Page 8 - SAR141018_Forterra AR 2013

FORTERRA
ANNUAL REPORT 2013
CHAIRMAN’S STATEMENT
6
the maximum gearing cap of
45.0% as stipulated in the Trust
Deed. Bank balances and cash on
hand amounted to S$112.94 million
as at 31 December 2013, increased
sharply by 124.9% year-on-year.
Overall , we are pleased that
the unit price performed well
during the course of 2013, as it
rose by 47.6% over the year to
S$2.17 as at 31 December 2013,
compared to S$1.47 a year ago,
outperforming the Straits Times
Index. The market capitalisation
of the Trust expanded 47.6% to
approximately S$550.73 million as
at 31 December 2013.
MARKET CONDITIONS
The 3rd Plenary Session of the
18th CPC Central Committee in
November 2013 outlined major
reforms to be accomplished by
2020. For the economic reform,
the core is to ensure that the
market shall play a decisive role,
different from a basic role in
the past, in allocating resources.
For 2014, the tone set by the
government is to maintain an
appropriate growth and deepen
comprehensive reforms with the
macro policy stance remaining
proactive in fiscal policy and
prudent in monetary policy, and
thus a steady economic growth is
expected in coming years.
China’s economy ended 2013 on a
firm footing. GDP growth came in
at 7.7% year-on-year in 4Q 2013,
taking annual economic growth
to 7.7%, unchanged from 2012 –
still above the official target of
7.5% and is in the comfort zone
to the Central Government and
the market. The continuing slower
growth trend seen since the 10.4%
level reached in 2010 suggested
that policy makers are pushing
Annual Retail Sales and YoY Growth
20
25
20%
25%
0
5
10
15
20002001200220032004200520062007200820092010201120122013
RMB Trillion
0%
5%
10%
15%
Annual Retail Sales YoY Growth
(Source: CEIC, National Bureau of Statistics)
Annual GDP and YoY Growth
0
10
20
30
40
50
60
20002001200220032004200520062007200820092010201120
12
2013
RMB Trillion
0%
2%
4%
6%
8%
10%
12%
14%
16%
Annual GDP YoY Growth
(Source: CEIC, National Bureau of Statistics)
forward structural reforms –
rebalancing the economy by
shifting away from investment
and exports for growth and relying
more on domestic consumption.
Consumption, accounting for half
of GDP growth, held up well in
2013. Retail sales in December
grew 13.6% year-on-year, almost
the fastest pace during the
year and for full year of 2013 it
posted 13.1% growth. Disposable
incomes grew relatively strongly
– 9.7% and 12.4% for urban and
rural households respectively,
which is believed to support
private consumption and offset
some of the weakness in public
consumption as a result of ongoing
anti-corruption drives.