APS halts redemptions after China stock rout

Founder Wong Kok Hoi said "many of our positions performed strongly" in APS' run this year. A screen, displaying data from the Shanghai Composite Index (top) and the Shenzhen benchmark, mounted on an overpass in Shanghai. The recent stock plunge in C
A screen, displaying data from the Shanghai Composite Index (top) and the Shenzhen benchmark, mounted on an overpass in Shanghai. The recent stock plunge in China wiped out almost US$4 trillion (S$5.4 trillion).PHOTO: AGENCE FRANCE-PRESSE
Founder Wong Kok Hoi said "many of our positions performed strongly" in APS' run this year. A screen, displaying data from the Shanghai Composite Index (top) and the Shenzhen benchmark, mounted on an overpass in Shanghai. The recent stock plunge in C
Founder Wong Kok Hoi said "many of our positions performed strongly" in APS' run this year. PHOTO: AGENCE FRANCE-PRESSE

Two of its funds affected; firm says it's hard to 'fairly determine' their net asset value

Singapore-based APS Asset Management has halted redemptions in two of its funds after the rout in China's stock market led to the suspension of more than 1,300 companies on mainland exchanges.

The asset management firm stopped redemptions and subscriptions for the APS China A-Share Fund and the APS Greater China Long/Short Fund, it said in an e-mailed statement yesterday.

"A significant proportion of China A-share listed companies recently suspended trading of their shares, and this unforeseen development makes it difficult to fairly determine" the net asset value (NAV) of some of APS' funds, the firm said. Redemptions will remain halted "until the suspension levels come down and the funds' NAV can be fairly determined".

APS will continue to accept new money and withdrawals for all other funds, it said. Given the rebound in the Chinese market, APS said it expects normal trading in the two funds to resume by the weekend.

Hundreds of counters resumed trading yesterday, with about 27 per cent of companies listed on the mainland stock exchanges still suspended, according to data compiled by Bloomberg.

China has unveiled market-boosting measures, including a six- month ban on major shareholders selling their stakes in listed firms and allowing banks to roll over loans backed by shares in a bid to end a stock plunge that wiped out almost US$4 trillion (S$5.4 trillion).

The Shanghai Composite Index has lost as much as 32 per cent since its peak on June 12, while the Shenzhen Composite Index declined as much as 40 per cent. The Shanghai benchmark fell 1.2 per cent yesterday, stemming a three-day, 13 per cent rally.

The Greater China Long/Short Fund had a net return of 32 per cent this year to July 3, while the China A-share fund returned 23 per cent net of fees, APS said. That compares with a 14 per cent gain in the Shanghai benchmark in the period.

"We had reduced the gross and net exposures of the fund, especially to China, before the meltdown not because we had expected it coming," Mr Wong Kok Hoi, founder and chief investment officer of APS, said about the outperformance of the A-share fund in an e-mailed response to questions.

"We did so because we have had such a strong run this year where many of our positions performed strongly."

APS had US$3.7 billion of assets in June. The A-share fund and related strategies had assets under management of US$2.9 billion as of July 3. The long/short fund had US$75 million.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 15, 2015, with the headline 'APS halts redemptions after China stock rout'. Print Edition | Subscribe