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Dear Shareholders,

The state of the global economy is generally a mixed picture. We observed increased bifurcation across regions and sectors over the last several months, resulting in clear divergences of performances among the commodity complex and related equities.


Looking into 2024, falling inflation in developed markets will allow recalibration of policy stances by central banks, leading to potential rate cuts in the latter part of the year, albeit this process may be milder and take longer than recent market expectations, given the continued resilience of US's labour market and consumer spending. The US Federal Reserve is expected to cut interest rates during 2024, but the timing and pace of those cuts will impact expected growth rates and therefore stock market valuations. The markets expectations for a soft landing scenario are increasing, but we still expect growth to moderate nonetheless, shaping our views on select commodities.

China, on the other hand, has seen increased economic volatility since the Covid-19 pandemic. However, in recent months, we are pleased to see more proactive policies to stimulate aggregate demand, including further monetary easing, increased fiscal spending, and a slew of policies to support the housing and equity markets. We anticipate the intensity of stimulus measures to pick up pace, in light of continued softness in domestic consumption, deflationary pressures and challenges in the property sector. The prospect of a cyclical recovery of the Chinese economy may become increasingly topical among commodity and equity investors throughout the year, and this will bode well for commodities. 

2024 will also be characterised by increased geopolitical tensions and many elections globally, most notably the US election in late 2024, leading to increased risks of further dislocations of supply chains, energy supply and changes in policies. These present opportunities and risks, and we are ready to capitalise should they arise. What will remain certain are secular trends such as energy transition and electrification, and we continue to find ample structural and cyclical opportunities across our investment universe.


It’s hard to predict the course of geopolitical events, but at the time of writing there are still ongoing conflicts between Russia-Ukraine and Israel-Hamas. These issues aren’t easily resolved, especially given recent escalation of violence in the Red Sea threatening to spill into a broader issue in the Middle East region. These conflicts are likely to impact inflation and broader economic growth, adding another layer of uncertainty to the outlook.


In the six months ended on 31 December 2023, we are pleased to report a net profit attributable to shareholders of the Company of HK$593,272,000, primarily driven by our Resource Investment segment, which delivered a segment profit of HK$237,951,000 and share of profit from Mount Gibson Iron Limited of HK$265,908,000. Our Commodity Business segment also generated a segment profit of HK$69,373,000.


It is our long-held belief that shareholders should receive a return, however given the current uncertainty in the global outlook, we have not declared a dividend. We will continue to reassess our dividend policy based on our expectations of the economic outlook. As ever, I would like to thank you all for your continued support for, and faith in APAC Resources.

Andrew Ferguson

Chief Executive Officer

23 February 2024

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