Page 35 - UTC Annual Report 2011

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Unit Trust Corporation
Annual Report 2011 35
Asian economies is projected to decelerate to 3.3 percent in 2012 from 4.2 percent in 2011 and 8.4 percent
in 2010 but is projected to grow by 4.1 percent in 2013. Growth in Emerging and Developing Markets is
also expected to slow to 5.4 percent in 2012 from 6.2 percent in 2011 and 7.3 percent in 2010. For Latin
America and the Caribbean, the growth rate is expected to fall to 3.6 percent in 2012 from 4.6 percent in
2011 and 6.1 percent in 2010.
In 2012, oil prices are expected to average around US$100 per barrel owing to a rise in geopolitical risks
while the prices of non-oil commodities, are projected to fall by 14 percent. The threat of higher food prices
has receded due to improvement in grain harvests particularly in Russia. Global consumer price inflation
is expected to ease as demand softens and commodity prices stabilize. Inflation in advanced economies is
projected to fall to 1.5 percent in 2012 from 2.38 percent in 2011. Inflation in emerging and developing
economies is also expected to slow to 6.25 percent in 2012 down from 7.25 percent in 2011.
Interest rates can be expected to remain at low levels.The U.S. Federal Reserve Bank has already signalled
that it will hold interest rates at current levels until at least 2013 and given the slow growth outlook in
Europe, policy interest rates there can be expected to stay more or less at current levels also. In the bond
markets, sovereign debt may give higher returns but the attendant risk has also increased.
In the domestic economy, a budget deficit of TT$7.6 billion for the 2011/12 fiscal year is predicated on an
oil price of US$75 per barrel WTI and natural gas price of US$2.75 per mmbtu (Henry Hub) with public
sector investment providing the stimulus for estimated growth of 1.7 percent. Interest rates can be expected
to remain at low levels, but could fluctuate around current levels depending on the rate at which the public
investment programme is implemented and how the deficit is funded.
We will celebrate our 30 year Anniversary in 2012. It is an opportune time to reflect on what we have
achieved and how we will refresh ourselves for the period ahead. In late 2010, we began an exercise to
review our strategies and prepare for the next stage in our on-going history – one of renewal and growth.
The markets have changed quite dramatically over the last 30 years. As markets have been liberalized
and global communication makes virtually all markets accessible, the competition for savings and
capital has become intense.The world economic structure also appears to be undergoing a dramatic
shift. It is now truly a global marketplace.The domestic market for mutual funds is also quite com-
petitive and the asset base remains limited, so we will maintain a global outlook.We have a suite
of 10 Funds and our strategies will focus on helping our customers to negotiate the financial
landscape and increase their financial well being.
We continue to work on the proposed legislative changes that were raised in the
National Budget of 2010/2011 with a view to having the proposals ready within this
calendar year.
The past year has provided many challenges for investors from the international finan-
cial market volatility that translated to weak investor confidence. As the Corporation
enters its 4th decade of operations it will continue to face the challenges of the global
and domestic financial markets with the use of best practices in the investment
arena and even greater focus on the execution of investment opportunities to pro-
vide our loyal unit-holders with the most competitive returns that are consistent
with their risk tolerance.
The management and staff of the Corporation have been very supportive
of the aims of the Corporation over the past year and I thank them on
behalf of the Board for their unfaltering dedication and effort in the
attainment of the financial goals of our valued unit-holders.
Amoy Chang Fong
March 29, 2012