for personal use only - asx · financial results –june 30th 2018 pre-tax profit $1.571 million...
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FPC Annual General Meeting & Share Holder information session
MR MICHAEL GALLAGHER – CHAIRMAN
• Introductory remarks
• AGM Open
• Formal business
• Resolutions
• AGM Close
• Shareholder information session – Mr Angus Geddes
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FPC Annual General Meeting & Share Holder information session
Discount to NTA
• Performance
• Assets under management
• Trading volume & perceived liquidity
• Large & multiple raisings
• Ratings agencies – no coverage
• Dividend policy
• Option overhang
Affirmative strategies
• Directors buying shares
• Buyback – sending a positive message
• Communications
• Roadshow – Feb 2019 – increasing profile
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FINANCIAL RESULTS – June 30th 2018
▪ Pre-tax profit $1.571 Million
▪ Net profit after tax $1.206 Million
▪ NTA (Jun 18) $1.1228 pre tax (Plus loyalty option; expires Mar 19)
▪ Current market cap $40mil; Share price $0.89
▪ NTA (Sep 18); $1.0992 pre tax.
▪ will typically be constructed for each thematic, along with the identification of the
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Board of FPCINDEPENDENT CHAIRMAN Michael Gallagher
Mr Michael Gallagher was appointed Chairman of the Board in November 2016. Michael has over 25 years investment experience.
In 2009 Michael co-founded Kima Capital, an Australian based funds management business, which he later moved to Hong Kong before it was acquired. Prior to AIMA & Kima, Michael headed Australasian Equities for Rand Merchant Bank, overseeing the Equity Trading, Derivative and Equity Funds Management businesses from 2005-2009. In the 10 years prior to this Michael was a director at Macquarie Bank heading up the structured retail equity derivative businesses in Australia, South Africa and also spent time with Macquarie in the UK.
INDEPENDENT DIRECTOR Katrina Vanstone
Katrina has worked in financial markets for 30 years, both in Australia and offshore, including such leading organisations as HSBC and Deutsche Bank.
Katrina has extensive experience in foreign exchange, interest rates and credit markets across asset and liability portfolios. She has held roles in trading, sales and syndication. She has extensive experience in the wholesale debt and derivative markets with strong product knowledge across capital structures and debt raisings, risk management and hedging, and cash and currency management.
Angus Geddes - Non-Independent Director
Refer to previous slide
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FPC Annual General Meeting
MICHAEL GALLAGHER – CHAIRMAN
• AGM Open
• Formal business
• Resolutions
• AGM Close
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Year in review
• Challenging year afflicted by high volatility
• Outperformance in the US/Super Tech
• Rest of world has underperformed
• Value coming back into vogue as growth stocks correct
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High volatility in 2018 vs 2017
Weekly .VIX 21/10/2016 - 7/12/2018 (EST)
16.07
49.85
BarOHLC, .VIX, Trade Price
26/10/2018, 19.38, 20.89, 18.82, 19.64, -0.25, (-1.26%)
Price
USD
Auto
10
12
14
16
18
20
22
24
26
28
30
32
34
36
38
40
42
44
46
48
19.64
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecQ4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
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Breakdown of the Fund’s assets
▪ will typically be constructed for each thematic, along with the identification of the relevant catalysts
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Top ten holdings – September 2018
▪ will typically be constructed for each thematic, along with the identification of the relevant catalysts
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Top 10 Holdings 31 October 2017 Country
COLLINS FOODS 6.8% Australia
SONY 6.0% Japan
TELSTRA 5.7% Australia
WALT DISNEY 5.7% US
BAIDU 5.7% China
PRAEMIUM 5.5% Australia
WYNN MACAU 4.5% China
QBE Insurance 4.5% Australia
SPDR GOLD ETF 4.5% US
EVOLUTION MINING 4.3% Australia
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Where do we see opportunities today?
• Gold and the over owned US dollar
• Rising interest rates – Japanese banks / QBE insurance
• Defensive & under owned Telco’s – Telstra
• China – valuations back to post GFC levels 10X
• Macau Casinos
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US Dollar – crowded trade
Weekly .DXY 21/10/2016 - 7/12/2018 (NYC)
BarOHLC, .DXY, Trade Price
26/10/2018, 95.657, 95.756, 95.647, 95.666, -0.047, (-0.05%)
Price
USD
Auto
88.5
89
89.5
90
90.5
91
91.5
92
92.5
93
93.5
94
94.5
95
95.5
96
96.5
97
97.5
98
98.5
99
99.5
100
100.5
101
101.5
102
102.5
103
103.5
95.666
21 04 18 02 16 06 20 03 17 03 17 07 21 05 19 02 16 07 21 04 18 01 22 06 20 03 17 01 22 05 19 02 16 02 16 06 20 04 18 01 22 06 20 03 17 07 21 05 19 02 16 07Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18
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Higher cost of servicing a growing debt
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Gold - a new bull market?
