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
He is courting hedge funds to invest in Taiwan and raise money from investors in that market. ThatÆs a bold move from a regulator, considering that many of his peers in other markets in Asia have not yet fully embraced hedge funds; some even still consider them the enemy. Hedge funds, after all, have been blamed û justifiably or not û at least in part for some of the difficult periods in AsiaÆs financial markets, most notably the regional financial crisis beginning in 1997.
ôThis is an excellent environment for hedge funds,ö Lee says.
Among the pluses of investing in Taiwan is its undervalued currency and stable foreign exchange regime, Lee says, that allows for relatively cheap access to local securities. He urges hedge funds to look more closely at opportunities in TaiwanÆs equities, fixed income, currencies, and interest rates markets.
Attracting hedge funds is in line with TaiwanÆs efforts to attract investors in general.
For those looking for more traditional investments, Taiwan equities are no longer as expensive as they used to be. Price-to-earnings ratios have fallen significantly and are now able to compete more with other Asian markets such as Korea, Hong Kong, and Singapore when it comes to attracting value investors. Ongoing legal reforms designed to make the use of international best practices more widespread in Taiwan is also expected to work in its favour, Lee says.
TaiwanÆs fixed-income industry û unloved by many international investors because of low yields and withholding tax that eats into returns û is set to undergo reforms in the areas of products and securitisation. Lee sees many opportunities for investors in this asset class.
The M&A environment is also favourable, Lee says, noting there are many acquisition opportunities in Taiwan because of low valuations, corporate liquidity, and the undervalued currency. The FSC, he says, is ready to be open-minded about potential investments to Taiwan.
Asset managers are also welcome to raise funds in Taiwan, Lee says. ôTaiwan is flooded with liquidity,ö he says. ôThere is a clear need for new assets to absorb these.
The potential to raise funds is certainly there. A total of $783.86 billion is currently parked in cash deposits in Taiwan, producing returns of 2% annually; the central bank has $270 billion in similar low-yielding deposits.
The FSC relaxed restriction on foreign investments in recent months. Insurers are allowed to allocate up to 45% of total assets to overseas, of which 10% exposure is allowed for foreign real estate.
The FSC is looking to relax more investment regulations, Lee says. He looks forward to an up-to-date and open regulatory environment in Taiwan that will be able to compete with other markets in the coming years.
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.