SINGAPORE – Singapore hedge fund Asia Genesis Asset Management is closing its macro fund after suffering an “unprecedented drawdown” following China’s stock market rout and Japan’s rally.

The Asia Genesis Macro Fund had a drawdown of 18.8 per cent in the first weeks of January, according to a letter sent to investors seen by Bloomberg News. The fund is returning money to investors after losses on long Hong Kong and China equities positions as well as short Nikkei bets, according to the letter.

“I have reached the stage whereby my confidence as a trader is lost,” founder and chief investment officer Chua Soon Hock wrote in the letter. Tough trading since October and a “disastrous” January have “proven that my past experience is no longer valid and, instead, is working against me”, he said.

Asia Genesis did not immediately respond to a request for comment.

Mr Chua said the fund made a “big mistake” in trying to pick the bottom of benchmark Hong Kong indexes. He was also “astounded” with the Nikkei-Hang Seng spread that priced Chinese and Japanese stocks at the same value as in 1991.

Japanese stocks are on a tear, rising to a 34-year high in January as the authorities and the stock exchange urge companies to boost shareholder value and corporate governance.

Meanwhile, China’s benchmark CSI 300 Index hit a five-year low on Jan 22, as the ongoing housing slump curtails economic growth.

Chinese Premier Li Qiang asked the authorities to take more “forceful” measures to stabilise the country’s slumping stock market and investor confidence on Jan 22.

The last straw for Mr Chua’s fund was hopes that China’s central bank would cut interest rates at a meeting earlier in January. But the People’s Bank of China disappointed investors by keeping the rate on its one-year policy loans unchanged.

Additionally, President Xi Jinping’s speech the day after indicated to equity investors that his focus was not on the markets, said Mr Chua. The fund then closed all the positions by Jan 18.

“I have lost my knowledge, trading and psychological edge,” he said. “The principle of risk-reward for both the short term and long term has turned its head.” BLOOMBERG