BEA CAPITAL GROWTH FUND

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					BEA CAPITAL GROWTH FUND




            INTERIM REPORT
               (Unaudited)
  For the period ended 30th June, 2003
BEA CAPITAL GROWTH FUND

CONTENTS

                                               Page

Market Review and Outlook                      1-2

Investment Portfolio                           3-4

Statement of Movements in Portfolio Holdings    5

Revenue Statement                               6

Statement of Assets and Liabilities             7

Statement of Movements in Capital Account       8
Performance Review

The BEA Asia Strategic Growth Fund effectively went into operation on 16 April, 2003. From
that date to 30 June, 2003, the net asset value of the Fund rose by 11.50% from US$10.00
to US$11.15. During the same period, the Morgan Stanley Capital International (MSCI) All
Countries Far East Free excluding Japan and Hong Kong Index rose 11.45% in US dollar
terms.

The performance of the individual markets is as follows:

    Market Index        Index as at       Performance Since       Performance Since
                       30 June, 2003        15 April, 2003          15 April, 2003
                                           (Local Currency)       (US Dollar Terms)

China HSCEI                  2,726.43                  25.05%                  25.07%
India SENSEX                 3,607.13                  20.34%                  22.56%
Indonesia JCI                 505.499                  15.48%                  23.44%
Malaysia KLCI                  691.96                   9.63%                   9.63%
Philippines PCI              1,222.80                   9.52%                   7.24%
Singapore STI                1,447.89                  12.08%                  13.47%
Korea KOSPI                    669.93                  10.73%                  13.00%
Taiwan TWI                   4,872.15                   8.57%                   9.16%
Thailand SETI                  461.82                  20.47%                  23.22%

Market and Economic Review

Asian equity markets in the first quarter of the year were battered by a combination of Iraqi
war and terrorist worries, political tensions in the Korean peninsula and global economic
uncertainties. The relatively quick and bloodless ending to the Iraqi war fueled a powerful
relief rally in the world’s major markets in the early part of the second quarter. A sharp drop
in bond yields world-wide and the accommodating policy adopted by the world’s central
banks to fight against a deflation threat continued to encourage investors to raise their risk
appetite, providing strong support to the major equity markets and a favourable backdrop for
the markets in the region. Asian markets were initially held back by the SARS outbreak and
did not start to catch up until May. The successful containment of SARS later in the quarter
enabled investors to shrug off the worries of the disease and re-focus on the merits of Asia.
As confidence returned, investors decided to chase shares in a rising market, pushing up the
MSCI AC Far East Free excluding Japan and Hong Kong Index by 11.45% during the period
under review, slightly surpassing the increase of 11.29% in the MSCI AC World Free Index
during the same period, both in US dollar terms.

The rally was started by foreign investors who were lured by attractive valuations of Asia, as
share prices were severely lagging behind their counterparts in the major markets. Driven by
historic low interest rates across the board, strong capital inflow from a surge in external
account surpluses and subsiding worries over SARS, local investors then flocked into the
markets towards the end of the second quarter, adding further fuel to the rally. The smaller
Asian markets, Indonesia and Thailand, were star performers as SARS had a smaller impact
on their economies. India also did well on the back of lower rates, rising foreign reserves and
an improving banking sector. Despite the impact of SARS, China was well supported by
good economic data, strong liquidity and speculation on the launch of QDII. The robust
Nasdaq performance and rising hopes of a turnaround in the tech cycle helped the
electronics heavy-weighted markets of Korea, Taiwan and Singapore. While Malaysia’s
gains were held back by the lethargic performance of big cap stocks, the mid-cap stocks
actually staged very credible double-digit gains.

On the economic front, statistics came out in the first quarter confirmed that the regional
economy was performing in line with, if not above, expectations despite widely held
concerns over weak external demand from the US, geopolitical uncertainties and higher oil

                                              1
prices. However, the unfortunate outbreak of SARS was a great blow to the region in the
second quarter, particularly in economies most impacted by the disease, including China,
Taiwan and Singapore. With the SARS impact subsiding, the regional economy should see a
strong sequential rebound in the second half of the year. Full year economic growth would
still need to be revised down because of poor second quarter.

