Value Partners

Value Partners upbeat on mainland prospects

PUBLISHED : Monday, 05 November, 2007, 12:00am
UPDATED : Monday, 05 November, 2007, 12:00am

From a start-up fund of S$5.6 million in 1993 to US$5.7 billion in assets under management as of June this year, the name Value Partners is still a miracle in the city's financial world.

The Hong Kong-based fund manager believes relatively expensive mainland-related stocks would still be supported by strong domestic consumption growth, and an anticipated rise in the yuan over the medium term, according to Value Partners' star fund manager Cheah Cheng Hye.

The firm has bet heavily on mainland stocks over the past decade, winning an average annualised return of 22.8 per cent since 1993.

'China is full of opportunities. We can either help international investors find projects in the mainland or bring mainland capital to invest overseas,' said Mr Cheah, also the company's chairman and chief investment officer.

He added that there would be plenty of room for future growth in the mainland's fund management sector because some restrictive policies are expected to be relaxed.

'We have an optimistic outlook on three sectors for the medium term - real estate, consumer goods and energy - given the strong market demand and expected high inflation environment,' Mr Cheah said.

Rising inflation in both Hong Kong and the mainland has been squeezed by increasing raw materials and labour costs, which could see real interest rates turn negative for bank savers, prompting them to turn to fixed-asset investments.

Mainland retail sales rose 15.9 per cent year on year to 6.38 trillion yuan in the first nine months, while the consumer price index (CPI) grew 4.1 per cent, the National Bureau of Statistics said yesterday.

'China will enjoy high growth in coming years and provide opportunities for international investors to make huge returns,' Mr Cheah said.

Mr Cheah said the fund manager has a clear market position focused on investing in undervalued small- to mid-cap stocks with high potential, mainly in Hong Kong, Taiwan and the mainland.

'We are not interested in investing in big names. We prefer to explore stocks that are undervalued,' said Value Partners chief executive Franco Ngan.