global economy would drag on credit demand.

Currency at risk…or not: New requirements to mitigate financial risks Indonesia has a very large amount of foreign debt obligations, diminishing

reserves is a worrying sign.

As such, IDR continues to be vulnerable to exogenous factors such as stronger USD and interest rate normalization in US, global economic concerns, particularly stemming from Europe and Japan, and falling commodity prices. We would continue to see a volatile foreign exchange market and IDR could take a hit if these risks realized.

To mitigate financial risks, the BI announced new requirements to limit foreign exchange risk and overleverage for non-bank companies, as well as to prevent macroeconomic instability.

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Restrictions on new offshore financing arrangements entered into by non-banking institutions in Indonesia. The regulation will be implemented in two phases. First phase (Jan. 1 – Dec. 31, 2015): Borrowers will be required to hedge at

least 20% of the difference between the amount of their foreign currency debt that will fall due in the following six months and their foreign currency assets, and to maintain a liquidity ratio* of 50%. *Note: Liquidity ratio is the ratio of foreign currency assets to the amount of foreign currency liabilities that will fall due in the ensuing three months

Second phase (Jan. 1, 2016 onwards): The minimum hedging ratio will be increased to 25% and the minimum liquidity ratio will be increased to 70%. Any non-bank institution that is seeking to incur foreign currency external indebtedness must have a minimum “BB” rating from an authorized ratings agency.

However, as the measures only require companies to hedge the difference their offshore debt and foreign assets, which does not includes the interest costs, companies would still be vulnerable to currency swings. With at safety net imposed, systemic risk may be averted but there are still risks for individual companies, especially those highly leverage and weak cash flow.

A stronger USD should continue to drag on IDR but further improvement on Indonesia’s current account and fiscal position should keep the IDR in check.

CAD should continue to improve – in line with robust manufacturing and mineral exports as well as controlled oil and gas imports. Mineral exports are poised to recover as unrefined mineral shipments up and running while government loosen mineral exports ban.

Export ban on unprocessed minerals A year ago, the Indonesian government imposed an export ban on

unprocessed minerals in order to stimulate smelter construction and increase mineral export value – a call to move Indonesian economy up the value chain to ensure a long-term competitive advantage.

The export ban on raw minerals hurt production growth and hampered investment for Indonesia’s mining industry (mining sector accounts for ~12% of GDP and ~20% of all FDIs). Since the regulations were implemented, Indonesia's external position has weakened considerably as prices of key exports such as coal have collapsed.

In the face of falling commodity prices and rising economic headwinds, government has thus recently loosen the ban in order to sustain mining growth. Government has allowed semi-finished products, such as copper concentrate produced by Freeport, to continue to be exported until 2017, and is reviewing to loosen the minimum limits of five types of minerals that can be exported.

CAD improved, mainly due to:- a significant surplus in non-oil and gas

trade balance; positive manufacturing export

performance stemming from the US recovery; and

licenses granted to recommence unrefined mineral exports.

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New challenge to Jokowi: Back to democracy but new threat emerges Indonesia’s parliament has recently reversed an earlier decision to scrap direct

elections for local leader. The lame-duck parliament’s move in September was widely criticized as taking a step back in democracy.

The decree only stayed in force for several months. On January 20, lawmakers in the lower house voted to reverse the decision and maintain direct elections.

The reversal gave Jokowi a vote of confidence in pushing through Indonesia much needed reforms.

However, a separate political crisis has emerged over Jokowi’s choice of national police chief, which has led to confrontation between the police and the Corruption Eradication Commision (KPK).

He stumbled into another political turmoil when he nominated three-star General Budi Gunawan (“Gen Budi”) as sole candidate to be national police chief – a move seen as to appease former president Megawati Sukarnoputri, the leader of his Indonesian Democratic Party of Struggle (PDI-P). However, Gen Budi was arrested three days after his nomination by the KPK, naming him as a suspect in a corruption probe, which then prompted Jokowi to postpone – but not cancel – his appointment as police chief.