Monthly XAU= 31/10/2008 - 30/04/2019 (GMT)
1,034.1787
BarOHLC, XAU=, Bid
31/10/2018, 1,191.8100, 1,233.2600, 1,183.0400, 1,228.0000, +2.1400, (+0.17%)
Price
USD
Ozs
Auto
680
720
760
800
840
880
920
960
1,000
1,040
1,080
1,120
1,160
1,200
1,240
1,280
1,320
1,360
1,400
1,440
1,480
1,520
1,560
1,600
1,640
1,680
1,720
1,760
1,800
1,840
1,228.0000
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Gold in A$ is close to breaking out
Quarterly XAUAUD=R 24/10/1998 - 23/01/2020 (GMT)
Price
AUD
Auto
400
450
500
550
600
650
700
750
800
850
900
950
1,000
1,050
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
1,550
1,600
1,650
1,700
1,750
1,800
1,731.65
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20191990 2000 2010
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Gold – market net short
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Japan’s recovery – rising inflation
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Japan - rising interest rates
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Daily JP10YT=RR 10/10/2017 - 25/10/2018 (GMT)
Line, JP10YT=RR, Bid Yield(Last)
5/10/2018, 0.149
Yield
Auto
0.025
0.03
0.035
0.04
0.045
0.05
0.055
0.06
0.065
0.07
0.075
0.08
0.085
0.09
0.095
0.1
0.105
0.11
0.115
0.12
0.125
0.13
0.135
0.14
0.145
0.15
0.155
0.149
10 16 23 30 06 13 20 27 04 11 18 25 04 15 22 29 05 13 19 26 05 12 19 26 02 09 16 23 01 14 21 28 04 11 18 25 02 09 17 23 30 06 13 20 27 03 10 18 25 01 09 15 22
Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18For
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Japan - rising spending
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Japanese interest rates
Daily JP10YT=RR 24/10/2016 - 29/11/2018 (GMT)
Line, JP10YT=RR, Bid Yield(Last)
23/10/2018, 0.154
Yield
Auto
-0.075
-0.07
-0.065
-0.06
-0.055
-0.05
-0.045
-0.04
-0.035
-0.03
-0.025
-0.02
-0.015
-0.01
-0.005
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
0.045
0.05
0.055
0.06
0.065
0.07
0.075
0.08
0.085
0.09
0.095
0.1
0.105
0.11
0.115
0.12
0.125
0.13
0.135
0.14
0.145
0.15
0.1550.154
31 07 14 21 28 05 12 19 26 04 16 23 30 06 13 20 27 06 13 21 27 03 10 17 24 01 15 22 29 05 12 19 26 03 10 18 24 31 07 14 21 28 04 11 19 25 02 10 16 23 30 06 13 20 27 04 11 18 25 04 15 22 29 05 13 19 26 05 12 19 26 02 09 16 23 01 14 21 28 04 11 18 25 02 09 17 23 30 06 13 20 27 03 10 18 25 01 09 15 22 29 05 12 19 26Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18
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Japan’s stock market recovery has –Nikkei 2008 - 2018
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Monthly [.N225 List 1 of 226] .N225 31/10/2008 - 30/04/2019 (TOK)
21,017.17
BarOHLC, .N225, Trade Price
31/10/2018, 24,173.37, 24,448.07, 22,212.57, 22,462.54, -69.54, (-0.31%)
Price
JPY
Auto
7,000
7,500
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
12,500
13,000
13,500
14,000
14,500
15,000
15,500
16,000
16,500
17,000
17,500
18,000
18,500
19,000
19,500
20,000
20,500
21,000
21,500
22,000
22,500
23,000
23,500
24,000
22,462.54
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Exposure across Japan
• Banking – Sumitomo Mitsui, Mizuho + regionals
• Consumer Electronics – Sony, Nintendo
• Energy - Inpex
• Robotics – SMC
• Electronics – Minebea Mitsumi, Nissha
• Insurance – Dai-Ichi
• Chemicals – Sumitomo Chemical
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Fukuoka FG
Weekly 8354.T 23/10/2015 - 21/12/2018 (TOK)
BarOHLC, 8354.T, Trade Price
26/10/2018, 2,935.0, 3,015.0, 2,918.0, 2,919.0, -76.0, (-2.54%)
Price
JPY
Auto
1,600
1,700
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
3,100
3,200
3,300
2,919.0
Vol, 8354.T, Trade Price
26/10/2018, 728,100.0 Volume
Auto728,100.0
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecQ4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
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Macau gaming – long term growth story intact
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Macau – but near term VIP revenues have dropped
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Weekly 1128.HK 22/01/2016 - 21/12/2018 (HKG)
BarOHLC, 1128.HK, Trade Price
26/10/2018, 17.100, 17.720, 16.960, 17.560, +0.640, (+3.78%) Price
HKD
Auto
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
17.560
Vol, 1128.HK, Trade Price
26/10/2018, 7.853M Volume
Auto
50M
100M
7.853M
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecQ1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
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Disney
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Monthly DIS 23/10/2008 - 10/05/2019 (NYC)
BarOHLC, DIS, Trade Price
31/10/2018, 117.280000, 119.170000, 110.320000, 118.900000, +2.720000, (+2.34%) Price
USD
Auto
16
20
24
28
32
36
40
44
48
52
56
60
64
68
72
76
80
84
88
92
96
100
104
108
112
116
118.900000
Vol, DIS, Trade Price
31/10/2018, 108.763M Volume
Auto
200M
300M
108.763M
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Collins Foods
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Monthly CKF.AX 31/08/2011 - 31/03/2019 (SYD)
BarOHLC, CKF.AX, Trade Price
