Lumiere Value Fund, the top performer in the past three years among funds investing in the Asia-Pacific region, expects more value in Singapore and Hong Kong stocks over the next two years fueled by economic growth.
The $30 million Lumiere Value Fund, run by Singapore-based Lumiere Capital Ltd., has returned 378 percent in the past three years, making it the best performer among 3,624 funds tracked by Bloomberg that invest in equity-related products in the region. The fund has a maximum capacity of $300 million to $400 million and is seeking to raise money from investors, said Yu Liang Wong, managing director of the company.
The fund invests in “deeply undervalued” stocks of companies that will benefit from the world’s fastest-growing economies and currently has about 25 to 30 key holdings, Wong said. It has returned 40 percent in U.S. dollar terms since inception in October 2007, outperforming the 23 percent drop by the MSCI Asia Pacific Index in the same period.
“We think stocks across the board are cheap now,” Wong said in an interview in Singapore today. “We are bullish on the markets over the next two years. Both Singapore and Hong Kong are the cheapest markets in Asia now.”
Hong Kong’s Hang Seng Index is trading at 9.63 times earnings, while Singapore’s Straits Times Index is valued at multiple of 9.62, which along with Pakistan are the Asia-Pacific region’s cheapest stock markets, according to data compiled by Bloomberg
“The last three times these markets were this cheap over the last two decades were during the 1997 Asian crisis, 2002 internet bust, 2008 financial crisis,” Wong said.
Among investments that the fund has made is Fufeng Group Ltd., a maker of food additives, which is benefiting from prospects of long-term growth of the fast food and restaurant industry in China, said Wong. Oriental Watch Holdings Ltd., Hong Kong’s second-biggest retailer of timepieces, is also attractive because of its market share of about 30 percent in China for Rolex watches and the outlook for the country’s luxury retail sector, he said.