July, 2021
Premium China Funds Management would like to formally announce the closure of the Premium Asia Property Fund. Since its inception in June of 2008, the Fund delivered its investment objectives, achieving a 9.98% p.a. return. Distributions and redemptions were paid in full on the 25th and 28th of June respectively.
File:March, 2021
In March, changing inflation expectations and policy tightening concerns continued to cause cautious market sentiment, dragging down China equities. Globally, consistent positive signs indicate a global economic recovery. Inflation and rate expectations were refreshed, while a run-up in bond yields triggered investor repositioning. As a result, the market gave up some gains year-to-date, and investor concerns over the gradual phase-out of easing policies and tighter regulation put pressure on Internet and consumer discretionary stocks.
In China, the recovery path remains solid, with investors being wary of policy normalization. Policymakers have made it clear that monetary policies would remain flexible and precise; a consistent message which has been delivered since December 2020. The Two Sessions (the annual meetings of China’s top legislature and top political advisory body) held in March reiterated the importance of balancing a sustained growth recovery.
Fiscal policy will tilt more toward basic livelihood, innovation, urbanization, energy conservation, and environmental protection; echoing the 14th Five Year Plan. These key reforms lay a multi-year structural transition in selected companies; for instance, technology and domestic consumption upgrades.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/PAPF-March-2021.pdfDecember, 2020
Despite growing optimism towards vaccine, the performance of China’s property sector was affected by the news of tighter credit control. An increasing number of confirmed COVID-19 cases in Hong Kong also hurt the performance of Hong Kong property stocks. The Fund was negatively impacted by the Australian dollar appreciation (The AUD appreciated about 4.8% against the USD in December). In the latest politburo meeting on 11 December, the Central Government has reiterated its stance on property to ensure the industry’s stable and healthy development. The idea of “demand-side-reform” has also been mentioned for the first time in a politburo meeting.
We believe this includes a stimulus of domestic consumption, which requires real estate prices to remain stable. We think the overall tone, which focuses on stability in almost every aspect of the industry, is a positive to the sector, decreasing the risk of developers making overly-aggressive expansion by increasing leverage. Big developers with balance sheet strength and lower financing costs should generate a sustainably higher margin than peers. In December, the contacted sales for the 24 major developers saw a strong momentum posting a 30% year-on-year growth1 . China was the first to lock down, but the earlier re-opening of the necessary physical activities for the realestate companies proved beneficial. In 2020, most of the 24 major developers surpassed their full-year targets, achieving 105% of their annual goals on average.
Following a quick recovery, the government’s priority has been set to manage the rapid debt growth in the property sector by setting “three red lines”, limiting the loan growth from 0 to 15% depending on the gearing level. Such a move is favourable for the long term to developers’ profitability as less competition is like to bring down the land cost. Despite the climb of COVID infection cases in the territory, Hong Kong’s home market saw a turnaround into the year-end. Supported by the long-lasting demand-supply imbalance unfolding in the last part of 2020, the total home sales figures were flipped to a manageable decline2 . In the commercial property space, the unexciting outlook on the economy may cap the uptake of commercial rental growth in 2021.
Although the valuations of the listed property developers and managers stay in the attractive range, we retain our cautionary view on this segment. Singapore’s upbeat new home sales concluded to be par with 2019 figures in a year which recorded the country’s deepest yet short-lived recession3 . In December alone, sales more than doubled from the total units sold in December 2019, as the COVID situation stabilised. Nonetheless, the anticipated vaccine brightens the outlook on the hospitality and retail sectors and the relevant REITs received some tractions.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/PAPF-December-2020.pdfasset_class: Property and Infrastructure
asset_category: Global Listed Property
peer_benchmark: Property - Global Listed Property Index
broad_market_index: Dvlp Global Real Estate
manager_contact_details: Array
ticker: MAQ0574AU
release_schedule: Monthly
commentary_block: Array
factsheet_url:
https://www.premiumchinafunds.com.au/funds/premium-asia-property-fund/
Updates & Reports
Monthly Factsheet….
fund_features:
The Premium Asia Property Fund is a managed investment scheme which invests primarily in securities of property or property-related companies with exposure to any, some, or all, of the following countries: Hong Kong, Mainland China, Taiwan, Macau, Malaysia, Philippines, Singapore, Republic of Korea, Thailand and Indonesia. The Fund aims to provide investors with positive returns over 10% p.a. over a three to five year period. The Fund is managed by value partners using a disciplined value-oriented approach supported by intensive, on-the-ground bottom-up fundamental research resulting in a portfolio of individual holdings, which are in the view of value partners, undervalued and of high quality, on either an absolute or relative basis, and which have the potential for capital appreciation.The Fund may also invest in listed equities (including depositary receipts), listed China A shares, listed unit trusts, shares in mutual fund corporations and other collective investment schemes (including real estate investment trusts), derivatives including both exchange-traded and OTC, convertible securities, participatory notes, bonds, cash and cash equivalents , and foreign exchange contracts.
structure: Managed Fund