The FSA Spy market buzz – 12 April 2019

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Pimco hires, so does Bank of Singapore; Two Sigma’s new CEO;  Baby at Jupiter; Infiniti buys a book; Hyflux bonds; Fixed income flood; Rugby for a good cause; Advertising and much more.

The FSA Spy market buzz - 06 April 2018

Spy was amused, over several glasses over wine, to glimpse the turgid testimony of America’s seven largest banking titans testify before the House Financial Services Committee this week in Congress. Whilst every executive knows that the world’s economy has slowed, they are not in the business of talking things down one tiny iota. Fudge words, euphemisms and talking around hapless interlocutors was the order of the day. Whilst this tedious session played out, Lloyd Blankfein, former Goldman  Sachs CEO took the opportunity to tweet, “Boy, I really miss my old job” during the multi-hour grilling. Spy reckons there can’t be a finance executive anywhere who does not share Blankfein’s enthusiasm to be unconstrained in his or her opinions after a career of toeing the corporate line.

One of Spy’s mini-mysteries has been solved. Market speculation had been rather rife as to who would take the marketing role vacated by Wendy Loke at Pimco in Singapore. Spy has noticed that Stephen Chu, formerly of Amundi, has taken up the hot seat at one of Asia asset management’s busiest marketing departments. According to Stephen’s shiny new LinkedIn profile, he is now “head of marketing, South Asia, HK & SG global wealth management, Korea at Pimco”. Over the last year, Pimco’s US High Yield Fund has delivered 5.7% and in the last six months, its Emerging Local Bond is up a stellar 8%.

News reaches Spy that Bank of Singapore has pinched Gary Leung from Blackrock to be its new head of managed investments and private equity in North Asia, based in Hong Kong. Gary, was previously a director within the Blackrock alternatives specialists team. Gary will be looking at the selection and structuring of managed and private market investments.

In another senior move, Kenny Lam, previously group president of Noah Holdings, China’s largest private wealth manager, has taken up the role of CEO at Two Sigma, Asia-Pacific. Two Sigma is an investment group that is obsessed with data modelling, or as they put it “We’ve been pushing the frontiers of big data since before it was a buzzword.” Rather uniquely, Spy could not find a single fund on its website – it is all about the tech. Welcome to a Brave New World.

The Jupiter family is expanding. Spy has heard that Maddie Han, head of sales in Southeast Asia for the British firm, has given birth this week to a little girl. Spy and the rest of the FSA team wish Maddie and the young one all the best.

Hong Kong-based regional wealth manager, Infiniti Financial Solutions, led by Trevor Keidan, has snapped up the complete assets under advice from rival advisor, Intelligent Investments, giving Infiniti an AUA of more than $300m. Spy thinks this moves reflects a trend of consolidation among smaller advisors who have grappled with a huge shift in advisory remuneration models in the last five years. Simon Cook, the previous CEO of Intelligent Investments, has now relocated back to the UK from Kuala Lumpur, in a move that also reflects another well-established trend: expatriate-focused advisors leaving the region.

Much was made of the fact that this week Hong Kong’s stock market has overtaken Japan’s market, measured by market capitalisation, making it the 3rd largest market in the world after New York and mainland China. It seems that occasional scandals, claims of nepotism and dodgy reporting, strange moves in equity prices, short trading hours and closing for lazy lunches have done nothing to dampen trading spirits in the Fragrant Harbour.

Is Singapore about to have another Lehman’s mini bonds-style kerfuffle, wonders Spy? One of the Lion City’s best known stocks, Hyflux, the water desalination specialist, looks to be on the brink of seeing its court protection from creditors expire at the end of the month, leaving thousands of mom and pop investors out of pocket. Public protests in Singapore, rare at the best of times, have been seen as the 34,000 individual investors who bought 6% perps, stand to lose all of their investment. Banks in Singapore have enthusiastically sold the bonds and investors have no doubt, mistakenly, assumed that Hyflux’s strong links to the Singapore government meant that a default was impossible. It never fails to surprise Spy that so many investors are willing to buy direct bonds instead of via a fixed income fund where risk is managed obsessively. As Craig Reeves of Prestige Funds put it an FSA event last year, “It is very easy to lend money, not so easy to get it back.”

Speaking of bonds, Spy’s gut feel is that the return to fixed income that we have seen by investors over the last few months is going to turn into a torrent. Portfolio managers, who have correctly guessed the Fed has no intention of raising rates any time soon, and, if anything, is more likely to cut rates, are on to a winning streak. Spy could find no fewer than 40 global bond funds that have returned 10% or more in the last year. Axa’s World Funds Asian Short Duration is up a whopping 15% over that time period. These kinds of numbers get investors excited, even if they should have jumped in a year ago…

In financial journalism, Fund Selector Asia’s parent company likes to have the Last Word. On the rugby field, it is widely accepted that the referee gets the last word, well, most of the time. Last week in Hong Kong at the Rugby 10s, Last Word sponsored the ball kids and referees in a fitting marriage of those used to having the final say. Beyond the action on the field, Last Word’s sponsorship (alongside Fundamental Media and other organisations) of the “Rugby Legends Tackle Cancer” charity game raised about HK$300k for a very good cause. Last Word’s head of Hong Kong, Gareth Wilde, no stranger to the rugby field or, unfortunately, cancer, was deeply involved in this important event.

 

Spy’s photographers have been spotting new adverts far and wide.

In Singapore’s Raffles Place, Saxo has been pushing its investment platform that now includes mutual funds:

 

 

Fidelity has a new campaign on the MRT promoting its multi-asset strategies:

 

 

Pimco is also asking clients to be ready at Raffles Place:

 

 

Until next week…

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