The police then arrested KPK’s deputy chief Bambang Widjojanto on perjury allegations relating to a five year-old case when he was a private lawyer. The arrest was widely seen as part of a police campaign to discredit the KPK investigation into Gen Budi. The police have also stated that three other commissioners are under investigation. By law, the KPK needs a quorum of three to function. Further police prosecutions will paralyze it.

The PDI-P, disgruntled over Jokowi’s delay in inaugurating Gen Budi as the national police chief, started piling on the pressure, threatening to withdraw its support in Parliament for Jokowi’s reform programs, and even to impeach Jokowi.

Jokowi’s administration is currently seeking parliamentary approval for the amended 2015 Budget, which includes massive spending for the construction of dams and power plants, as well as for various social programs.

Faltering support from his own party elites and Jokowi’s recent meeting with his former presidential rival and also the opposition leader, Prabowo Subianto, whom had showed support over Jokowi’s has fuelled speculation that Jokowi is seeking an alliance with opposition parties.

Jokowi’s non-intervention approach to the KPK-police stand-off has also received public criticism for being indecisive. Public satisfaction with Jokowi fell from 71.7% in August to 42.3% 100 days into his term, a poll late last month by Lingkaran Survei Indonesia showed.

The standoff serves as a key test for Jokowi – to fulfil his commitment to eradicate corruption and prove that he is not a puppet-president while striking a political balance.

Overall, a prolonged stand-off would damage not only Jokowi but also Megawati and the PDI-P.

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Themes for 2015 Problems of poor infrastructures, high logistics costs and an inflexible labor market hampered investment. With foreign investment stagnate, the Indonesian government’s effectiveness in delivering its fiscal spending would be crucial in to put those savings into productive investment. Post fuel revamp alongside cheap oil, legislators would be meeting this month (February) to revise the budget – where we would see how the Indonesian government utilize this breathing space. Investment accounts for about a third of the nation’s GDP. Effectively identifying and tackling the push factors while introducing the pull factors and eliminating bottlenecks would be the key to Indonesia’s success story. Resources reallocation: Start infrastructure projects The revamp of fuel subsidies implemented at the start of 2015 will allow the

government to reallocate the resources on urgently needed infrastructure, including toll roads, rail, a port on Sumatra island, cement and fertilizer factories in Papua and other projects across the archipelago from power to metal-ore processing.

While the previous government promised to overhaul infrastructure, projects have been stalling and made little progress. Breaking ground on major projects in the next few months would be a powerful indication to investors that Jokowi means business.

The long and complicated process of land acquisition remained as the bottleneck in infrastructure developments. As such, a new land acquisition law for public needs has took effect since

January 1. A land bank would be established to accelerate on land acquisition.

While some of the funding will come from the re-allocation of the fuel subsidy, government should also look to institutional funding such as the Asian Infrastructure Investment Bank (AIIB), initiated by China. Indonesia has yet to join as participant of the AIIB.

Improve government tender process Jokowi has ordered agencies to complete all procurement for infrastructure

projects this year by the end of March. Previously most regional government tenders were conducted at the end of the year or not at all, resulting in rushed, poor quality works or delays.

A good first step to reform but would take some time before we see improvements.

Wooing FDIs: Administration overhaul, reform the bureaucracy, cut corruption and unwinding nationalism 1. One-stop shop for investors

Currently, Indonesia is characterized by a high degree of bureaucracy resulting in a lengthy licensing process as investors need to obtain permits from various ministries as well as local government institutions. Lack of coordination between the various government institutions has been an obstacle to investment in the country.

The new service called One-Stop Integrated Service (PTSP), soft launched on January 15, will see investment licenses at the national level being processed under a single institution, the Investment Coordinating Board (BKPM).

The flagship project of BKPM would simplify investment licensing procedures, cut the lengthy period to secure permits and reduce the number of permits. It allows authorities to reduce the process time, synchronize procedures, avoid authority overlap and eliminate red tape – improving the business climate in Indonesia and attract more investment. The government targets to reduce the time to process all permits to seven days by 2019.

The service covers 1,198 business sectors, excluding finance and oil and gas.

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The one-stop facility has also been implemented at the regional level, though only in five provinces and 12 districts. By the end of 2015, the government aims to integrate 24 provinces and 120 districts into the system.

