TheStar
KUALA LUMPUR: MAA International Assurance Ltd, an offshore composite insurance arm of MAA Holdings Bhd, is targeting about S$30mil sales in the first year for its latest product, the Global Natural Resources Fund.
The Singapore dollar-denominated feeder fund will officially hit the local market on April 28 and invest in equities of high quality global companies involved in the extraction, processing, transportation and distribution of natural resources.
The fund, which will be managed by US-based investment management company Newgate Capital Management LLC, will be fed or invested into Newgate Capital's existing underlying Global Natural Resources Fund.
Chief executive officer Richard Goh said the launch was timely in view of the rising prices of natural resources due to the shortage of global supply. The company is anticipating an annual return of about 20% for the fund.
“Going forward, the supply of natural resources is likely to get tighter with massive demand from countries like China, India and other emerging markets, and this will drive natural resources prices through the roof.
“In 2002, the price of crude oil was US$18 to US$20 a barrel and today it is more than US$100. Consumption, on the other hand, will also surge as half of the world population's wealth rises,” Goh told StarBiz.
According to Goh, the governments of different countries were currently taking steps to address the issue of food shortage. Thailand, Ecuador, Senegal, Egypt, Argentina and Venezuela had capped food prices.
Zambia, Ethiopia and Pakistan had suspended food exports, while Malaysia – together with Jordan, Ethiopia and Pakistan – were stockpiling major foodstuff, he said, adding that others were cutting import tariffs and increasing food subsidies.
Base metals like copper, iron, lead and aluminium were also in great demand in line with the global entry of a huge cycle of infrastructure spending, he said.
Morgan Stanley estimated that emerging markets would spend US$21.7 trillion on infrastructure over the next 10 years.
Goh welcomed investors to get into the booming natural resources sector as he felt the growth cycle had only started at the turn of the decade.
“Historically, most commodity bull markets tend to span 10 to 15 years, with super cycles stretching out to 20 years. That means the current boom in commodities shall not peak until 2012, indicating another four more years of rising prices.
“But odds are high that we are in a super boom cycle, which will mean we would not see the top in prices until 2022,” he said.
The minimum initial investment for the Global Natural Resources Fund is S$2,500, and additional investments can be made at anytime with just S$1,000. All investors will also be covered with a free group life insurance of 1% on the initial and all top-up investment.
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