Outlook and Strategy

In the near term, the region is seeing a massive jump in foreign reserves as the external
account surpluses continue to grow and the monetary authorities continue to intervene in the
foreign exchange market to keep their currencies stable. The local authorities have followed
the Fed’s move to cut their interest rates by at least 25 basis points, and are expected to
maintain very accommodating policies. Countries such as Singapore, Thailand and even
China are busy mulling over possible stimulus packages to pump-prime their economies
while Korea and Malaysia have already announced their plans at the time of writing. It is
clear that they still have ample resources to do so. Further out, there are many good reasons
to be optimistic that the regional economy will expand for a sustained period. After 6 years
of restructuring and reform, the region’s economic fundamentals are in much better shape,
which have enhanced the effectiveness of the underlying loose monetary and fiscal policies.
Asian currencies remain very competitive that will enable the region to continue to gain
market share in the world trade arena and Asian demographics remain supportive with a
growing working age population. The region will also benefit from China’s rapidly expanding
middle class and its joining of the WTO.

Despite our long held optimism about the economic prospects of Asia, our outlook for the
regional market has been held back by our reservations on the US market, to which the
regional market is unfortunately highly correlated. We believe the US economy as well as its
equity market need to adjust further to unwind the excesses that had built up during the tech
bubble as evidenced by the prevailing high debt level of the economy and expensive
valuation of the market. The sluggish response of the economy to the aggressive rate cuts
by the Fed has reinforced this view as the risk of a Japanese style recession looms in the
US. However, Governor Benanke’s unorthodox speech and the subsequent talks of Alan
Greenspan have shown increasing determination of the central bank to fight against
deflation, notwithstanding the risk of re-igniting asset bubble. This has set a conducive
background for the US capital markets, leaving an even more favourable implication on
Asian markets where valuations are much cheaper and growth is superior.

Against the backdrop, we are expected to maintain a close to fully invested position. At the
time of writing, the regional market has risen another 9% after the credible 20.8% gain in the
second quarter and a period of consolidation is looking overdue. Given our outlook for the
Fed to continue its reflationary policy, the global capital market and the regional market in
particular will continue to be flooded by massive liquidity. Any correction in the near term will
be brief and shallow. In terms of country allocation, we shall maintain our big overweight
position in Thailand and add to Malaysia and Taiwan. We continue to like Thailand despite
its already strong performance as the economy may surprise on the upside, benefiting from
low interest rates, a strong government, growing employment and personal incomes. We are
positive on the banking sector in particular, as continued improvement in the economy will
lead to the possibility of the writing back of their bad debt. While Malaysia’s export sector
remains supported by an undervalued currency, the country’s private consumption is picking
up and thus making it the next domestic consumption story in the region after Thailand. After
the strong rebound of the tech stocks in Taiwan, the market will be subjected to
disappointments should the end demand for tech products fail to live up to expectations.
However, the possibility of an increase in benchmark weighting on the back of the proposed
liberation of foreign investor restrictions is the biggest threat to our downbeat outlook for
Taiwan. We shall also look to accumulate shares in Indonesia should opportunities arise.
The performance of the market so far this year has mainly been supported by a rebound of
the rupiah from a very depressed level. The prospects of further lowering of local interest
rates have not been fully discounted by the market yet.

                                               2
BEA CAPITAL GROWTH FUND
BEA ASIA STRATEGIC GROWTH FUND

INVESTMENT PORTFOLIO
as at 30th June, 2003


                                       Holding      Market Value      % of
                                       Shares           US$        Net Assets

Listed / quoted investments

CHINA (5.25%)
Beijing Datang Power Gen. Co Ltd - H   110,000            48,314         0.72
China Telecom Corp Ltd - H             250,000            57,387         0.86
Huaneng Power International Inc - H     50,000            57,066         0.85
Petrochina Co Ltd - H                  440,000           132,598         1.99
Yanzhou Coal Mining Co Ltd - H         120,000            55,784         0.83

INDIA (4.16%)
India Fund Inc                             12,000        147,000         2.20
State Bank of India - GDR                   6,400        131,072         1.96

KOREA (33.14%)
Hana Bank                                   6,200         58,837         0.88
Hyundai Motor Co Ltd                        2,200         58,126         0.87
Kia Motors Corp                            15,100        111,103         1.66
Kookmin Bank                                7,590        228,459         3.42
Koram Bank                                 17,020        114,272         1.71
Korea Electric Power Corp                   3,280         51,832         0.78
KT Corp                                     1,330         51,932         0.78
KT Freetel                                  2,600         54,239         0.81
LG Electronics Inc                          4,600        191,537         2.87
POSCO                                         590         61,170         0.92
Samsung Electronics Co Ltd                  2,180        647,067         9.68
Samsung SDI Co Ltd                            900         68,101         1.02
Samsung Securities Co Ltd                   2,330         56,399         0.84
Shinhan Financial Group Ltd                 3,800         39,556         0.59
Shinsegae Co Ltd                              890        138,782         2.08
SK Telecom Co Ltd                           1,070        182,506         2.73
Woori Finance Holdings Co Ltd              19,390        100,191         1.50

