Savinvest India Asia Fund Unit Holders Meeting

On July 25th 2012, the Trustees of the Savinvest India Asia Fund ("The Fund"), will be convening a unit holders meeting to vote on the conversion of the Fund from a close-ended mutual fund to an open- ended fund and its delisting from the Trinidad and Tobago Stock Exchange. These changes have been proposed by Bourse as sponsor of the Fund. We consider hereunder the advantages and possible drawbacks in going forward with the Fund. As sponsor, Bourse declares its interest accordingly.

Advantages of an Open-Ended Fund

The advantages of the fund as an open-ended mutual fund are as follows:-

• Increased liquidity resulting from the ability to redeem units at any time: With the existing clos-ended format investors can only sell their units if there are buyers willing to trade over the Trinidad and Tobago Stock Exchange [TTSE]. This could take some time if trading is thin. With conversion to an open ended mutual fund, the investor would able to liquidate his holdings at any time by going directly to the Fund.

• Redemption in United States Currency: With the existing Fund, original investors would have paid for their units in US$. However, in liquidating their holdings over the TTSE they would receive TT$ if the investor needed to sell before the first closing of the Fund in November 2012. With conversion to the open-ended fund, investors can redeem their units at any time and receive payment in US$.

• The upside potential benefit of remaining in the Fund and being able to exit anytime thereafter, rather than exit at a time of relatively low values as at present. With conversion of the Fund, there is much more flexibility to the unit holder for exiting the Fund at highest capital values and to receive US$ payment at any time as opposed to the closed end approach.

The Fund's Performance

The Fund was incorporated on the 14th November 2005 as Bourse was, and still is, the only securities company to list an Asian regional fund on the TTSE. For the first two years, the Fund gained strong returns reflecting the vitality of Asian markets (see Exhibit 1). The world financial crisis of 2008 had significant adverse impact on all equity markets, eroding earlier returns in the Fund. Fulsome recovery was achieved in years 2009/2012. The Eurozone economic and financial crisis in 2011 and continuing into 2012 has brought about reversal of gains. Asian markets, like all equity markets, could not escape the vagaries of these two major international events over the past five years. It was a very volatile era as the Fund encountered significant challenges along its path.

Asia Outlook

The IMF cautioned that the repercussions of the European debt crisis remained a hazard. However, the IMF noted that Asia's economies have been extremely resilient in the face of the global financial crisis and are central to global economic stability. Asia's stronger bank balance sheets and fiscal positions have allowed the region to avoid the downward spiral of debt and weak banks that is threatening Europe. Emerging Asia's GDP remains ahead of developed economies even as growth decelerates to 7.1% and 7.5% in 2012 and 2013 respectively as predicted by the IMF. The expected growth outlook for the US is far lower at 2% and 2.3% respectively.

Asian equities are now at attractive levels after most indices have corrected significantly, pricing in the problems of the developed countries (see Exhibit 2). Analysts believe in China's resilience and cite that entry opportunities are being created as China's government loosens monetary policy. Morgan Stanley's and Goldman Sach's analysts further corroborate that Asia's market performance hinges on stability in Europe and policy announcements in Europe and the US could prompt a rebound in equity markets.

India Outlook

India's domestically driven economy and strong business models have attracted FIIs over the last 5 years boosting the India's equity market performance (see Exhibit 3). FIIs continued to propel India's equity markets in the first half of 2012 with the strongest inflows of US$8.5 billion within the last 5 years signalling continued confidence in Indian equities. Some of India's local investment houses expect the domestic macro environment to improve, in the medium term, on the back of easing oil prices, moderating inflation, further monetary easing in the form of repo rate cuts and narrowing current account deficit. Several international houses namely UBS, Citigroup and JP Morgan have postulated that India's equities have already priced in the adverse global environment and weakened economic activity in India. They have turned bullish on India citing relatively attractive valuations and continued hopes of policy reforms.

The Bourse viewpoint

• The conversion to an open-ended mutual fund will provide investors with benefits over the current close-ended format, especially in this period of volatility and uncertainty going forward.

• Given current India/Asia economic and market outlook, investors should be well placed by staying in the Fund. Valuations for the Asian region are relatively cheap compared to the five averages. The region's economic growth outlook is far superior to developed world.