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

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

Macroeconomics

-The oil majors' favourite refining hub in ASEAN is Singapore, while the crude-oil/gas comes mainly from Indonesia, Malaysia and Brunei. Infusion of Saudi capital will help to partially redress that, although Saudi Arabia is only the 7th largest oil-refining country, and ARAMCO has moderate amounts of technological expertise (mainly from its ownership of S-Oil in Korea). -Malaysia and (especially) Indonesia have been wary of "Arabised" or Wahhabi Islam, and see Saudi offers to widen Arabic…

-The oil majors' favourite refining hub in ASEAN is Singapore, while the crude-oil/gas comes mainly from Indonesia, Malaysia and Brunei. Infusion of Saudi capital will help to partially redress that, although Saudi Arabia is only the 7th largest oil-refining country, and ARAMCO has moderate amounts of technological expertise (mainly from its ownership of S-Oil in Korea). -Malaysia and (especially) Indonesia have been wary of "Arabised" or Wahhabi Islam, and see Saudi offers to widen Arabic…

King Salman Bearing Gifts: Implications for ASEAN, Oil-Refining and Religion

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

This week we feature an interview with <a href="https://www.smartkarma.com/profiles/35" target="_blank" data-smartkarma-citation="accounts:35">Manu Bhaskaran</a> and his team at Centennial Asia, including <a href="https://www.smartkarma.com/profiles/48" target="_blank" data-smartkarma-citation="accounts:48">Jason Tan</a> and <a href="https://www.smartkarma.com/profiles/49" target="_blank" data-smartkarma-citation="accounts:49">Asees Bajaj</a> to canvass their views on South East Asia, with Indonesia a clear leader in their estimation. The volume of output of Insight Providers across ASEAN has picked up significantly this week, so buckle up and enjoy the ride.<a href="https://www.smartkarma.com/profiles/48" target="_blank" data-smartkarma-citation="accounts:48">Jason Tan</a> sees the economic gloom in Singapore starting to clear, with a pick up in bank loan growth, though employment prospects still look bleak in <a href="https://www.smartkarma.com/insights/singapore-the-gloom-is-clearing-but-slowly" target="_blank" data-smartkarma-citation="insights:8596">The</a>…

This week we feature an interview with Manu Bhaskaran and his team at Centennial Asia, including Jason Tan and Asees Bajaj to canvass their views on South East Asia, with Indonesia a clear leader in their estimation. The volume of output of Insight Providers across ASEAN has picked up significantly this week, so buckle up and enjoy the ride.Jason Tan sees the economic gloom in Singapore starting to clear, with a pick up in bank loan growth, though employment prospects still look bleak in The…

The Week that Was in ASEAN@Smartkarma - Politics, Pain and Soap Operas

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.

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§  The SGX Maritime &amp; Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in tandem with the recovery of crude oil prices, which may be an indication that the sector could be bottoming out.
 
§  Despite the rally, the 18 constituents within the SGX MOE Index are trading at an average current price-to-book (PB) ratio of 0.7x, with 10 of them trading below their book values.
 
§  Consensus estimates are expecting oil prices to stabilise and…
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§  The SGX Maritime &amp; Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in tandem with the recovery of crude oil prices, which may be an indication that the sector could be bottoming out.
 
§  Despite the rally, the 18 constituents within the SGX MOE Index are trading at an average current price-to-book (PB) ratio of 0.7x, with 10 of them trading below their book values.
 
§  Consensus estimates are expecting oil prices to stabilise and…



SGX's MOE Sector Sustains 4Q16 Momentum into 2017

Asean-focused. Ex-Head of Thai Research

Athaporn Arayasantiparb, CFA

In this review, we highlight the importance for investors to: 1) not 'jump the gun' and sell on companies that are in decline; and 2) think logically about the macro picture, since those may have an impact on whether companies can recover or would lose relevance in the marketplace altogether.From our observations, the companies in Thailand that do turn around tend to follow one or more of these four measures, namely: 1) operations: a complete transformation rather than minor patch-ups (eg. KARMART, IVL); 2) competitive strategy: changing the frame of reference (PIZZA...now part of MINT); 3) debt restructuring (BLAND, TPI); and 4) marketing: re-branding (eg. DTAC, BTS). Whether you are stuck with certain investments or thinking about investing in potential turnaround plays, observing these four traits or steps could be helpful.

In this review, we highlight the importance for investors to: 1) not 'jump the gun' and sell on companies that are in decline; and 2) think logically about the macro picture, since those may have an impact on whether companies can recover or would lose relevance in the marketplace altogether.From our observations, the companies in Thailand that do turn around tend to follow one or more of these four measures, namely: 1) operations: a complete transformation rather than minor patch-ups (eg. KARMART, IVL); 2) competitive strategy: changing the frame of reference (PIZZA...now part of MINT); 3) debt restructuring (BLAND, TPI); and 4) marketing: re-branding (eg. DTAC, BTS). Whether you are stuck with certain investments or thinking about investing in potential turnaround plays, observing these four traits or steps could be helpful.

Turnarounds: Finding A Phoenix In the Land of the Dead

Thailand

Banpu Public Company Limited mines for coal and other minerals. The Company produces thermal coal and coking coal, and have expertise in open-pit and underground coal mining operations, as well as coal-fired power generation.  Banpu PCL has business bases in Thailand, Laos, Indonesia, China, Australia and Mongolia.

