Fund Manager’s Diary

Tathagata Guha Roy is head of Asian equities and senior portfolio manager at Alliance Trust Asset Management. His diary runs from November 28 – December 4.

Tuesday The US stockmarket had a sharp correction overnight and Asian markets are weak today. Suddenly everyone is talking about the dollar weakness and its potential to derail the markets. The dollar has been falling for some weeks while the stockmarkets in a number of countries hit new highs, so the only surprise is that it took the markets a while to notice. I am leaving for Indonesia tomorrow and spend some time working out the schedule with CLSA.

Wednesday I arrive in the office around 8:30am. We have a few stocks on our buy list whose prices had moved away due to the strong markets. The correction has brought them back below our target entry prices. Since I will be leaving in the afternoon, we have a meeting at lunchtime focusing on the prospects of the Japanese economy and stockmarket for the next 12 months. Harfun Ven, our Japanese portfolio manager, is not optimistic.

I leave to catch my flight, picking up a sandwich on the way. I have not left myself enough time and barely make it. The flight to Jakarta is almost four hours long. I am quite tired when I arrive and face a long queue at immigration. It is close to 10pm when I reach the hotel.

Thursday I meet Daniel, the property analyst from CLSA, at 8am. I am here to look at what is happening in the property sector. Many of the property companies in Indonesia have huge land banks in the western outskirts of Jakarta, picked up cheaply in the Suharto era (1965-1998). They are building townships here, developing clusters of houses. Most people in Indonesia prefer to live in houses rather than apartments.

The commute to the centre of Jakarta is long as traffic is heavy. I will be visiting four of these townships built by Ciputra, Jaya Real Property, Summarecon and Lippo.

The marketing people in each estate take us around. Mortgage rates have dropped from more than 18% to 13-14% over the past 12 months. They say sales have picked up in the past one to two months but it is still early days. Homebuyers are waiting to see if the low rates hold before committing. We return to the hotel around 7pm and I meet a local broker for dinner. He calls me to say he is arriving just as I am entering the room. I barely have time to change before meeting him in the lobby.

Friday All my meetings are with banks and property companies around central Jakarta. My first is with Bank Mandiri at 8am. We also visit the offices of Procon Indah, one of the largest real estate agents in Indonesia. While it does not deal in residential property, it gives us a good view of what is happening in the office, retail and industrial markets. Every office building has a metal detector and all bags are checked. We meet Jababeka, which develops industrial estates, for lunch. I get dropped back at my hotel at 5:30pm.

Saturday I get up late and have a leisurely breakfast. My flight is at 2:50pm and I leave the hotel around 12:30pm. By the time I arrive back at my apartment it is almost 10pm.

Sunday I have an invitation to the wedding lunch of a friend. He works in a hedge fund so there are a lot of people from the industry. There is a fair amount of talk of how busy things are this year. No sign of the year-end slowdown.

Monday Back in the office to find a pile of prospectuses on my desk, mainly from Chinese companies. Some of the issues are closing soon, so there is a lot of work to be done. I also have to rework some of my company models based on the information gathered from the trip and see if there is any value in a couple of interesting companies I met. Another week and here we go…