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The FSA Spy market buzz – 09 March 2018

Capital Group adds, Kasikorn Bank loses; Gramercy closes; Fund Supermarket adds funds; Trilake gives agony advice; the death of cash; Plummeting HKD; advertising from Jupiter and much more.
The FSA Spy market buzz - 06 April 2018

Spy had dinner this week with the head of a French asset manager that is building its presence in Asia rather under the radar. Spy’s jolly companion announced he was “under doctor’s orders to diet a little” and promptly ordered a pizza, cheese platter, meat platter and several bottles of wine. Spy wryly observed that we all seldom do what is good for us and seldom heed well intentioned advice. Just look at those margin numbers. Central and investment bank economists can bleat all they like about dangerous volatility ahead…the punters add to their margin positions and order another bottle along the way. As the French say, Plus ça change, plus c’est la même chose – the more things change, the more they stay the same.

News reaches Spy that Cecilica Chung has joined Capital Group in Hong Kong as the assistant vice president of marketing. Cecilia was formerly with Morningstar as marketing and communications director. Capital Group’s New Perspectives Fund, which invests in global equities, is up 25% over the last year. The “new” bit in the name is a tad misleading…the fund was started in March 1973 and celebrates its 45th birthday next week.

In another Morningstar move, Kittikun Tanaratpattanakit, senior data analyst at the firm’s Thailand office who knows Thailand’s mutual fund landscape well, has left. No word on where he is going. Pat Rajatanawin will take on his role in Bangkok.

Out of Thailand, Spy has learned that Suvit Chantakraiwat, who is the head of private banking financial advisory at Kasikorn Bank, is stepping down from the firm. Spy has not heard where Suvit is going to, but he understands that he is staying within the industry. Kasikorn has been in the news this week as Julius Baer has agreed to set up a joint venture with the firm to service Thailand’s growing band of HNWIs.

Is this the canary in the proverbial investment coal mine? Spy has learned that $6bn EM specialist, Gramercy, has closed its Singapore office. This has meant that regional sales head, Andrew Williams, has stepped down from the firm. Spy has noticed, of late, a real absence of new players coming to Asia as the barriers to entry have been getting higher and higher. No doubt more American and European asset managers will feel they can’t ignore the region and dip their toes in the Oriental waters. However, word to the wise…you are going to need deeper pockets and a bigger boat than before.

There has been a flurry of funds added to Fund Supermarket’s FS Mone platform in Singapore since the beginning of the year, notes Spy. Excluding different currency classes or shares classes, Spy did a quick tally and discovered no fewer than 34 new funds available to retail investors. Fidelity has 18 of these new funds, while First State, Columbia Threadneedle, Eastspring, Neuberger Berman and Blackrock all feature. The choices for Singapore’s consumers keep growing. Spy’s question is: Are Fund Supermarket’s assets growing at a pace to make all this choice worthwhile?

With the almost painfully dull “opinion” and “thought leadership” pieces regularly put out by the asset and wealth management industry, Spy was pleasantly surprised to see something very different and witty from Swiss wealth manager Trilake Partners. Their client update, in the form of an agony aunt column, combined a happy silliness with serious market commentary and stood out from its beige peers. Trilake’s “Love Guru” is providing investment advice in a folksy fashion that includes references to Kurosowa films, the literary works of Albert Camus and glasses of Chianti. Just up Spy’s street.  If wealth managers could only remember that their clients, no matter how wealthy, are just normal people, too.

In the 1970s and 80s, and even more recently, “investment guru” writers have been predicting the “death of the dollar” making a good living publishing books with scary titles, misleading charts, dubious facts and pig-headed figures. While those predictions have proven to be way off the mark, the “death of cash” is another thing altogether. Sweden’s central bank is so concerned that so many shops and restaurants no longer accept any form of cash, they are trying to reverse the trend. Try and use a €500 note anywhere in Europe and Spy will bet there will not be a shop around that will accept it. Even in Singapore, the S$1,000 note favoured by high-rolling Indonesian gamblers is falling out of favour faster than Durian at the end of the season. So, who is the real winner? Just check out Visa and, more impressively, Mastercard. Their long-term charts are a thing of beauty and wonder.  And, which fund houses are benefitting, Spy asks? A check of the top five holders of Mastercard’s shares include Fidelity’s Contrafund with 1.10% of the company. Meanwhile, T Rowe Price’s Blue Chip Growth owns a respectable 0.76%. No need to play roulette with crypto bets, reckons Spy.



Spy awoke this week in Hong Kong to dramatic headlines of the “plummeting” Hong Kong dollar. “Lowest in 33 years” screamed one headline as if Armageddon had arrived. The commentators were almost breathless with concern and excitement. Pour yourself a nice cold gin and tonic, take a deep breath and calm down. The HKD trades in a 10 cent band, 7.75 to 7.85 to the USD, meaning it can move about 1.5%. If Hong Kongers want some volatility, Spy can think of almost any other currency that is more volatile and actually moves around faster than a sloth.

You would have to have been dumb, blind, deaf and, perhaps, a real misogynist to miss the fact that the world celebrated International Women’s Day (IWD) this week. Spy noted a great deal of real (and some imagined) virtue on display. One asset manager that is allowing investors a chance to actually play the long-term women’s empowerment trend is Robeco. The Dutch company, well known for its ESG expertise, has a fund called The RobecoSAM Global Gender Equality Impact Equities Strategy. Spy is personally a great fan of women and the myriad talents they bring to the boardroom. He is utterly convinced that companies who utilise all their available talents to the maximum are likely to do better in the long run, therefore, this might just be a fund for life, not just for IWD.

At times, Spy’s Western upbringing fails to appreciate China’s cultural mores. Spy came across an article published by Didi Tang, the Beijing correspondent of Britain’s Times, that made his eyes pop out of his head. Apparently, the Chinese government is encouraging people to “settle for a lower standard of spouse” and have some babies, just so their demographic time bomb can be averted. That said, Spy can freely imagine Western central banks encouraging something similar for their citizens poor pension provision, if not their reproduction. “Please, please invest in something, anything, that gives you a return instead of squandering your monthly paycheck…” may just be their clarion call for their spendthrift subjects.



So, The Donald is going to meet Kim. Perhaps they should simply settle their military dispute with a best-out-of-three hairstyling competition, suggests Spy. It would save a lot of military money and give us all something to bet on.

Spy’s photographers have seen a new tram trundling the streets of Hong Kong promoting Jupiter. Trams never seem to be out of fashion for asset managers:



Until next week…















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