GEORGE TOWN: Hong Kong-based Value Partners Group, which is one of Asia’s largest fund and asset management firms, plans to set up an office in Kuala Lumpur over the next 18 to 24 months.
Group chairman and co-chief investment officer Datuk Seri Cheah Cheng Hye told StarBiz that the Malaysian stock market had a market capitalisation in excess of US$400bil.
“This is why it is worth considering. Currently, we have a few hundred million ringgit in Malaysian assets, mostly in palm oil.
“Two years ago, we had already set up an office in Singapore,” he said after delivering a talk at The CEO Speaks forum organised by investPenang.
Cheah noted that the ringgit had depreciated by about 23% against the US dollar over the past three years.
“This is due more to the political scenario in the country rather than the non-performance of companies,” he said.
He said that previously, the company was unable to focus on the Asean region because it had limited manpower.
Cheah believed that another financial crisis was forthcoming.
“This is because politicians are not coming up with the appropriate solutions to deal with the structure problems.
“They are only patching up the problems temporarily with the assistance of band-aids, which is fuelling another crisis.
“The strategy is to have a diversified portfolio,” he said.
Cheah’s recommendation is to have 10% to 15% of the capital placed in gold, 15% to 25% in cash, and the remainder in high risk investments that can generate high returns.
“You need to have high risk investments that can generate high returns so that you can afford to lose when the crisis comes,” he added.
On the Hong Kong stock market, Cheah said it had already stabilised. “The price-to-earnings ratio for the stocks are 12 to 15 times. The stock market situation in Hong Kong for the next 24 months is okay,” he said.
On the errors that he had made, Cheah said a lot of times the error was due to the misjudgement of human characters.
Founded in February 1993, Value Partners now manages about US$14bil of assets.