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3 Dec 10:
The NAV of the Apollo Asia Fund rose 2.6% in November, to US$1,201.07.
25 Nov 10:
After discussing today whether the paucity of good new financial verse in recent years may be attributable to general overload, new distractions, or a diversion of creativity to new media, I was belatedly introduced to www.versusplus.com, where song titles include 'The dollar and its diving (great recession remix)', 'Nobody knows the bubbles I've seen', 'Go tell it in accountin'', 'Oh CRE', 'Crash dance', and more. Links have been added to the doggerel page. Happy thanksgiving!
4 Nov 10:
Investors as well as Hong Kong residents should resist what David Webb calls The Community Collusion Fund - and analogous proposals in the rest of Asia. Well said.
2 Nov 10:
The NAV of the Apollo Asia Fund rose 2.3% in October, to US$1,171.15: charts.
My colleague Ines, on requesting a meeting with l'Occitane (listed earlier this year in Hong Kong), was startled to be refused by the investor relations contact on the grounds that we would not then be inclined to invest in their stock. This was on the strength of our website: presumably the comment about not overpaying? The assumption is that we would, after the meeting, consider the market's valuation less justified than before? Fascinating. We are quite used to managers being busy running their businesses (and really appreciate the many who nevertheless make time to explain the details and answer our questions), but it's the first time we've encountered an investor deterrence officer! We shall look at the apparently rosy growth prospects through this interesting filter.
1 Nov 10:
David Webb makes some excellent recommendations on Hong Kong land lease reform.
27 Oct 10:
A risk which I have been intending to write about has been aired by Martin Hutchinson: the fragility of virtual ownership. After the 2004 tsunami, Sri Lankan savers were worried about the disappearance of their accounts at submerged banks with no offsite storage, but the move to abolish paper and interconnect everything could cause much more widespread problems.
8 Oct 10:
Two outstanding research reports are available from Forensic Asia, www.forensicasia.com - it is rare to see meticulous analysis which is also such a compelling read. Congratulations to Gillem Tulloch, both for the analysis and for surviving the lengthy regulatory process now apparently required to set up an independent research boutique. Regulators should surely be encouraging such startups by getting out of the way! Independent company research is not easy to commercialise (much harder than macro/strategy), but is most certainly to be encouraged. I wish the new team well.
The 3Q report has been posted.
6 Oct 10:
The NAV of the Apollo Asia Fund rose 6.4% in September, to US$1,144.68: charts.
15 Sep 10:
Caveat emptor. John Hempton analyses a NYSE-listed company in 'Travelling through China with the Universal Travel Group'...
2 Sep 10:
The NAV of the Apollo Asia Fund rose 3.6% in August, to US$1,076.33: charts.
20 Aug 10:
Andy Xie's verdict: inflation, not deflation. Must read.
2 Aug 10:
The NAV of the Apollo Asia Fund rose 5.4% in July, to US$1,038.78: charts.
4 Jul 10:
The 2Q report has been posted.
1 Jul 10:
The NAV of the Apollo Asia Fund rose 4.5% in June, to US$985.22: charts.
18 Jun 10:
The Administrator's progress report on Aero Inventory raises more questions than it answers. No significant sales of inventory have been made since a single parcel to Qantas in December, even though most of the stock is at customers' sites and they were thought to have been dependent on just-in-time supply. Realising the rest is now thought to require a new IT system and sales infrastucture, and may take years. Realisable value is reduced by problems with trace documentation. These problems go to the core of the company's business model, and the major airline companies which were its customers had appeared satisfied with its efficiency over the preceding years. What happened?
A report has apparently been filed with the 'Department for Business, Innovation and Skills' (the Administrator puts this in inverted commas, I make no further comment), but will the contents see the light of day? I continue to find the opacity of this process disappointing: the lessons of business failures should be discussed. Other directors, members of audit committees, lenders and investors might then be able to learn of warning signs, and of advisable checks and controls.
The CEO of Lloyd's, in his foreword to its joint report with Chatham House, notes that it 'should cause all risk managers to pause... we have entered a period of deep uncertainty in how we will source energy for power, heat and mobility, and how much we will have to pay for it... different from the normal volatility of the oil or gas markets'. For an outstandingly clear summary of why companies and investors should be paying attention to these issues, see 'Energy security: strategic risks and opportunities for business'.
