Apollo Investment Management
What's new archive - 2005

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13 Dec 05:
John Hussman's explanation is a model of clarity on US overvaluation: one among many excesses, but enough to justify a 'Durable Sense of Doom'.

9 Dec 05:
More financial doggerel, this time set to music: 'Inflation Nation' and 'Silver Solution'.

2 Dec 05:
NAV of the Apollo Asia Fund rose 2% in November, to a new high of US$556.81; charts.

29 Nov 05:
'If a G8 group based on reserves were to be formed today, the constituent members would be Japan, China, Taiwan, South Korea, Russia, India, Hong Kong and Singapore.' Read Bedlam Asset Management on fiat currencies and gold.

2 Nov 05:
NAV of the Apollo Asia Fund fell 0.2% in October, to US$544.11; charts.

10 Oct 05:
The measured John Hussman comments that US 'investors have fairly abruptly adopted a skittish view of risk taking'.

4 Oct 05:
NAV of the Apollo Asia Fund rose 0.8% in September, to US$545.05; charts; 3Q report.

Rob Kirby's 'Easy come, easy go' raises interesting questions about Venezuela's reported liquidation of US treasuries and yet another set of US statistics.

Marshall Auerback thinks 'the dollarís problems havenít gone away'. I agree.

23 Sep 05:
In the absence of fresh financial doggerel, politics feeds nursery rhymes for our times: 'Are you sitting comfortably?'.

13 Sep 05:
'Auspicious times for Maoism', concludes Gary Leupp, reviewing the chances of a rebel takeover in Nepal.

5 Sep 05:
NAV of the Apollo Asia Fund rose 0.9% in August, to US$540.74; charts.

16 August 05:
Thailand's former standing as South-East Asia's bastion of press freedom has recently been eroded, and the latest criminal & civil charges against the Bangkok Post are depressing. On such a day, it is interesting to see a strong editorial from The Nation on the urgent need for coherent policy in the South. The Financial Times last weekend warned forcefully of the AIDS risk to bankers' rosy projections for India; political risks may be rising in Thailand.

2 August 05:
The Apollo Asia Fund continued to hop on the spot, missing out on the region's top performers. NAV rose 0.4% in July, to US$535.87; charts.

19 July 05:
John Hussman's 'Skews & Smiles' is a wonderfully lucid explanation of how a large probability of small gains may be balanced against a small probability of large losses.

8 July 05:
John Williams thinks the US sovereign rating should be C- rather than AAA, given a US Federal deficit including Social Security obligations of a recurrent US$4.5-5 trillion a year. This official figure, using GAAP accounting, is an order of magnitude larger than the headline release - and the total federal obligations amount to $47 trillion. 'Federal Deficit Reality: an update'.

Williams observed in September that, of the 15 countries rated AAA by Fitch in Aug04], "the worst deficit as a percent of GDP was for France at 4.1%... the not-generally-recognized GAAP U.S. deficit in 2003 was 34.2%. Similarly, the highest level of debt to GDP [is] 75.6% for Canada... versus a GAAP ratio of total financial obligations to GDP of 334.3% for the United States... Where most of the other "AAA" countries have significant unfunded social insurance liabilities that are not included in the debt-to-GDP ratios, consistent 2003 numbers are not available. As a rough estimate, the high ratios mentioned for Canada, France, Germany and Austria would increase by two-to-three times, still well shy of the U.S. extreme... In searching World Bank data, I couldn't find any nation with a debt-to-GDP ratio worse than the United States' GAAP obligations ratio of 334%. The closest found is for the West African state of Guinea-Bissau at 224%, but Guinea-Bissau is not rated."

5 July 05:
NAV of the Apollo Asia Fund rose 0.7% in June, to US$533.73; charts; 2Q report.

4 July 05:
Excellent reading: Marc Faber interviewed by Jim Puplava on 'Inflation / Deflation'; and John Hathaway on 'A Process of Elimination... gold & the credit cycle'.

2 June 05:
NAV of the Apollo Asia Fund fell 0.6% in May, to US$530.23; charts.

19 May 05:
The insurgency in Southern Thailand is analysed in a report by the International Crisis Group. Today's FT reports sensible comments by Khun Anand, chairman of the National Reconciliation Commission, but an earlier Asia Times article highlighted the difficulties.

4 May 05:
NAV of the Apollo Asia Fund rose fractionally in April, to US$533.59; charts.

3 May 05:
BP is to develop a gas field in West Papua. This has little immediate relevance to the fund, but investors in Indonesia (like ourselves) should be aware of its history: read George Monbiot, or freewestpapua.org.

