SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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THE FIRST AUSTRALIA FUND, INC.
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Due to overwhelming demand...we introduce a new publication This Week In
Australia, to keep you up-to-date with economic and market news from
"down-under".
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[LOGO]
THIS WEEK IN AUSTRALIA EQUITILINK
oooooooooooooooooooooooooooooooooooooooooooooooooo INVESTMENT MANAGEMENT
Week ending March 12, 1999
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ECONOMIC NEWS
o Australia recently reported stronger than expected economic growth for the
December quarter of 1.1% versus market expectations of 0.6%. The average
annual GDP growth for 1998 was 4.9%. The market expects some easing of
economic growth, to 3.2% in 1999.
o The GDP deflator, an indicator of inflationary pressures, was negative for
the second consecutive quarter.
o Employment figures released on Thursday showed employment increased by
32,900 in February which was near market expectations of 25,000.
CORPORATE NEWS
o Corporate tax is currently being reviewed by Parliament. The Treasurer has
suggested that the corporate tax rate should be reduced from 36% to 30%.
The concession is that the accelerated appreciation allowance be abolished.
o Telstra Corporation Ltd. presented a good result, with fiscal first-half
net profits up 12.2%. Telstra said its business was coming under increasing
pressure from competition, but its national long-distance, data and mobile
revenues were strong.
MARKETS
o The Australian stockmarket rallied over the week, due to generally strong
results this reporting season.
o The Australian dollar rallied, boosted by stronger commodity prices.
o Australian bond yields declined, led by lower US treasury yields.
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| | | | | |
| | | | | |
% | Current | 1 Week | 1 month | 3 months | 6 months | 1 Year
--- | ------- | --- ---- | --- ----- | --- ------ | --- ------ | --- ----
| | | | | |
ASX All Ordinaries | 2951 | 2885 +2.3% | 2867 +2.9% | 2730 +8.1% | 2468 +19.5% | 2715 +8.7%
ASX All Industrials | 5322 | 5232 +1.7% | 5179 +2.8% | 4922 +8.1% | 4340 +22.6% | 4658 +14.3%
ASX All Resources | 1007 | 953 +5.6% | 970 +3.8% | 934 +7.8% | 958 +5.1% | 1164 -13.5%
Australian Dollar | 0.6370 | 0.6264 +1.7% | 0.6480 -1.7% | 0.6208 +2.6% | 0.5983 +6.5% | 0.6662 -4.4%
| | | | | |
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OUTLOOK
o The key to the Australian dollar in the short-term is commodity prices,
which are starting to show signs of improvement.
o The outlook for the Australian stockmarket remains positive, with stronger
growth and benign inflationary pressures, supporting earnings growth.
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The discussion of economic and market news is based on information believed to
be accurate, but EquitiLink does not give any warranty in relation to the
accuracy or reliability of such information. That discussion, as well as the
discussion of outlook, which represents the views of EquitiLink, is subject to
change as market and economic events unfold.
-more-
The First Australia Fund, Inc. and certain other persons named below may solicit
proxies to (a) elect five directors to serve as Class II Directors for a
three-year term, (b) ratify the selection of independent auditors, and (c) vote
against certain shareholder proposals. The participants in this solicitation may
include the directors of the Fund: Anthony E. Aaronson, Sir Roden Cutler, David
Lindsay Elsum, Rt. Hon. Malcolm Fraser, Laurence S. Freedman (Chairman), Michael
R. Horsburgh, Harry A. Jacobs, Jr., Howard A. Knight, Richard H. McCoy, Neville
J. Miles, William J. Potter, John T. Sheehy, Brian M. Sherman (President), of
whom Messrs. Fraser, Jacobs, Knight, McCoy and Sherman are nominees as Class II
Directors; the other executive officers of the Fund: (David Manor, Treasurer,
Ouma Sananikone-Fletcher, Assistant Vice President - Chief Investment Officer,
and Barry G. Sechos, Assistant Treasurer); and the following employees of
EquitiLink Australia Limited, the Fund's Investment Adviser: Craig A. Hood,
Director - Head of Equities, Irfan N. Kahn, Product Manager - Overseas Funds,
Munib Madni, Equity Portfolio Manager, and Vincent John Parrott, Director -
Business Operations.
As controlling shareholders of EquitiLink International Management Limited, the
Fund's Investment Manager, Messrs. Freedman and Sherman share investment and
voting power for 46,062 shares of the Fund owned by EquitiLink International
Management Limited. As of the date of this communication, none of the
participants named above owns individually or in the aggregate in excess of 1%
of the total outstanding shares of the Fund.
Messrs. Freedman, Sherman, Manor, Sechos, Hood, Khan, Madni, Parrott and Ms.
Sananikone-Fletcher may be deemed to have a substantial interest in the
shareholder proposals because of their share ownership in, or any employment
relationship with, the Fund's Investment Manager or Investment Adviser.
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