“There are two persistent and irrefutable rebukes to business and political humbug around the world: Apple and Singapore”, an global equity portfolio manager said to Spy on Teams this morning. Apple’s stellar results last night, despite global recessionary fears and supply chain woes, demonstrate what outstanding leadership combined with developing products people simply can’t do without, achieves. So, too, Singapore in the global governance sphere continues to build for the long term whilst most other countries’ petty politics seem juvenile in comparison.
Schroders had their H1 results out this week and Spy was interested to read the remarks that the CEO, Peter Harrison had so about the way portfolios are being built. He said the world had changed from country-based building blocks to thematics. In his own words: “The notion of building blocks has changed completely. So, more people have moved to a passive core and are putting, if you like, thematic funds around the edge…thematics is a really important part of that and the ability to keep innovating in that area will be a feature of the future, so I don’t think we are going to go back to the old country view to a great extent. Clearly, allocations to GEMs will stay, allocations to Global will stay, but, really, the rest of it will be much more Thematic going forward.” He also added that Singapore had been outstanding in Asia with net flows of £0.4bn.
Jack Daniels, the Chief Investment Officer of M&G is retiring in June next year, the company has announced. Daniels’ career across investment and markets has spanned more than 35 years. He joined Prudential back in 2001 and took on the role of M&G CIO in March 2019, ahead of its demerger later that year. M&G has traditionally been seen as a really strong fixed income house. With rates rising again, Jack may just be happy to leave the market turbulence to his successor and enjoy putting his feet up.
This week the Singapore Stock Exchange and the New York Stock Exchange have announced a new partnership to develop new exchange traded funds and ESG products to be traded in Singapore. With a mere 36 ETFs currently listed on the SGX, Spy would expect that number to change rather dramatically, if the partnership is successful. That said, the problem for local or regional bourses remains: the giant liquidity and global nature of the major US markets, often outweigh the benefits of local time zone trading.
Does anyone stick to their core business any longer, wonders Spy? He has spotted adverts around Singapore from DBS boasting it is much more like a tech company than a bank, and other such grandiose marketing statements. Funnily enough, Spy would rather his bank continues to act like a bank and look after his money with ruthless efficiency. But that is probably just an old curmudgeonly attitude.
Hat tip to investor Howard Marks who has been in the news this week. He wrote to investors that people are constantly asking him about inflation, Federal Reserve moves in the short-term, etc. His response was something most investors should have tattooed on their arm: “If we have an opinion about the short term, we can’t (or shouldn’t) have much confidence in it.” In other words, the short or near term, is practically impossible to predict but on longer time horizons, investors have a much better chance of being right.
One for the “wildly optimistic box”. Spy saw the Amundi Institute put out a note this week, “Investors expect central banks will tame inflation whatever the cost, even triggering recession if necessary. This may indeed be policymakers’ approach in the short term as they seek to re-establish their credibility.” Spy could not help but chuckle at the “re-establish their credibility”. They have about as much chance of doing that as stopping a dog wagging its tail when one yells ‘walkies’.
Talking of Central Banks, if you want a quick lesson in how they work, perhaps take a look at the old Monopoly board game rules, in particular, Rule No.11. It says, “Some players think the bank is bankrupt if it runs out of money. The Bank never ‘goes broke.’ If the Bank runs out of money, the Banker may issue as much as needed by writing on any ordinary paper.” And the powers that be wonder why the plebs refer to their outrageous cash printing as ‘Monopoly money’.
Barely a day goes by before some organisation or business in Hong Kong pleads with SAR Chief Executive John Lee to open up Hong Kong’s borders and reduce the quarantine rules. This week the Australian Chamber of Commerce added their voice. “We urge Hong Kong to adopt measures that demonstrate the city is ‘open for business.’ In our view, the remaining restrictions need to be relaxed with urgency in order for Hong Kong to remain relevant to international business and retain talent needed to support its position as an International Financial Centre.” Spy can’t put it more plainly than that. It takes more than money to make an international finance centre. You simply can’t do it without people, too.
Spy’s trusty photographers have spotted some adverts out and about in Singapore. OCBC is pushing its wealth management arm, and in particular its 37 Robo Portfolios.
Until next week…
