During the quarter, Indonesia and Taiwanese holdings were among the biggest detractors to Fund performance. Some of the portfolio’s holdings in the utilities sector were a drag on performance. In particular, uncertainties around profitability of PT Perusahaan Gas Negara Persero (ISX:PGAS) hurt the underlying equity, which was further exacerbated by a fall in the Indonesian rupiah. In addition, the company’s decision to modestly lower the dividend payout ratio highlights the constraints on their cash flow arising from weakening profitability and continuing investments, which may only yield returns in the long term.
From Matthews Pacific Tiger Fund (Trades, Portfolio) Q1 2015 Commentary.
