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The FSA Spy market buzz – 25 September 2020

Noah hires; Krungthai loses; Thai investors’ outlook; Buy Europe; Volatility endures; Singapore’s population; Ant Financial IPO; LinkedIn lunacy and much more.

“Hello, LinkedIn Contact”, was the dreadful opening line of a message that arrived in Spy’s inbox this week. “I have been nominated for an award and would like you to endorse me.” This rather odd person wanted Spy to endorse her for some dubious award, by some unreliable entity, for “best customer service” when Spy has never been a customer of hers and has no idea whether she offers even the bare minimum of service. Spy has a long list of bugbears in life, including bars that serve warm lager, but of late LinkedIn has risen to the top of Spy’s annoyance pile. Facebook’s idiocy seems to have seeped into the ubiquitous platform. Spy is reminded of the Groucho Marx quote, “I refuse to join any club that would have me as member.” If only.

Word reaches Spy that Noah Holdings has a new head of mutual funds. The Shanghai-headquartered, Chinese wealth manager has hired Sarah Stacey Wong from HSBC Private Bank for the role. Sarah is based in Singapore. Before HSBC PB, Sarah held various roles at Citibank in the Lion City. The firm manages more than $22bn, has more than 320,000 registered clients and in the first quarter of 2020 managed to distribute more than $3.3bn of financial products, according to Noah’s website.

A change is coming at Krungthai Bank in Bangkok. Kulachat Chandavimol is stepping down from his head of private wealth management role for the bank at the end of the month. Spy has no news of where Kulachat is moving too, although he understands he is staying with the industry. Krungthai has not announced Kulachat’s replacement as of yet.

Another day, another active manager gets in on the active ETF trend. This time it is Natixis Investment Managers that Spy has spotted rolling out funds. The French multi-boutique has launched the Natixis Vaughan Nelson Mid Cap ETF, which does what it says on the tin, and, the Natixis Vaughan Nelson Select ETF, which is a concentrated all-cap strategy. Both of these have been listed on the NYSE Arca exchange. Vaughan Nelson Investment Management is based in Houston and currently has about $10bn under management. Spy expects this trend to gather pace as exchanges are seen, increasingly, as a convenient distribution mechanism.

Spy’s colleagues hosted their annual Investment Forum in Thailand this week. Dozens of Thai fund selectors and analysts joined in for the virtual session. Polling was conducted as usual – and unsurprisingly, the outlook among local investors was subdued. Nearly 30% of respondents were outright bearish over the next 12 months with just over half neutral at best. Only 16% were optimistic. Half reckon Donald Trump won’t be re-elected with 30% thinking he will hold the White House. For what it is worth. Spy is not going to venture his opinion yet. Give him a few more weeks.

Speaking at the Bangkok Investment Forum, JO Hambro Capital Management’s senior portfolio manager on the Global Select strategy, Chris Lees, was in typically pugnacious form. He surprised participants by being rather bullish on Europe, which has been everybody’s favourite whipping boy for a decade. As Chris put it, “Europe was the gift that kept on giving if you avoided it, especially European banks.” However, the highly successful veteran sees brighter times ahead for European equities thanks to the EU’s vast stimulus. What you need to look for is the rate of change and Europe is changing rather quickly from beaten down to a bit of growth and that provides a great opportunity, Chris told the delegates. In Spy’s experience, most investors will ignore this change until a red hot bull market is nearing its end.

We all know it has been a volatile year. US stock markets, in particular, have been treacherous places for day traders and portfolio managers alike, thinks Spy. Just how volatile? 184 trading days into the year and nearly half, 87 of those days, have had more than 1% swings during the day. What is interesting, according to Macrochart, is that when we experience a volatile year such as this one, it typically remains volatile ALL year. So if you were hoping for a bit of calm for the next few months, hold on to your hat, because that is very unlikely.


Spy can imagine there are a lot of condo investors in Singapore who are nervous about where their next tenant is going to come from. The Singapore government has just released data that shows Singapore’s population has just dropped for the first time in 17 years as expats leave in their droves. Singapore’s annual population report came out on Thursday and showed a large reduction of employment in the services sector. Long term, Spy expects Singapore to attract workers again and in healthy numbers, but with foreign travel curbed due to Covid, the Red Dot has never seemed so restricted. The flipside, has to be, that funds offering global investment opportunities have never been more appealing to Singaporeans. Surely?

The Ant Financial IPO draws ever closer. (As of publication, a date is not confirmed but appears imminent.) One crowd that will not be participating in the gold rush will be many of America’s formidable army of day traders or RobinHood, eh, gamblers. In rather parochial fashion, many US brokerages simply don’t offer foreign exchanges to their customers, RobinHood included. Ant does not have any major anchor investors and is expecting retail buyers to support their massive valuation ambitions, with a target of $250bn, widely reported. Ant’s huge advantage is that it does actually make money – a lot of it, about RMB 24.2bn ($3.55bn) last year. Well, in typical Ant fashion, that is before accounting for service and royalty payments, gains on the disposal of subsidiaries and some other items such as the minor consideration of equity-based compensation….Caveat Emptor.

Until next week…

Part of the Mark Allen Group.