- Ferres cautions that US rates may climb to as high as 6%
- Hedge fund sells out of Alibaba, Tencent, Samsung, TSMC
By Richard Henderson
(Bloomberg) — Asian technology stocks will remain unattractive as the dollar rallies in tandem with investors capitulating on bets for interest rate cuts from the Federal Reserve, according to Vantage Point Asset Management’s Nicholas Ferres.
“Everything that has worked in the first six weeks of the year has reversed,” said Ferres, the hedge fund’s Singapore-based chief investment officer. He sees “another phase of dollar strength and higher bond yields.”
Global bonds fell by the biggest margin since September last week while US stocks suffered their worst week since mid-December and a gauge of dollar strength advanced. Meanwhile, Hong Kong-listed tech shares slumped almost 6%.
Hedge Fund That Got China Right Sees Risk in US Markets
Vantage still regards major tech companies in the region as good businesses, but sold into the rally from late October. Ferres cut the weighting in his holdings from 30% to about 10% last month. He’s now cut this to zero.
“It’s a bit of taking profits and a bit of reducing our equity exposure,” he said. Companies in the portfolio had included Alibaba Group Holding Ltd., Tencent Holdings Ltd., Baidu Inc., Samsung Electronics Co. and Taiwan Semiconductor