| |
Country Weighting
Fund Review
7/30/2010
Asian markets closed higher in July, on the back of better than expected earnings results and policy relaxation in China. The Fund rose 7.6% during the month, outperforming the benchmark, which rose 6.5%. The outperformance was led by positive returns in construction materials, property developers and domestic retailers. Securities that had underperformed during 1H10 rebounded, contributing positively to the Fund's performance.
Beijing continues to promote reforms to rebalance the country's economic engines. China's GDP expanded 10.3% YoY in 2Q, a moderate drop from the previous quarter. The People's Bank of China and the Hong Kong Monetary Authority also reached a supplementary memorandum of cooperation to offer basic RMB accounts and more yuan-denominated financial products to be developed in Hong Kong. The announcement further internationalises the RMB while strengthening Hong Kong as the premier offshore RMB market.
Macro indicators continued to signal a growing economy, with May's industrial production expanding 11.5%, the 8th consecutive month of double-digit growth. Investor confidence improved during July and the BSE index rallied to near a two-year high.
The Korean Kospi closed 7.0% higher over the month, while the economy expanded 7.2% YoY during the second quarter. The economic reading was driven by a boost in manufacturing and robust export figures, lending support to the view that the central bank may raise interest rates again to curb inflation.
Cross-strait relations continue to improve between Taiwan and China, after the mainland authorized BOC Hong Kong to offer yuan cash settlement services to Taiwan banks. Strong demand for electronic products and smart phones remains a positive catalyst for Taiwan's growth, although overseas shipments have begun to slightly taper off.
Risk appetite appears to have improved, as sentiment believes that China's serious efforts to tighten lending have peaked. The Fund continues to hold strong conviction in long-term plays including urbanisation, as well as metals, hospitality, and software names.
* The Fund has changed its index from MSCI AC Far East ex-Japan to MSCI Daily TR AC Far East ex-Japan Net with effect from 1 January 2007.
Important Information:
Investment involves risk. Past performance is not indicative to future performance. The fund may invest in emerging markets and derivative instruments and thus involve higher risk and volatility. Before investing, please refer to the offering document(s) for details, including the risk factors.
The document is issued by Hamon Investment Group and has not been reviewed by the SFC. It is not a recommendation, an offer or invitation to investment. Consult your financial advisor before making any investment decisions.
|
