May 7, 2014

Press Release
Nikko Asset Management Co., Ltd.

Risk Factors Prompting Nikko Asset Management to Cut Equity
Exposure WorseningzUkraine and China remain most worrisome issues

The volatile geopolitical situation in Eastern Ukraine and the prospect for prolonged
negative news out of China continue to weigh on Nikko Asset Management’s stance on
global equities, which the Tokyo-based asset manager cut to neutral from overweight lastmonth. In its latest research report, Evolving Markets, the firm’s analysts provide detailed
analysis of these risk factors as well as an overview of the most (and least) attractive
emerging markets.

The situation in Eastern Ukraine may be more perilous than many realize because vital
production facilities for military equipment, including missile, aircraft and naval engines arelocated in the region and which Russia is not likely to permit coming under the control of ahostile government.

“While we did not previously believe that Russia would invade Eastern Ukraine, we did
expect ethnic violence to occur there,” said John F. Vail, Chief Global Strategist andChairman of the Global Investment Committee. “However, now we have to admit that someform of Russian presence, perhaps ‘peacekeepers’ requested by the separatists, is likely.
Whether opponents of strong Russian control in Eastern Ukraine decide to fight thesepeacekeepers is a key question, but it clearly could become more unstable than theCrimean example.”

Meanwhile, in China, Nikko Asset Management continues to believe the country will be able
to avoid a hard landing even though negative news is accelerating on several fronts.
Property price declines are spreading—with secondary prices starting to fall in many
second- and third-tier cities—while the government is pushing even harder to rein in theshadow banking system, which provides funding to many struggling sectors of the economy.

“Falling property prices put a damper on investor sentiment, and also lead to less activity inthe crucial housing construction industry,” Vail said. “Rising defaults among the shadowbanks will lead to a rise in banks’ non-performing loans, but in the long run the governmentis doing the right thing in instilling some discipline in lending activity.”In the emerging markets, Nikko Asset Management’s top investment professionals covering
equities, fixed income and forex have updated their views on the relative attractiveness ofseveral countries, based on a ranking of average scores across six categories: 1) the
direction of the one-year interest rate, 2) the direction of the forex rate, 3) equity earnings
growth, 4) equity valuations (based upon several measures), 5) political risk and 6)
vulnerability to credit or property market downturns.

The most attractive emerging markets are India, Korea and Mexico, while the most
unattractive markets are Chile, Egypt, Russia, South Africa, Thailand and Turkey. In themiddle, average-scoring countries include China, Indonesia, Malaysia, Peru, the Philippinesand Vietnam. Brazil scores slightly below average.

Overall, Nikko Asset Management is cautious on emerging markets equities as a whole,even though certain countries offer excellent prospects; nevertheless, investors should becautious about the political risks associated with this asset class.

-ENDS-This material has been prepared solely for the purposes of Nikko AM to communicate about the market
environment, etc. It is not solicitation for a specific fund. Moreover, the information in this material will noteffect Nikko AM's fund investment in any way. Mentions of individual stocks in these materials neither
promise that the stocks will be incorporated nor constitute a recommendation to buy or sell. The informationin these documents have been prepared from what is considered to be reliable information but the accuracy
and integrity of the information is not guaranteed by the Company. Figures, charts, and other data in thesematerials are current as of the date of publication unless stated otherwise. In addition, opinions expressedin these materials are as of the date of publication unless stated otherwise. * The graphs, figures, etc.,
contained in these materials contain either past or back-dated data, and make no promise of future
investment returns, etc. These documents make no guarantee whatsoever of future changes to the market
environment, etc. Opinions expressed in these documents may contain opinions that are not Nikko AM's but
the personal opinion of the author, and may be changed without notice.
Forwarding or quoting from these materials without the advance permission of Nikko AM's corporate
communications representative is strictly prohibited. Please contact Nikko AM's Corporate Communications
at +81-(0)3-6447-6775 if you have any questions.

About Nikko Asset Management
Nikko Asset Management (Nikko AM) is a leader in the Asian financial services industry, withover $160 billion in assets under management as of December 31, 2013. Established in 1959,
the firm has representation in 24 locations in 12 countries and enjoys one of the largest
distributor networks in the region, serving both retail and institutional clients. More than 300
banks, brokers, financial advisors and life insurance companies distribute the company’sproducts.
Nikko AM manages a wide range of equity and fixed income strategies in both active andpassive formats, leveraging the talents of over 250 investment professionals. In 2013 alone,
Nikko AM won awards for excellence in asset management from Lipper, Mercer, AsianInvestor,R&I, among others.
The company’s management team is highly diverse and experienced, and is committed torunning the company according to international best practices. Nikko AM’s independence fromthe limitations imposed on many captive asset management companies allows it to focus on theinterests of clients. At the same time, the company enjoys a stable base of shareholders, withmajority ownership held by Sumitomo Mitsui Trust Holdings and a smaller stake by DBS Bank.
For more information, please visit http://en.nikkoam.com/* Consolidated assets under management and sub-advisory of Nikko AM and its subsidiaries as of 31 December 2013.