The PTSP marks the second investment service breakthrough by the BKPM under President Jokowi’s administration after it had launched an online licensing service in December which allows both local and foreign investors to submit their license applications online.

2. Revised Indonesian Negative Investment List

Under the Negative List, some Indonesian business sectors are closed to foreign investment, while others are subject to foreign ownership limits. The Indonesian law requires that the list be revised every three years. The 2014 Negative List, revised from the 2010 Negative List, reflect the intention of the Indonesian government to prepare for a more open economy while preserving certain sectors for domestic investment. The current Negative List will be effective until at least 2017, subject to any policy changes made in the interim.

Overall, there has been a liberalizing trend, with a number of sectors becoming more open for foreign investment, as the nation is preparing itself to integrate into the ASEAN bloc by end of this year.

Sectors with restrictions relaxed or position clarified

Sectors with restrictions tightened

Sectors remain largely unaffected

Advertising

Broadcasting

Electricity generation

Healthcare

Pharmaceutical

Port facilities

Retail

Telecommunications

Transportation

Venture capital

Energy and resources

Trading

Banking

Finance

3. Other opportunities

Agriculture President Jokowi’s new vision is for Indonesia to be self-sufficient in

food production and to wean off rice, sugar or soy bean imports. By eliminating the current auction and introducing a new system to

distribute fertilizer, seed and equipment to farmers, productivity and competitiveness should improve. The current auction system takes 45 days to two months.

Financial Merging and listing state-owned banks are in the Indonesian

government’s pipeline. Four-state owned banks (Bank Mandiri, Bank Negara Indonesia, Bank Tabungan Negara and Bank Rakyat Indonesia) in Indonesia will take turns in offering new shares to raise capital and expand lending over the next few years.

Although the plan is still at a very early state and mergers will not happen in this year, but it would increase competitiveness.

Currently, the government is focusing on lifting banks’ capitalization so lenders can compete in the region, and on lifting country’s savings rate to improve financial inclusion.

Oil & Gas Revamp state oil firm and improve on governance Long been plagued by underperformance, inefficiencies and corruption,

Indonesian administration has finally stepped up on their anti-graft

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campaign, improving corporate governance, particularly the state-owned enterprises’ (SOEs).

A plan for Pertamina to take over oil importing from its offshore trading unit, Petral, will increase domestic oversight of the company and improve the transparency of oil transactions. Pertamina will also be benchmarked against other companies, with the aim to meet global standards and remains competitive.

Previously, there has been a lack of transparency about how the country imports oil, the price it pays and who wins the contracts. With the reorganization, Petral, which has acted as the energy product buyer for Pertamina, will concentrate on conducting international oil trading in the future.

Tax cut on land and buildings for oil & gas exploration The Indonesian government has scrapped the tax on land and buildings

for oil & gas firm that are in the exploration stage, effective from January 2015, in an attempt to attract more investment in that sector.

Indonesia particularly needs investments in the oil sector as the country’s oil output has declined drastically in the past two decades due to lack of exploration amid weak government management, bureaucracy, an unclear regulatory framework and legal uncertainty.

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Equity Market Possible re-rating: Economy to rebound and fundamentals to improve Indonesia is enjoying fiscal windfall on lower oil prices after biting the bullet to revamp fuel subsidies last year: fuel prices dropped in January even though the government scrapped subsidies while inflation pressure is easing. We expect some recovery in the economy in 2H2015, with SOEs, construction and infrastructure as the main beneficiaries of Jokowi’s economic programs. Meanwhile, minerals shipment should improve in near term as government tweak its unfavorable policy, allowing some breathing space for companies to build smelters and prepare themselves to comply with the new rules. On the other hand, the stronger USD should be able to lend some support on the commodity prices (most of them are priced in USD). Structural reforms, improves tax collection, accelerates infrastructure development and improves the investment climate – these efforts would boost market confidence in the government and the country’s economic fundamentals. Bold reforms may prompt a re-rating on Indonesia’s sovereign debt to investment grade. Lower borrowing costs coupled with higher market confidence could attract more capital inflows and boost investment.

