MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
This comes at a time when the A-share market is in free-fall. The Shanghai Composite Index fell nearly 4% last week, the worst weekly finish in 11 years, to close at a year-low of 3,094 points. The index has declined 41% year-to-date, after doubling in value in 2007.
But the real impetus for CBRC's actions, according to fund industry executives, is the loss incurred by a Minsheng Bank QDII product, structured by UBS using an underlying fund managed by Baring Asset Management. The product had the misfortune of being launched on October 31 last year, the day after Hong KongÆs Hang Seng Index reached what turned out to be its peak.
The CBRCÆs memo expresses the regulatorÆs concern that banks are creating investment products with inappropriate levels of risk. It says some banksÆ manner of calculating yields for their wealth-management portfolios donÆt add up, going as far as to accuse them of a ôcomplete lackö of risk management in identifying and quantifying product risk.
The industry, says the memo, has failed to understand and assess products in its negotiation with external product providers. The CBRC says banks had failed to assess track record, investment market and risk control capability of these external fund-management companies. Most importantly, fiduciary duties and risk clauses between product procurer and supplier have gone ignored.
The CBRC highlighted 14 areas where banks are failing as distributors, including violations of the Regulation on Personal Wealth Management Business, as well as areas related to customer evaluation, product advice, disclosure, the management of salespeople and customer communication.
No banks have been singled out for punishment but the sector has been warned to clean up its act, adding that the CBRC will conduct secret investigations of branch sales of investment products.
The full story, including the impact this will have on QDII business, will appear in the May edition of AsianInvestor magazine.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
Insto roundup: GPIF staff say J-Reits more attractive than traditional assets; Hong Kong's strict Spac criteria
EISS Super hit by another scandal; China's CSRC launches consultation on disclosure requirements for new BSE securities; Hong Kong issues consultation paper on Spacs; New World Development partners with China Taiping to focus on Greater Bay Area projects; GPIF employees say Japanese Reits have grown more attractive; Taiwan's BLF invites bid for $1.7 billion mandate; and more
SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.