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Matthews Asia: What ‘China Plus One’ means for the recovery of Indian equity markets

Fondsmanager Peeyush Mittal, Matthews Asia

Indian equity markets have proven to be quite resilient – despite the second Covid wave from late March to June, high equity valuations and above-average inflation. Peeyush Mittal of Asia expert Matthews Asia points this out in his latest market commentary („Matthews Asia Insights: What’s on the horizon for India’s markets?”) and explains which three reasons are mainly responsible for the equity recovery on the subcontinent in his view.

Matthews Asia: Evergrande’s difficulties are an idiosyncratic, not a systematic risk of China’s bond market

Teresa Kong, Matthews Asia

The plight of China’s largest property developer, China Evergrande Group, which appears to be struggling to service interest payments to two creditor banks, has not only caused turmoil in the bond markets. “Evergrande’s plight raises critical issues about investing anywhere in emerging markets, not just China,” says Teresa Kong, responsible for all fixed income strategies at Asia specialist Matthews Asia. The Evergrande saga therefore underlines the importance of conducting thorough due diligence on three aspects of good corporate governance when making bond investments, namely accounting, legal and regulatory requirements, she explains in her latest commentary.

 

Matthews Asia: “China’s regulation is doing just what the rest of the world is thinking about but hasn’t gone around to implement.”

Andy Rothman, Matthews Asia

The Chinese government’s intervention in the market for private education providers, as well as its intervention in the planned listings of ride-hailing giant Didi and Ant Group on US stock exchanges, have worried investors worldwide. Many now fear further regulation that could negatively impact listings of Chinese companies. Andy Rothman (pictured), investment strategist at Asia specialist Matthews Asia, and his colleague and Chief Investment Officer Robert Horrocks believe these concerns are only partially justified, as they explain in the following interview.

Read the full commentaries from Andy Rothman here and from Robert Horrocks here.

 

Article about the future of UK as a financial centre post-Brexit on FondsTrends.lu

The UK government and the British financial industry are currently desperately looking for ways to keep the UK an attractive international financial centre post-Brexit. Indeed, since the EU referendum in June 2016, but especially in recent months, the financial industry on the island has lost a lot of staff, companies and assets. Asset management has been hit hardest, as Hagen Gerle explains in this article for FondsTrends, the information platform of Hauck & Aufhäuser Fund Services about current trends and topics in the fund business: Financial Centre UK Post-Brexit: Searching for A New Meaning (article available in German only).

Hazelview Investments: “Mobile operators will need to work with mobile REITs to expand their networks”

The strong growth of the global mobile industry will increase the need for infrastructure for the new 5G mobile standard. This will be triggered by the robust increase in data consumption and traffic resulting from the continued roll-out of 5G mobile technology. This will benefit providers of listed real estate investment trusts (REITs) of mobile tower operators already this year, explain the REITs specialists at Hazelview Investments (formerly Timbercreek Investments) in their latest market commentary.

 

GFC podcast Episode 7: ESG, SFDR and the risk of “Impact Washing”

Logo GFC Podcast

The “Sustainable Finance Disclosure Regulations (SFDR)“ which has been in force for almost three months now, reveals it: The number and volume of investment funds that either take sustainability criteria into account (article 8) or even want to improve them (article 9) are on the rise.  Is it all a sham – or is the fund industry really becoming more sustainable? And what do the, sometimes rather meager data and parameters such as the new “Principle Adverse Impact” indicators reveal? We talked about this with Christina Böck, partner at international strategy consultancy INDEFI, for the new episode of GFC (not the ‘Global Financial Crisis’) Podcast.

This podcast is in German. Length of the podcast: 19:42 min.

British financial sector post Brexit: hoping for equivalence – or move to the EU straight away?

The United Kingdom and the European Union want to sign a “Memorandum of Understanding” by the end of March, which should determine how the financial services industry will proceed after Brexit. While the UK hopes that its regulations will also be recognised as equivalent on the continent, a level playing field seems to be more important for the EU. Every day without an agreement drives more business, firms, and staff to Europe – and unsettles British investment managers increasingly.

Things are not looking good for the UK as an international financial hub. While the Brexit deal may have been an unexpected Christmas present for some Brits, for many it is turning into a national tragedy. Enervated hauliers, angry fishermen and ripped-off online shoppers from the United Kingdom (UK) may soon be joined by relocating employees in financial services firms. The sales manager of a London investment boutique put it succinctly in a phone call with me the other day: “Down the line, if you want to work in the EU, you need the local licence.” Ergo, his employer is intensively looking for a location on the European mainland.

Considerations, like those of this asset manager with its tens of billions in assets under management, are being made by more and more investment houses on the Thames that do not (yet) have a branch in the European Union (EU). The post-Brexit period is a grey area for many of them as long as there is no separate agreement between the UK and the EU. But that may be a long time coming. Continue Reading

The fish, the finances and the last act in the Brexit drama

The (for the time being) final curtain in the Brexit drama is rising these days, but it does not look like a good ending for the British financial and fund industry. Until recently, the biggest opportunity seemed to be “Fish for Finance“. But that is unlikely to happen. British financial firms are sitting on dry land if they do not have their own branch in the European Union by now (read the whole article as a PDF). Until the cancellation of British Prime Minister Boris Johnson last Friday, “Fish for Finance” – a possible trade between fishing rights for EU fishing boats in British waters on one hand and access for British financial products to the European Union on the other – looked quite promising. Haddock for funds or cod for derivatives, so to speak. Continue Reading

The Woodford case: When nervous investors sit on illiquid investments

The impending collapse of the Woodford Equity Income Fund (WEIF) in the UK may not only cost (ex-)star fund manager Neil Woodford his company. The crisis also casts a shadow over the increasingly popular illiquid investments, especially among institutional investors, and their supervision.

The case of Neil Woodford, who is currently holding British investors, the media and financial regulators in suspense, can be told from three perspectives: as a drama of the rise and fall of a former star fund manager, as evidence of the carelessness of supervisors, or as a harbinger of the difficulties of active asset managers when they juggle illiquid investments. Above all, however, it is a warning of how reluctantly the key players in the affair communicate.

So, what happened? Continue Reading

The quiet before the Brexit storm (infographic)

Unease within the British investment industry is increasing: Facing the threat of a „No Deal“-scenario there are continuous speculations about the extent of (anticipated) asset outflows due to Brexit, which companies are going to leave and how many employees they will take with them. Since the referendum the media, investment managers and national trade associations have their finger on the industry’s pulse. They predict: Small investment boutiques without any European representation will be hit particularly hard (article as PDF file) Continue Reading