Spy is still smarting from a young whippersnapper who suggested he should shave off his beard. "We have had peak beard, everyone is shaving again", said the young trendy who joined the market after the GFC. Along with single malt whisky and dirty martinis, Spy's beard will remain a constant in a world of volatility, vix indices and vixens selling single country, double-leveraged, local currency bond funds.
The honeymoon appears to be over for Tidjane Thiam of Credit Suisse. The market reacted badly this week to his proposed capital raise, which will see the Swiss behemoth focus on wealth management in Asia for its growth and shun lower margin securities activities. Spy recalls market scepticism over Pru's attempt to buy AIA, which the market did not like either, and was probably entirely wrong about. Spy will give Tidjane the benefit of the doubt, as he believes the wealth industry is just at the beginning of generational shift to managed assets in Asia and investment is required to grow with the market. Have a glass of Gluhwein, Mr Thiam and ignore the naysayers.
Spy likes whisky but his tastes also run to its younger cousin, craft beer, on occasion. And the good news is that over an 82-year period (1933-2015), the top performing sector in the US was beer, according to a study by Philosophical Economics. “Beer delivered a real, inflation-adjusted total return of 10% per year” and a $1,000 investment in 1933 is worth $26m in real terms today. By comparison, steel returned 5%, and a $1,000 investment is a paltry $57,000 today.
Does it pay to have wealth manager in the family? Spy reads that Taylor Swift, 25, is worth about $300m. While pop music stars tend to squander their earnings, Forbes believes Swift could be a billionaire before her 30th birthday and eventually one of the world’s wealthiest women. Credit for her financial success goes to her father, a wealth management adviser, and mother, a former mutual fund executive.
America may laud its wealthy pop stars, but China has the monopoly on the world’s richest women, many who make their money in business. Zhou Qunfei, founder of touchscreen-maker Lens Technology tops the list at 50bn yuan ($7.8bn), according to the Hurun Richest Self-Made Women in the World 2015 report. Eight of the world’s top ten billionairessses live in China.
Spy thinks we live in the world of the niche, but has his doubts about an ETF launched this week. Loncar Investments has launched a cancer immunotherapy ETF that holds just 30 stocks, many of which have market caps below $1bn. Mainly focussed on biotech, the new $10m AUM fund trades as CNCR on the NASDAQ. One for the bottom drawer, perhaps?
Spy expects some market-oriented thinking to be injected into China’s market regulatory body, the CSRC. The agency has appointed Fang Xinghai, a PhD in economics from Stanford University, as deputy chairman. He’s also worked at the World Bank and the Shanghai Stock Exchange. This might reassure nervous investors who were very critical during the summer sell off.
Will Hong Kong beat its 2014 performance in generating fraudulent financial industry websites? Last year 37 were uncovered, the Securities and Futures Commission reports. Spy notes that this year already 23 have been revealed (only 15 to go). The fake websites, usually phishing attempts, didn’t just involve obscure names. Standard Chartered, Wells Fargo, Citic, Hang Seng Bank and HSBC were among them.
Spy’s band of trusty photographers have spotted some new Chinese language fund advertising:
AB is promoting their Low Volatility Equity Portfolio Fund and highlighting Standard Chartered as a distribution point.
BEA Union is promoting 3 funds: Asia Pacific Multi Income Fund, Asian Bond and Currency Fund & Asia Pacific Flexi Allocation Fund
In Hong Kong, Jupiter is still splayed across the tram stop in Central:
Until next week. If you have any items for the Spy, send them to me at: email@example.com