MALAYSIA (12.83%)
AMMB Holdings Bhd                       61,000            61,321         0.92
Commerce Asset Holdings Bhd             70,000            63,737         0.95
Genting Bhd                             17,000            67,105         1.00
IJM Corp Bhd                            50,000            63,158         0.95
IJM Plantations Bhd                     20,000                 -            -
Lafarge Malayan Cement Bhd             310,000            55,066         0.82
MAA Holdings Bhd                        52,000            62,674         0.94
Malayan Banking Bhd                     26,000            58,842         0.88
Malaysian Resources Corp Bhd           210,000            59,684         0.89
Maxis Communications Bhd                38,000            57,000         0.85
New Straits Time Press Bhd              64,000            62,316         0.93
Public Bank Bhd - Foreign              146,000           116,031         1.74
Road Builder (M) Holdings Bhd           76,000            70,400         1.05
Tanjong Plc                             23,000            60,526         0.91

                                       3
BEA CAPITAL GROWTH FUND
BEA ASIA STRATEGIC GROWTH FUND
INVESTMENT PORTFOLIO (CONTINUED)
as at 30th June, 2003


                                                Holding   Market Value      % of
                                                Shares        US$        Net Assets

Listed / quoted investments (Continued)

SINGAPORE (12.10%)
Allgreen Properties Ltd                         225,000        122,861        1.84
Capitaland Ltd                                   92,000         64,889         0.97
City Developments Ltd                            26,000         65,662         0.98
DBS Group Holdings Ltd                           32,000        187,476        2.81
Keppel Corp Ltd                                  20,000         55,742         0.83
Singapore Airlines Ltd                           10,000         59,155         0.89
Singapore Exchange Ltd                           72,000         56,106        0.84
Singapore Press Holdings Ltd                      6,000         62,454         0.93
United Overseas Bank Ltd                         19,000        134,009        2.01

TAIWAN (16.03%)
Asustek Computer Inc                             40,000        101,257        1.52
China Steel Corp                                140,000         97,206        1.45
Chinatrust Financial Holding Co Ltd             230,000        185,647        2.78
Formosa Plastics Corp                           110,000        153,389        2.30
Hon Hai Precision Industry                       34,000        123,446        1.85
Quanta Computer Inc                              24,000         49,645        0.74
Taiwan Semiconductor Manufacturing Co Ltd       140,000        230,865        3.46
United Microelectronics Corp                    200,000        129,030        1.93

THAILAND (7.58%)
Kasikornbank PCL - Foreign                      182,000        169,839        2.54
Siam Cement PCL - Foreign                        50,000        199,713        2.99
Siam Commercial Bank PCL - Foreign              160,000        136,946        2.05


TOTAL INVESTMENTS                                            6,086,527       91.09

TOTAL INVESTMENTS AT COST                                    5,370,209




                                            4
BEA CAPITAL GROWTH FUND
BEA ASIA STRATEGIC GROWTH FUND
STATEMENT OF MOVEMENTS IN PORTFOLIO HOLDINGS
for the period ended 30th June, 2003



                                 % of Net Assets as at
                          30th June, 2003    15th April, 2003*

China                               5.25%             -
India                               4.16%             -
Korea                              33.14%             -
Malaysia                           12.83%             -
Singapore                          12.10%             -
Taiwan                             16.03%             -
Thailand                            7.58%             -
                                   91.09%             -




*date of inception




                                              5
BEA CAPITAL GROWTH FUND1

REVENUE STATEMENT
for the period ended 30th June, 2003



                                                     BEA Asia Strategic
                                                       Growth Fund1
                                                          US$

Investment income/(loss)
Dividend income                                               14,486
Interest on bank deposits                                      3,263

Total income/(loss)                                           17,749

Expenses
Investment management fees                                         -
Trustee's fees                                                     -
Pre-operating expenses                                        21,236
Safe custody fees                                              6,667
Bank charges                                                     355
Auditors' remuneration                                         6,668
Overdraft interest                                                  1
Printing and publication                                         254

Total expenses                                                35,181

Net income/(loss) before investment and exchange
 gain/loss                                                  (17,432)

