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Strategies & Market Trends : Thai Funds

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To: Polartee who wrote (68)	2/2/1998 10:15:00 PM
From: Polartee	Read Replies (2) of 107

A black day for shorts with markets everywhere up strongly. I made big strategic changes today. Too bad I didn't do it earlier. I covered my TTF short at 10 1/8. A decent profit for five months considering I shorted at an average price of about 12 3/4. Still it's disappointing given the $1 uptick today on the big Asian rally and considering that a month ago I had plenty of opportunity to cover for under $6. I should have recognized that all the media hype about Asia crashing and going bankrupt was a signal the worst was over, but that's hindsight. The SSG fund had a good move though up 3.5 to 43.5p and I'm holding onto it. I called SSG in London to ask if it held mainly local shares or foreign shares in Thailand but was met with an air of English uncertainty. They are going to send me some fund accounts however (by mail). I also bought back the rest of my KF position after covering half of it a couple weeks ago. The Korean market fell on profit taking today and KF dropped slightly. The NAV premium was down to 26% on Friday. I've got a loss on this position but I'm still up overall with a long position in the AIM Korea fund. Switching to the bullish camp - I think it's better to be simply long on Korea rather than wait for the 26% potential gain on the hedge play. I also covered part of my MF short position at 9 1/16 as a defensive move but held on to EWM. Malaysia has not worked out at all well as a hedged position. I shorted MF and it went higher despite NAV falling. I went long on EWM as the hedge and it went down. Again, I'm switching to the bullish side. MF is still at a huge premium to NAV though. However, I still haven't found out how much of a premium the foreign class shares trade at relative to the local class on the KLSE. EWM is all foreign I understand and MF is mostly local shares. As I said on the weekend, if there is a big premium of foreign to local, and you think local shares could rise to meet the foreign price then there's nothing really to arbitrage. Anyway, I hope I haven't entered the proverbial bear market trap by turning bullish. John

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