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It was noted that a copy of HSBC’s approach to
responsible investment had been circulated to the Members of the
Committee and was attached to the Quarterly Report to be discussed
by this meeting.
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It was AGREED
that a meeting of this Committee be arranged
to discuss HSBC’s documentation on responsible
investment.
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Submitted - the HSBC Global Asset Management (UK) Limited
Quarterly Report for the period up to the end of March
2010.
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The Investment Management reported that the portfolio
showed a return of + 5.4%, benchmark of
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+ 6.0%. The closing value of the fund on 31 March,
2010 was £13,402,507. The value of the fund on 24th
May, 2010 was £12,371,324. The fund underperformed its
benchmark this quarter by - 0.6%.
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Mr. Gareth Watts, Client Director reported that there is
some improvements in the global markets but recovery is subdued.
The banking system is more stable but is still fragile.
Significant government intervention has taken place leading
to ballooning of debt and deteriorating national balance sheets.
It was noted that public sector spending will be under
pressure together with low interest rates likely to persist for
some time.
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Mr. Marcus Pakenham gave an insight to the Committee on
the UK equity market and sector performance for quarter 1.
The significant changes in quarter 1 are that Halma,
Spirax-Sarco Engineering, Imperial Tobacco, Stagecoach, Cable &
Wireless, United Utilities and Drax stocks have been sold.
Capita, Johnson Matthey, Carnival (Cruise Ships), 3i Group
are the stocks that have been purchased.
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It was also noted that in general the portfolio is
overweight in equities and underweight in bonds; and currently the
portfolio is underweight in the UK markets compared to the
benchmark and overweight in foreign markets. A recent change
in the portfolio is that an increase has been undertaken in the
Japanese financial markets as the profit growth in Japan will be
substantial over the year as that market is offering good value for
money.
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Mr. Schofield stated that he considered that the banking
element is still a major factor in terms of the future economy.
He considered that the billions that have been injected into
the banking systems, whilst it has saved the banks, it has done
nothing for small businesses in particular and business in general.
Mr. Marcus Pakenham responded that the bank
‘bail-out’ in most countries will not cost very much to
the taxpayer eventhough the sums of money looks large. He
noted that there was a fiscal deficit in the UK before going into
the financial crisis as the GDP on a nominal basis has fallen 6/7%
and the government has had to compensate for that issue.
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Following a question and answer session it was
RESOLVED to accept the report.
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