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The FSA Spy market buzz – 15 November 2019

OCBC is unstoppable; Capital Group celebrates; Wisdom at GIC; Job titles at DWS; Fintech’s bamboozlement; S&P highs; Insider sells; Advertising and much more.

If you are a fund salesperson, frustrated with the difficulty of trying to sell an out-of-favour asset class, Spy has more than a touch of sympathy. The wealth industry repeatedly claims one should buy low and out of favour assets and sell high and crowded assets but at the moment simply does not want to know. The dilemma was summed up by one fund selector Spy had a drink with this week. She said, quite simply, “I can easily recommend Asian high yield, because everyone else is. However, ask me to sell Asian or EM equity and if it goes wrong, I am going to get pilloried, because consensus is not with me. So we keep on selling high yield.” Spy wonders if that is why his local bar keeps selling dreadful Heineken, when a thousand craft beers taste infinitely better.

There are many corporate slogans dreamed up by marketing departments that seemed like a good idea at the time, thinks Spy. British Airways’ ‘The World’s Favourite Arline’, for example. They have now dropped that because not even a blind or deaf passenger on a BA flight could think it is the world’s favourite airline these days. Spy brings this up because he spotted OCBC’s new campaign: “Your wealth made unstoppable.” Spy is not entirely sure what it means. However Spy can think of a dozens of reasons the wealth might stop: a crash, a correction, a crumbling of trust. OCBC appears to be promoting its snazzy wealth management app with this particular campaign. Tech, in Spy’s humble experience, more than occasionally has a habit of, eh, stopping.

Spy’s post box has been brim full of invitations to anniversary parties in Singapore this year. First State Investments celebrated 50 years, Eastspring 25 years and this week, Capital Group, 30 years. In the Lion City. Capital threw a rather lavish party at the Fullerton Bay Hotel last night, the same venue, as it so happens, as First State’s bash. Still, Spy can hardly disagree with the venue choice – it is one of Singapore’s finest and always smells as fragrant as a frangipani plantation.

There was wisdom coming from one of Asia’s most successful investors this week. Eng Seng Ang, chief investment officer at GIC, was quoted as saying, “We don’t just need resilient infrastructure, we need resilient investors too.” Asia loves a good infrastructure story, but Spy could not agree more that a touch of resilience in Asian wealth management investors, in particular, would go a long way, too.

Goldman Sachs promoted 465 employees to the rank of managing director this week, with all of the attendant perks that glorious title brings. Employees at DWS can only look on enviously. The German firm has announced it is scrapping job titles such as MD and VP and the organisation will be nice and flat going forward. Instead, apparently, roles will be defined “functionally” but still allow for recognition for achievements. Good luck with that. If there is one thing that has been learned over thousands of years, it is that groups organise themselves into hierarchies. Spy suggests the DWS management should watch a bit more David Attenborough and listen less to its woke social science graduates. Spy gives this policy three years, at best.

Pity Spy’s poor city of Hong Kong this week. As the protests made a more violent turn, the news was all about cancellation of events in the Fragrant Harbour. Meanwhile, in Singapore, their giant Fintech Festival went ahead with tens of thousands of attendees and hundreds of exhibitors. Spy attended the jamboree himself and was overwhelmed with the number of firms trying to shake up finance. Some will, no doubt, succeed, but even the most committed tech revolutionary must have felt some scepticism at some of these companies’ claims. A startup named, Amaris.Ai claims to be “a trustworthy full-stack artificial solutions provider for businesses worldwide”. So far so good. Amaris then slightly blew it with: “We solve problems with cutting edge technology to advance the future of humanity.” A touch of We Work in that line. Or how about Booza App Company from South Korea, which has an AI and big data-based investment platform. Booza claims, “We help people solve the most fundamental question, ‘How can I make money?’” It assures visitors in “In 2-3 years, Booza app will be the must-have app for people who want to grow rich.” Spy can only assume its founders were spending more time at the boozer than at the computer when they came up with that particular line. Spy’s favourite though was simply called, Altcoin Fantasy Limited. Enough said.

Alibaba formally announced its much-hyped mega Hong Kong IPO today. The most unusual line from the press release was: “Alibaba is guided by our mission to make it easy to do business anywhere with the vision to be a good company that lasts for 102 years.” Spy can’t help but wonder why 102 years?

S&P 500 take a bow. It hit another high this week and is now categorically in the longest bull market in history. But what’s this? Oh, yes, those Insiders are selling at a record pace. In September the FT reported that selling had reached its highest annual rates since just before the crash nearly twenty years ago. The pace has only picked up since then. It makes Spy wonder what they know.

Some lucky people are already thinking about their Christmas holidays. Spy has a recommendation for a book should you need some plane or beach reading. The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution, is rather breathtaking. Jim Simons has become a very, very wealthy man though his Medallion Fund. One staggering stat? The fund was making so much money that in 2002, Simons raised the fees to 44% of profits. Eat your heart out Vanguard, iShares and State Street.



Gold bugs Spy has spoken to have been a little surprised at the recent sell off in the barbarous relic. Spy was reminded of the quote by Nat Rothschild. “I know of only two men who really understand the value of gold…unfortunately, they disagree.” Spy thinks this could apply to the trade war and Brexit, too.

Spy’s photographers have spotted a new Fidelity MPF campaign in Hong Kong’s Central Station. With so little outdoor advertising at the moment, this one stands out:



Lion Global has launched a combined active and passive ETF vehicle branded the All Seasons Fund. It is being marketed in collaboration with Saxo. Spy thinks this trend may well increase – after all, it is all about distribution.



Until next week…

Part of the Mark Allen Group.