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In case you missed it (02 August 2019)

Franklin Templeton appointment; Asia's fund passport schemes struggle; Fund managers buying up A-shares through the Stock Connect and more...



People moves

Franklin Templeton has appointed Michael Lai as senior vice president and portfolio manager for China equities, effective August. Based in Hong Kong, Lai will be managing Chinese equity strategies and will report to Sakumar Rajah, senior managing director and director of portfolio manager for Asia equity. Lai will replace Eddie Chow, who will be retiring from Franklin Templeton after 25 years of service. Before Franklin Templeton, Lai was previously at Gam Investments, where he was lead portfolio manager of the firm’s China equity strategy, which he has been managing from 2007…

Business moves

First State Investments on August 2 announced the completion of its sale from Commonwealth Bank of Australia to Mitsubishi UFJ Trust and Banking, for $2.7bn. First State will operate as a standalone global investment management business, governed by a board initially comprising representatives from First State Investments and Mitsubishi UFJ Trust and Banking. “Our investment teams will continue to enjoy their current levels of investment autonomy, which has underpinned the business’ strong growth and long-term performance,” said Mark Steinberg, First State’s CEO.

Japan’s Softbank intends to invest $2bn to develop Indonesia’s digital infrastructure. The investment will go towards creating a next-generation transportation network for cities and transforming how critical services, like healthcare, are delivered. The investment will be made through Indonesian technology company Grab. “We are delighted to facilitate this Softbank investment, as we believe by investing in digitizing critical services and infrastructure, we hope to accelerate Indonesia’s ambition to become the largest digital economy in the region and improve the livelihoods of millions in the country,” said Anthony Tan, CEO of Grab.


Despite much talk that new fund structures in Asia pose a serious threat to Ucits, the EU’s regulatory framework is safe for the foreseeable future, according to a report from Cerulli. The report pointed to the struggling fund passport initiatives, the Asean Collective Investment Scheme and the Asia Region Funds Passport Scheme. “Two of the three major initiatives taking shape in Asia have had a slow start and the third is still in its embryonic stages. To say they are facing an uphill battle against the behemoth that is Ucits would be an understatement,” said Fabrizio Zumbo, associate director of European asset management research. “Asset managers can build significant assets in one Ucits fund that can be passported into a number of markets, rather than launching a series of smaller funds.”

Funds and fund managers were major net buyers of A-shares through the Hong Kong Stock Connect, according to the Securities and Futures Commission’s half year review of global securities markets, released this week. They accounted for 89% of NB (northbound) net buy but only 20% of the NB trading. “Amidst the inclusion of A-shares into major international indices, funds and fund managers tended to buy more than sell,” the report said. “Although funds and fund managers (the majority of which are believed to be long-term institutional investors) accounted for a small share of NB trading, the cumulative inflow of funds can be huge. Going forward, as the inclusion of A-shares into international indices broadens, the participation of institutional investors will likely increase further. This will help improve the investor mix in the Mainland A-share market, which is dominated by local retail investors.”

Northbound trading and net buy – Investor type 26 September 2018 – 30 June 2019




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