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The FSA Spy market buzz – 13 July 2018

DBS hires; Julius Baer expands; Hedge fund woes; Artificial intelligence and robotics; Asian bond concerns; Trump and defence; advertising from Amundi, Pimco, Schroders and much more.
The FSA Spy market buzz - 06 April 2018

Spy is taking a vow of temperance. Spy indulged too heavily this week watching World Cup games with some French friends in Hong Kong who celebrated France’s elevation to the final (and, it must be said, England’s corresponding lack of progress), once again. For all the joy Spy’s companions had about the beautiful game, Spy noted a distinct lack of joie de vivre with regards to Asian stock and bond markets and Spy’s perennial bugbear, Hong Kong prices, among his Gallic companions. It seems it is going to take more than a jolly World Cup to beat the present summer gloom.

News reaches Spy that DBS has pinched a senior banker from Citibank. Vinod Eashwar, who was previously market head and senior vice president for Singapore, Malaysia, India and Saudi Arabia within Citi Private Clients, joined DBS in June as senior director. He will be focussing on ultra-high net worth clients and families across Asia-Pacific, the Middle East and Africa. Vinod has a plenty of experience with funds, having held, at one point, the product head role for mutual funds on the IC team covering NRIs at Citi.

Another week, another announcement about a big Swiss private bank expanding operations in Europe. However, this week Julius Baer has announced that it has completed its move – into Marina One in Singapore, the most expensive city in the world for the fifth year in a row, according to the Economist Intelligence Unit. JB’s new office has a whopping 100,000 feet of space and is apparently two-fifths bigger than their previous space in Marina Square. With rents in Asia at eye-watering levels, it is hard not see this move a massive vote of confidence in the wealth-generating prospects in the region. Spy finds it hard to disagree with this view.

2018 is proving to be a pain in the neck for a lot investors, reckons Spy. Seldom has he heard asset managers complain more about the difficulty within markets. The world that is having the biggest challenge, however, must surely be hedge funds. According to Barclay Hedge, a hedge fund tracking firm that produces 17 indices to track hedge fund performance, hedge funds have once again underperformed the general market this year. The Barclay Index is up only 0.69% to date while the S&P has managed 2.66%. 12 of their 17 indexes lost money in June, with emerging markets particularly badly hit, racking up a loss of 2.55%. Ouch!

The artificial intelligence and robotics bandwagon trundles on, notes Spy, and iShares has launched a new ETF covering the theme. It invests in robotics and AI-orientated companies across the globe. The new fund includes such companies as Horton Works that produces machine learning software. No surprise there. More surprising to Spy was that the fund included Netflix in its top 10. Is Netflix an entertainment company or an AI/robotics business?

Earlier this week Bloomberg caused a flurry when it reported on Bank of America Merrill Lynch’s highly negative survey data on investor’s attitude toward Asian bonds, indicating a deeply bearish view of the asset class. Spy is reminded of Warren Buffett’s oft quoted and seldom acted upon maxim, “Buy when others are fearful and sell when others are greedy.” Just sayin’.

Spy is watching Donald Trump rampage across Europe, causing jitters wherever he goes. The mercurial and singular leader of America has an uncanny knack of upsetting vast swathes of the world with blunt talk and adversarial policies. This week, at a Nato summit, Trump berated European partners for not spending enough on defence and asked firmly for them to aim for spending 4% of GDP. It would not surprise Spy to actually see some sort of increase in spending from the Europeans as they begin to realise Trump is serious about disrupting the status quo. So what would Spy do? He would look for funds that are heavily exposed to defence firms.

Spy’s photographers have spotted a ream of advertising around Asia this week.

Amundi is back in Central MTR station focusing on their Disruptive Opportunities Equity Fund:



Manulife Asset Management’s chief investment officer for Asia ex-Japan was spotted in a sponsored video about investing in China’s greater bay area at a branch of Standard Chartered in Causeway Bay:



Pimco is out with a new branding campaign in Hong Kong with new billboards spotted across the island:



Nomura’s robo-adviser, 8 Securities, is out pushing its service with real people across Hong Kong. This van was spotted in Causeway Bay area:



Finally, Schroders has been spotted on some consumer websites with pop-up animated videos:



Until next week…

Part of the Mark Allen Group.