Investing in high growth Asian frontier economies., Asia Frontier Capital

Scott Osheroff

Investing in high growth Asian frontier economies.

Asia Frontier Capital

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.

Thematic (Sector/Industry)

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, traveled to Laos to visit portfolio companies and other companies on our shortlist. The photos in this article are all by AFC.

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, traveled to Laos to visit portfolio companies and other companies on our shortlist. The photos in this article are all by AFC.

Asia Frontier Capital Travel Report: Laos

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

The South Korean President Park Geun-Hye was officially impeached today, with the South Korean Supreme Court upholding the impeachment decision. Most likely, the next South Korean Presidential election is likely to take place on May 9th. At this point, Moon Jae-In is the odds on favorite to become the next South Korean President, barring any major last minute catastrophes.Since late last year, the market has been pricing in both the official impeachment of President Park as well as who may…

The South Korean President Park Geun-Hye was officially impeached today, with the South Korean Supreme Court upholding the impeachment decision. Most likely, the next South Korean Presidential election is likely to take place on May 9th. At this point, Moon Jae-In is the odds on favorite to become the next South Korean President, barring any major last minute catastrophes.Since late last year, the market has been pricing in both the official impeachment of President Park as well as who may…

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

Until 1H 2016, Vietnam was the solitary bright spot among Asia's exporters. Its export performance has remained strong in the past eight months, but first India and then Singapore and Indonesia joined the export-recovery bandwagon in 3Q 2016, then Taiwan and Korea vigorously jumped on in 4Q 2016. The early evidence suggests that 2017 will be a year of spectacular Asian export growth. Korea's exports jumped 15.7% YoY and Taiwan's 17.5% YoY in Jan-Feb 2017, while Indonesia's rose 27.7% YoY in January. The one exception to the export revival is China (in a near mirror image of 1996, when Asian exports stalled while China's pressed ahead). Diminishing supplies of migrant labour post-CNY, rising costs exacerbated by the relative strength of the RMB (all similar to Thailand in 1997) are curtailing China's exporters' ability to compete with the rest of Asia.  Strong intra-Asian demand is the main driver of this Asian export rebound, complemented by a decent recovery in Emerging Market and European demand. Thus far, US demand has been a relative laggard, and no more than a tertiary factor in Asia's export recovery. But ISM new orders, an excellent 6-month leading indicator of US demand for imports from Asia, has soared over the past half year -- and hit a 38-month in February 2017, suggesting that Asia's exports to the US too should be growing over 10% YoY by August 2017. The main threat to the sustainability of that robust rebound in US import demand is the growing certainty of the US imposing a border tax adjustment (BTA) by the time the new fiscal starts on 1 October 2017. The second threat to the Asian export recovery is that intra-Asian demand was ultimately made possible by China's success in boosting materials prices in 2H 2016 -- accomplished via a judicious mix of output curbs (on steel, other metals and coal) and a surge in TSF (up 19.9% YoY in 2016). China still had a trade surplus of US$493bn in the 12 months to February 2017 (albeit down from US$577bn in the 12 months to February 2016), with the reduction (and the modest rebound in the RMB) perfectly timed to forestall a US Treasury department concluding (in its April 2017 report) that China is a currency manipulator. But the weakness of China's exports and the strength of its imports are an indication that the current policy mix is ultimately unsustainable. When the cracks widen, China will have to abandon that policy mix (probably just after the politburo leadership changes in November 2017). There is a Sword of Damocles hanging over Asia's export recovery (and its intra-Asian provenance in particular), but the Sword will not fall until 4Q 2017. Until then, enjoy the ride!

Until 1H 2016, Vietnam was the solitary bright spot among Asia's exporters. Its export performance has remained strong in the past eight months, but first India and then Singapore and Indonesia joined the export-recovery bandwagon in 3Q 2016, then Taiwan and Korea vigorously jumped on in 4Q 2016. The early evidence suggests that 2017 will be a year of spectacular Asian export growth. Korea's exports jumped 15.7% YoY and Taiwan's 17.5% YoY in Jan-Feb 2017, while Indonesia's rose 27.7% YoY in January. The one exception to the export revival is China (in a near mirror image of 1996, when Asian exports stalled while China's pressed ahead). Diminishing supplies of migrant labour post-CNY, rising costs exacerbated by the relative strength of the RMB (all similar to Thailand in 1997) are curtailing China's exporters' ability to compete with the rest of Asia.  Strong intra-Asian demand is the main driver of this Asian export rebound, complemented by a decent recovery in Emerging Market and European demand. Thus far, US demand has been a relative laggard, and no more than a tertiary factor in Asia's export recovery. But ISM new orders, an excellent 6-month leading indicator of US demand for imports from Asia, has soared over the past half year -- and hit a 38-month in February 2017, suggesting that Asia's exports to the US too should be growing over 10% YoY by August 2017. The main threat to the sustainability of that robust rebound in US import demand is the growing certainty of the US imposing a border tax adjustment (BTA) by the time the new fiscal starts on 1 October 2017. The second threat to the Asian export recovery is that intra-Asian demand was ultimately made possible by China's success in boosting materials prices in 2H 2016 -- accomplished via a judicious mix of output curbs (on steel, other metals and coal) and a surge in TSF (up 19.9% YoY in 2016). China still had a trade surplus of US$493bn in the 12 months to February 2017 (albeit down from US$577bn in the 12 months to February 2016), with the reduction (and the modest rebound in the RMB) perfectly timed to forestall a US Treasury department concluding (in its April 2017 report) that China is a currency manipulator. But the weakness of China's exports and the strength of its imports are an indication that the current policy mix is ultimately unsustainable. When the cracks widen, China will have to abandon that policy mix (probably just after the politburo leadership changes in November 2017). There is a Sword of Damocles hanging over Asia's export recovery (and its intra-Asian provenance in particular), but the Sword will not fall until 4Q 2017. Until then, enjoy the ride! 

