Spy returned to his usual debauched ways this week. He was persuaded to drink immeasurable quantities of Don Papa special edition 10-year old rum by a banker with a gleam in his eye. This was all in a good cause, you should know. Spy was sacrificing his liver to investigate the Philippines fund market, which looks certain to expand the possibilities for offshore managers in the years ahead. The banker was sharing detailed knowledge of the way the market is moving; all very encouraging for the industry, was Spy’s conclusion. Spy is willing to share the information, just don’t offer to buy him a rum, make it a fine claret or no deal.
News reaches Spy that Diya Lowe has joined Investec Asset Management. Diya has taken on an institutional sales role at the South African / British asset manager. Diya is looking after the Southeast Asia region. Diya was formerly at Lazard Asset Management based in Singapore. Investec has had stellar performance in China over the last year with its All China Equity Fund up 45%.
Spy understands, but has not had it directly confirmed (thus could be wrong), the news that David Peng is joining LGIM, the asset management arm of British insurer Legal & General in Hong Kong. David was previously in charge of Standard Life Investments in Asia. He recently stepped down post the merger with Aberdeen. LGIM has a wide range of active capabilities across all asset classes and a growing range of passives, too.
Spy notes that the Standard Chartered fund selection team has made practically no changes to their focus and core lists between Q1 and Q2. Spy could only find one fund that has been added to their focus list: BlackRock’s Dynamic High Income Fund (no huge surprise there). On the core list, JP Morgan Asset Management’s Japan Equity has been added. No funds have been dropped from either list. The challenging performance of the last three months is beginning to show, though: 29 out of 37 of their core and focus funds are negative over that period. The standout performer is UBS’s China Opportunities, which is up a very respectable 3.67%
Spy’s colleagues have been running their Long Term Investment Forums in Singapore and Hong Kong for fund selectors and analysts this week. The great and the good of the community have been thinking about investments that last longer than a Hollywood marriage. As usual, FSA has been polling the audience. One key finding from Hong Kong is that nearly half the attendees had major concerns about US fiscal sustainability. Is the penny finally beginning to drop that the even the mighty USA can’t spend money it does not have forever? The majority in Hong Kong thought that technology will shape markets more than any other factor over the long term. And, for what it counts, Spy agrees.
Spy has received, in his inbox what has to be, the most misleading description of a fund’s payout profile yet. The communication from the press office gushed, “OCBC Bank has launched a first-of-its-kind fund (unit trust) for retail customers in Singapore. It is the first hybrid fund that combines a three-year fixed maturity fund (providing quarterly pay outs of at least 9%)” Spy almost choked on his morning congee: quarterly pay outs of 9%, show Spy where to sign! Rather like those Hong Kong estate agents who include your apartment’s percentage share of the communal swimming pool in your apartment’s advertised size, this claim is not all it seems. In fact, reading more closely, the 9% is achieved over 3 years. Ah, normal business resumed. Move along, nothing to see here.
What does the competition look like in Singapore for retail asset managers? Pretty intense, thinks Spy. At last count, Spy could identify no less than 49 firms with full retail authorisation in the tropical city-state. The list includes the usual well-known suspects but also newer entrants such as Foord Asset Management and SEB Asset Management. Spy is aware of at least three more firms that will join those ranks, bringing the total above the half century number. With consolidation on the distribution side, that is a lot of funds chasing a small number of shelves.
It is often said that gold does not fluctuate in price but rather currencies themselves fluctuate in price to relative to gold. After all, a quality toga in ancient Rome cost two gold coins and a decent suit today costs about two gold coins, too. What about the S&P 500 as seen in the value of gold coins? The chart below shows how far off the highs we still are in golden terms:
What courage is this? Some bold fraudster has made a phishing attempt using a fake Monetary Authority of Singapore email and website to glean banking details from the unsuspecting. The MAS has put out a fraud warning. Singapore’s reputation for dealing with scallywags is justifiably “no-nonsense”. Should the protagonists ever get caught, Spy suspects the ever articulate Ravi Menon may just administer the caning himself!
If you are having a bad day, just remember this. On April 12th 1976 Ronald Wayne sold his 10% stake in Apple for $800. Today that stake would be worth about $92bn. Frank Sinatra springs to mind, “Regrets, I had a few…”
Spy’s colleagues are breathing a slightly selfish sigh of relief that the Trump / Kim Summit may be off, sparing Singapore a week of security lockdown. Trump seems to have suddenly decided that meeting Kim in the tropics did not fit in with his busy Twitter schedule. Still, a week is a long time in geo-politics and Spy would not be surprised if Trump’s unexpected decision is reversed. Spy’s advice: don’t cancel that holiday to Bali just yet, you may still need it to escape the madness.
Spy photographers have spotted new advertising from CSOP in Central station, the thoroughfare for retail investors. The Chinese firm is promoting its Hang Seng Index Daily (2x) Leveraged Product with a superhero-like character. After all, every superhero needs some leverage:
Until next week…
