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Orbis SICAV Asia Ex-Japan Equity Fund - News
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Orbis SICAV Asia Ex-Japan Equity comment- Dec 09
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Tuesday, 23 March 2010
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Fund Manager Comment
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Uncertainty seems to be the name of the game thus far this year in both the Asia ex-Japan region and globally, as investors seem to take a cautious "show me" stance. Pundits pedalling a solid cyclical recovery story seem equally balanced by pundits touting a "double dip" recession scenario. The Asia ex-Japan markets seem to both amplify the volatility and suffer downdrafts from the increasing volatility in investor sentiment. We don't know for certain, or even have any useful degree of confidence, as to the way the economy or markets are going to go in the near or medium term. We are, however, finding excellent investment opportunities on a stockby-stock basis. Malaysian hotel and casino operator Genting Berhad is a good example. Genting has a solid 40-year operating history, has Malaysia's only casino with another just opened in Singapore, a solid net cash position and saleable non-core plantations and energy assets. We find Genting's valuation attractive at 14 times 2010 earnings and a 20% expected growth rate.
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Orbis SICAV Asia Ex-Japan Equity Comment- Sep 09
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Monday, 14 December 2009
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Fund Manager Comment
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Your Fund returned 10.4% in September, bringing its year-to-date return to 85.3%. This compares to the benchmark MSCI Asia ex-Japan Index's 8.8% and 61.4% returns for the month and year-to-date respectively. Our bottom-up, intrinsic value-based stockpicking continues to result in a portfolio concentrated in the shares of companies whose fortunes are significantly and directly driven by individual consumers in their local markets. Examples include real estate broker E-House (China) Holdings, Chinese on-line gaming portal Shanda, and investment broker Korea Investment Holdings. Largely as a result of the stock research process itself, we believe significant portions of the region are currently in the early stages of establishing a sizable middle class. While we expect there will be potentially disruptive air pockets in this development, we believe this trend will produce an extended period of high growth in demand for products and services that are commonplace in the developed markets, but just starting to hit critical mass penetration levels in these markets.
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Orbis SICAV Asia Ex-Japan Equity Comment- Jun 09
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Wednesday, 23 September 2009
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Fund Manager Comment
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The Asia ex-Japan Fund experienced strong relative performance across most countries in June, however, nearly half of total outperformance came from a single stock, GOME Electrical Appliances. As you may recall, GO ME's shares were suspended last November when it was announced that the then Chairman was being investigated in connection with unspecified "economic crimes". During the suspension, the uncertainty created by the investigation was compounded when the ensuing disruption to supplier and creditor relationships threatened to exacerbate an existing liquidity concern. The suspension was finally lifted last week, after the conclusion of a special audit report allowed the board to pronounce the financials sound and news of a capital infusion from Bain Capital addressed the market's funding concerns. The 70 % rise in the share price reflects not only considerable relief that GOME has survived the period intact, but also a catch-up with the
strong market performance during the suspension. We remain positive on GO ME's prospects for business recovery and further upside in its share price.
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Orbis SICAV Asia Ex-Japan Equity Comment- Mar 09
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Thursday, 11 June 2009
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Fund Manager Comment
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The Asia ex-Japan region rebounded with the rest of the world's stock markets in March, finishing with a 13.8% gain. Your Fund followed suit with a 14.3% return. This brings both the Fund and region into positive territory for the year, standout performances in what has been a materially negative year thus far for much of the rest of the world's equity investment alternatives. Performance for the quarter was largely driven by stock selection in Korea and China. Our renewed enthusiasm for the valuations and prospects of Chinese shares continues to grow in confidence. The Fund's exposure to Chinese shares is now the highest it has been, at 43%, up from a since inception low of just 14% a year ago. Many of the Chinese shares in the Fund sell for what we consider to be very attractive valuation levels and offer the prospect of higher than average growth. Most are domestically oriented and thus stand to benefit from the Chinese government's well funded and well founded stimulus plans.
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Orbis SICAV Asia Ex-Japan Equity comment- Dec 08
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Monday, 9 March 2009
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Fund Manager Comment
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The Fund returned 14.7% in December, completing 2008 with a loss of 44.0%. While of little solace to those experiencing significant absolute losses, these results compare favourably to the returns of the benchmark MSCI Asia ex-Japan Index which finished 2008 with a 52.4% loss. Chinese shares have corrected significantly from their 2007 bull market peak, with the Shanghai stock exchange down 70% and underperforming all other stockmarkets in the region. The Fund has taken advantage of the sell-off to build positions in Chinese shares that have made it through our research process, leading to a shift in the country weight in China from underweight to overweight. We expect that, as a major exporting economy, China and many Chinese shares, will experience negative news flow in the coming months as the global recession takes its toll. At this point, however, we find the status of Chinese shares as investors' darlings has largely disappeared, and valuations and fundamental outlooks for selected shares now attractive enough to outweigh the near-term risks.
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Orbis SICAV Asia Ex-Japan Equity Comment- Mar 08
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Thursday, 22 May 2008
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Fund Manager Comment
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Your Fund returned 2.0% in March, significantly outperforming the 6.1% loss in the benchmark MSCI Asia ex-Japan Index. Strong outperformance in March and thus far this year to date has been largely driven by the significant overweighting and outperformance of the Fund's holdings in Taiwan. These positions have benefited markedly from the landslide parliamentary and presidential election victory of the pro-China KMT party, which promises to reverse Taiwan's self-imposed isolation from China and provide relief from the resulting years of economic stagnation.The Fund's entire 35% Taiwanese position is made up of financials, which have been held back in particular by past policies and stand to benefit very materially from the expected reforms. While the market has anticipated this through stock price increases, valuations remain attractive, and we believe significant upside remains once the improved operating environment and impact on fundamentals become more visible.
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Orbis SICAV Asia Ex-Japan Equity Comment- Dec 07
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Monday, 25 February 2008
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Fund Manager Comment
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China has been and continues to represent a fascinating long-term investment opportunity for intrepid investors. From the start of the Fund, in our communications we have tried to strike an appropriate balance between the reward and risk of significant investments in China. China has long had amazing secular economic growth prospects, and a long-term likelihood of moving toward more investorfriendly regulatory and legal systems. And at the Fund's launch, valuations were such that we were able to buy into these long-term positives at incredible discounts to global comparisons, owing to investors' concerns with the risks. These risks are the same as they have been, chiefly that as an emerging economy, volatility should be expected, spurred in part by immature market, legal, and regulatory systems. While slow progress has been made in these areas, we caution that current investor enthusiasm for China has pushed valuations to levels that indicate a degree of comfort with these risks more befitting the world's more advanced markets.
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