Given the uncertain direction of the coronavirus outbreak, asset management firms operating in Singapore are expected to delay their fund launches, according to Yvonne Chung, director at the Investment Management Association of Singapore (IMAS).
In a recent survey conducted by the association, 73% of the respondents indicated that they are cancelling or deferring their events. Respondents included 51 member firms, which are a combination of domestic and global players.
“From that perspective, we are being told that events, which include fund launches or client events, may be deferred to a later time,” Chung told FSA.
The findings are in line with fund managers’ concern that the coronavirus outbreak may have some impact on both China- and non-China-related fund launches or businesses.
In terms of China business, managers were asked to rank the coronavirus impact on a scale of 1-10, with 1 representing the least likely to be impacted. Fifty percent of those surveyed hovered on the 6-10 scale.
Chung noted that the majority of the firms who said they are unlikely to be impacted (about one-third) had not planned to launch China-focused products this year.
“Intuitively, you would expect most managers to hover around the 5-10 scale. It is really because those who answered ‘1’ do not have any China fund launches this year. Some of them do not even manage their China-related businesses out of the Singapore office,” she explained.
“China fund businesses are usually not something that is conducted out of Singapore and are mainly from the Hong Kong offices,” she added.
For non-China-related funds or businesses, Chung noted that 25% of the respondents were “neutral” or chose “5” as their answer. “They are in a watch-and-see mode.”
“But I think the situation will evolve, as more cases are being reported in other countries,” she said, noting that the survey was conducted from 10-24 February, before the large number of cases in Korea appeared.
A number of firms recently received approval from the Monetary Authority of Singapore to launch funds targeting Singapore’s retail investors. They include funds managed by Allianz Global Investors, Goldman Sachs Asset Management and HSBC Global Asset Management.
An Allianz GI spokesman said that the firm has been “monitoring and evaluating the coronavirus situation in Singapore”, but did not comment whether they have delayed their fund launch-related activities.
“We have taken measures to safeguard our staff and clients, which include work from home and flexi-work arrangements if needed, and the use of conference calls or video conferencing. We follow closely the advisories issued by the Ministry of Manpower and the Ministry of Health and will implement relevant actions when necessary,” he said.
Small scale events still a go
Although a majority of firms are cancelling their events, IMAS’ Chung pointed out that 8% of the surveyed firms are still pushing through with their plans.
“[Some] are considering a non-face-to-face format. But these are for smaller-scale events where not a lot of people are involved,” she explained.
Chung said a small number of firms plan to proceed with their events but she does not know the complete details. She speculates that it might be “a very important event and probably also for a very small group”.
IMAS will be postponing most of their huge scale events, which usually have 100-500 attendees, she added.
“We had originally planned to have our seventh legal and regulatory forum this month, our second digital acceleration programme in March and the IMAS and Bloomberg investment conference in April. So all of these events we are postponing to the third quarter.”
Chung added that for now, firms are just ensuring that it is “business as usual” by still connecting with clients through technology.
“That is the usual engagement now [as meetings have been also cancelled].
“With many events and travel plans being shelved for the time being, it is actually a good time for training,” she said, suggesting continuing professional development (CPD) training.
The survey also noted that most firms have suspended employee travel. Nearly 100% of respondents indicated that employee travel to China has been suspended, and 64% have suspended travel to other parts of the world, with Hong Kong as the most frequently shunned country.
