WHY JAPAN NOW?

1
WHY JAPAN NOW? Keith DonaldsonDirector, Japan
2
WHERE DID IT ALL GO WRONG?
Source Datastream. As at 31 December 2005.
3
14 year bear market
4
Bankingcrisis
14 year bear market
5
Deflation
14 year bear market
6
Unwind
14 year bear market
7
Income correction
14 year bear market
8
THEN AND NOWPost bubble problems
Source Japan Real Estate Institute. As at 30
November 2005. Source Datastream. As at 31
December 2005.
9
THEN AND NOWPrice deflation is the bear
Source Datastream. As at 31 December 2005.
10
THEN AND NOWUnwind
Bn
Source Tokyo Stock Exchange. As at 31 October
2005.
11
THEN AND NOWCorporate restructuring ended now
investing again
Capacity
ROE
12.0
10.0
Denial
8.0
Growth
6.0
Correction
Bull market
4.0
2.0
0.0
-2.0
-4.0
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
Source METI and KBC. As at 31 December 2005.
Source Daiwa. As at 31 December 2005.
12
THEN AND NOWTightening labour market
RISING INCOMES
Source Ministry of Health, Labour and Welfare.
As at 30 November 2005.
13
OUTLOOK
Economy ? Consumption ? Capex ? Corporate
change ? Financial system ? Supply and demand
? Reform ?
14
WHY MARTIN CURRIE FOR JAPAN?
15
JAPAN INVESTMENT TEAM

• Keith Donaldson
• Director
• 26 years investment experience
• 17 years experience of Japan
• John Millar
• Director
• 11 years experience of Japan
• Michael Thomas
• Director, team leader
• 30 years experience of Japan
• 16 years at Martin Currie

John-Paul Temperley Director, Japanese
linguist 8 years experience of Japan Kevin
Troup Director 10 years experience of
Japan Katy Marchbank-Smith Investment
analyst 3 years experience of Japan Eri
McKenna Japan investment research
co-ordinator Japanese national

As at 31 December 2005.
16
OUR COMPETITIVE ADVANTAGES

• Proven and experienced team
• Independence of mind
• Dynamic decision-making
• Collaboration

• Size and location advantage
• Big enough to get quality service
• Investment team in one location
• Ideal time zone reflect on Tokyo, react to
  Wall Street

17
INVESTMENT UNIVERSE
Japan equity universe
Research universe
Topix 33 sectors1,643 stocks Other2,057
stocks Total3,700 stocks
Research focus
Japan core
65-75 stocks
700 stocks
200 to300 stocks
Japan Alpha
30-40 stocks

• Select for portfolios on
• Fundamental analysis
• Company meetings
• Team discussion
• Valuation screens
• Technical analysis

• Filter on
• Liquidity (gt2m of average daily turnover)
• Market cap gt300m

Filter onRelevance to top-down analysis
18
INVESTMENT PROCESS

• Technical overlay
• Supply/demand
• Entry/exit points

• Bottom-up
• Prospects for top line growth
• Competitive advantage
• Attractive stage in margin cycle
• Focused management
• Financial strength
• Valuation

• Top-down
• Macro analysis
• Market structure
• Regulatory environment
• Looking for top line growth

19
LONG-TERM PERFORMANCE RECORD Martin Currie Japan
Fund
Martin Currie Japan Fund Out-performance versus
the Topix
Past performance is not a guide to future
returns. Source Lipper Hindsight. Bid-bid basis
with gross income reinvested over calendar years
to 31 December 2005 (). Net of fees performance
has been grossed up internally using a fee rate
of 1.25 to 31 May 2002 and 1.50 going forwards.
From 14 September 1989.
20
SUMMARY

• The bear market is over
• The economic backdrop is positive
• We have an experienced and well resources team
• We have a proven, tried and tested investment
  process

21
REGULATORY INFORMATION

• Martin Currie Investment Management Limited
  (MCIM) has issued and approved this presentation
  in its capacity as investment adviser. MCIM is
  referred to throughout as Martin Currie. MCIM
  is authorised and regulated by the Financial
  Services Authority and is a member of the
  Investment Management Association. Registered in
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  Court, 20 Castle Terrace, Edinburgh, EH1 2ES.
• The presentation may not be distributed to third
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  The presentation does not form the basis of, nor
  should it be relied upon in connection with, any
  subsequent contract or agreement. It does not
  constitute, and may not be used for the purpose
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• The information contained in this presenter has
  been compiled with considerable care to ensure
  its accuracy. But no representation or warranty,
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  research or analysis contained in this
  presentation for its own use. It is provided to
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  are subject to change without notice.
• Past performance is not a guide to future
  returns. Markets and currency movements may cause
  the value of investments and income from them to
  fall as well as rise and you may get back less
  than you invested when you decide to sell your
  investments. There can be no assurance that you
  will receive comparable performance returns, or
  that investments will reflect the performance of
  the stock examples, contained in this presenter.
  Movements in foreign exchange rates may have a
  separate effect, unfavourable as well as
  favourable, on the gain or loss otherwise
  experienced on an investment.
• Funds which invest in one country carry a higher
  degree of risk than those with portfolios
  diversified across a number of markets.
• Investment in the securities of smaller and
  unquoted companies can involve greater risk than
  is customarily associated with investment in
  larger, more established, companies. In
  particular, smaller companies often have limited
  product lines, markets or financial resources and
  their management may be dependent on a smaller
  number of key individuals. In addition, the
  market for stock in smaller companies is often
  less liquid than that for stock in larger
  companies, bringing with it potential
  difficulties in acquiring, valuing and disposing
  of such stock. Proper information for determining
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  exposed, may not be available.
• Investment in derivative instruments, including
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  carries a high risk of loss, the markets in these
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  small adverse market movement may result not only
  in the loss of the original investment but also
  in unquantifiable further loss exceeding any
  margin deposited. Warrants often involve a high
  degree of gearing so that a relatively small
  movement in the price of the security to which
  the warrant relates may result in a
  disproportionately large movement, unfavourable
  as well as favourable, in the price of the
  warrant.