GreatLink Singapore Equities Fund Report as at 28 February 2010 Fund Objective and Investment Strategy Fund Facts The Fund objective is to maximize capital growth through investing primarily in Singapore equities. Inception Date 25 March 2002 Portfolio Weightings Offer Price S$ 1.843 Cash & Equivalents Bid Price S$ 1.751 Telecomm Svs 1% Fund Size S$ 154.55 mil 9% Fund Manager Lion Global Investors Ltd Consumer Materials Discretionary Bid-Offer Spread 5% 2% 3% Fund Management Fee 1.50% p.a. Consumer Staples Valuation Frequency Daily Information Tech 5% Currency of Fund Singapore Dollar 2% CPFIS Included CPFIS - OA Risk Category Higher Risk / Narrowly Focused Industrials Country – Singapore 24% Benchmark MSCI Singapore Free Index, Net Financials Morningstar Rating (as at 28 Feb 2010) Health Care 52% 2% (Overall) Source: BONY/Lion Global Investors Ltd Performance Since Inception Performance on Bid-Bid basis (%) Asian Equity Source: Morningstar. Performance figures are calculated on a bid-bid basis, with all dividends and distributions reinvested, taking into account all charges which would have been payable upon such reinvestment. Top 10 Holdings Company Country Industry % UNITED OVERSEAS BANK LTD Singapore Financial Intermediaries (Bank) 12.95% DBS BANK LTD/SINGAPORE Singapore Financial Intermediaries (Bank) 11.52% SINGTEL Singapore Telecommunications 9.37% SINGAPORE AIRLINES LTD Singapore Air Transport 8.11% CAPITALAND LTD Singapore Building & Development 5.26% KEPPEL CORP LTD Singapore Conglomerates 4.46% CITY DEVELOPMENTS LTD Singapore Building & Development 3.85% SINGAPORE EXCHANGE Singapore Financial Intermediaries (Finance) 2.99% NEPTUNE ORIENT LINES LTD Singapore Surface Transport 2.94% WILMAR INTERNATIONAL LTD Singapore Farming / Agriculture 2.62% GreatLink Singapore Equities Fund Report as at 28 February 2010 Market Review Singapore's 4Q09 real GDP rose 4% YoY (year-on-year) but fell 2.8% over the last quarter. January CPI inflation rose 0.4% over previous month. For the full year of 2009, Singapore’s GDP registered a 2.0% contraction. Given the stabilization of financial markets, and expectations of stronger 2010 Asia growth, the government has raised its 2010 GDP forecast to 4.5-6.5% (from the previous 3.0-5.0%). Meanwhile, Singapore’s industrial production rose 11.8% over previous month in January. On the equity market front, Genting Singapore continued its underperformance on the back of selling related to CB (convertible bond) conversion and a casino opening that failed to meet the market’s high expectations. Property stocks declined on the announcement of additional measures to stabilize the property market just ahead of the 2010 Budget. The measures consist of a seller’s stamp duty for residential properties sold within one year of purchase and a maximum loan-to-value limit of 80% for all housing loans provided by financial institutions. The 2010 budget maps out the government’s strategy to reposition the Singapore economy for the future, based on “skills, innovation and productivity”. A key objective of the strategy was to raise Singapore’s productivity levels by 2% to 3% over the next decade through skills upgrading and continuing education and retraining. In a nutshell, the property sector saw a muted impact from the budget with the introduction of a new progressive property tax structure and an extension of all current S-REIT tax exemptions to March 2015. Modest tax incentives were granted for industries ranging from marine, MRO and selected financial services, but foreign worker levies were raised to boost productivity. Market Outlook We expect equities to generate positive returns amid a recovery year in 2010. The prevailing low interest rates, weak US$ will likely continue to fuel liquidity in the form of financial and real estate investments into this region. At the same time, Singapore’s economic recovery is firmly on track and corporate earnings are rebounding to pre-crisis levels. However, after the strong market performance in 2009, we believe the market could see weaker growth going forward, as market valuations appear to be trading at the historical mean. 4Q09 earnings for Singapore companies yielded little surprises with earnings coming in slightly ahead of estimates. Better results were largely seen in transportation and capital goods sector. 2010 earnings growth projection appears to be tapering off. Going forward, growth will have to be driven by stronger top-line and margins outlook. Industrials (transport, in particular), should continue to see meaningful upgrades. The 2010 budget signals that the rate of inward immigration will slow but it remains a relevant strategy to achieve Singapore’s aspiration of becoming a world-class city. In our view, a five million population with a rising income/capita provides strong base for domestic consumption. The government’s aim to increase productivity by 2-3% supported by 3-4% GDP growth next 10 years (leading to higher wages) should bode well for rising domestic consumption trend. In the near to medium term, we believe the low interest rate environment will continue to support asset markets and equities, but we are cautious of the government’s incremental intervention to address the rapidly rising property market. Longer term, we expect the two integrated resorts to drive tourism, generate more consumption demand and create a more vibrant services sector. We expect job creation and investment spending to continue, driven by government’s expenditure and direct foreign investments. Domestic services like financials (banks & real estate), telecoms, healthcare, consumer and land transport sectors will benefit from the ongoing economic recovery. In view of improving economic fundamentals, we would be positioned in banks for a 2010 recovery as interest rates are expected to trend up in the medium term amid lower credit costs. Loan growth momentum appears to be improving, mainly Asian Equity from retail mortgages, although corporate and SME loans are showing early signs of pickup as well. We believe there is some upside in the REIT sector over next 3-6 months. In the last six months, S-REITs have acquired new properties totaling about S$2.5bn with the majority funded through equity raisings. Those with a large asset pipeline from sponsors are likely candidates for asset injections. The REIT sector also faces fewer policy headwinds compared to developers. We like REITS exposed to tourism, office and suburban retail mall segments. We see market valuations fair at current levels although domestic catalysts and strong liquidity should lift markets higher in 2010. Source: Bloomberg, Lion Global Investors Ltd DISCLAIMER: This factsheet is compiled by Great Eastern Life. The information presented is for informational use only. A product summary in relation to the Fund may be obtained through Great Eastern Life Assurance Co Ltd, its Life Planners or any of its appointed distributors. Potential investors should read the product summary before deciding whether to invest in the Fund. Returns on the units of the Fund are not guaranteed. The value of the units in the Fund and the income accruing to the units, if any, may fall or rise. The fees and charges payable through deduction of premium or cancellation of units are excluded in the calculation of fund returns. Past returns, and any other economic or market predictions, projections or forecasts, are not necessarily indicative of future or likely performance.