|
|
Templeton China Fund - News
|
|
|
|
|
Templeton China comment - Jul 06
|
|
Monday, 28 August 2006
|
Fund Manager Comment
|
In July, Templeton China Fund outperformed its benchmark, returning a net +0.46% (in U.S. dollars), versus -0.49% for the MSCI Golden Dragon Index.
Despite tightening measures, China outperformed its regional counterparts in July as investors remained confident of continued economic growth. During the month, the largest additions were in Taiwan and Hong Kong. This increased the fund's exposure to the computer hardware, semiconductor and industrial conglomerates sectors. Taiwan's lagging performance, relative to regional markets, provided the fund with an opportunity to buy value stocks at attractive valuations. Selective China "H" and Shenzhen "B" shares were also purchased during the period.
China's economy grew at its fastest pace in more than 10 years and the government introduced additional tightening measures in July due to renewed concerns of overinvestment. Gross domestic product (GDP) grew an annualised 11.3% in the quarter ending June 30, 2006, mainly due to robust export and investment growth. This brought GDP growth for the first half of 2006 to 10.9%. Investment increased 30.8% during the quarter as both the private and public sectors continued to invest in new projects. China also registered a record trade surplus of US$14.5 billion in June, bringing the total for the first six months of 2006 to US$61.5 billion. Exports expanded 25% year on year, while imports were up 21%. Confident of China's economy, Moody's raised its outlook on the country's long-term foreign currency bonds to positive from stable, while Standard & Poor's upgraded its long-term sovereign credit rating to 'A' from 'A-'.
|
| Click here for original article |
| |
|
Templeton China comment - Sep 05
|
|
Friday, 18 November 2005
|
Fund Manager Comment
|
For the three-month period ending September 30, 2005, the Templeton China Fund returned a net 5.57% (in US dollars) outperforming its primary benchmark, the MSCI Golden Dragon Index, which returned 3.92%.
China continued to benefit from a strong macroeconomic environment and greater investor interest. As the Fund continued its search for value stocks, it increased in its exposure to all the countries in the portfolio. The largest investments were undertaken in China "H" shares, Taiwan, South Korea and Hong Kong. This increased the fund's exposure to the diversified banking, multi-sector holding and integrated oil & gas sectors.
One of the fund's top 10 holdings, Hopewell Holdings is involved in infrastructure, property development & investment, hotel operations & management, restaurants & food catering, as well as construction & project management. The recovery of the property market, and the boom in tourism in Hong Kong should benefit its property investment portfolio and hotel business.
Outlook
Despite a minor revaluation of the yuan in July, China's exports continued to strengthen reaching a new high this year in August. Exports totaled USD67.8 billion, up 3% month-on-month and 32% year-on-year. Imports rose 23% year-on-year to USD57.8 billion, resulting in a USD10 billion trade surplus for August. While FDI inflows declined 3% year-on-year to USD38 billion, contracted FDI jumped 21% to USD112.7 billion; indicating China's continued attraction to foreign investors. Driven by strong exports and industrial production, China's economy grew 9.5%, year-on-year, in the second quarter. Expanding economic relations, regionally, China entered into agreements with Singapore and Thailand as well as held trade talks with Malaysia during September.
|
| |
|
Templeton China comment - Jul 05
|
|
Wednesday, 14 September 2005
|
Fund Manager Comment
|
Despite high oil prices and the government's administrative measures to slow down the economy, the Chinese markets preformed well in July, with the MSCI Golden Dragon index returning +4.17% in US dollars. During the month, the Fund increased its investments in South Korea, Taiwan and Hong Kong. The Fund's investment in one of the largest banking and financial services organizations in the world led to an increase in the Fund's holdings in Britain. This group has significant interests in the greater China region. As a result, the Fund's exposure to the multi-sector holdings, diversified banks and electronics equipment manufacturers increased. No sales were undertaken during July.
One of the Fund's largest holdings is China International Marine Containers (CIMC). A Sino-foreign joint venture company, CIMC is the world's largest manufacturer of marine containers. The company has been the market leader in its speciality since 1996. (The second largest player is Singamas, which is listed on the Hong Kong Stock Exchange). CIMC was established in 1980 and listed on the Shenzhen market in 1994 for both A-share and B-share trading. The company has numerous competitive advantages with a dominant market share and economies of scale.
China's economy grew 9.5% in the second quarter, surpassing the 9.4% recorded in the preceding quarter mainly due to strong exports and industrial production. Exports jumped an annualised 31% to USD66.0 billion in June, while imports rose 15% to USD56.3 billion, resulting in a USD9.7 billion trade surplus. This brought the surplus for the first six months of the year to USD39.7 billion, a turnaround from the USD6.8 billion deficit in the same period last year. However, foreign direct investment inflows declined an annualised 3.2% to USD28.6 billion in the first half of the year, as government measures to cool the economy continues to show positive results. In July, China replaced the Yuan's peg to the US dollar with a basket of currencies. Thus far the yuan has appreciated by 2.1% against the US dollar.
|
| |
|
Templeton China comment - Jun 05
|
|
Tuesday, 16 August 2005
|
Fund Manager Comment
|
Markets in the greater China region recorded good performances in the second quarter, with the MSCI Golden Dragon index returning 6.62% in US dollar terms. During the period, the Fund increased its investments in Hong Kong, China "H" shares and Taiwan, while selective sales were undertaken in China "Red chip" shares as sell targets were reached. As a result, the Fund's exposure to the highways & rail tracks and banking sectors increased. The largest sales were seen in the computer hardware and construction sectors.
