Marketing Director, Asia Frontier Capital

Asia Frontier Capital

Marketing Director

Investing in high growth Asian frontier economies.

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

Cross Asset Strategy

<ul><li>The AFC Iraq Fund, and its benchmark the Rabee Securities RSISX USD Index, “skyrocketed” +23.3%, +24.9% respectively in February.</li><li>For the year, the AFC Iraq Fund is up 22.6%, outperforming the index’s increase of 18.8%.</li><li>February’s gain once again illustrates the diversification benefits that the AFC Iraq Fund and Asian frontier markets offer to investors since the performance of the AFC Iraq Fund is already well ahead of global benchmarks two months into the year.</li></ul>

The AFC Iraq Fund, and its benchmark the Rabee Securities RSISX USD Index, “skyrocketed” +23.3%, +24.9% respectively in February.For the year, the AFC Iraq Fund is up 22.6%, outperforming the index’s increase of 18.8%.February’s gain once again illustrates the diversification benefits that the AFC Iraq Fund and Asian frontier markets offer to investors since the performance of the AFC Iraq Fund is already well ahead of global benchmarks two months into the year.

AFC Iraq Fund February 2023 Update: "Dinar Revalued Upwards by 10%, Strong Gains for the Fund"

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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<ul>
<li>SGX INR/USD Futures reached a record high open interest of 138,207 lots or USD$3.72 billion on 24 June</li>
	<li>SGX USD/CNH Futures achieved a record high open interest of US$10.8 billion on 10 June</li>
	<li>SGX USD/SGD (full-sized) Futures hit a new monthly volume record of 36,982 contracts</li>
	<li>SGX FX Futures aggregate open interest as at end-June stood at US$12.2 billion</li>
</ul>
 

Fed’s policy stance remained unchanged as it views inflation as “transitory”

The Federal Open Market Committee (FOMC) continued to keep interest rates just above zero since its last meeting in April, but raised its headline inflation expectation for 2021 to 3.4%, a full percentage point higher than the March estimate, and forecasted two rate hikes in 2023.

While the US Bureau of Labor Statistics reported a 5% year-on-year (“y-o-y”) increase in the CPI for all urban consumers, Federal Reserve Chair Jerome Powell, maintained that inflation effects are “transitory”, and that the inflation rate is expected to move back towards the 2% target, once the U.S. resolves its trade deficit.

As official GDP growth estimates for 2021 raised from 6.5% to 7%, Powell expressed optimism about the U.S. labour market in spite of weak employment data released earlier this year. The unemployment estimate remained unchanged at 4.5%.

Euro zone sees highest business growth in 15 years

Business growth in the euro zone expanded at its quickest rate in 15 years, as the lifting of lockdown measures unlocked pent-up demand and fueled a boom in the services sector, but also leading to soaring price pressures. The lifting of restrictions came after the region’s vaccination drive picked up pace and this had led to a spike in the IHS Markit Eurozone PMI Composite Output Index, from 57.1 in May to <a>59.5</a> in June , the highest level since June 2006.

Businesses have also reported a surge in demand, especially in the hospitality sector as the economy slowly reopens. However, there were also signs of labour shortages pushing up wage costs, causing U.K.’s inflation to jump 2.1% in May, breaching the Bank of England’s target for the first time in two years.

Chart 1: SGX FX Futures Trading Volume

 
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SGX USD/CNH Futures: Volumes and Month-end Open Interest up m-o-m and y-o-y in June

<ul>
<li>SGX USD/CNH Futures volumes increased <a>10.4% month-on-month (“mom”) and 12.8% y-o-y in June to US$96.0 billion</a>
</li>
	<li>Month-end open interest at US$9.9 billion, up 2.4% m-o-m and 52.0% y-o-y</li>
	<li>SGX USD/CNH Futures achieved a record high open interest of US$10.8 billion on 10 June</li>
</ul>
China’s producer price index surged 9% y-o-y in May, its fastest growth in 12 years. Meanwhile, the nation’s consumer price index rose 1.6% y-o-y in May, triggering global inflation concerns as China accounts for 15% of global exports. Experts have attributed the increase in factory gate prices to higher commodity and raw material prices.

In May, the Caixin China General Manufacturing Purchasing Managers’ Index rose to 52, a marginal increase from April’s 51.9. Overall demand for new export orders was at its highest this year. However, bottlenecks created by supply chain disruptions resulted in material shortages, higher purchasing costs and longer delivery times.

The China central bank has increased the foreign reserve requirement ratio from 5% to 7%, signaling its unease with the yuan’s appreciation. This was the first hike since 2007, aimed at improving China’s forex liquidity management.   People’s Bank of China (“PBOC”) deputy governor Liu Guoqiang also emphasised that two-way fluctuation of the yuan will be the norm given the uncertainties of the global pandemic as well as the imbalanced recovery of global economies.

