Spy has felt a touch of “schadenfreude” reading that rents in Hong Kong’s priciest districts have recently hit decade-long lows. Some of the falls have been truly spectacular. Apparently, luxury goods brands have been ditching their $1m-a-month Central boutiques in droves, as Hong Kong turns itself into the Hermit Kingdom with Chinese characteristics. And yet, there is something terribly sad about Hong Kong’s almost wilful (hopefully temporary) absence from the realms of globalised, travel friendly finance hubs and all the bustling dynamism that it entails. Hong Kong’s opening of the Chinese border can’t come soon enough.
Spy has been accused more than once in the past few years of being old fashioned. Spy likes books made of paper, travelling by train not by plane and has absolutely zero interest in the metaverse, preferring to meet people face-to-face any day of the week. The tech powers that be splendidly ignore Spy’s preferences and build on, regardless. First, we had Facebook’s new parent name, Meta and now a South Korean fintech business, Fount Investment, has launched an ETF to give investors pure exposure to the “metaverse”. The new Fount Metaverse ETF trades in New York under the ticker MVTR and aims to give investors exposure to companies building this shiny new metaverse. For those of you luddites who do not live permanently under a VR helmet, this includes games companies with immersive worlds, “augmented reality” providers, computer simulated environments developers and other such dystopian fare. The metaverse does not come cheap, however — the fees are 0.70%. That sounds like a dose of real-world reality to Spy.
The CFA Institute has spent the last two and half years trying work out ESG disclose standards for investment managers. Earlier this week, it finally released its recommendations, if one feels so inclined. Their recommended standards include insightful gems such as:
“The investment manager must not, in an ESG disclosure statement:
a. present information that is false or misleading;
b. omit significant information about the investment product’s ESG approaches;
c. contradict disclosures made in the investment product’s regulatory documents”
Spy could have saved the Institute all that time and research money and simply said, “Please be honest about your investments”. Would that have been so hard?
If you have that feeling that the rise of global markets seems utterly relentless, the S&P 500 price history is giving further proof. Yesterday, the world’s most invested index, closed at an all-time high for the 63rd time this year. The index only needs 15 more highs to break the record set in 1995, which was 77. Over and above that, the S&P 500 is on pace for its third straight year of 15%+ price gains. If achieved, it would be just the second time that has happened since 1928. Considering we have been in the worst global pandemic since 1919, something a tad odd is going on, reckons Spy.
DBS announced its Q3 results last night and as expected, its profit rocketed to “S$1.7bn ($1.26bn) for the third-quarter 2021, up 31% from a year ago and stable from the previous quarter”. The bank did not add much about its wealth management unit in its results, except to say: “Wealth management fees rose 8% to S$461m, with higher activity across a range of investment products.” Sounds like good news for the wealth management sales teams and their year-end bonuses…
Spy hears periodic worries from equity investors that “too many companies are going private”, reducing their available investment opportunities. The IPO market in 2021 should give those same investors much heart. Total IPOs across the world in the first three quarters of the year, have raised more $310bn from 1,635 companies, according to EY. This is about $150bn more than in the whole of 2020. Of those listing, 750 were in Asia Pacific. Technology was the dominant sector in Asia with a 154 tech companies listing in the region. Call Spy a cynic but there is something “peakish” about all this deal making and rush to market.
Over the last few years, central bankers have taken it upon themselves to become supportive of a green transition across the world. (The perfect excuse to print more money, in Spy’s humble opinion.) This week, Bill Ackman, pointed out the bleeding obvious: “Central bankers have not considered how inflationary ESG initiatives are. ESG is not transitory, but rather persistent and growing. Stakeholder capitalism will drive much needed increases in wages, but also higher energy costs, among other inflationary factors.” Spy is not too sure how the central banks are going to square all this green largesse with ultra-low rates. That appears to be a conjuring trick too far, even for these masters of the universe.
Does diversification work when you are trying to create gargantuan wealth? Well, it sure gives people comfort as they go along. But here is a thought for the day: if Bill Gates, Microsoft’s co-founder, had held on to all his Microsoft shares, instead diversifying his investments as his chum Warren Buffet recommended, his stake would be worth a staggering $1.2trn. That is more than four times Elon Musk’s current net worth. According to Bloomberg, Gates is currently worth “only” about $136bn today. Still, Bill can look on the bright side. He can buy all of the Shiba-inu tokens in circulation for a mere $25bn, leaving him $111bn in change to pay his rent.
Spy’s eagle-eyed ad spotters have seen a range of new campaigns out. First up, Goldman Sachs Asset Management who want us all to invest in millennials. Yoga studios and avocado toast futures?
Next up is BNY Mellon Invesment Management with another promo for their Mobility Fund. With Tesla hitting record highs, Spy assumes this is not a particularly hard sell.
Until next week…
