Posted inNewsFSA Spy

The FSA Spy market buzz – 22 June 2018

Janus Henderson hires, Bank of China is hiring; Vontobel on chess and AI; Nordea boots Facebook; Aberdeen Standard and plastic; Summer reading and much more.
The FSA Spy market buzz - 06 April 2018

This week, Spy was enjoying the onset of summer proper in Hong Kong with a few industry colleagues who all agreed, over several glasses of well-chilled Louis Latour Chablis, that they were all stressed out. They were all working too hard, they said over the first glass. They had too much to do, they said over the second glass. They all had no time, they said over the third glass. It was a proper gripe fest, when Spy would have far preferred a jolly grape fest. One fellow imbiber did point out that in all this stress, wealth managers were not alone. She whipped out her phone and shared a study reported by the World Economic Forum indicating that bees also suffer from stress. When they are tired they find it harder to navigate between flowers and their hive and to manage problems. Spy’s conclusion to all this is that if you are stressed, you are not alone, it is normal and it could be far worse –you could be working all day to make honey, only for some giant human to steal it from you and put it on his toast.

News reaches Spy that former Pimco executive, Scott Steele has joined Janus Henderson as head of distribution in Asia. Scott is replacing Alex Henderson who is relocating back to London and will take on a range of duties for the Anglo-American-Australian firm. Spy understands that Scott will be based in Singapore; he was previously head of wealth management for Hong Kong and Singapore at Pimco. Janus Henderson’s Global Technology Fund has had, unsurprisingly, a stellar 12 months. It is up 34%.

Another week, another Asian private bank says it is ramping up the hiring of RMs. This week was the turn of Bank of China PB. The Chinese bank is looking to hire between 25 and 60 RMs. None of this particularly surprises Spy. After all, that is the time-honoured template for growth followed by private banks in the region. What may occur to observers, however, is that all the talk of fintech replacing RMs and making banks leaner seems to be a very long way off. Perhaps, in Asia, the strength of relationships, above all, is what counts despite the popularity of the mobile phone?

Spy is bombarded, almost daily, with reports claiming that artificial intelligence is going to dramatically change the economy, radically change investments, even reboot the contents of my sock drawer – usually written in impenetrable jargon. Spy has usually taken these things with a pinch salt, presuming most commentators confuse processing power with intelligence. Therefore, hat tip to Vontobel Asset Management’s Daniel Seiler for a cracking blog post on AI and chess, which puts the subject into a more accessible light. In essence the early days of brute force computational power are now giving way to learning problems and, indeed, the game seems to be changing. Highly recommended.

Nordea Asset Management has decided to stop investing in Facebook within its Stars Funds observes, Spy. The rationale given is that after due diligence, it has concluded that Facebook has a “lack of accountability over data security/data sharing infrastructure of the platform, lack of transparency and a reactive behaviour combined with increased scrutiny from regulators and stakeholders”. Fair enough. Is this the first shot across the boughs in the fight against big tech from the asset management community? Spy is not sure, but either way it is a big call…Facebook’s shares hit a new high this week.

Spy has had a tree hugging, Garden-of-Eden moment of late when learning about the amount of plastic destroying our oceans. Plastic seems to be enemy number one for our marine life and all those who love sushi. Spy, therefore, wholeheartedly commends Standard Aberdeen, parent of Aberdeen Standard Investments, for making two of their offices in Scotland (with others to follow) disposable cup free. This will, apparently, mean 1 million fewer disposable cups used annually at these sites alone. If anyone wants to see ESG in practice, this must surely be it.

It is the summer and that means JP Morgan Private Bank releases its annual reading list, now in its 19th year. If you are off to lie on the beach in Phuket, Penang or Da Nang you may want to pick up one of their recommended tomes. Spy has only read one on the list, “The Fourth Age: Smart Robots, Conscious Computers and the Future of Humanity” by Byron Reese. Spoiler alert: Your mobile phone is going to get even more powerful and its costs plummet. Spy will be adding “On Grand Strategy” by Yale professor John Gaddis, to his own wish list.



If the above titles don’t appeal, you can always try Blackrock’s recommendations instead. Their list is over here. Unsurprisingly, both lists include books thinking about the future.

Expect some wailing and gnashing of teeth, thinks Spy. The Dow has been down for eight days in a row. For market watchers who like to track such things, this has not happened since March 2017. Trade worries, political worries and a good old fashioned dose of thinner summer trading are all being blamed. Traders will no doubt be watching Trump’s Twitter feed for any further signs he intends to escalate his trade confrontation.

Spy read with total relief that all the US banks have passed the Fed’s stress tests! Spy feels totally reassured now that the banks will not go cap-in-hand to the government for a juicy taxpayer bailout should the markets take a nasty hit. They wouldn’t do that, would they?

Spy’s photographers have spotted new outdoor advertising from Schroders in Hong Kong, with the 4 1/2 glasses of juice representing the 4.5% yield of the global credit income product. The separate DBS ad is just sharing the outdoor space:



AB continues its campaign with new outdoor campaign promoting its emerging markets multi-asset and low volatility equity portfolios:



Until next week…


Part of the Mark Allen Group.