19 Apr 05:
Worth reading: 'The coming bull market in gold stocks' by Frank Barbera, for a century's perspective, and 90-year charts showing that gold stocks have often bucked US equity downturns.

4 Apr 05:
NAV of the Apollo Asia Fund fell 1.8% in March, to US$532.62: 1Q report; charts.

25 Mar 05:
The Singapore stockmarket was long distinguished by over-capitalised companies, poor capital allocation, and poor returns on capital. This has begun to change in recent years, but some groups have adopted shareholder value more convincingly than others. We were therefore delighted when a local shareholder, Mr Ong Chin Woo, wrote to the board of Overseas Union Enterprise on 4 Mar, and wrote to other known shareholders with his reasoning.

OUE has valuable assets, including cash and shares of United Overseas Bank, and has historically traded at a significant discount to NAV because of the lacklustre returns on capital. In 2004, Mr Ong Chin Lim proposed an AGM resolution to distribute some of the UOB shares: the board responded that dividend recommendations are vested with the directors, and the resolution was not tabled. This year Mr Ong proposed two resolutions: to distribute UOB shares, and to appoint a financial adviser to evaluate options to unlock shareholder value. The board has again responded that "these are management matters, which are vested with the Board of Directors [chaired by Mr Wee Cho Yaw, the chairman & CEO of UOB]... we are unable to accede to your request". They copied the proposal and their reply to the stock exchange: it may be coincidental that both were released at 6.29pm on 24 Mar, just before the long Easter holiday weekend.

We've made one small addition to our wishlist of simple improvements to financial disclosure in Asian markets, following the note that wire service newslists for some companies are dominated by hundreds of individual share transaction reports. We forgot to mention that the text often indicates only the type of announcement - eg "notice of a change in the percentage level of a substantial shareholder's interest" (how helpful) - and requiring the download of an attached file for each of the hundreds. Such headlines should indicate which shareholder and in which direction - unless all announcements are to be plain text, as in the US.

3 Mar 05:
NAV of the Apollo Asia Fund rose 5.9% in February, to a new high of US$542.17. Charts.

14 Feb 05:
I am just back from Manila, where Valentine's Day celebrations started on Friday, appointments are hard to schedule for today, and President Arroyo has declared a cash bonus engagingly entitled "productivity enhancement pay" to be paid today to the 1.4m government employees. Such news is more enjoyable reading than William Engdahl on US foreign/energy policy, outlining a purported "US agenda for the new War on Tyranny. If we add Syria, Sudan, Algeria and Malaysia, as well as Condi Rice's list of Cuba, Belarus, Myanmar (Burma) and Zimbabwe, to the JCS list of Somalia, Yemen, Indonesia and Philippines, we have some 12 potential targets for either Pentagon covert destabilization or direct military intervention, surgical or broader. And, of course, North Korea..."

2 Feb 05:
NAV of the Apollo Asia Fund rose 2.6% in January, to a new high of US$511.96. Charts.

7 Jan 05:
Among aggravations for foreign investors in Malaysia, I forgot to mention that effective FX spreads are not as low as one would expect of a pegged currency, but instead seem unusually high. HSBC tells us that they obtain multiple FX quotes before dealing in any other currency, but that regulations preclude this for Malaysia. Hmmm.

Gerry adds that share splits, usually popular with Asian retail investors, are not such good news in Malaysia, where they involve a minimum three weeks' trading suspension.

Masya Spek is our expert on both sustainable forestry and Indonesian malpractice. Commenting on the Asia Times article 'A forest falls in Cambodia', she notes that:

She recommends the CIFOR website www.cifor.cgiar.org, and in particular a publication discussing fast-growing forests.

The 4Q report is here.

6 Jan 05:
Outsiders are sometimes surprised that we are not more interested in the Malaysian market. Malaysians are often shocked that we have a higher weighting in Indonesia. We could hold forth on the characteristics of the companies, or the business environment; or why bureaucratic hurdles and an over-protected banking system might lead to inefficient capital structures; or the bureaucratic disincentives for listing and for acting as a director; or why we are still bruised from our forced disposal of Bumi Armada. However, less widely appreciated is the sheer hassle of dealing and settlement in the Malaysian market for a foreign investor. In the hope that some of the officials who ask for investor feedback may be interested in receiving it, Gerry Ambrose of Kim Eng Securities has kindly responded to a request to summarise some of the issues, in 'The cons & cons of Malaysian settlement'.

5 Jan 05:
NAV of the Apollo Asia Fund rose 3.0% in December, closing the year at a new high of US$498.87. Charts.


Claire Barnes

To What was new archive - 2004
To What was new archive - 2003
To What was new archive - 2002
To What was new archive - 2001
To What was new archive - 2000
To What was new archive - 1999

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