Spy has had a torrid week. Along with everyone else in Hong Kong and Macau, he has been drenched from top to toe. Even worse, his old but trusty thinking chair that sat on the small balcony, was literally blown away by typhoon Hato. Spy’s domestic-commander-in-chief has pointed out that at least Spy was not himself seated in the worn but comfy heirloom, a prize possession once rescued from a junk store on Lantau. With solar eclipses causing ripples in the United States this week and T10 weather at home, Spy has been harbouring malevolent thoughts. Do these events herald some turn in the tide; some schism in the orderly nature of things? Old wives’ tales of course…
News has reached Spy that Hon Wah Choi has moved from Principal to AMG Wealth Management. Hon Wah, an FE alumnus has taken up a new role as chief distribution officer of the Hong Kong headquartered wealth management firm, one of the largest in the greater China region. He was previously head of marketing and communications at Principal in Hong Kong, according to his LinkedIn profile.
Hardly a day now goes by when Spy is not bombarded with news about artificial intelligence and its imminent threats to forever change our world. Such luminaries as Elon Musk are voicing concern at the dangers lurking within every server farm. Earlier this year, RWC’s emerging markets team published a report, that showed the Chinese showing few such qualms, in fact, quite the contrary. They write, “It is impossible to overlook or underestimate the sheer scale, growth momentum and money that China embodies in the quest to automate. In 2013 China overtook Japan in domestic robot unit sales. Guangdong province offered 943 billion yuan ($137bn) in subsidies to about 2,000 local companies, including both robot makers and those making autos, home appliances, and construction materials, that are looking to automate their plants.” Spy takes a rather more sanguine view, remembering Monty Python’s immortal lines, “And pray that there’s intelligent life somewhere out in space, ’cause there’s bugger all down here on Earth!” Perhaps a little bit of Chinese AI will help counter the idiocy shown by our policy makers all over the world.
Blackrock seems to have been given a big green light by Fund Supermart in Singapore for some summer hedging. In the last week, the global asset management leader has listed no fewer than 7 new hedged versions of its funds on the FSMone consumer fund platform, with a particular focus on the New Zealand dollar, notes Spy. Singapore investors can now buy NZD versions of Blackrock’s emerging markets, Asian tiger bond, global corporate bond and European equity income funds. What next, sponsorship of the annual Kiwi ball?
There is always a tipping point, as Malcolm Gladwell reminded us in his bestselling book. Spy is wondering whether typhoon Hato is the moment Asia-based retail investors start to take ESG seriously. After all, climate change is meant to bring warmer, more violent weather in its wake – supposedly, many more ‘Hatos’ to come. JP Morgan Private Bank in Asia has recently put out a mandate for several ESG-flavoured funds. Whilst ESG and its related themes of impact and SRI have been quietly adopted by Asian institutions over the last few years, Spy is willing to bet that 2018 is the year ESG starts to filter through to Asian wholesale fund markets. Expect more banks to be looking for ESG solutions. Watch, in particular, UBS.
If one wants to find commentators arguing that stocks and bonds and just about everything else is overvalued, you won’t have to look too far. However, Spy noted two little things this week that spoke volumes, and both happened in the UK. Profit warnings by two prominent FTSE companies lead to violent reactions. Providence Financial, a wealth manager, got slammed 70% after its warning. Shortly thereafter, electronics and mobile phone retailer Dixon’s Carphone was hammered 30% for a similar indiscretion before recovering somewhat. The markets tend to be very unforgiving at the top of cycles. Just sayin’.
Have you heard from a product developer or fund selector recently saying he or she wants “investments especially for millennials”? Marketers seems obsessed with categorising every demographic, often forgetting people are just people – and they don’t change much. BMO GAM has a good reminder of that this week. “Millennials – at one time referred to as ‘generation Y’ – are often criticised by baby boomers and generation X-ers for being self-centred, immature, entitled, and too keen to upset the status quo”, they write. BMO points out, however, it was “acclaimed author Tom Wolfe [who] called baby boomers ‘self-absorbed and spoiled’ in his 1976 New York Magazine article ‘The Me Decade’.” Meanwhile, back in 1990, ‘Time Magazine described generation X as sceptical, poor at making decisions, and having “attention span[s] … as short as one zap of a TV dial.” Spy would add that it was the Ancient Greek philosopher, Socrates, who said, “The children now love luxury. They have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise.” Spy would humbly argue that millennials haven’t changed for, eh, millennia, and they want what everyone else wants – a healthy return on their investments at low risk before marketers succumb to the silly temptation of adding a free quinoa salad into every fund sold.
At the time of writing, Korea’s courts have not yet given the verdict in the Samsung-heir trial of the century. There is hardly a tech fund in Asia without the Korean giant included, if not in their top 10 holdings. We might see a little volatility should he be found guilty and sent to prison for a very long stint. Hold onto your kimchi.
The second half advertising machine is rolling and Spy’s photographers have seen a flurry of new ads on the streets of Hong Kong and Singapore.
Fidelity is pushing multi-asset with a pyramid in the Lion City:
Invesco is back on the buses in Hong Kong using a well-worn metaphor of the performance athlete for its European strategies:
And Spy could not help but laugh at FWD this week…
Until next week…
