DR FU YONG is a Chinese fund manager often referred to as the 'S-chip sage' for his history of favouring Singapore-listed Chinese firms.
When he won the 2007 Fund Manager of the Year award in his category, he had a high water mark of seven S-chips among his fund's top 10 holdings in the second half of that year.
Dr Fu has now taken on a new position with a Shanghai-based 8.6 bln yuan fund of Changxin Asset Management following his stepping down from Beijing-based Orient Fund in February.
While recent analysis and media reports are not deluding themselves into believing that Dr. Fu will immediately jump full bore back into S-chips as a fund manager with Changxin, the fact that the 'S-chip sage' is back in the game at this point in time does present a ray of hope for Chinese firms selling shares in Singapore.
During his tenure with Orient, Dr. Fu became known for chasing high-risk, high-return opportunities, and having a very high rate of bagging his quarry.
Mixed funds under his control saw a nearly 169% average return during an 18-month period three years ago, making him the second most profitable fund manager in this category over the timeframe.
Dr Fu and Orient acquired a reputation at the time for being a cheerleader for Chinese firms listed on the Singapore stock exchange.
He has been steeped in the world of investment and money management for much of his life.
After earning his PhD in Finance from Peking University, he took a position as an account manager with one of the country's 'Big Four' state-owned banks -- China Construction Bank.
He then progressed to vice general manager of Hualong Securities followed by a position as general manager with Northeast Securities before serving as a fund manager with Orient Fund for four years before stepping down this February.
In its recent corporate announcement, Changxin Asset Management was quick to emphasize that the 42-year old Dr. Fu has never been warned by the China Securities Regulatory Commission (CSRC) for any activity, nor has he ever been under investigation.
That the Hunan province-born Dr. Fu's new employer is so intent on clarifying that its new hire has been cleared by the PRC's bourse watchdog speaks volumes on how mainland-based funds are trying to restore their image.
By extension they are hoping that Chinese shares listed in Singapore will also elicit renewed interest among investors amid a climate of enhanced transparency.
The career move for Dr. Fu also builds confidence in his unfettered ability to continue to promote investment in Chinese firms (read S-chips, his specialty) now that sundry rumors surrounding his somewhat sudden departure from Orient Fund in February were possibly CSRC investigation-inspired have been soundly dispelled.
As evidence of the recent woes of Singapore-listed Chinese shares, the benchmark indicator for S-chips -- the FTSE ST China Index -- fell by some 60% between January 2008 and October of last year.
This contrasts with its Hong Kong equivalent, the Hang Seng Enterprises Index, which tracks H-shares (Hong Kong-listed Chinese firms). It lost a much more manageable 20% over the same period.
Investors in S-chips are all too familiar with the not-so-distant loan repayment issues marring Beauty China Holdings and FerroChina as well as sundry auditing irregularities afflicting China Hongxing, Oriental Century and Sino-Environment.
The conflux of irregularities plaguing Chinese firms listed in Singapore over the past few years and Dr. Fu's heavy client reliance on these said S-chips reportedly was at least partly responsible for his decision to step down as one of Beijing-based Orient Fund's star fund managers in February.
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That he is back in the saddle as a high profile fund manager with Shanghai-based Changxin after a nearly five-month hiatus bodes well for the possibility that the 'S-chip sage' may once again soon be promoting the counters.
Most analysts blame the alleged fraudulent activity among S-chips of late on risky and/or unstudied securities promotion by Singaporean and Malaysian traders, complicated by what the press generally characterizes as an uncooperative corporate management in the PRC at the affected firms.
Therefore, Dr. Fu's return may augur well for S-chips, which have been facing scandals related to embezzlement, forgery and accounting irregularity accusations.
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