SGX USD/CNH Futures volumes increased 10.4% m-o-m and 12.8% y-o-y in June to US$96.0 billion, with month-end open interest up 2.4% m-o-m and 52% y-o-y to US$9.9 billion.

 

Chart 2: SGX USD/CNH Futures volume 
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SGX INR/USD Futures month-end open interest at 79,970 contracts, up 15.1% m-o-m in June

<ul>
<li>SGX INR/USD Futures volumes increased 23.8% m-o-m in June to US$35.5 billion</li>
	<li>Month-end open interest at US$2.1 billion, up 12.3% m-o-m and 105% y-o-y</li>
</ul>
India’s inflation data in May showed a surge in wholesale price inflation of 12.94%, the highest in two decades. Annual retail inflation accelerated 6.3% in May, compared to 4.3% in April. Even so, the central bank of India is committed to keeping monetary policy accommodative, where the repo and borrowing rate will remain unchanged, at 4% and 3.35% respectively. The RBI has also announced that it would purchase 1.2 trillion rupees worth of bonds under the G-SAP 2.0 programme.

While supply constraints due to COVID-19 may cause higher input costs, the monsoon season along with supply side interventions should keep inflationary pressures at bay. However, India’s real GDP growth forecast was downgraded from 10.5% to 9.5% as a result of the significant economic impact caused by the sudden rise in COVID-19 infections.

RBI was also reducing its forward dollar book, a sign that it may be tweaking its FX strategy. Meanwhile,India’s foreign exchange reserves have grown past the $600 billion mark, reaching an all-time high of $608 billion on June 18.

SGX INR/USD Futures month-end interest surged 102% y-o-y to 79,970 contracts or USD$2.1 billion.

Chart 3: Trading range starting to widen out in SGX INR/USD Futures 
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SGX KRW/USD Futures daily average volume notional 6.2% y-o-y in June 2021

South Korea’s exports are expected to record double-digit growth in June  as exports grew 29.5% y-o-y in the first 20 days of the month. However, the gains are expected to the slower than in May due to weaker base effects. The finance ministry revised its GDP growth forecast to 4.2% this year, 1% higher than its previous forecast, after factoring in record exports and a rebound in domestic consumption due to rising vaccination rates.

The Bank of Korea signaled an intention to a gradually tighten the monetary policy such that the economy is able to sustain its recovery from the pandemic.

In June, US$762 million (or 32,132 contracts) of SGX KRW/USD Futures were traded, down 12.2% m-o-m but up 6.2% y-o-y. Daily average volume in June 2021 was at US$35 million, down 24.2% m-o-m but up 6.2% y-o-y. Month-end open interest was down 13.8% m-o-m but up 41.1% y-o-y to US$78 million (or 3,383 contracts). 
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SGX INR/USD Futures reached a record high open interest of 138,207 lots or USD$3.72 billion on 24 June
	SGX USD/CNH Futures achieved a record high open interest of US$10.8 billion on 10 June
	SGX USD/SGD (full-sized) Futures hit a new monthly volume record of 36,982 contracts
	SGX FX Futures aggregate open interest as at end-June stood at US$12.2 billion

 

Fed’s policy stance remained unchanged as it views inflation as “transitory”

The Federal Open Market Committee (FOMC) continued to keep interest rates just above zero since its last meeting in April, but raised its headline inflation expectation for 2021 to 3.4%, a full percentage point higher than the March estimate, and forecasted two rate hikes in 2023.

While the US Bureau of Labor Statistics reported a 5% year-on-year (“y-o-y”) increase in the CPI for all urban consumers, Federal Reserve Chair Jerome Powell, maintained that inflation effects are “transitory”, and that the inflation rate is expected to move back towards the 2% target, once the U.S. resolves its trade deficit.

As official GDP growth estimates for 2021 raised from 6.5% to 7%, Powell expressed optimism about the U.S. labour market in spite of weak employment data released earlier this year. The unemployment estimate remained unchanged at 4.5%.

Euro zone sees highest business growth in 15 years

Business growth in the euro zone expanded at its quickest rate in 15 years, as the lifting of lockdown measures unlocked pent-up demand and fueled a boom in the services sector, but also leading to soaring price pressures. The lifting of restrictions came after the region’s vaccination drive picked up pace and this had led to a spike in the IHS Markit Eurozone PMI Composite Output Index, from 57.1 in May to 59.5 in June , the highest level since June 2006.

Businesses have also reported a surge in demand, especially in the hospitality sector as the economy slowly reopens. However, there were also signs of labour shortages pushing up wage costs, causing U.K.’s inflation to jump 2.1% in May, breaching the Bank of England’s target for the first time in two years.