One of the Fund's top ten holdings, Acer Inc. is well positioned to benefit from the growing demand for personal computers (PCs). Established in 1981, Acer sells PC and PC-related products under its own brand "Acer" and was Taiwan's first global PC brand. 75% of Acer's PC sales is through distributors. Currently, Acer ranks 7th in the world, with a 2.7% market share in the global PC market. It ranks No.1 in Europe in notebook sales. In addition to the PC business, Acer is also involved in the IT distribution business through its recent merger with Acer Sertec. Acer initiated a restructuring program in 2002 and adopted the "three ones, three multiples" business structure, in which it focuses on the "Acer" brand, centrally controls pricing and marketing policy of its products and outsources all its manufacturing to original equipment manufacturers (OEM).
China's trade surplus continued to increase, recording a new high in May 2005, as imports grew at a slower-than-expected 15%. Exports remained robust, surging 30% in May. The result was a trade surplus of US$9.0 billion, nearly double the US$4.6 billion recorded in April. Government efforts to slow down the economy were fairly effective. Inflationary pressures eased and there was slower growth in some areas of the economy. Fixed-asset investment grew 28% in May. While it is marginally higher than the 27% recorded in April, it is well below the 50% range seen in early 2004. Politically, relations between China and Japan suffered a further setback when Chinese Vice Premier Wu Yi unexpectedly cancelled a meeting with Japanese Prime Minister Junichiro Koizumi and cut short an official visit to Japan.
|
| |
|
Templeton China comment - Mar 05
|
|
Friday, 29 April 2005
|
Fund Manager Comment
|
Markets in the Greater China region fell during the quarter as rising cross strait tensions between China and Taiwan affected market sentiment. During the quarter, selective purchases were undertaken in China "H" shares, Taiwan and China "Red-chip" shares as the Fund continued its search for stocks trading at attractive valuations. This resulted in an increase in the Fund's exposure to the integrated oil & gas, wireless telecommunications services, distributors and airlines sectors. Alternatively, the Fund's largest sale was in Hong Kong as the stock reached its sale target.
As of end-March, the Fund's largest exposure is to multi-sector holdings. Within this sector, one of the largest holdings is Cheung Kong. Cheung Kong is a major conglomerate in Hong Kong with a strong market position in the real estate market. Its core business is residential real estate development. Cheung Kong also owns 49.9% of Hong Kong-listed, Hutchison Whampoa Limited. Hutchison Whampoa comprises five core divisions: (1) Ports and Related Services; (2) Telecommunications; (3) Property Development and Holdings; (4) Retail, Manufacturing and Other Services; and (5) Energy, Infrastructure, Finance and Investments.
Tension in the greater China region increased during the quarter as China passed the anti-secession law which allows it to use force against Taiwan in the event that the latter demands independence from China. Completing the final step towards a transfer of power, Jiang Zemin resigned as chairman of the state Central Military Commission. President Hu Jintao succeeded Mr. Jiang. Economically, the first couple of months in 2005 point towards rising prices and investment, raising concerns of overheating. Consumer prices bucked a downward trend registering 3.9% y-o-y in February due to the Lunar New Year holidays and higher commodity prices. Fixed asset investment rose 24.5% y-o-y in January-February, faster than the 21.3% increase recorded in December 2004.
|
| |
|
Templeton China comment - Feb 05
|
|
Wednesday, 23 March 2005
|
Fund Manager Comment
|
Markets in the Greater China region rebounded in February with the MSCI China index returning 7.4% in US$ terms. Little activity was undertaken in January with selective purchases undertaken in China "H" shares. This resulted in an increase in the Fund's exposure to the airlines and oil & gas sectors. The Fund also repositioned its holdings in Taiwan, adding an IT distributor, while reducing its holdings in the banking sector. The Fund's largest sale was a financial services company in Hong Kong as its sale target was achieved.
As of end-February, one of the Fund's largest exposures was to the banking sector. A key holding in this sector is HSBC. Headquartered in London, HSBC is one of the largest banking and financial services organizations in the world. It has an international network of over 98,000 offices in 77 countries and territories in Europe, North America, Hong Kong, the rest of Asia-Pacific and South America. HSBC has over 100 million customers around the world. Through a global network linked by advanced technology, including a rapidly growing e-commerce capability, HSBC provides a comprehensive range of financial services balanced geographically and across its five business units, Corporate, Investment Banking & Markets, Personal Financial Services, Commercial Banking, Consumer Finance, and Private Banking.
Solidifying China's growing importance globally, the country outpaced the US as the largest consumer of food, industrial commodities and energy (ex-oil) in 2004. According to a World Bank report, China recorded an annual economic gain of US$40 billion as a result of its accession into the WTO. However, the benefits have yet to be felt by the rural residents where average household income fell 0.7%. Consumer prices continued on a downward trend in January, easing pressure on the central bank to increase interest rates. CPI rose 1.9% in January, down from the 2.4% in December, the slowest pace in 14 months. The trade surplus registered a record US$6.5 billion in January as exports continued to thrive. Exports jumped 42.2% y-o-y to US$50.8 billion, while imports rose 24.0% to US$44.3 billion.
|
| |
|
|
