Asia hedge funds scoop up Alibaba, Sea after stock rout
SOME of Asia’s biggest funds more than doubled their positions in Alibaba Group and Sea in the second quarter after a year-long rout.
The number of Alibaba shares held by the Asia-focused funds increased 311 per cent during the period, while that of Sea jumped by 110 per cent. That’s based on the analysis of the 13F filings of 15 Asian asset managers – including hedge funds Aspex Management (HK) and Oasis Management – that had at least US$200 million in quarter-end holdings.
The choppy markets put Asia’s hedge funds to the test. A Nasdaq gauge with heavy exposure to Chinese technology firms has slumped nearly 67 per cent since a February 2021 peak, as the regulatory crackdowns and geopolitical tensions spooked investors.
The 13F filings, a quarterly report of US-listed holdings by money managers, provide a snapshot of the quarter-end positions of Asia’s largest funds, albeit offering less insight than for their their US peers that have more of their holdings in New York.
A growing number of Chinese technology firms are now also listed in Asia, and the switch from US-listed to Asia-traded shares may explain some of the position changes. US-listed Asian companies tend to concentrate in the technology and healthcare industries, meaning the filings may give a biased picture of the funds’ industry exposure. The filings also don’t reveal short-selling activities or timing of the trades.
E-commerce, delivery, solar energy companies and electric vehicle makers made up the funds’ 20 largest combined holdings by market value at the end of June.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
While JD.com topped the chart, Alibaba represented the biggest percentage increase in combined positions, measured in number of shares, from the previous quarter. Alibaba’s US shares have slumped 72 per cent since October 2020. Sea is down 82 per cent from a high in October 2021.
The semiconductor trade is losing lustre, with some of the Asian funds selling Advanced Micro Devices, the second-largest maker of chips that run computers, Nvidia and Taiwan Semiconductor Manufacturing Co (TSMC).
The semiconductor industry is bracing for what could become the worst decline in a decade or more, due to a downturn in demand for consumer electronics.
Hermes Li’s Hong Kong-based Aspex, which managed US$8 billion earlier this year, went the other direction. His fund bought Nvidia and TSMC shares in the quarter, before TSMC raised its 2022 revenue forecast and said it would cut spending on expansion in mid-July.
Meal and express delivery, semiconductors, e-commerce, electric vehicle and online brokerages were among the most crowded trades.
Seven managers kept or added to their positions in Chinese online property platform operator KE Holdings, whose US-traded shares jumped 45 per cent in the quarter.
Nvidia and TSMC were reduced by the biggest number of funds in the 3 months through June, joining Alphabet and Microsoft in the global tech rout.
Some funds remained sceptical about the outlook of Chinese e-commerce companies, leading to cut backs in Alibaba and JD.com.
Aspex, CoreView Capital Management, Oasis Management, Ovata Capital Management, and Perseverance Asset Management declined to comment.
HHLR Advisors, SeaTown, FengHe Fund Management, Franchise Capital Management, Greenwoods Asset Management Hong Kong, MY.Alpha Management HK Advisors., Oxbow Capital Management (HK) didn’t respond to emails seeking comment. BLOOMBERG
Share with us your feedback on BT's products and services
