-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B/B1BOD5Cf09t0CrPkpquVQsyXKGUNBov4OB9GdQnBOLOZZlxhp/QWShLOy/gWmn b/d5ANQXwvEIz3cTSs5AKw== 0000889812-99-001277.txt : 19990423 0000889812-99-001277.hdr.sgml : 19990423 ACCESSION NUMBER: 0000889812-99-001277 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANCE GROWTH FUND INC CENTRAL INDEX KEY: 0000860743 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133560020 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 811-05994 FILM NUMBER: 99599027 BUSINESS ADDRESS: STREET 1: 1285 AVENUE OF THE AMERICAS STREET 2: C/O MITCHELL HUTCHINS ASSET MANAGEMENT CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127133589 MAIL ADDRESS: STREET 1: 1285 AVE OF THE AMERICAS STREET 2: 32ND FL CITY: NEW YORK STATE: NY ZIP: 10019 DEFA14A 1 PERSONAL SOLICITATION MATERIALS INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ___) Filed by the Registrant /x/ Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Definitive Proxy Statement /x/ Definitive Additional Materials / / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) The France Growth Fund, Inc. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check the appropriate box): /x/ No fee required. [LOGO] INDOCAM THE FRANCE GROWTH FUND INVESTOR PRESENTATION (April 1999) [LOGO] INDOCAM International Investment Services 1 OUTLINE OF THE PRESENTATION o The French equity market o Market performance o Some positive developments give support to the market o The France Growth Fund o Performance o Strategy o Discount to net asset value [LOGO] INDOCAM International Investment Services 2 THE FRENCH EQUITY MARKET [LOGO] INDOCAM International Investment Services 3 The French Equity Market - -------------------------------------------------------------------------------- Market Performance: SBF 120 Index Return [Graphic Appears Here Showing the Market Performance of the SBF 120 Index from 12/31/96 to 2/3/99.] Performances ------------ 1997: +26.82 1998: +29.47% 1999 (as of 04/14/99): +10.25% [LOGO] INDOCAM International Investment Services 4 The French Equity Market - -------------------------------------------------------------------------------- Market Performance: Relative to European equity market [Line Chart Appears Here Comparing the Performance of the SBF 120 Index and the DJ Stock Index from 12/30/97 to 2/23/99] [LOGO] INDOCAM International Investment Services 5 The French Equity Market - -------------------------------------------------------------------------------- Market Performance: SBF 120, Change in stock prices by type CAC 40 Index: +10.31% SBF second marche: -7.99% [Line Chart Appears Here] Interest Defensive Growth Cyclical rate-sensitive _______________ Stocks Stocks Stocks Stocks | | ------ ------ ------ ------ | SBF 120 Index | | +10.25% | 8.09% 5.55% 19.01% 4.79% |_______________| [LOGO] INDOCAM International Investment Services 6 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market o A resilient macro-economic picture o Equity inflows o Birth of the Euro: M&A deals are soaring o Sentiment on Earning growth is improving o Attractive valuation [LOGO] INDOCAM International Investment Services 7 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market A resilient macro-economic picture Consumer confidence, underpinned by the fall in unemployment, remained at high levels, ... [Bar Chart Appears Here Showing the Unemployment Rate in France in Percentages and the French Consumption in Percentages from the Fourth Quarter 1988 to the Fourth Quarter 1998] ... confirming the scenario under which consumer spending is currently the main engine of growth. [LOGO] INDOCAM International Investment Services 8 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market A resilient macro-economic picture Interest rate levels, the recovery in the property market, and tax incentives ... [Line Chart Appears Here Showing French Surveys on Property Construction from the Fourth Quarter 1990 to the Fourth Quarter 1998] ... all combined to make housing once again an attractive investment. [LOGO] INDOCAM International Investment Services 9 