One year ago today, Asia Genesis Asset Management announced it was shutting down. The decision came after a ‘disastrous’ January of trading that followed several tough months and destroyed the confidence of CIO Chua Soon Hock.

Every trader has gone through struggles and the feeling of losing his edge. This is a raw example of the pain of getting it wrong for a sustained stretch. Notably, Chinese assets and the response of policymakers have continued to confound market participants.

Dear Investor,

I am writing to you with a heavy heart and utmost regret. Asia Genesis Macro Fund has had a significant and unprecedented drawdown of -18.8% in the first weeks of January. As such, I am making the painful decision to close the fund and return your investments. This decision has been seriously thought through and considered with my colleagues and is the logical prudent way forward before incurring further losses. A detailed explanation of the drawdown, actions taken to manage the Fund’s risk, and contain losses for investors can be found on the next page.

I have reached the stage whereby my confidence as a trader is lost. The recent tough trading—October, November, December 2023 followed by a disastrous January 2024—has proven that my past experience is no longer valid and instead, is working against me. I have lost my knowledge, trading, and psychological edge. The principle of risk-reward for both the short-term and long-term has turned its head. We made big mistakes in the recent sharp Nikkei and Hong Kong moves which went in opposite directions. I underestimated the Nikkei’s straight-line upward movement and Nikkei ETFs being bought at a 20% premium over net value on China exchanges, and how long this will continue.

I still do not understand the inconsistency of China policymakers not fighting against deflation, leading to the continued loss of market confidence and prolonged bear market. We made another big mistake in trying to pick the bottom in the Hang Seng and Hang Seng Tech indices. I am astounded by the incredible Nikkei-Hang Seng spread that priced Chinese versus Japanese stocks at the same value as in 1991, despite current economic realities.

In the days and weeks ahead, we will follow up with each and every one of you regarding redemptions from the Fund. Our fund administrator CITCO will calculate the Fund’s Net Asset Values and my team will work closely with them to process the return of your investment at the earliest possible time. Meanwhile, we remain at your disposal to answer any queries or provide further detail.

My sincere deep apologies to all of you who have trusted me with your money.

With utmost apology, thanks, and deepest appreciation,
Chua Soon Hock

CIO

Notably, this blowup marked the bottom for the Hang Seng Index and it has rallied 32% from there. As any trader knows, this only makes the pain worse for Chua Soon Hock. His LinkedIn profile currently shows him as ‘retired’ but he’s still active on the platform and is bullish on the $45 trillion in Chinese savings moving into equity markets.

“Be patient Spring is coming to China stock markets,” he

Hang Seng daily