Partnership Fund Updates! Oct 1 2006
Dear Partners,
Due to our lack of exposure to India and G.China (the two most improved markets for 1 month, our fund has severely underperformed the MSCI Asia Ex-Jap Index (+12.37%), but did well against the MSCI World Free Index (+4.54%).
These two markets also carry the greatest risks for now, with HK at 22.3x PE, China (HSCE) at 28.2x and India (SENSEX) at 26.3x.
On a rationale basis, we think that the risks are getting a little high in respect of the P/E picture, thus we are still giving those regions a miss.
Another development is that the SGD has been strengthening against the Taiwan dollar, Korean Won and USD, but weakening against EUR. That’s hurting the portfolio slightly in view of the amount slanted towards USD related currencies.
We view that the last quarter should still be bullish for the equities market esp. for Asia Ex-Jap (avoiding China, India and HK for now), Our Cash position is also uncomfortably low, perhaps in the next 2-3 months, we may increase the amount of Cash/Money Market.
The Asian Small/Mid Cap play is not really playing out well at the moment, small/mid caps having taken a sever confidence blow. Our original intention is that when the players get bored with the Blue Chips, they’ll start to move the Small/Mid Co. This effect might turn up much longer than expected. So we are likely to reduce the current exposure 23% over the next few months and look for other opportunities.
Due to our lack of exposure to India and G.China (the two most improved markets for 1 month, our fund has severely underperformed the MSCI Asia Ex-Jap Index (+12.37%), but did well against the MSCI World Free Index (+4.54%).
These two markets also carry the greatest risks for now, with HK at 22.3x PE, China (HSCE) at 28.2x and India (SENSEX) at 26.3x.
On a rationale basis, we think that the risks are getting a little high in respect of the P/E picture, thus we are still giving those regions a miss.
Another development is that the SGD has been strengthening against the Taiwan dollar, Korean Won and USD, but weakening against EUR. That’s hurting the portfolio slightly in view of the amount slanted towards USD related currencies.
We view that the last quarter should still be bullish for the equities market esp. for Asia Ex-Jap (avoiding China, India and HK for now), Our Cash position is also uncomfortably low, perhaps in the next 2-3 months, we may increase the amount of Cash/Money Market.
The Asian Small/Mid Cap play is not really playing out well at the moment, small/mid caps having taken a sever confidence blow. Our original intention is that when the players get bored with the Blue Chips, they’ll start to move the Small/Mid Co. This effect might turn up much longer than expected. So we are likely to reduce the current exposure 23% over the next few months and look for other opportunities.
posted by Xeo Lye @ 12:17 PM
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