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market A resilient macro-economic picture Historic low level of interest rates [Line Chart Appears Here Showing the Increments of Short- and Long-term Interest Rates from December 1983 to December 1998] [LOGO] INDOCAM International Investment Services 10 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market A resilient macro-economic picture Note that industry has seen a improvement in export order books. Generally, this reflects a pick-up in sales to the USA and Asia. [Line Chart Appears Here Showing the Volume of French Exports to Thailand, Taiwan, Korea and Singapore from January 1997 to January 1999.] [LOGO] INDOCAM International Investment Services 11 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Equity inflows: Net subscriptions o French Mutual Funds o Money market funds are in redemptions o Equity funds record high level of subscriptions o In 1998, this phenomenon has even accelerated [Bar Chart Appears Here Showing Sector Differences Between the SBF 120 Index and the DJ Euro Stock Trader] 1995 1996 1997 1998 ---- ---- ---- ---- In Billions ----------- $-1.5 $-1.6 $0.7 $3.5 [LOGO] INDOCAM International Investment Services 12 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Equity inflows: Switch to Equities Households are shifting their allocation to equities... Equities as a % of total mutual fund asset % 1995 1998 - -------------------------------------------------- Germany 14.6 33.9 France 13.2 26.5 Italy 28.9 22.3 Spain 3.1 12.8 EURO - G4 average 14.1 24.4 Source: Cheuvreux Study [LOGO] INDOCAM International Investment Services 13 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Equity inflows: Europeanisation of Equity Investments The trend for portfolios to go European continues: o The advent of the Euro has had a quite dramatic impact upon the distribution of institutional savings in Europe. o Over the last eighteen months, a large proportion of all inflows into equity funds has gone into those funds invested throughout Europe (either Euro zone or pan European). As a result, the percentage of << foreign >> equities has rapidly increased and should soon exceed the 50% threshold. Foreign equities as % of equities held by mutual funds Equities as a % of total mutual fund asset % 1996 1997 1998 - --------------------------------------------------------------------- Germany 34.1 42.4 53.8 France 31.5 35.5 41.9 Italy 43.5 50.1 54.0 Spain 17.2 23.2 38.5 EURO - G4 average 30.8 38.0 47.6 Source: Cheuvreux Study [LOGO] INDOCAM International Investment Services 14 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Equity inflows: Europeanisation of Equity Investments [Bar Chart Appears Here] [LOGO] INDOCAM International Investment Services 15 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Birth of the Euro: M&A are soaring o France is the second largest European target country in 1998: o with M&A volumes of $86bn... o up 31% from 1997 and... o 14% of European deals o 1998- Major deals include: o $21bn joint venture between Rhone-Poulenc and Hoescht (Germany) o $16.8bn Total bid for Petrofina (Belgium) o $11bn Sanofi/Synthelabo merger o $5.9bn acquisition of Generale de Belgique by Suez Lyonnaise o $3.1bn Carrefour/ Comptoires Modernes take over o $4.7bn Castorama/Kingfisher merger (UK) o 1999- Finance sector: This phenomenon accelerates o Paribas / Societe Generale / BNP [LOGO] INDOCAM International Investment Services 16 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Sentiment on Earning growth is improving SBF 120 Index companies Evolution of Research Analysts Earnings growth forecasts for 1999 [Line Chart Appears Here Showing the Trend of Growth in the Earnings Per Share of the Companies Comprising the SBF 120 Index] [LOGO] INDOCAM International Investment Services 17 The French Equity Market - -------------------------------------------------------------------------------- 1999: Some positive developments give support to the market Attractive Valuation Main French Market Ratios Current level Based on Consensus Estimates SBF 120 Index As of April 14, 