Mobius bets on Thailand after dismal 2013

January 16, 2014 Leave a comment

Mobius bets on Thailand after dismal 2013

Published: 2014/01/15

HONG KONG: Emerging markets fund manager Mark Mobius is heading into 2014 with heavy investments in Thai, commodities and energy stocks, the same bets that led to the biggest miss for his US$14 billion (RM45.69 billion) Asia fund in almost a decade and a half.Investors last year pulled out an estimated US$500 million from his Templeton Asian Growth Fund, the most recorded by fund tracker Lipper since it started compiling flows data for Asia’s biggest equity fund in 2003.
The fund lost 7.8 per cent last year compared to a 3.33 per cent rise in the MSCI AC Asia ex-Japan index, its second straight year of underperformance, the data showed, while its peers on average gained 2.4 per cent.
Mobius, however, remains unfazed and said Thailand’s past resilience to crises made him committed to its economy.

“We stick to our guns very often,” said Mobius, executive chairman of Templeton Emerging Markets Group.
Mobius is considered an authority on emerging markets. His often contrarian “value investing”, which involves buying out-of-favour stocks, has earned nearly 200 per cent returns for his Asia fund over the last 10 years, one of industry’s best.
This very same approach, however, backfired last year, largely because of the political unrest in Thailand and China’s waning appetite for commodities.
Templeton’s top 2013 bets in Thailand, Siam Commercial Bank Pcl and Kasikornbank Pcl, lost money. China investments such as Inner Mongolia Yitai Coal and Yanzhou Coal Mining slumped over 35 per cent each.
At the end of November, however, Mobius invested a quarter of his Asian fund assets in Thailand, more than eight times the weight of the country in its benchmark index.
Mobius said commodities demand would bounce back even as the economy of China, the world’s biggest resource buyer, is forecast to grow at the same pace as the previous year.
In a separate note, Franklin Templeton said it saw value in the energy sector, given demand trends, and that stock-picking was critical to addressing macroeconomic concerns in countries such as India and Indonesia.
“It’s not over yet. Commodities are still going to be important,” said Mobius, who had a combined 40.1 per cent allocation to energy and materials stocks at end-November. Reuters

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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