IBB Asia Equity Fund 1st quarter report

The bid price of Islamic Bank of Brunei (IBB) Asia Equity Fund yesterday was B$0.55 while the offer price was B$0.57. "In addition to the fear of a longer than expected "Operation Iraqi Freedom", Asia is now overcast with a new, and arguably more serious problem, the Severe Acute Respiratory Syndrome (SARS)," the first quarter 2003 report of IBB Asia Equity Fund issued by IBB Capital Asset Management Sdn Bhd stated yesterday.

"We are of the view that the current consensus and earning per share (EPS) growth in affected areas remains way too optimistic. Hence, this could lead to disappointment.

"We expect the SARS to slow economic growth in Asia as a result of the decline in the two pillars of the Asian economies, tourism and private consumption. There has already been closure of schools, hospitals, restaurants, conventions, trade fairs, concerts and nightspots as a direct result of the disease. Tourism has also been severely affected with report that tourist arrivals have fallen by 33%.

"On the Japanese policy front, the first Bank of Japan board meeting under the new governor Fukui did not lead to any major change.

Meanwhile the latest economic data was slightly better than expected, with unemployment decreasing in February to 5.2% while deflation pressures did not gather pace. Looking ahead, policy markers will have to demonstrate more initiative if a sustained recovery is to take root.

"The closing net asset value (NAV) as of March 25, 2003 stood at B$0.56. The highest NAV is B$0.59 (January 15, 2003) while the lowest NAV is B$0.54 (March 12, 2003)," IBB said

Courtesy of Borneo Bulletin