1999 ----------------------------------------------------------------- PRICE EARNING RATIO PER 1999 (estimate) 23.8 x PRICE / BOOK VALUE 1999 2.66 GLOBAL YIELD 1999 2.25% 10 years BONDS YIELD 3.95% SHORT TERM RATES (3 months) 2.50% Source: Jacques Chahine Finances [LOGO] INDOCAM International Investment Services 18 FRANCE GROWTH FUND (as April 9, 1999) [LOGO] INDOCAM International Investment Services 19 The France Growth Fund - ------------------------------------------------------------------------------ Track record o The fund was launched in May 1990. Since inception, the France Growth Fund has consistently outperformed its benchmark. In USD Out- As of April 9, 1999 FUND SBF 120 Index Performance - ------------------------- --------- ------------- ----------- SINCE INCEPTION + 167.47% + 92.54% + 74.93% (as of May 18, 1990) 3 YEARS + 97.17% + 83.43% + 13.74% 1998/1999 + 43.85% + 41.20% + 2.65% [LOGO] INDOCAM International Investment Services 20 The France Growth Fund - ------------------------------------------------------------------------------ Performance over 1996/1999 As of April 9, 1999 Outperformance over 3 years: +13.74% [Line chart appears here Showing the Performance of the Fund and the Performance of the SBF 120 Index from 1/25/96 to 1/29/99] - --FRF Net Asset value in USD --SBF 120 index in USD (benchmark) [LOGO] INDOCAM International Investment Services 21 The France Growth Fund - ------------------------------------------------------------------------------ Performance Vs SBF since Inception (May 18, 1990) As of April 9, 1999 Outperformance since inception: +74.93% [Line chart appears here Showing the Performance of the Fund and the Performance of the SBF 120 Index Since 5/18/90 Through 1/29/99] - --FRF Net Asset value in USD --SBF 120 index in USD (benchmark) [LOGO] INDOCAM International Investment Services 22 The France Growth Fund - ------------------------------------------------------------------------------ Investment Strategy: Fully invested [Pie chart appears here] Cash French Equities ---- --------------- 0.0% 100.0% [LOGO] INDOCAM International Investment Services 23 The France Growth Fund - ------------------------------------------------------------------------------ Investment Strategy o High exposure on large cap stocks o Come back on cyclicals due to dollar strength and Far East Asia recovery o Overweighting on the banking sector: M&A [LOGO] INDOCAM International Investment Services 24 THE FRANCE GROWTH FUND - ------------------------------------------------------------------------------ Investment Strategy: High exposure to large cap. o Large cap exposure [Piechart appears here] Small Cap. Large cap. - ---------- --------- 2.75% 97.25% Large cap: Market cap. more than $1bn large cap. outperformance... [Linechart appears here Showing the Performance of the CAC 40 Index and the SBF Second Marche Trade from 12/31/97 to 3/16/99] As of 04/14/99 - --- CAC 40 (+45.03%) - --- SBF Second Marche (+1.74%) [LOGO] INDOCAM International Investment Services 25 The France Growth Fund - ------------------------------------------------------------------------------ Investment Strategy: Overweighting on the banking sector: M&A Strategic shifts by type since Dec. 30, 1998 [Barchart appears here] Interest rate- Growth stocks Cyclical stocks sensitive stocks - ------------- --------------- ---------------- -3.88% 0.72% 3.18% [LOGO] INDOCAM International Investment Services 26 The France Growth Fund - ------------------------------------------------------------------------------ Investment Strategy: recent moves to companies exposed to economic rebound in Asia & benefiting from recent rise of the US Dollar Strategic shifts by sector since Dec. 30, 1998 [Barchart appears here] Energy Capital Car Consumer Food and Retail Services Banks goods goods beverage - ------------------------------------------------------------------------------ -0.84% 1.05% 1.97% 0.96% -0.90% -0.65% -5.60% 2.43% [LOGO] INDOCAM International Investment Services 27 The France Growth Fund - ------------------------------------------------------------------------------ Investment Strategy: Overweighting the Finance, capital goods & Services sectors [Barchart appears here] Banks 2.85% Capital goods 2.19% Car 1.88% Services 1.17% Energy -0.18% Construc. -0.35% Consumer goods -0.37% Holdings -0.46% Real estate -0.52% Retail -0.90% Insurances -1.10% Basic products -1.20% Food and beverage -3.01% The France Growth Fund: Over/Under sector allocation Vs SBF 120 Index [LOGO] INDOCAM International Investment Services 28 The France Growth Fund - ------------------------------------------------------------------------------ Investment Strategy: Top 10 Holdings Stocks % Asset FRANCE TELECOM 10.46% AXA 6.50% VIVENDI 5.73% OREAL (L') 5.60% TOTAL 4.68% SUEZ - LYONNAISE DES EAUX 3.97% ELF AQUITAINE 3.54% ALCATEL 3.37% CARREFOUR 3.07% SYNTHELABO 3.04% 10 most overweightings Stocks % Asset OverWeight. PARIBAS 2.93% 2.93% SYNTHELABO 3.04% 1.84% UBI SOFT ENTERTAINMENT 1.15% 1.15% TF1 1.55% 1.08% VIVENDI 5.73% 0.98% RENAULT 1.96% 0.89% SIDEL 1.14% 0.84% VALEO 1.64% 0.83% SUEZ - LYONNAISE DES EAUX 3.97% 0.82% STMICROELECTRONICS 2.66% 0.81% [LOGO] INDOCAM International Investment Services 29 DISCOUNT TO NET ASSET VALUE [LOGO] INDOCAM International Investment Services 30 Discount to Net Asset Value - ------------------------------------------------------------------------------ Stock performances in 1998/99 (in USD) [Line chart appears here Showing the Market Price Return Including Dividends, the Market Price Return and the NAV Return Including Dividends for Fund Shares from 12/31/97 to 4/9/99] As of December 31, 1997: Discount of 19.97% As of April 9, 1999: Discount of 15.46% - --Market Price including dividend - - -Market Price --NAV including dividend [LOGO] INDOCAM International Investment Services 31 Discount to Net Asset Value - ------------------------------------------------------------------------------ The France Growth Fund has announced new policies to enhance shareholder value o The board of directors decided to: o institute a tax-advantaged managed distribution plan to provide shareholders with quarterly payments totaling at least 12% of the Fund's net assets annually o The adviser has revised management fee calculation: o Advisory fee will be adjusted downward to the same amount as the Fund's discount (during the year ended Dec. 98, the investment advisor voluntary waived $181 661 of its fees) [LOGO] INDOCAM International Investment Services 32 Discount to Net Asset Value - ------------------------------------------------------------------------------ FRF: declared dividend o 1997: 0.32833$ per share on April 4, 1997 1.5$ per share on December 29, 1997 o Global Yield: 13.9% on NAV o 1998: 0.53727$ per share on June 6, 1998 0.3936$ per share on November 6, 1998 1.0936$ per share on December 30, 1998 o Global Yield: 12.3% on NAV o 1999: 0.7913$ per share on April 9, 1999 o Global Yield: 4.95% on NAV [LOGO] INDOCAM International Investment Services 33 Discount to Net Asset Value - ------------------------------------------------------------------------------ FRF: Discount has slightly reduced Discount o As of December 31, 1997: 19.97% o Average discount from January to Week prior the release of the Distribution Plan: 18.16% o Average discount through fall: 18.42% o Average discount from Nov. 98 to April. 99: 15.83% [LOGO] INDOCAM International Investment Services 34 Discount to Net Asset Value - ------------------------------------------------------------------------------ On closed-end fund listed on NYSE
Prem/Disc Prem/Disc Prem/Disc Prem/Disc 52-WEEK AS/OF RANGE 4/9/99 3 months ago 12/31/97 12/31/96 HIGH LOW ------ ------------ -------- -------- ---- --- FRANCE - ------ France Growth Fund -15% -16% -20% -22% -15% -23% GERMANY - ------- Dresdner RCM Europe Fund -4% -8% -11% -24% -3% -18% Germany Fund -10% -11% -12% -20% -4% -22% New Germany Fund -17% -17% -17% -22% -14% -26% IRELAND - ------- Irish Investment Fund -19% -9% -8% -17% -5% -29% ITALY - ----- Italy Fund -18% -15% -19% -19% -14% -26% SPAIN - ----- Spain Fund -7% -13% -10% -22% -7% -21% SWITZERLAND - ----------- Swiss Helvetia Fund -18% -16% -17% -18% -15% -25% UNITED KINGDOM - -------------- UK Fund -6% -7% -10% -18% -5% -17% AUSTRIA - ------- Austria Fund -19% -7% -14% -21% -7% -22% Average Premium/Discount -13.4% -11.8% -12.7% -20.4%