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Jakarta Stock Exchange Composite Index (JCI): Maintain OW JCI’s current valuation is above its 10-year average P/E of 19.04x, on moderate 4.6% earnings growth expected this year, which translates to a multiple of 15.68x forward P/E. Lack of earnings growth may weigh on the index. Indonesian companies would feel a pinch from the higher interest rates and increased minimum wages. Under the Indonesian labor law, government reviews its minimum wages annually. For the year of 2015, the average Indonesian minimum wage rises 12.77% y/y. Concerns on twin deficits alongside an interest rate hike in US would continue to fuel bouts of volatility in the foreign exchange market and IDR, which in turn would result in equity market volatility.

Source: Bloomberg, CEIC, Phillip Securities Research (Singapore) Estimates

In conclusion, we maintain our Overweight (OW) stance on the Indonesian equities. Positive steps in early reforms and the current trend of international optimism that reforms could be enacted, would continue to support the upward trajectory.

Indonesian stocks (JCI index) is slightly toppish compared to its LT average P/E= 23.87x; 52-weeks Trailing P/E= 22.29x;

LT P/E= 19.04x P/B= 2.42x; LT P/B= 2.69x Earnings to gain traction

forward 15.68x P/E

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Appendix: Overview Global Macro, Equities, Phillip Securities Research OW = Overweight ; NW = Neutralweight ; UW = Underweight

Present Prior

G3 US LT OW

ST NW

LT OW

ST NW

Fidelity - America

Legg Mason - Clearbridge US Aggressive Grow th

Legg Mason - Royce US Small Cap Opportunity

SPDR S&P500 (SGX) - S27

Lyxor NASDAQ (SGX) - H1Q

iShares Russell 2000 (NYSE Arca) - IWM

Europe NW NW Templeton - European

Schroder - European Equity Alpha

Schroder - ISF European Smaller Companies

DBX Tracker MSCI Europe - IH3

VGK Vanguard European Stock Index

Japan OW OW Aberdeen Japan Equity Fund

Lion Global Japan Grow th Fund

Nikko AM Shenton Japan Fund

DB X-trackers MSCI Japan ETF – LF2 (SGX)

iShares MSCI Japan – EWJ (NYSE/Amex)

WisdomTree Japan Hedged Equity – DXJ

Asia ex-Japan China/HK OW OW Fidelity Greater China

First State Regional China

Schroder Greater China

db x-trackers MSCI China TRN Index 1C

(LG9.SGX)

db x-trackers CSI300 Index ETF 1D (KT4.SGX)

ChinaAMC CSI 300 ETF (3188.HK/83188.HK)

iShares FTSE A50 China (2823.HK)

CSOP FTSE China A50 ETF (2822.HK/82822.HK)

India OW OW Aberdeen - India Opportunities SGD

Fidelity - India Focus A SGD

Lion Global - India Acc SGD

MSCI India (I98.SGX)

DBX India (LG8.SGX)

Indonesia OW OW Aberdeen Indonesia Equity

Fidelity Indonesia A USD

Lyxor Indonesia10US$x@ (P2Q.SGX)

DBXT MSINDO 10US$x@ (KJ7.SGX)

Ishares MSCI Indonesia ETF (EIDO.NYSEARCA)

Market Vectors Indonesia Index ETF

(IDX.NYSEARCA)

Thailand NW NW Fidelity Thailand Fund

Aberdeen Thailand Equity Fund

Lyxor ThaiSET 10US$x@ (P2P.SGX)

Ishares MSCI Thailand Capped ETF

(THD.NYSEARCA)

X DBMSCITHAI (3092.HK)

Malaysia UW NW Lion Global Malaysia Fund

Aberdeen Malaysian Equity Fund

db x-trackers MSCI Malaysia TRN Index 1C

(LG6.SGX)

XIE Shares Malaysia (FTSE BM KLCI) ETF

(3029.HK)

Singapore NW NW DWS Singapore Small/Mid Cap Fund

Nikko AM Singapore Dividend Equity

Amundi Singapore Dividend Grow th Fund

SPDR STI ETF (ES3.SGX)

Nikko AM STI ETF (G3B.SGX)

Source: PSR (as at 16 Feb 2015)

