Spy was introduced to the joys of the Brandy Alexander (brandy, coffee liqueur, fresh cream and nutmeg, since you ask) this week by an Aussie wealth manager in Hong Kong. Whilst consuming far too many of these silky delights, the manager told Spy, he had never had so many clients calling him nervously about the remainder of the year as he did this week. The itch to take profits or move money to the side-lines was palpable, he told Spy. Who knows if this one anecdote means a thing, but if past couple of weeks’ market volatility is any guide, they aren’t the only ones with nervous trigger fingers.
Tech. Tech. Tech. Is there another game in town? Spy finds it hard to find investors excited about any other sector. This week, Blackrock carried on riding that wave with its launch of the iShares Hang Seng Tech ETF which tracks the largest 30 tech shares listed on the local exchange. iShares is not the first in this space: CSOP AM, China AM and Hang Seng IM all have competing ETFs. The real question is whether wealth managers and private banks will take up the ETF for clients’ portfolios? ETFs have struggled in Hong Kong as investors have shown a preference for buying stocks directly or allowing active managers to help them navigate opaque Chinese markets. Time will tell, but if this ETF in such a hot sector does not gather assets in quantity, Spy has to wonder what sort of ETF in Hong Kong ever will?
Spy has to admire Grab, the Southeast Asian taxi-hailing app. It saw off giant Uber and is now making a real go at its nascent financial services arm, Grab Financial. Its latest innovation, launched this week, is something it calls a “micro-investment solution”. The scheme is called AutoInvest, and it allows users to automatically invest $10 every time they use a cab or pay with the Grab Pay. They have appointed two managers, UOB Asset Management and Fullerton Fund Management to manage the flows. Projected returns are not exactly exciting, at 1.8% per annum, but Spy acknowledges that anything that gets people saving and investing is a Good Thing.
SingLife managed quite a coup this week buying the Singapore assets of British giant, Aviva Insurance. The one part of Aviva in Singapore that is not going to SingLife, however, is Aviva Investors. That remains part of the UK operations and it will continue as a separate local company. Charles Wong remains in charge of the wholesale distribution at the business. Aviva has had success this year with its Global Convertibles Fund – it is up 18% since 1 January.
A chart is worth a thousand words. Well it can be. Spy rather loved this one sent through by a reader. It covers the GDP per capita of countries across the world. It is staggering to see how well Singapore, Macao and Hong Kong have done over the last fifty years, according to IMF data. The chart is courtesy of HowMuch.net, a site that loves visualising financial information, among other stats.
This week, Blackrock’s CEO, Larry Fink, nailed the key question of our era in Spy’s mind. Talking at a Morningstar conference he commented, “I don’t believe Blackrock will be ever 100% back in the office. I actually believe maybe 60% or 70%, and maybe that’s a rotation of people. But I don’t believe we’ll ever have a full, you know, cadre of people in office.” That said, Fink was not convinced we really know the effects on company culture. “Through technology we’ve been operating really well, really efficiently,” he said, “but I really am worried about this whole idea of culture. How long can you keep that culture together?” He added, “Cultures were not meant to be done in a remote fashion, and culture is what binds and unifies us as an organisation.” He concluded, “I’m still not sure how well we’re doing on a cultural basis.” Spy reckons there are literally thousands of companies wondering exactly the same thing.
Wanna buy a corporate bond? Well, lucky for you there have never been so many available to choose from. The market has had an absolute binge of issuance; a positive riot of debt. So far this year, $2.6tn of bonds have been issued across all currencies by corporates according to Bloomberg data. Spy is simply not convinced that this ends well. Central banks gave the market confidence during the pandemic nadir by indicating they were buying too, but data has begun to show that the Fed, probably the biggest influencer of all, did not buy that much itself. More a case of do as I say, rather than do what I do. And the total debt pile just keeps growing. Even before the pandemic hit, global debt to GDP to 340% and growing. Get out your popcorn.
So we now have another tech name for the Robin Hood crowd to place their options bets on. Step aside Tesla, Nikola, Apple – make way for the Warren Buffet-backed Snowflake Inc. Hats off to the investment bankers, Goldman Sachs and Morgan Stanley, who IPO’d this cloud services business that is only eight years old. It had a rocketing start on Wednesday before succumbing to a touch of profit-taking yesterday. Still, the business now has a market cap, this morning, of $63bn. Not bad for a business that lost $348m last year. Spy can’t help wonder if the people behind the business realise that snowflakes don’t last very long, despite their uniqueness.
Does Central Bank liquidity help the man in the street? Spy this week spotted this rather cynical, but probably rather truthful, picture. When money is splashing about, it seldom reaches the bottom glasses.
Spy’s photographers have not seen much new advertising out and about. A new retail campaign by Allianz GI was spotted in Singapore’s consumer online press. The firm is focusing on income helping those worried about risk and return. There must be lots of those out there.
Until next week…