Chart 1: SGX FX Futures Trading Volume

 



      
    
    202107_1E


SGX USD/CNH Futures: Volumes and Month-end Open Interest up m-o-m and y-o-y in June


SGX USD/CNH Futures volumes increased 10.4% month-on-month (“mom”) and 12.8% y-o-y in June to US$96.0 billion

	Month-end open interest at US$9.9 billion, up 2.4% m-o-m and 52.0% y-o-y
	SGX USD/CNH Futures achieved a record high open interest of US$10.8 billion on 10 June

China’s producer price index surged 9% y-o-y in May, its fastest growth in 12 years. Meanwhile, the nation’s consumer price index rose 1.6% y-o-y in May, triggering global inflation concerns as China accounts for 15% of global exports. Experts have attributed the increase in factory gate prices to higher commodity and raw material prices.

In May, the Caixin China General Manufacturing Purchasing Managers’ Index rose to 52, a marginal increase from April’s 51.9. Overall demand for new export orders was at its highest this year. However, bottlenecks created by supply chain disruptions resulted in material shortages, higher purchasing costs and longer delivery times.

The China central bank has increased the foreign reserve requirement ratio from 5% to 7%, signaling its unease with the yuan’s appreciation. This was the first hike since 2007, aimed at improving China’s forex liquidity management.   People’s Bank of China (“PBOC”) deputy governor Liu Guoqiang also emphasised that two-way fluctuation of the yuan will be the norm given the uncertainties of the global pandemic as well as the imbalanced recovery of global economies.

SGX USD/CNH Futures volumes increased 10.4% m-o-m and 12.8% y-o-y in June to US$96.0 billion, with month-end open interest up 2.4% m-o-m and 52% y-o-y to US$9.9 billion.

 

Chart 2: SGX USD/CNH Futures volume 



      
    
    202107_2E


SGX INR/USD Futures month-end open interest at 79,970 contracts, up 15.1% m-o-m in June


SGX INR/USD Futures volumes increased 23.8% m-o-m in June to US$35.5 billion
	Month-end open interest at US$2.1 billion, up 12.3% m-o-m and 105% y-o-y

India’s inflation data in May showed a surge in wholesale price inflation of 12.94%, the highest in two decades. Annual retail inflation accelerated 6.3% in May, compared to 4.3% in April. Even so, the central bank of India is committed to keeping monetary policy accommodative, where the repo and borrowing rate will remain unchanged, at 4% and 3.35% respectively. The RBI has also announced that it would purchase 1.2 trillion rupees worth of bonds under the G-SAP 2.0 programme.

While supply constraints due to COVID-19 may cause higher input costs, the monsoon season along with supply side interventions should keep inflationary pressures at bay. However, India’s real GDP growth forecast was downgraded from 10.5% to 9.5% as a result of the significant economic impact caused by the sudden rise in COVID-19 infections.

RBI was also reducing its forward dollar book, a sign that it may be tweaking its FX strategy. Meanwhile,India’s foreign exchange reserves have grown past the $600 billion mark, reaching an all-time high of $608 billion on June 18.

SGX INR/USD Futures month-end interest surged 102% y-o-y to 79,970 contracts or USD$2.1 billion.

Chart 3: Trading range starting to widen out in SGX INR/USD Futures 



      
    
    202107_3E


SGX KRW/USD Futures daily average volume notional 6.2% y-o-y in June 2021

South Korea’s exports are expected to record double-digit growth in June  as exports grew 29.5% y-o-y in the first 20 days of the month. However, the gains are expected to the slower than in May due to weaker base effects. The finance ministry revised its GDP growth forecast to 4.2% this year, 1% higher than its previous forecast, after factoring in record exports and a rebound in domestic consumption due to rising vaccination rates.

The Bank of Korea signaled an intention to a gradually tighten the monetary policy such that the economy is able to sustain its recovery from the pandemic.

In June, US$762 million (or 32,132 contracts) of SGX KRW/USD Futures were traded, down 12.2% m-o-m but up 6.2% y-o-y. Daily average volume in June 2021 was at US$35 million, down 24.2% m-o-m but up 6.2% y-o-y. Month-end open interest was down 13.8% m-o-m but up 41.1% y-o-y to US$78 million (or 3,383 contracts). 



      
    
    202107_4E

SGX FX Futures volume up 16% y-o-y in June to US$140 billion, setting new records across multiple contracts

India

Central Bank Of India is a full service commercial bank. The Bank's services include taking deposits, lending services, and investing. Central bank operates branches throughout India.

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Central Bank Of India (CBOI IN)

AFC Iraq Fund February 2023 Update: "Dinar Revalued Upwards by 10%, Strong Gains for the Fund"

The AFC Iraq Fund, and its benchmark the Rabee Securities RSISX USD Index, “skyrocketed” +23.3%, +24.9% respectively in February.

Asia Frontier Capital

SGX FX Futures volume up 16% y-o-y in June to US$140 billion, setting new records across multiple contracts

SGX INR/USD Futures reached a record high open interest of 138,207 lots or USD$3.72 billion on 24 June SGX USD/CNH Futures achieved a record...

Singapore Exchange Ltd (SGX)

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