“The next time you read an analyst enthusiastically quoting a recent poll predicting an outcome, reach for your pinch of salt and do your best to ignore it,” was the sage advice from the chief economist of a leading wealth manager in Singapore to Spy this week. “The polls have been so wrong, on so many things, so often, the industry has become a joke. Insiders know that polls are designed to shape opinion, not reflect it.” This conversation, hot-on-the-heels of the non-landslide win of Joe Biden. It was not just Donald Trump who was a casualty of last week’s election, the polling industry and all its self-importance and hubris was a victim too.
Odey Asset Management has had a bit of a coup, luring Robert Marshall-Lee away from BNY Mellon’s Newton Asset Management, where he was head of emerging market and Asian equites. Although Odey is traditionally known for its hedge funds, Marshall-Lee will be running long-only global emerging market strategies for the firm when he formally joins in March 2021. Robert will be based in London. As Asia and emerging markets continue to play a much larger role in global portfolios, Spy expects competition to be intense for talented portfolio managers in the space. Odey’s Absolute Return Fund is up 42% in the last 12 months.
Pictet Wealth Management has expanded in Singapore team with the recent hire of Karen Tan, notes Spy. Karen is an experienced funds advisory specialist having had roles at UBS, Julius Baer, HSBC PB and Bank of Singapore. In her new role, Karen has been appointed an executive director and fund specialist. As of June 2020, the Swiss firm had CHF 559bn ($654bn) in AUM.
HSBC has promoted Serene Lim to head of managed solutions for Southeast Asia. Serene has been with HSBC for nearly five years, focusing on funds and managed products. She was previously with Credit Suisse as a funds specialist and before that worked for Eastspring, BlackRock and DWS.
News reaches Spy that DBS has pinched a portfolio counsellor from Citibank. Pierre Teo, who was with Citi for five years and was an investment analyst at St James’s Place before that, has recently joined Singapore’s largest bank. He has taken on a portfolio counsellor role within the private banking division. The bank’s wealth management division has more than S$250bn ($185bn) in AUM and in 2019 generated S$3.08bn in income.
Spy almost choked on his morning coffee reading the news in Caixin that ChiNext, Shenzhen’s tech-heavy stock board on the exchange, has actually turned down a firm wanting to IPO. In what is surely a first for the notoriously relaxed section of the market, Jiangsu Netin Technologies was rejected on the basis it did not meet the requirements for listing and information disclosure. Is this the first hint that China’s long and inevitable march to higher stock market standards well and truly underway? Spy can only hope so for the millions of investors who use the market daily.
How strong is the wealth management industry in Asia? Pretty strong. It is estimated by that onshore personal financial assets have reached an estimated $34trn by the end of 2019. The industry continues to grow at an annual compound rate of 10%, which far outstrips developed markets of only about 5% per year. Is all of this wealth being managed at the moment? Not according to McKinsey, who reckon a mere 15-20% of that wealth is in a managed format. The growth potential for the wealth and asset management industry in Asia seems set for years to come. The details above come from one of those deeply encouraging blog posts that specialist Asia manager, Matthew Asia, puts out from time to time. You can read the full thing here, for a healthy dose of optimism about Asia.
Occasionally Spy needs to take a blood pressure pill and remove all sharp objects nearby, lest he loses the plot and starts breaking things and harming small fluffy creatures. This week, a suggestion from an analyst, Luke Templeman at Deutsche Bank Research, made Spy apoplectic with rage. This brainbox has suggested that companies should pay a 5% tax on any worker who is instructed to work from home. Not content with his nefarious scheme to tax employers more, he then suggests that workers who voluntarily work from home should also be charged a tax because their lifestyle is better and their non-spending in the big city needs compensation. This idiotic suggestion, which is apparently dreamed up to help fund overpopulated and congested cities cope with the fall out of Covid, flies in the face of the entire green revolution encouraging people to use less energy. What next? A tax on every Zoom call to prop up airlines? A tax on every Teams meeting to fund doughnut shops no longer getting their meeting room orders? Spy has a suggestion for Luke – have a nice sit-down, have a cup of tea and don’t go anywhere near your computer for a few weeks.
Global stock markets have had a wild ride this week. Pfizer’s vaccine news caused more volatility than osmium tetroxide. However, in all the volatility a new milestone was reached. The combined AUM of global markets reached a healthy $95trn. A trillion here, a trillion there and pretty soon we are talking about real money.
Everyone loves a company to make a few dollars. After all, profits are not a bad thing, thinks Spy. How about lose a few dollars with serious profits expected in the future? That is okay too, as long as it does not go on too long. Spy looked at Uber and Lyft’s losses this week, which add up to a combined, astounding, $22.55bn since the second quarter of 2018. If anyone thinks these companies will ever actually make some money and pay back their losses to investors, do invite Spy to your unicorn tea party.
Until next week…