Net investment and exchange gain/(loss)
Net realised gain/(loss) on investments                       22,817
Net unrealised gain/(loss) on investments                    681,326
Net realised gain/(loss) on foreign currency
 exchange                                                   (48,776)
Net unrealised gain/(loss) on foreign currency
 exchange                                                     34,746

                                                             690,113

Net income/(loss) for the period/amount
 transferred to/(from) capital account                       672,681




Note:
1. BEA Capital Growth Fund consists of three initial Investment Funds, namely BEA Asia Strategic
   Growth Fund, BEA Hong Kong Growth Fund and BEA Hong Kong Dollar (HK$) Bond Fund.
   Since BEA Asia Strategic Growth Fund commenced operations on 15th April, 2003, preceding
   comparative figures are not available. No financial statements are included in this unaudited
   interim report for BEA Hong Kong Growth Fund and BEA Hong Kong Dollar (HK$) Bond Fund as
   both Investment Funds have not commenced operations.



                                                 6
BEA CAPITAL GROWTH FUND1

STATEMENT OF ASSETS AND LIABILITIES
as at 30th June, 2003



                                              BEA Asia Strategic
                                                Growth Fund1
                                                      US$

Assets
Investments                                          6,086,527
Dividends and other receivables                          3,148
Amounts receivable on subscription                      22,218
Bank balances                                          601,962

Total assets                                         6,713,855

Liabilities
Amounts payable on redemption                                -
Accruals and other payables                             31,883

Total liabilities                                       31,883

Net assets                                           6,681,972


Units in issue
- Class A                                          599,013.035
- Class B                                                    -

Net asset value per unit
- Class A                                                11.15
- Class B                                                    -

Note:
1. BEA Capital Growth Fund consists of three initial Investment Funds, namely BEA Asia Strategic
   Growth Fund, BEA Hong Kong Growth Fund and BEA Hong Kong Dollar (HK$) Bond Fund.
   Since BEA Asia Strategic Growth Fund commenced operations on 15th April, 2003, preceding
   comparative figures are not available. No financial statements are included in this unaudited
   interim report for BEA Hong Kong Growth Fund and BEA Hong Kong Dollar (HK$) Bond Fund as
   both Investment Funds have not commenced operations.




                                               7
BEA CAPITAL GROWTH FUND1

STATEMENT OF MOVEMENTS IN CAPITAL ACCOUNT
for the period ended 30th June, 2003



                                                   BEA Asia Strategic
                                                     Growth Fund1
                                                          US$

Balance brought forward                                         -
Subscription of units during the period                  6,009,291
Redemption of units during the period                           -
                                                         6,009,291
Net income/(loss) for the period                          672,681

Balance carried forward                                  6,681,972

Class A :
Units outstanding at beginning of period                        -
Units issued                                           599,013.035
Units redeemed                                                  -

Units outstanding at end of period                     599,013.035

Class B :
Units outstanding at beginning of period                        -
Units issued                                                    -
Units redeemed                                                  -

Units outstanding at end of period                              -




Note:
1. BEA Capital Growth Fund consists of three initial Investment Funds, namely BEA Asia Strategic
   Growth Fund, BEA Hong Kong Growth Fund and BEA Hong Kong Dollar (HK$) Bond Fund.
   Since BEA Asia Strategic Growth Fund commenced operations on 15th April, 2003, preceding
   comparative figures are not available. No financial statements are included in this unaudited
   interim report for BEA Hong Kong Growth Fund and BEA Hong Kong Dollar (HK$) Bond Fund as
   both Investment Funds have not commenced operations.




                                               8
       MANAGEMENT AND ADMINISTRATION


                  Investment Manager
     East Asia Asset Management Company Limited
        8th Floor, The Bank of East Asia Building
               10 Des Voeux Road Central
                       Hong Kong


Investment Adviser for BEA Asia Strategic Growth Fund
      Asia Strategic Investment Management Limited
        Unit B, 19th Floor, Entertainment Building
                 30 Queen’s Road Central
                        Hong Kong


                Trustee and Registrar
          Bank of East Asia (Trustees) Limited
               27th Floor, Cosco Tower
              183 Queen’s Road Central
                      Hong Kong


                    Legal Advisers
                        Deacons
              5th Floor, Alexandra House
                  16-20 Chater Road
                         Central
                      Hong Kong


                      Auditors
              PricewaterhouseCoopers
             22nd Floor, Prince’s Building
                       Central
                     Hong Kong