Posted inFSA Spy

The FSA Spy market buzz – 03 March 2017

UBS loses, so does Credit Suisse; FPI boss returns; change at Franklin Templeton; T Rowe Price is hiring; Jobs are tight in Japan; Fed Up book review; Munger’s wisdom and much more.


Spy was drinking several Holgat Hopinator Aussie craft beers in a grimy bar in Wan Chai last night when the late, very great Prince’s classic, ‘1999’ blared out of the sound system. Spy and his group of investment-oriented companions all agreed it was most apt: SNAP, Snapchat’s parent company has just IPO’d and leapt 44% on the first day of trading, making its founders and early investors gazillionaires with its $34 billion valuation. The fact that Mr Wong’s newspaper kiosk on Lockhart Road makes more profit than SNAP seems to bother the investors not one tiny jot. Are stocks in a bubble? Well, if you believe nonagenarian former Fed Chairman, Alan Greenspan, we can’t spot bubbles. For what it is worth, Spy thinks he just saw one, and it might just go snap, crackle, pop before year end.

News has reached Spy that Michael Christo is leaving UBS after 12 years. Michael, who has had a number of different roles for UBS, was most recently overseeing discretionary portfolios in HK. Spy does not know where Michael is moving to, but can confirm that he is staying in the industry and is moving to another private bank that has ambitions to build its discretionary services. He will be putting his feet back under a desk after gardening leave in June. Stefan Lecher remains in charge of the discretionary unit in HK.

Another Swiss private bank in Hong Kong with a change is Credit Suisse, where Spy has heard that Jack Lee, one of the team’s investment councillors, is leaving to join another firm. Jack has also been working on discretionary portfolios and is understood to be moving to a similar role.

Friends Provident International, Aviva’s offshore high net wealth platform in Hong Kong has got its old regional head back again, Spy heard this week. Apparently Charles Barrows, who had a six month secondment to a unit of Aviva in Indonesia, is back in the saddle. He returned in early January and it seems FPI is building out its team again. Jonathan Quach, who was local head of sales, has apparently stepped down. No news yet on his replacement.

Another industry move that has crossed Spy’s desk is Scott Collinson, the former head of alternatives in Asia for Franklin Templeton, based in Singapore. Scott has moved to Sydney to join Banner Asset Management. He is heading up their institutional sales.

It seems that T Rowe Price’s expansion plans in Singapore are moving at pace. Spy understands that Gerald Koh will soon have some additional support as T Rowe is hiring another person to help with sales in the wholesale market in the Lion City. The firm has been actively promoting its flagship technology fund, which has gained traction within the private bank space.

Narratives in investment are vital, or so momentum traders will tell you. Spy thinks the dominant narrative of 2017 has been inflation. Gold has been on a tear, rate expectations have been rising and inflation in some markets, such as the UK, is making a very real comeback. A published chart by Columbia Threadneedle illustrates that wage inflation may finally be heading up in that perennial inflation underperformer, Japan. The ratio of the number of available jobs to available job applicants has soared – indicating a very, very tight job market. How do you say “salary increase” in Japanese?


Spy’s regular readers know that Spy is no great fan of the United States Federal Reserve Bank or indeed most central banks. Spy thinks central bank credibility is thinner than old rice paper. Spy has recently read a new book which does nothing to dilute this view and indeed probably adds to the anger. It is called “Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America”, written by former Fed analyst and Wall Street veteran Danielle Di Martino Booth. As a dissection of the crisis it is useful; as an evisceration of Fed dysfunctionality and arrogance it is deeply unnerving. The elite will hope that few people read the book and probably claim it is nothing more than another bit of fodder for the swivel-eyed loons. Spy says read it for yourself and weep at the power these academics and bureaucrats have over monetary policy.

With US markets hitting record highs this week, Spy took a peek at the best performing funds over one year in the North American equity sector that are available in Hong Kong. Hats off to Natixis’s boutique, Harris Associates. Their Concentrated US Equity Fund is up a healthy 32.8%, leading the pack. In close second place, Eastspring’s North American Value is up 31% (nice to see a big Asian player, giving the Yankees a run for their money) and in a very respectable third place, BNY Mellon’s US Dynamic Fund is up 29.4%. This money-making lark is easy, isn’t it?

Much ink has been used up commenting on Warren Buffet’s musings in his annual Berkshire Hathaway letter that was published last Saturday. The Sage from Omaha had a few choice things to say about asset management fees that have been widely reported. Spy took the opportunity to look over old editions and came across this quote from Charlie Munger, Buffet’s partner. “If you want to guarantee yourself a lifetime of misery, be sure to marry someone with the intent of changing their behaviour.” This could equally apply to investments. The activists’ road is long, and filled with many potholes.

Spy has heard about a little loss for Morningstar. Apparently, Great Eastern, the insurance arm of OCBC in Singapore, has stopped using long-time provider Morningstar to share fund performance data with their insurance-linked investors and is now using British competitor, FE. If there is one thing Spy has learned in Asia, it is that competition is a constant.

Spy’s trusty photographers have spotted a new outdoor campaign in Hong Kong from Allianz Global Investors promising investors US income. The imagery is so reminiscent of a 4th of July banner, Spy felt like eating apple pie and watching fireworks:



Until next week…




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