Spy was thinking about Baz Luhrmann’s sage wisdom encapsulated in his lyrical monologue, Everyone’s Free (to wear sunscreen). That song includes the line, “The real troubles in your life are apt to be things that never crossed your worried mind; the kind that blindsides you at 4pm on some idle Tuesday.” The news this week that Evergreen’s giant container ship, Ever Given, has got stuck in the Suez Canal, causing untold chaos for global shipping supply lines is just the sort of mini Black Swan nobody has been worrying about. Spy has no idea what the next market surprise is going to be, but it is almost certainly as unexpected and uncontemplated as 220,000 tonnes of container ship causing a boating traffic jam of epic proportion, in the shadow of the Great Pyramids at Giza.
Spy has no doubt the announcement by Ben Rudd on LinkedIn this week that he was taking on the role of Chief Wealth Officer at Prudential Hong Kong made a few people take notice. Ben, Pru’s former CIO, gleefully shared his new role and the tantalising line “Lots more announcements to follow in the coming months, so watch this space!!!” Those three exclamation marks must surely have The Pru’s competitors (and Spy) wondering what new offerings are on their way. Competition, innovation and, may Spy add, enthusiasm, are the heartbeat of Hong Kong’s dynamic economy. Bring it on.
The competition within the ESG space has ratcheted up to insane levels in the last twelve months. One could almost be forgiven for thinking that in the traditional asset management space it is the only thing people are talking about. Spy spotted a new video advert from Schroders pushing the ESG boundaries this week. The manager is actively calling into question profits, unless they are the right kind of profits. Adam Smith will be turning in his grave with this heresy but Spy has no doubt that Schroders will be appealing to an entire generation grown deeply suspicious of capitalism at any cost. It is a great and necessary conversation to be had.
Wanna buy a SPAC? Every day this year, give or take, a $1bn of SPAC equity has been snapped up in the United States. $96bn if you are doing the numbers. In the whole of 2020 is was only $83bn. But, but, but…this week all but one of the 15 new SPAC offerings closed below their debut IPO price. It is just possible that demand is not insatiable after all. Despite the snappy names such as Magnus Opus Acquisition, Glass Houses Acquisition and Disruptive Acquisition – we might just be witnessing the top of the boom. Don’t look down, says Spy.
How are flows doing? Well, in the US March has been a pretty good month. A total of $75bn has flowed into mutual funds and ETFs. That is higher than any previous month’s figure since 1995. Yes, you have to go back 26 years to find such exuberance. It was $54bn in the last week alone. It is a funny old thing, but when governments give out free money, people tend to have a bit of a flutter…and since those casinos in Las Vegas have been closed, well, it hardly surprises Spy it has found a new home.
If you are like Spy, you will be constantly amazed at the numerous justifications given out by the talking heads on Bloomberg and CNBC about why the markets are moving in one way or another. The current theme, if you hadn’t noticed, is “Sector Rotation.” What is sector rotation, you ask? “It is when the market rotates out the stocks you have just bought and back into the ones you sold last week”, said the experienced cynic.
Spy was reminded of the perennial debate in Hong Kong whether Yung Kee in Central or Yue Kee does the best Guandong Roast Goose. Passionate arguments abound for one’s personal favourite. And so it seems the same with Bitcoin. The debate rages on the asset’s true worth. Amundi’s deputy CIO, Vincent Mortier, said cryptocurrencies simply can’t be viewed as an asset worth investing in or even considered as money. Meanwhile, Cathie Wood of ARK fame, says Bitcoin’s total valuation at $1tn ‘is nothing compared to where this ultimately will be’. Fidelity has just filed an application with the SEC for a new Bitcoin ETF it is calling Wise Origin, a play on Satoshi Nakamoto’s name, apparently. Meanwhile everyone’s favourite wannabee James Bond villain, Elon Musk, started selling his cars for Bitcoin. This debate ain’t over, folks, not even close. (For those wondering, Spy favours, the Yue Kee goose, naturally…)
How many Ultra High Net Worths does Singapore have at the moment? A lot. According to Knight Frank’s Wealth Report 2021, Singapore now has 3,700 people with more than $30m in net assets. That grew by 10% last year and is now the third-highest globally. Is it any wonder the wealth management industry is thriving despite these challenging times? This number may become more politically challenging as Singapore tries to figure out whether a wealth tax on the ultra-rich is worth it. Watch this space.
Spy’s beady-eyed photographers have been out. A new campaign in Singapore’s consumer media by Eastspring is hoping people bond with it and its Asian bonds.
Fidelity is popping everywhere. This time it the firm is encouraging investors to keep at it through the market cycle in China. With China’s markets currently under pressure, sound advice indeed.
Until next week…
P.S. Spy’s favourite meme on the Ever Given.