Source: Smith Barney Research [LOGO] INDOCAM International Investment Services 35 Discount to Net Asset Value - ------------------------------------------------------------------------------ FRF: Premium/Discount Dec. 98 to April 1999
Decemb. + 12/30/98: Dist. Div. January 1999 February ------------------------------ ------------ -------- Price NAV %Prem. Price NAV %Prem. Price NAV % Prem. ----- --- ------ ----- --- ------ ----- --- ------- Dec. 04 13.750 16.60 -17.17% Jan. 08 14.750 17.50 -15.74% Feb. 05 14.125 16.61 -14.94% Dec. 11 13.688 16.63 -17.71% Jan. 15 14.125 16.80 -15.91% Feb. 12 13.625 16.35 -16.66% Dec. 18 13.625 16.51 -17.47% Jan. 22 13.875 16.63 -16.58% Feb. 19 13.813 16.22 -14.84% Dec. 25 14.563 17.06 -14.66% Jan. 29 14.375 17.23 -16.56% Feb. 26 13.625 16.06 -15.16% Dec. 30 13.750 16.41 -16.23% Average 13.875 16.644 -16.65% Average 14.281 17.041 -16.20% Average 13.797 16.309 -15.40% March 1999 April + 04/09/99: Dist. Div. May 1999 ---------- ---------------------------- -------- Price NAV % Prem. Price NAV % Prem. Price NAV % Prem. ----- --- ------- ----- --- ------- ----- --- ------- March 05 13.750 16.14 -14.81% Apr. 02 13.813 16.30 -15.26% March 12 13.813 16.33 -15.42% Apr. 09 13.500 15.97 -15.47% March 19 13.813 16.46 -16.08% Apr. 16 March 26 13.313 15.82 -15.85% Apr. 23 Average 13.672 16.188 -15.54% Average 13.656 16.135 -15.36% Average
[LOGO] INDOCAM International Investment Services 36 Discount to Net Asset Value - ------------------------------------------------------------------------------ Information Highlights o NAV: daily versus weekly. Daily NAV could help to reduce the discount o Investment objective : With the birth of the Euro, some investors have started to question the attractiveness of a single country European closed-end fund. o The French market has been a top performer so far. Some investors like it this way: pure French o However: a more diversified portfolio could protect the portfolio from easy hedge versus future contracts. o Closed-end structure creates value versus open-ended [LOGO] INDOCAM International Investment Services 37 Discount to Net Asset Value - ------------------------------------------------------------------------------ A tale of two mutual funds o The France Growth Fund o Active o Benchmark SBF 120 o Indocam International o French investment process o Size: $247 ml o Expense ratio: 1.3% o Closed-end o Indocam France o Active o Benchmark SBF 120 o Indocam o French Investment Process o Size: $214ml o Expense ratio: 1.2% o Open-end [LOGO] INDOCAM International Investment Services 38 Discount to Net Asset Value - ------------------------------------------------------------------------------ Indocam France: Market performance Vs. fluctuations of outstanding shares [Line Chart Appears Here Showing the Monthly Performance of the SBF 120 Index and Shares of Indocam France from 1/29/93 to 1/29/99] - -- SBF 120, monthly performance --INDOCAM France, Subscriptions [LOGO] INDOCAM International Investment Services 39 Discount to Net Asset Value - ------------------------------------------------------------------------------ France Growth Fund Vs. Indocam France: Relative performance [Line Chart Appears Here Showing the Outperformance of the Fund Compared to Indocam France Since 12/31/90] Since Dec. 31, 1990: FRF outperformed its open-ended counterpart by 24.60% [LOGO] INDOCAM International Investment Services 40 Discount to Net Asset Value - ------------------------------------------------------------------------------ S&P 500, SBF 120 and FRF Discount [Line Chart Appears Here Showing the Performance of the S&P 500 Index, the SBF 120 Index and the Size of the Discount to Net Asset Value for Fund Shares from 5/18/90 to 5/29/98] - --S&P 600 composite --SBF Index [_] France Growth Fund: Historic Discount / Premium [LOGO] INDOCAM International Investment Services 41 -----END PRIVACY-ENHANCED MESSAGE-----