Posted inFSA Spy

The FSA Spy market buzz – 21 October 2016

Robeco hires; Progress at T Rowe Price; Chinese thoughts from Matthews Asia; Maybank’s fund list; Liquid ETFs; Central bank balance sheets and much more.

Spy’s plans have been thwarted and, like the rest of Hong Kong, he is stuck at home waiting for Typhoon Haima to wash across the region drenching everything in its path. Instead of a lazy lunch at the Mandarin Grill with an indulgent industry contact, who promised “a bottle of wine that would impress a Taipan”, Spy will be nibbling left over noodles and drinking water. Instead of juicy steak and even juicer gossip, Spy will be left to watch the talking heads on Bloomberg try and persuade themselves the Fed is going raise rates, that Donald Trump has more than the slightest chance of getting the White House keys and that China’s debt bubble is manageable, well, because it is China.

News reaches Spy that Dawn Foo, formerly of Pioneer Investments has turned up at Robeco in Singapore. Robeco, the Rotterdam-headquartered asset manager, has been building out its wholesale business in Asia. In July, the Dutch group opened an office in Singapore to better service Southeast Asian and to undertake regional credit research. The office is headed up by Maurice Meijers.

Spy is hearing news that T Rowe Price’s efforts in the wholesale distribution market are gathering pace. The American business now has five equity funds for sale in Hong Kong and will be adding fixed income Sicavs next year. Several tier one private banks have given T Rowe shelf space and the retail market is not being ignored, either. Currently, sales people are on the ground in Hong Kong and Singapore, but the business is looking to add capability beyond the regional hubs with North Asia a particular focus. Watch this space.

While the world frets about Chinese corporate debt levels, Matthews Asia, the San Francisco-headquartered Asian investment specialist is thinking a little differently about opportunities. A recent blog post on Matthews’ Sinology Blog, written by Andy Rothman, has a great infographic illustrating the changing nature of China’s economy from exports and infrastructure to domestic consumption. At the very least, the annual average growth rate of 61% in Chinese tourists visiting Japan over the last 3 years seems to show the dark days of boycotting Toyota and Sony are over and island disputes could be behind us. In China, forget the old economy, it is all about the new.

Spy has been investigating the retail offerings of distributors and this week examined Maybank’s public fund list in Singapore. Only 18 different asset managers are listed, which has not changed much in the last few years despite a number of new “fully authorised” groups entering the market. Maybank is very concentrated with only 287 funds on offer. Schroders (49), Fidelity (30) and Franklin Templeton (27), make up more than a third of their offer. When hedged share classes are removed, the fund total drops by about 25%. Not exactly a big shelf there, is it?

An ETF has come to market this week that naturally piqued Spy’s interest. ETF Managers Group in partnership with Spirited Funds has launched a Whisky and Spirits ETF, with the tad obvious NYSE ticker, WSKY. David Bolton, CEO of Spirited Funds, gushed that he believed “we’re at year 5 of a 25- to 40-year supercycle that could see continued growth in consumer demand for whisky and spirits, much like what has occurred with craft breweries over the past two decades.” Spy will gladly raise a glass to these entrepreneurial and optimistic fellows.

The world’s central banks add to their balance sheets as fast as a flu spreads in a kindergarten. The ten largest central banks now own $21.4trn in assets, a staggering 10% increase from the end of 2015. Bloomberg reports that that during 2015 and 2014 the banks only expanded their balance sheets by 3%. How does this all end? Badly reckons Spy. His advice, unwanted no doubt, is to buy a few gold coins for a rainy day when Joe Public wakes up to the fact that central banks have as much credibility as Park n Shop’s discounts.

As the world’s economists put out paper after paper predicting the economic future of our nations, regions and companies, Spy advises readers to remember the wise words of Eddie George, a former governor of the Bank of England: “There are three types of economists in the world: those who can count and those who can’t.”

Spy’s band of merry photographers have spotted some new asset manager advertising. First up in Singapore is T Rowe Price’s rather generic campaign spotted in Raffles Place in Singapore.



Meanwhile in Hong Kong, Old Mutual Global Investors has gone the traditional route of covering a tram and promoting its income solutions.



Until next week…

Part of the Mark Allen Group.