Asia's Export Recovery Set to Strengthen -- Although Trump's BTA and China Are Threats After October

Asia Economist and CEO, Centennial Asia Advisors

Manu Bhaskaran

Asia Economist and CEO

Centennial Asia Advisors

At Centennial Asia Advisors, we tell it like it is. We have no vested interests, no need for a China wall, and no reason to skew our outlook any other way. With over 30 years experience covering Asia’s political economy, you can be sure our conclusions and analyses are based on the unadulterated facts. Through years of fine-tuning our research methodologies, we deliver a quality of macroeconomic analysis few other houses can match.

Centennial Asia Advisors is an independent research and advisory firm that works with governments, multilateral institutions, financial firms and leading MNCs.

Economic Policy and Strategic Advisors

Where will the inflation surprises come from?<ul><li>Deflationary pressures are dissipating leading to an upward march of price levels worldwide.</li><li>We examine a number of metrics used to determine inflationary pressures and use them to determine which countries would see unexpectedly faster inflation than expected.</li><li>In summary, upside surprises to inflation are likely to be seen in China, India, Indonesia, Malaysia and the Philippines.</li></ul>

Where will the inflation surprises come from?Deflationary pressures are dissipating leading to an upward march of price levels worldwide.We examine a number of metrics used to determine inflationary pressures and use them to determine which countries would see unexpectedly faster inflation than expected.In summary, upside surprises to inflation are likely to be seen in China, India, Indonesia, Malaysia and the Philippines.

Where Will the Inflation Surprises Come From?

Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

The charts below illustrate what has happened in China in terms of primary land sales for residential or mixed-use development in 40 major cities.In 2016, the land sales declined slightly in Gross Floor Area (GFA) terms (despite <a href="https://www.smartkarma.com/insights/china-property-2017-forecast-summary" target="_blank">strong property sales volumes</a>) but increased significantly in terms of RMB Value, i.e. the average price of land on that basis went up.Such average calculations don't take into account the change in the type of locations where land is being sold - recent sales are more…

The charts below illustrate what has happened in China in terms of primary land sales for residential or mixed-use development in 40 major cities.In 2016, the land sales declined slightly in Gross Floor Area (GFA) terms (despite strong property sales volumes) but increased significantly in terms of RMB Value, i.e. the average price of land on that basis went up.Such average calculations don't take into account the change in the type of locations where land is being sold - recent sales are more…

China Property: Land Sales In 2016 - Less Supply, Higher Prices

China

iShares China Large-Cap ETF is an exchange-traded fund incorporated in the USA. The ETF tracks the FTSE China 50 Index, investing in large cap stocks. Its investments are focused in the financial, oil and gas, technology and communications sectors. The ETF uses a representative sampling indexing strategy, investing at least 90% of its assets in the securities of the underlying index.

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iShares China Large-Cap (FXI) (FXI US)

Asia Frontier Capital Travel Report: Laos

In line with our process of being on the ground in the countries we invest in, Scott Osheroff, Analyst at Asia Frontier Capital, traveled to Laos...

Asia Frontier Capital

President Park Is Officially Impeached

The South Korean President Park Geun-Hye was officially impeached today, with the South Korean Supreme Court upholding the impeachment decision....

Douglas Kim

Asia's Export Recovery Set to Strengthen -- Although Trump's BTA and China Are Threats After October

Until 1H 2016, Vietnam was the solitary bright spot among Asia's exporters. Its export performance has remained strong in the past eight months,...

Prasenjit K. Basu

Where Will the Inflation Surprises Come From?

Where will the inflation surprises come from? Deflationary pressures are dissipating leading to an upward march of price levels worldwide. We...

Manu Bhaskaran

China Property: Land Sales In 2016 - Less Supply, Higher Prices

The charts below illustrate what has happened in China in terms of primary land sales for residential or mixed-use development in 40...

Robert Ciemniak

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)