2 Jun 10:
The NAV of the Apollo Asia Fund fell 4.9% in May, to US$943.13: charts.
4 May 10:
The NAV of the Apollo Asia Fund rose 0.9% in April, to a new high of US$992.06: charts.
19 Apr 10:
I added one more paragraph at the end of the energy overview, calculating what Asia's growing coal consumption might mean for exporters. Incompatible assumptions are always interesting. Is the assumption of continued growth in Asia compatible with the physical implications for coal extraction? Can other sources meet the demand?
15 Apr 10:
I added more detail on coal to the energy overview posted last month, reinforcing the conclusion that Asia's high growth rates should not be extrapolated into the future without considering energy constraints.
12 Apr 10:
A semilog chart of the NAV has belatedly been added to the performance page. Like the relative performance chart, it shows that the fund's returns since 2004 have been more mundane than those of earlier years.
This chart of per capita electricity consumption is interesting. Over the 35 years to 2006, compound growth of 5.9% pa resulted in Singapore's increasing 7 times. Korea's 9.9% pa resulted in an increase of 27 times. Consumption in both countries is now comparable to Japan's.
5 Apr 10:
Apollo Asia Fund's 1Q report has been posted.
1 Apr 10:
The NAV of the Apollo Asia Fund rose 9.9% in March, to a new high of US$983.02: charts.
23 Mar 10:
Energy may be a constraint on Asia's ability to continue fast growth, and several countries may face adverse changes in the availability of resource windfalls. I have written an overview of energy for Asia.
3 Mar 10:
The NAV of the Apollo Asia Fund fell 1.2% in February, to US$894.37: charts.
16 Feb 10:
The report of the UK Industry Taskforce on Peak Oil and Energy Security, 'The Oil Crunch: a wake-up call for the UK economy' is an excellent summary of the issues, with some particularly good charts, written by companies which use energy and need to be able to plan. Recommended.
The Jewel of Muscat sails from Oman today, and will call at Cochin, Galle, Penang and Malacca before her expected arrival in Singapore in June. The Jewel is a dhow built of African timber sewn with coconut rope, a replica of the C9th Belitung wreck, South East Asia's most exciting archaeological discovery of recent decades. The ship sank while returning from Tang China with large volumes of targeted-mass-market ceramics and some exquisite treasures of imperial quality. The best introduction to the story of the wrecked ship, her cargo, and this earlier age of prosperity and globalisation, is in a National Geographic article: 'Made in China: a 1,200-year-old shipwreck opens a window on ancient global trade'. Other links and references may be found at www.maritimeasia.ws/topic/chronology.html#Belitung. The reconstruction and voyage of the Jewel of Muscat may be followed at www.jewelofmuscat.tv.
The Year of the Tiger, according to my feng shui book, 'is a time of dramatic and often dangerous change. For some there will be success and adventure; for others disaster and calamity. Globally it is a time of political upheaval... hurricanes and typhoons of unusual severity... does not bode well for speculative dealings or financial risks.' Best wishes to all our investors for the year ahead.
2 Feb 10:
The NAV of the Apollo Asia Fund fell 1.5% in January, to US$904.95: charts. The cash level at end-Jan was 11%.
11 Jan 10:
Apollo Asia Fund's 4Q report has been posted.
Asia Sentinel notes a remarkable fall in Malaysia's foreign reserves: 'Malaysia's disastrous capital flight'.
6 Jan 10:
News on Aero Inventory remains lamentably inadequate, but the Financial Director website reports that KPMG expects to pay unsecured creditors 1p in the pound (which would imply a wipeout for equity holders, and on the basis of December 08 accounts a loss of approximately 50% of assets), and that KPMG billed GBP2.02m for its first month of work. The same website earlier reported that the Serious Fraud Office had responded to the directors' request and launched an investigation. The lack of formal reporting to shareholders continues to seem strange to us, as does the lack of any requirement to maintain an online public record of company statements and documents - which may still be required by the various parties involved, and would facilitate investigation by journalists, students of accounting, and those with a policy interest.
5 Jan 10:
The NAV of the Apollo Asia Fund fell 0.8% in December, to US$918.61: charts.
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