Spy’s liver is a damaged wreck this morning: he found himself in the Lion City drinking large quantities of wine in lively bars on Club Street. Debating the state of the world with fund selectors and analysts into the wee hours is a dangerous sport. Singapore does indeed seem to be getting its mojo back. Clients are investing, growth is picking up and there are increasing hints the moribund property market is waking from its six-year slumber. All good news. Being in Singapore made one mindful of what can be done with long-term investing, the theme of FSA’s events this week. The contrasting picture below of Singapore in 1990 to 1995 illustrates best what can be done with a long-term approach. More thoughts on this below.
News reaches Spy that Hermes Investment Management has added more sales support to its Singapore office. Tai Watanabe has joined the team, reporting to regional head, Jake Nilsson. The Japanese-speaking Tai who is based in Singapore will, no doubt, be helping Hermes to grow its Japan footprint. Hermes, perhaps best known for its strong focus on ESG in its investment process is the ‘child’ of the giant British Telecom in-house pension manager.
Capital Group, the American investment giant with more than $1.5trn in AUM, has also added sales and marketing support in its Hong Kong office. Spy understands that Angel Wong has joined the team to support Christian Leger and Joyce Wong. Angel was formerly at Schroders in Hong Kong.
Spy was wondering where Michael Coglin, CTCB Private Bank’s former head of investments in Singapore has gone. Making Spy distinctly jealous, it has been confirmed that Michael has in fact ‘retired’. He has moved to his villa in Italy and will enjoying a lazy summer with Chianti and dabbling in the local property market. Saluti!
At Fund Selector Asia’s Long Term Investing (LTI) Forums this week, more than 80 senior fund selectors, discretionary investors and analysts were polled on their clients’ attitudes to investment. Remarkably in Singapore, 20% reckoned that a long-term investment for clients was 1 year or less. Fewer than 50% of attendees claimed their clients believed a long-term investment should be 5 years or more. Meanwhile, in Hong Kong, the results were even more dismal. Nearly 30% of respondents believed their clients thought 1 year was a long term investment and only 38% felt it was 5 years or more. This poll highlights the enormous challenge asset managers and wealth managers have on their hands to let investments percolate and deliver the strong returns that academia and the asset management industry has long since proven are possible.
In another poll conducted exclusively in Hong Kong at the LTI Forum, Spy noted that more than 85% of the attendees thought that the local residential property market was in a bubble. It was described as “bubbling more than popped champagne”. Still, calling the death of this remarkable property run in HK has Spy thinking of Mark Twain and his “greatly exaggerated” quip. Hard to be a bear.
Is the message getting through to the market that equities have been performing well? Spy strongly doubts it. Reviewing Hang Seng’s best performing sectors this year every single sector in the top 10 is an equity variety. Surprisingly, Spanish equity is top of the list returning 26.10%. At the bottom of the top 10, India has returned a very healthy 20.08%. Contrast that with the top 10 fund sales this month: almost all of them are bond funds or multi-asset income funds. The exception being a Hang Seng H Share tracker. For the record, the best-selling fund is AB’s American Income.
Whisperings on the street that have reached Spy is that Credit Suisse is continuing to have a good run. In the word of one insider, “Sales are on target, performance is good.” In fact, that may be understating it. Another source told Spy that the momentum for 2016 has continued this year without a let up and are set to exceed the ambitious targets set. Fondue anyone?
Spy heard a number of good lines this week, but perhaps the best of the lot came from Adrian Bender, Senior Portfolio Manager at Vontobel Asset Management. With reference to investing in emerging market sovereign debt, he noted, “Venezuela may have defaulted on its people, but it has not defaulted on its debt.” Spy can’t help but concur; emerging markets in general look distinctly more credit worthy than a few decades ago. No wonder the investment keeps flowing.
French asset manager, Amundi has been keeping an eye on the upcoming British election which Prime Minister Theresa May surprised the market by calling a few weeks back. They note: “When Theresa May called for snap elections on April 18, the Tories had a 20 percentage points lead over the Labour in opinion polls, a lead unobserved since 2008/2009…Even if polls still indicate a clear victory of Tories, the lead of the Tories has tightened sharply in the recent weeks. It is interesting to underline that the pound has depreciated versus the euro when this lead has tightened as a large Tories’ victory would be interpreted as favoring a smoother Brexit process.” With a Macron victory in France already in the bag, Spy is wondering what the French word for “schadenfreude” is.
The competition among asset managers to grab attention at events and conferences seems to soar. Spy has been gathering some of his favourites. Hard to beat the “Go Pro” style camera given away by Jupiter earlier in the year. Although for sheer writing pleasure, Spy rather enjoyed the Franklin Templeton faux-leather notebook.
Until next week…