Rating

CountryRegion Unit Trust ETF

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Contact Information (Singapore Research Team) Management Chan Wai Chee (CEO, Research - Special Opportunities)

yebo@phillip.com.sg Research Operations Officer Jaelyn Chin chinjn@phillip.com.sg

Macro | Equities Market Analyst | Equities US Equities Soh Lin Sin sohls@phillip.com.sg Kenneth Koh kennethkohwk@phillip.com.sg Wong Yong Kai wongyk@phillip.com.sg Bakhteyar Osama

osama@phillip.com.sg

Finance | Offshore Marine Real Estate REITs Benjamin Ong benjaminongcw@phillip.com.sg Caroline Tay carolinetayyy@phillip.com.sg Dehong Tan tandh@phillip.com.sg Telecoms | Technology Transport & Logistics

Colin Tan colintanwh@phillip.com.sg Richard Leow, CFTe

richardleowwt@phillip.com.sg

Contact Information (Regional Member Companies) SINGAPORE

Phillip Securities Pte Ltd Raffles City Tower

250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631

Website: www.poems.com.sg

MALAYSIA Phillip Capital Management Sdn Bhd

B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450

Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099

Website: www.poems.com.my

HONG KONG Phillip Securities (HK) Ltd

11/F United Centre 95 Queensway Hong Kong

Tel +852 2277 6600 Fax +852 2868 5307

Websites: www.phillip.com.hk

JAPAN Phillip Securities Japan, Ltd.

4-2 Nihonbashi Kabuto-cho Chuo-ku, Tokyo 103-0026

Tel +81-3 3666 2101 Fax +81-3 3666 6090

Website: www.phillip.co.jp

INDONESIA PT Phillip Securities Indonesia

ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia

Tel +62-21 5790 0800 Fax +62-21 5790 0809

Website: www.phillip.co.id

CHINA Phillip Financial Advisory (Shanghai) Co Ltd

No 550 Yan An East Road, Ocean Tower Unit 2318,

Postal code 200001 Tel +86-21 5169 9200 Fax +86-21 6351 2940

Website: www.phillip.com.cn

THAILAND Phillip Securities (Thailand) Public Co. Ltd

15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak,

Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999

Fax +66-2 22680921 Website www.phillip.co.th

FRANCE King & Shaxson Capital Limited

3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France

Tel +33-1 45633100 Fax +33-1 45636017

Website: www.kingandshaxson.com

UNITED KINGDOM King & Shaxson Capital Limited

6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS

Tel +44-20 7426 5950 Fax +44-20 7626 1757

Website: www.kingandshaxson.com

UNITED STATES Phillip Futures Inc

141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building

Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005

Website: www.phillipusa.com

AUSTRALIA Phillip Capital Limited

Level 12, 15 William Street, Melbourne, Victoria 3000, Australia

Tel +61-03 9629 8288 Fax +61-03 9629 8882

Website: www.phillipcapital.com.au

SRI LANKA Asha Phillip Securities Limited

No-10 Prince Alfred Tower, Alfred House Gardens, Colombo 03, Sri Lanka Tel: (94) 11 2429 100 Fax: (94) 11 2429 199

Website: www.ashaphillip.net

INDIA PhillipCapital (India) Private Limited

No.1, 18th Floor Urmi Estate

95, Ganpatrao Kadam Marg Lower Parel West, Mumbai 400-013

Maharashtra, India Tel: +91-22-2300 2999 / Fax: +91-22-2300 2969

Website: www.phillipcapital.in

TURKEY PhillipCapital Menkul Degerler

Dr. Cemil Bengü Cad. Hak Is Merkezi No. 2 Kat. 6A Caglayan 34403 Istanbul, Turkey

Tel: 0212 296 84 84 Fax: 0212 233 69 29

Website: www.phillipcapital.com.tr

DUBAI Phillip Futures DMCC

Member of the Dubai Gold and Commodities Exchange (DGCX)

Unit No 601, Plot No 58, White Crown Bldg, Sheikh Zayed Road, P.O.Box 212291

Dubai-UAE Tel: +971-4-3325052 / Fax: + 971-4-3328895

Website: www.phillipcapital.in

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