Southeast Asian funds shine, Indonesia tops

Southeast Asian funds shine, Indonesia tops

Sabyasachi Mitra, Reuters, Hong Kong

Investors in Indonesian focused mutual funds emerged as Asia
winners in January getting staggering returns of nearly 20
percent over the previous month.

Japan-themed funds were the region's worst performers shedding
some 7.2 percent in January, with Hong Kong in the penultimate
position with a loss of 2.12 percent in a universe of 15 fund
categories, according to data from fund tracking firm Lipper
Asia, a Reuters company.

"In general, Southeast Asia outperformed North Asia in
January," said Robert Conlon, chief investment officer at
Investec Asset Management, which manages US$27 billion assets
globally. "But we are still seeing Korea and Taiwan performing
fairly well," Conlon added.

Funds concentrating on the Philippines and Thailand occupied
the second and third spot in the league table with returns of
18.6 and 18.07 percent.
The top three funds outperformed the regional benchmark, MSCI Far
East ex-Japan ex-Hong Kong index which rose by just five percent
in January.

Indonesia funds even outpaced the rise in the bellwether
Jakarta stock index which added an impressive 15 percent in
January.

Savers Thailand Fund, promoted by OCBC Asset Management Ltd,
was the region's star performer in January, soaring 23.84 percent
over the previous month.

ING Barings in a research report said foreign interest has
been the main driver of market performance in Thailand, Indonesia
and Philippines in January.

"With some of the highest returns and most attractive
valuations in Asia, Indonesia and Thailand are our preferred
markets after initial wave of liquidity driven buying," ING said.

Investors in ASEAN-themed funds on an average gained nearly 13
percent month-on-month in January, according to Lipper data.

ASEAN stands for Association of Southeast Asian Nations.

Some analysts said it was still early days and difficult to
predict whether the Southeast Asian markets would be able to
sustain the rally in the coming months.

"You got to remember that some of the Southeast Asian markets
like the Philippines are very illiquid. Therefore, some of the
rate of gain you saw in the some of the markets is
unsustainable," Conlon said.

South Korea delivered returns of about 9.45 percent in
January. Funds focusing on Korea grew 40.4 percent in 2001.

Singapore followed next with gains of 5.8 percent during the
month, with Taiwan following closely at 5.45 percent.

Malaysia-themed funds were the laggard in Southeast Asia,
delivering returns of about 4.3 percent.

But fund managers and analysts said Malaysia along with
Singapore markets could outperform the region in the mid-phase of
an economic rebound because of their strong export linkages to
the U.S. economy.

China-focused funds delivered returns of 2.13 percent in
January.

But most fund managers remained optimistic of higher annual
returns from China-themed funds, eying gains flowing from strong
economic growth during the year and after Beijing's entry into
the World Trade Organization.

"I think China will outperform. The economic growth in China
is stronger than others and I think it can be sustained," said
Norman Ho, a fund manager at Value Partners Ltd.