Bangchak Corporation Public Company Limited operates as an energy company. The Company offers petroleum exploration and production, biomass, crude oil, and solar energy. Bangchak markets its products in Thailand.

Esso Thailand PCL is a fully integrated oil business, including oil refinery and production. The Company provides liquefied petroleum gas (LPG), gasoline, aviation fuel, diesel, marine fuel, lubricants, aromatic products and other related products such as purified terephthalic acid (PTA), solvents, plasticizers, and benzene concentrate stream.

IRPC PCL produces a variety of petrochemical products including polypropylene, high density polyethylene and expandable polystyrene primarily used in packaging materials. Through its subsidiaries, the Company produces and distributes gasoline, liquefied petroleumgas (LPG), asphalt, as well as electricity and construction materials.

Energy Absolute Public Company Limited engages in the research, development, and production of biodiesel products in Thailand.

Prima Marine Public Company Limited operates as a marine vessel management firm. The Company offers oil-tanker, crude oil, liquefied petrochemicals, and petroleum products transportation services. Prima Marine also provides shipbuilding, shipping, and storage services. Prima Marine serves customers in the Asia Pacific region.

Siamgas & Petrochemicals PCL distributes liquefied petroleum gas (LPG). The Company provides LPG, ammonia and other related petrochemical products such as propane, butane and propellant. Siamgas is also involved in the logistics services for LPG and petrochemical products.

The Lanna Resources Public Company Limited mines and distributes lignite and granite products in Thailand.  The Company produces two types of granite products, polished granite slab and granite block.  Its lignite is supplied to power generation, cement, paper, and food industries.  Additionally, Lanna imports coal for domestic distribution.

SUSCO Pcl distributes petroleum products including unleaded and regular gasoline and diesel oil through its gasoline filling stations and directly to large end-users.  Through its subsidiaries, the Company acts as an oil agent and offers marine freight transportation services.

Asian Insulators Public Company Limited manufactures electrical porcelain insulators for use in low, medium and high voltage applications such as underground power lines, overhead power lines, and power distribution systems and sub-stations.

Shanxi Meijin Energy Co., Ltd. produces coal and related products.

Shanxi Meijin Energy Co, Ltd. (000723 CH)

New Hope Corporation Limited is a thermal coal production company based in Australia. The Company also has interests in logistics and infrastructure operations in Australia as well.

Kosmos Energy Ltd. provides oil and gas exploration and production services. The Company focuses on discovering new petroleum systems and to grow and mature discovered hydrocarbon basins, as well as development and production projects. Kosmos Energy serves customers worldwide.

Peabody Energy Corporation mines and markets low sulfur coal, primarily for use by electric utilities. The Company also trades coal and emission allowances. Peabody owns and operates mines in Arizona, Colorado, New Mexico and Wyoming, Illinois, Indiana, and Australia.

Paladin Energy Ltd operates as a mining company. The Company explores and mines uranium. Paladin Energy serves customers worldwide.

Pingdingshan Tianan Coal Mining Co., Ltd. operates underground coal mining, coal washing and processing. The company also provides ground transportation services.

Jizhong Energy Resources Co., Ltd. produces and markets coal products, generates electric power, and manufactures cement.

CVR Energy, Inc. is an independent refiner and marketer of transportation fuels. The Company, also through a limited partnership produces ammonia and urea ammonia nitrate, or UAN, fertilizers.

Gulfport Energy Corporation operates as an energy exploration and production company. The Company focuses on oil and natural gas exploration and production services. Gulfport Energy serves clients in the United States.

PT Golden Energy Mines Tbk, (GEMS) operates as a holding company. Through its  s ubsidiaries, the Company mines for coal. GEMS' supplies paper mills and export energy markets including China, India, Thailand, Vietnam, and Bangladesh.

Thai Oil Public Company Limited is an oil refinery company. The Company imports crude oil and refines it into gasoline.  It also produces oil related products including liquefied petroleum gas (LPG), kerosene, fuel oil and chemicals. Thai oil supplies its products to domestic market where its major customers include Shell, Caltex Oil and the Petroleum Authority of Thailand.

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Thai Oil Pcl (TOP TB)

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

King Salman Bearing Gifts: Implications for ASEAN, Oil-Refining and Religion

-The oil majors' favourite refining hub in ASEAN is Singapore, while the crude-oil/gas comes mainly from Indonesia, Malaysia and Brunei. Infusion...

Prasenjit K. Basu

The Week that Was in ASEAN@Smartkarma - Politics, Pain and Soap Operas

This week we feature an interview with Manu Bhaskaran and his team at Centennial Asia, including Jason Tan and Asees Bajaj to canvass their views...

Angus Mackintosh

SGX's MOE Sector Sustains 4Q16 Momentum into 2017

§ The SGX Maritime & Offshore Services (MOE) Index, a benchmark for the MOE Sector, has rebounded 19.7% from its trough on 1 Sep 2016 in...

Singapore Exchange Ltd (SGX)

Turnarounds: Finding A Phoenix In the Land of the Dead

In this review, we highlight the importance for investors to: 1) not 'jump the gun' and sell on companies that are in decline; and 2) think...

Athaporn Arayasantiparb, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)