Asia: step up!
At AsianInvestor we like to think we’re ahead of the competition. We were at it again last night when we kick-started seasonal festivities with our end-of-year party – on November 26. Topics of discussion from the industry’s assembled thinkers and drinkers included the art of after-dinner speaking. From recollection, the last British governor of Hong Kong, Chris Patten, scored highly; six-time major golf champion Nick Faldo fared less well.
Anticipation over annual bonuses was also in the air, although the excitement was tempered slightly by uncertainty over quite where to put the money. My suggestion of buying property was roundly dismissed, on the grounds that value will be hard to realise in a world hooked on the drip-feed of quantitative easing (QE). The suspicion is that loose monetary policy is more permanent than people might think. The US Federal Reserve is still struggling to foster healthy economic growth and this worrying state of affairs will persist because the quantum of debt is that much higher than it was.
Certainly our readers are of the view that QE has done little to safeguard global growth (see page 84), although they agree it was better than the alternative – restrictive central bank policies during a post-crisis period where aggregate demand was collapsing. That would have led to a nasty correction as huge amounts of debt and financial assets failed.
But the fact is, there is growth in Asia. There are current account surpluses in Singapore, Taiwan, China, Hong Kong and Korea. Meanwhile, Malaysia, the Philippines and Thailand are also viewed as sound beta plays on Asia. It is only Indonesia and India that have weaker current account positions, although both have taken steps to address these recently, the former having moved to cut its huge fuel subsidy and the latter introducing some much-needed liberalisations (see page 10).
The point is that Asia and emerging markets have depended on consumers in the US, UK and Europe living beyond their means for long enough. Now it’s time for Asia to step up to the plate and become less risk averse.
You can see from our annual top 100 ranking by assets sourced from Asia Pacific that the growth potential in this region is substantial and there is business to be won (see page 28). The challenge of overcoming the inherent conservatism and home bias of Asian investors will be most severe in markets such as Japan, where two decades of deflation remains ingrained. But Abenomics was a necessary attempt to break the country’s cycle of perpetually decreasing prices. Succeed or fail, the Bank of Japan will continue to buy more bonds. That’s the world of quantitative easing that we live in today, and it looks like it’s here to stay. Merry Christmas.
On the move
Beonca Yip to run distribution at Investec; BlackRock replaces Taiwan head
08 The top 10 moves of 2013
10 Regulatory Analysis:
India cuts red tape as flows unravel
11 Regulatory Roundup:
Korea shorting rules; India bond ceiling
12 Data Centre
UBS/Campden family office survey findings
14 DIY down under
What can Asia learn from Australia’s self-managed retirement funds model?
18 Q&A: Jeung Jae-ho of the Korean Federation of Community Credit Cooperatives
20 KIC signs Russia deal, sees CEO exit; NPS names CIO
22 Wealthy Koreans prefer free to fee
The country’s rich are demanding clients for private banks, but change is coming.
26 Private banks said to be warming to outsourcing; BNY Mellon IM launches capital markets business
28 The top 100 fund houses by Asia-sourced assets
China is at the heart of the region’s asset growth.
36 Competition clouds London’s RMB ambitions
38 ETF roundtable: Experts discuss issues around exchange-traded funds
44 Manulife buys Malaysian fund house; first US-listed RQFII to launch
46 Opportunities amid volatility
Hedge fund managers give their views on what to expect in 2014.
48 The Philippines: the next Indonesia for PE firms?
50 Q&A: Mark Okada of Highland Capital
52 PE secondaries on the rise; Blue Rice winds down
56 Taiwan: a model for Hong Kong funds automation?
Taiwan is seen to be reaching a tipping point in terms of funds automation.
74 Operations manager: Kate Misic of Telstra Super
75 NPS switches to State Street for equity custody; fund services firms expand presences
76 Trader talk: Steve McCole of Martin Currie
62 Service Provider Awards 2013
The winners in categories including custody fund admin, legal, indexing and prime broking
78 Art of Asset Management Forum
80 Borrowers and Investors Forum, SE Asia
82 Africa Investment Summit
The Great Rebalancing: Trade, conflict, and the perilous road ahead for the world economy, by Michael Pettis