The majority of people Spy has spoken to are literally sick of WFH. Yes, the working-from-home phenomenon which has swept Hong Kong and Singapore in this extraordinary period, which may have seemed an amusing change of scene at first, has worn very thin. People actually miss their ‘annoying’ colleagues with their dodgy jokes, water cooler banter about the latest Netflix series and the simple interactions of daily work. Spy, for one has missed the after work drinks. Spy has noticed people are quietly drifting back to Central, if, for no other reason, their local coffee bar coffee is awful. Have we reached peak WFH? Spy certainly hopes so.
News reaches Spy that Citic Securities Brokerage has lost its head of wealth management and equity sales in Hong Kong. Leo Li has stepped down from that role after being with the company for nearly five years in various positions. Citic has developed a substantial wealth management platform in Hong Kong, especially targeting mainland HNWIs. It is, of course, a subsidiary of giant Citic Group, the conglomerate owned by the Chinese state. Spy has no news on who is replacing Leo at Citic or where he is moving to within the industry.
As the markets have descended into a fair amount of turmoil in the last six weeks, Spy decided to take a little look back at what industry observers were saying at the end of 2019 for their 2020 outlooks. Most commentary was calling for another year of gains in equity markets, albeit more modest than 2019 – which now feels a tad silly. It was however, the commentary by Jim Leaviss of M&G on the Bond Vigilantes blog that really stood out. He wrote this on the 18th of November. “If you do believe that 2020 is the year for bond bears finally to triumph, I think you have to believe that a lot of very long term, established trends are about to come to an end simultaneously.” The whole article is worth reading again if you missed it first time round, especially in light of seeing 10-year Treasury yields dropping below 1% this week. There were a lot of bond bears prowling at the end of 2019. They must have retreated pretty sharply of late or changed their views as fast a teenager updates her Instagram profile.
The finance industry is constantly trying to find ways to express financial risk or distress more palatably. For example, junk bonds became high yield. Hey presto, that risk felt awfully low thereafter. Speaking to a PM this week who has been in the market for 53(!) years, he told Spy, “We used to call a 10% sell off a ‘mini-crash’. That term was too scary for people and magically the word ‘correction’ has appeared in the financial lexicon.” Interestingly, we have had 26 ‘corrections’ since World War II and the average decline was 13.7%. And yes, each one felt like a crash at that time.
The next time Spy hears a portfolio manager speaking on rolling 24-hour financial news talking up China, he will reach for his edition of the SCMP, which details car sales dropping 80%. Sure, car sales will recover in time, but the knock from Covid-19 has people worried about getting loo paper, not a new car.
There was a touch of honesty last night by a chap called Michael Shaoul, who is the CEO of a company called Marketfield Asset Management, when he was interviewed on Bloomberg. “All we know now is that we don’t really understand what’s going to happen next.” Spy could not have put it better himself. Spy was also rather pleased that Jürgen Klopp, the Liverpool manager, told people not to ask him for an opinion on Covid-19 because he had no idea and was not qualified in the slightest to have an opinion. Celebrities, of all kinds, seem to love giving opinions on things they know nothing about. Then again, this week there seem to be a fair number of bond and equity analysts who think they are epidemiologists, too.
Spy has to thank the marketing department at OCBC. They must have a great sense of humour. They are running a promo about where to save one’s bonus. Do they really think anyone is going to be getting bonuses under these market conditions…?
Spy spoke to one bright and breezy asset management recruiter this week who was hunting for information. He assured Spy that he ‘had plenty of briefs on the go and was hunting down multiple candidates for juicy roles in both Hong Kong and Singapore.” Spy believed that as much as the estate agent who assured me that a 4000 square foot apartment in Stanley was currently available for a bargain. Still, if there was a grain of truth from that snake oil salesman, that is an encouraging sign.
If anyone wants a real explanation for the volatility in the markets. One could do worse than this cartoon which has been doing the rounds this week:
There are people out there who can’t help but try to scam using LinkedIn. Spy got a link request from a person claiming to be a deputy governor of the “Central Bank of Singapore” this week. If one is going to try and scam, at least get the name of the MAS correct.
Spy’s photographers have been hunting in vain for new outdoor campaigns. This week, Allianz Global Investors was back in the papers with a new creative pushing active in “challenging conditions”. This is certainly the time to be active, if ever there was one. If fact, nimble springs to mind:
Until next week…