31/10/2018, 6.230, 6.810, 6.090, 6.650-0.030, (-0.45%) Price
AUD
Auto
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
4.2
4.4
4.6
4.8
5
5.2
5.4
5.6
5.8
6
6.2
6.4
6.650
Vol, CKF.AX, Trade Price
31/10/2018, 8.135M Volume
Auto
5M
10M
15M
8.135M
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q12011 2012 2013 2014 2015 2016 2017 2018 2019
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Telstra – major low?Quarterly TLS.AX 31/10/1998 - 22/01/2020 (SYD)
BarOHLC, TLS.AX, Trade Price
31/12/2018, 3.170, 3.270, 3.020, 3.120, N/A, N/A
Price
AUD
Auto
2.7
3
3.3
3.6
3.9
4.2
4.5
4.8
5.1
5.4
5.7
6
6.3
6.6
6.9
7.2
7.5
7.8
8.1
8.4
3.120
Vol, TLS.AX, Trade Price
31/12/2018, 451.873M Volume
Auto
2B
451.873M
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20191990 2000 2010
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TLS - Inflection pointWeekly TLS.AX 28/10/2016 - 30/11/2018 (SYD)
BarOHLC, TLS.AX, Trade Price
26/10/2018, 3.160, 3.185, 3.120, 3.120,
Price
AUD
Auto
2.6
2.7
2.8
2.9
3
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
5
3.120
Vol, TLS.AX, Trade Price
26/10/2018, 41.402M Volume
Auto
100M
200M
41.402M
04 18 02 16 06 20 03 17 03 17 07 21 05 19 02 16 07 21 04 18 01 22 06 20 03 17 01 22 05 19 02 16 02 16 06 20 04 18 01 22 06 20 03 17 07 21 05 19 02 16Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018
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Praemium
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Monthly PPS.AX 31/10/2008 - 30/04/2019 (SYD)
BarOHLC, PPS.AX, Trade Price
31/10/2018, 1.110, 1.145, 0.830, 0.8600.000, (0.00%) Price
AUD
Auto
0.08
0.12
0.16
0.2
0.24
0.28
0.32
0.36
0.4
0.44
0.48
0.52
0.56
0.6
0.64
0.68
0.72
0.76
0.8
0.84
0.88
0.92
0.96
1
1.04
1.08
1.12
0.860
Vol, PPS.AX, Trade Price
31/10/2018, 21.327M Volume
Auto
20M
40M
21.327M
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Outlook 2019
• Volatility normalising
• Interest rates will move higher globally, and in line with wage inflation
• Precious metals could do well
• Telcos back
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Contact Details
Fat Prophets Funds ManagementInvestment managerAngus GeddesCIO02 9024 6706Angus.Geddes@fatprophets.com.au
Fat Prophets Global Contrarian FundCompany Michael GallagherChairman0412 224 400Michael@spinnakerinvest.com
Fat Prophets Funds ManagementPortfolio ManagerSimon Wheatley0429 910999Simon.Wheatley@fatprophets.com.au
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Disclaimer
This presentation has been prepared by Fat Prophets Global Contrarian Fund Limited (FPC). The information contained in this presentation is for information purposes only and has been prepared for use in conjunction with a verbal presentation and should be read in that context.
The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. Please note that, in providing this presentation, FPC has not considered the objectives, financial position or needs of any particular recipient. FPC strongly suggests that investors consult a financial advisor prior to making an investment decision.
This presentation is strictly confidential and is intended for the exclusive benefit of the institution to which it is presented. It may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the express consent of FPC .
No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of FPC, its related bodies corporate, shareholders or respective directors, officers, employees, agents or advisors, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence for any loss arising from the use of information contained in this presentation.
This presentation includes “forward looking statements”. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of FPC and its officers, employees, agents or associates that may cause actual results to differ materially from those expressed or implied in such statement. Actual results, performance or achievements may vary materially from any projections and forward looking statements and the assumptions on which those statements are based. FPC assumes no obligation to update such information.
This presentation is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities and neither this presentation nor anything contained in it forms the basis of any contract or commitment. Any offer or sale of securities will be made pursuant to definitive documentation, which describes the terms of the offer (Offer Document). An Offer Document for any offer of securities in FPC will be made available when the securities are offered. Prospective investors should consider the Offer Document in deciding whether to acquire securities under the offer. Prospective investors who want to acquire under the offer will need to complete an application form that is in or accompanies the Offer Document.
This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The securities of FPC have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (Securities Act) or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and any other applicable securities laws
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