Posted inFSA Spy

The FSA Spy market buzz – 25 February 2022

State Street hires; Fundsupermart’s busy year; Bitcoin versus gold; Oil and Johnny Walker whisky; Digital Indian ETF; Private markets and Titanbay; Titanium drama; advertising and much more.

It never rains but it pours. Russia’s power-hungry leader, Vladimir Putin has invaded Ukraine causing untold misery in the bread-basket of the world. At the time of writing, explosions are being seen and heard across the capital Kyiv, and investors are understandably jumpy. Some brave souls dived in yesterday afternoon as the Nasdaq rallied after having fallen into bear market territory yesterday morning for the first time since March 2020. So, is the old, cynical adage, “The time to buy is when there is blood on the streets” going to be true this time round, too? Speaking to one private banker in Singapore yesterday, he said to Spy, “Only a fool thinks this won’t create opportunities, but choosing when to buy is the most difficult bit.” Well, quite.

News reaches Spy that State Street has hired Albert Ming. The American firm has pinched Ming from Vistra as managing director, head of relationship management, alternatives client segment. Ming is a veteran of the alternatives and hedge fund world, having previously had stints with UBS and Standard Chartered Bank. With the world in a such a volatile space, the interest in alternatives has soared in the last few months. Ming will continue to be based in Hong Kong.

It has been a busy few weeks for Fundsupermart’s FSMone in Singapore. The ubiquitous fund platform has added no fewer than fifteen different strategies (or asset classes variations) since the beginning of February, on top of eighteen in January. Goldman Sachs Asset Management has been rather active and has added two funds that launched in December: GS Global Future Health Care Equity ACC SGD and Global Environmental Impact Equity ACC SGD. The firm has also listed its GS India Equity Portfolio Acc SGD. Other firms joining the fray this month are Fidelity, Pinebridge, First Sentier and Manulife.

If Spy had a penny for every time he had heard the expression, “bitcoin is the new gold”, he would certainly be able to fly first class to Europe. It must have come as rather a terrible shock in the last week to Bitcoin “Hlodrs” that in a time of crisis, investors have turned in droves to the “Ancient Relic” and Bitcoin has been selling off like a risk-asset. Gold has jumped above $1900 this week, almost breaching $2,000 intraday yesterday. The street is awash with gold bugs shouting out “I told you so” to anyone who will listen to them. Spy is by no means writing off bitcoin’s alternative appeal, but if it is going to be “the new gold” one would expect a rally in times like this.

In the early stage of the pandemic, readers will no doubt recall that we had an absurd position with oil trading in negative territory – traders couldn’t give the stuff away for love or money due to storage restraints. This week it is trading above $105 and it is now more expensive than Johnny Walker Gold Whisky, which you can buy for about $80 a bottle. Oil is not yet as expensive as Johnny Blue, which retails for about $150 a bottle. If oil gets to that rarefied realm, expect us all to be singing the blues, and not drinking them.

Do you want relatively pure exposure to India’s digital economy? Well, you guessed it, there is an ETF for that. VanEck, the hyperactive ETF issuer has launched the VanEck Digital India ETF on NYSE’s Arc. India has 622m active internet users that is predicted to grow to 900 million by 2025. (Spy is quite surprised those numbers aren’t already higher.) The excitement is of course all about Generation Z who are growing up digital natives and consuming digital content in mega quantities. The fund, based on the MVIS Digital India Index, includes Reliance Industries Infosys, Bharti Airtel Tata Consultancy, Wipro HCL Technologies and Tech Mahindra among others. No news if the strategy will be listed in Hong Kong or Singapore any time soon.

If there is one thing Spy has heard from investors, asset allocators and fund selectors in the last few months, it has been an almost insatiable demand for private assets or private markets strategies. It is almost as if people desperately want to convert those juicy profits accumulated in the last few years’ rally and put them somewhere that they don’t have to monitor their daily valuation. Spy is keeping an eye on Titanbay, a private equity platform that is targeted at wealth managers to help them specifically manage private assets. Headquartered in Luxembourg, the firm has largely been focussed in Europe to date, but Spy understands the company has global ambitions, too.

With all the drama taking place in Ukraine and Europe, industrial metals markets have been going bananas and one in particular: titanium. Titanium is usually a metal only heard about in superhero movies: Iron Man has a titanium hybrid armour (really light but super strong), if Spy’s memory serves him well.  Spy was intrigued to read in the Daily Telegraph in London, that Russia and Ukraine controls 30% of the world’s titanium. And that matters because you can’t build a modern plane or car without the stuff. The Russian titanium giant VSMPO-AVISMA supplies 35% of Boeing’s titanium, mostly for 737, 767, 777, and 787 jets. If the West is going to sanction Russia’s exports, expect some crucial supply lines to get even more constrained.

Spy’s photographers have not seen much advertising on the streets of Hong Kong of late. Hard to justify outdoor billboards when people are being asked to stay at home. In Singapore, a new online campaign by Franklin Templeton, targeting consumers has been spotted. The manager is pushing the green theme. Apparently being green these days is not enough, one needs to be greeeeeeeeeeeeeen!

Until next week…

Part of the Mark Allen Group.