The FSA Spy market buzz - 1 Apr 16

By FSA Spy

Added 1st April 2016

Julius Baer adds to discretionary team; CCB International is going Lion; April Fool’s Day rumours about DBS and StanChart; First quarter write-off; BlackRock is axing; Krung Sri looking for Long Short, Back Families says First State; Allianz and Maybank advertising; and much more...

The FSA Spy market buzz - 1 Apr 16

Spy found himself back on venerable Hollywood Road this week enjoying a refreshing post-Easter Tsing Tao appreciating the quiet of Hong Kong on an extended holiday. It seems half of town has left for sunnier (or wintrier) climes. Those few stragglers left were only too happy to see the back of a miserable first quarter, with most wealth managers describing it as a write-off. Spy assumes things can only get better with Ms Yellen releasing the doves this week.

Spy is a little late with the news Julius Baer has added to its discretionary fund team in Singapore in the last few months. Reporting to John Capetta, Rae Ho has joined JB from Bank of Singapore. She will be looking across multiple asset classes for quality funds freed up from the Mercer straight jacket. Readers will recall that Hsiao Ching left JB to join Bank of Singapore last year, so it gives Spy a feeling of merry-go-round between the two heavyweight private banks.

CCB International, or China Construction Bank International Asset Management, if you want the full name, is doing a build-out in Singapore, hears Spy. Simon Ng was hired from Axa Investment Management last year to develop the business and CCBI is hoping to get a licence to do wholesale business in the summer. Spy hears that CCBI is looking to hire a private bank distribution specialist.

Is it just the fact that it is April Fool’s Day? Spy heard a rumour running across the desks at Standard Chartered and DBS that Temasek is considering merging the two banks together. As the largest shareholder in both, Temasek would certainly have some sway. With StanChart’s market cap sitting at only about £15bn, Temasek could certainly afford it. Stan Chart’s share price is near a decade low and emerging markets are certainly out of favour. The ultimate contrarian play? Watch this space.

BlackRock is axing about 400 jobs across the world according to FSA’s sister publication, International Adviser. The job cuts are being blamed on volatility and in usual corporate speak, apparently it is a “re-alignment”. BlackRock sacked about 300 people in 2013 but has since hired another 2,500. The actual positions to go have not been finalised but no doubt the elbows are being sharpened and bootlaces tightened. Spy is rather pleased he is not BlackRock’s HR manager.

Spy was speaking to one discretionary fund of fund portfolio manager who controls significant sums in Asia this week who had two strong opinions: “One, never buy a fund managed by asset manager owned by an investment bank – sooner or later they blow up. Two, if your fund is widely sold in retail, I have no interest.” Ouch!

Spy hears that Krung Sri Asset Management is looking for long/short funds to add to to their range of international mirror funds to be sold in Thailand. Thailand has been steadily opening up and the shelves of most local players still have large gaps, providing asset managers with plenty of opportunity in the Land of Smiles.

How is the big push going for UBS and Julius Baer to persuade clients to buy discretionary mandates? “Like wading through treacle, at best” say investment councillors at both banks that Spy spoke to. The knock on effect for fund groups has been palpable with one asset manager saying “This change of strategy has taken huge sales momentum out of the market. Remember in Asia, funds are sold not bought and this mandate business is not helping.”

How should you invest in Asia? According to Alistair Thompson of First State Stewart, it is simple: look for good families. Focus on the families who treat their shareholders fairly and back them for the long-term as they build multi-generational businesses. With Asia’s myriad family politics that sounds easier said than done…

Spy will settle down to watch the Cricket T20 World Cup Final where a battle royal will be fought between the developed and emerging world. The West Indies shocked India last night to secure their place against unlikely opponents England. Will sport mirror markets with EM surprising Developed? Spy, always having a soft spot for underdogs, will be rooting for Darren Sammy and his Windies eccentrics.

Finally Spy’s photographers have found some new asset and wealth management advertising in Singapore after a dearth of activity:

Allianz is talking up its Income Strategies at Raffles Place:

Maybank is offering up to 3% without specifics:


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