SOURCE: Singapore Fund

Singapore Fund

March 31, 2011 17:03 ET

The Singapore Fund Announces Termination of Investment Advisory Agreement, Discount Management Plan, Change to Primary Benchmark Index and Cancellation of Special Meeting of Stockholders

JERSEY CITY, NJ--(Marketwire - March 31, 2011) - The Singapore Fund, Inc. (NYSE: SGF)

Termination of Investment Advisory Agreement

The Singapore Fund, Inc. (NYSE: SGF), a closed-end management investment company seeking long-term capital appreciation through investment primarily in Singapore equity securities, announced today that Daiwa SB Investments (Singapore) Ltd. ("Daiwa SB"), the Fund's current Investment Adviser, has agreed to terminate the Investment Advisory Agreement (the "Investment Advisory Agreement") between the Fund and Daiwa SB. The termination of the Investment Advisory Agreement will be effective upon the date that the new Investment Management Agreement (the "new Investment Management Agreement") between the Fund and DBS Asset Management (United States) Pte. Ltd. ("DBSAM") goes into effect following the consummation of the pending merger between the parent company of DBSAM and Nikko Asset Management Co., Ltd ("Nikko Asset Management"). Upon termination of the Investment Advisory Agreement, DBSAM and Daiwa SB will enter into a separate arrangement pursuant to which Daiwa SB will provide research services to DBSAM regarding the Singapore securities market. Under this new arrangement Daiwa SB would switch from being the Investment Adviser to the Fund to providing advice on Singapore securities to DBSAM, allowing the Fund to eliminate the fees it currently pays to Daiwa SB, while still benefiting, through DBSAM, from the experience Daiwa SB has gained having served as Investment Adviser to the Fund since its inception. As a result of the termination of the Investment Advisory Agreement, the total advisory fees paid by the Fund would be a monthly fee at an annual rate of 0.80% of the first $50 million of the Fund's average weekly net assets and 0.66% of the Fund's average weekly net assets in excess of $50 million. 

Discount Management Plan

The Fund also announced today that the Fund's Board of Directors has approved a Discount Management Plan, effective March 31, 2011, which will consist of a discount-triggered share repurchase program. 

In accordance with the Discount Management Plan, if the Fund's shares trade on the New York Stock Exchange ("NYSE") at an average discount from their net asset value ("NAV") by more than 10% during any 13 week period (based on the reported closing price on the NYSE on each trading day during that 13 week period), the Fund will commence a tender offer to purchase 10% of the Fund's then outstanding shares of common stock at a purchase price of 98% of their NAV at the conclusion of the tender offer. Upon satisfaction of the above-referenced conditions, the Fund will commence the tender offer within eight weeks of the conclusion of any such thirteen week period (but no more than once during any fiscal year of the Fund).

The Board of Directors believes that the Discount Management Plan represents a responsible allocation of the Fund's assets by providing additional value to stockholders who wish to tender their shares when discounts have been at high levels for a prolonged period of time as well as enhancing NAV for all stockholders through the Fund's purchase of shares at market discounts that have an accretive effect on NAV.

Change of Primary Benchmark Index

The Fund also announced today that, effective May 1, 2011, the Fund will change its primary benchmark index from the Straits Times Index to the MSCI Singapore Total Capital Index. The Board of Directors believes that the MSCI Singapore Total Capital Index is more broadly representative of the Singapore market containing both small and mid-cap stocks as well as large cap stocks.

Cancellation of Special Meeting of Stockholders

The Fund also announced today that it has cancelled the Special Meeting of Stockholders, which had been scheduled for Thursday, April 28, 2011 at 10:30 A.M., New York time. The Fund's stockholders will instead be asked to approve the new Investment Management Agreement with DBSAM to take effect upon the consummation of the pending merger between the parent company of DBSAM and Nikko Asset Management at the Fund's Annual Meeting of Stockholders, which will be held as scheduled at the offices of Daiwa Capital Markets America Holdings, Inc., Financial Square, 32 Old Slip, 14th Floor, New York, New York 10005-3538, on Thursday, June 2, 2011 at 10:30 A.M., New York time. If the merger takes effect before the Fund's shareholders have approved the new Investment Management Agreement with DBSAM, DBSAM will continue to provide investment management services to the Fund under an interim Investment Management Agreement that has been approved by the Fund's Board of Directors.

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