March's most read: Could Russia's SWIFT ban benefit renminbi assets?; Family offices unfazed by Singapore's wealth taxes
Renminbi assets could serve as an attractive alternative for investors looking for a risk-off environment in a new normal where Russian banks are excluded from US dollar trading, however they would have to tread this line very carefully, investors and economists told AsianInvestor.
Following what some have dubbed the “financial nuclear bomb” whereby the European Union has banned several Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network of cross-border payments, analysts have speculated that the move could be good news for a China looking to internationalise its currency.
However, they say that amid rising inflation and geopolitical shocks, a question mark still hangs over the wisdom of adding positions in renminbi assets at a time when Russia is looking for alternative partners.
Family offices unfazed by Singapore’s wealth taxes as their numbers grow
Despite the slew of wealth taxes announced in the 2022 Singapore budget, family offices are unperturbed as the ultra wealthy continue to be drawn by other factors such as political and currency stability, high living standards, and accessibility to regional investment opportunities.
The impact of the recent tax measures on properties, luxury cars, and top earners announced in February was “measured and “not significant”.
Family offices are unlikely to be affected by the property tax hikes since most of them own one residential property for personal use. They are also deterred from buying multiple properties because of the high additional buyer’s stamp duty, which can be as steep as 30% for foreigners and permanent residents depending on the number of properties purchased.
AIA set to boost exposure to Asian infrastructure 'as much as possible'
AIA Group is aiming to boost infrastructure investment as much as possible globally - with a focus on Asia - saying that the asset class perfectly matches the liability of life insurers. The move will also permit it to support local development, a company spokesman said.
AIA is one of the largest life insurance companies in Asia and the infrastructure push will enable it to access projects across the region, from China, India, to Korea, Australia and Southeast Asia.
“Not only do we need to invest to provide good returns for policyholders in the region, but this is also a very good opportunity for us to contribute to local infrastructure development in the region. So local access in Asia is an important focus for us,” said Chi Zhang, AIA Group’s director of infrastructure debt investment, during AsianInvestor’s Infrastructure Investing Forum 2022 recently.
Zhang said the life insurer sees good opportunities in Asia, where local currency assets naturally fit its liabilities on the ground.
The amount raised exceeded the previously reported, unofficial target of $20 billion for the first year.
The commitments, which include a $10 billion multi-sector investment from the UAE government and a $7.5 billion maritime infrastructure investment vehicle - to invest in seaports, cargo yards, and logistic facilities - by a consortium comprising supply chain solutions company DP World and Canadian pension fund Caisse de depot et placement du Quebec (CDPQ), were secured within months of each other in 2021.
INA has also secured $5 billion in seed money from the Indonesian government and a $3.75 billion thematic fund – with contributions of $1 billion each from the Abu Dhabi Investment Authority (Adia), Dutch pension fund APG, and CDPQ, and $750 million from INA’s initial capital – for the construction of toll roads.
6 of 11 investors won’t reveal if they are divesting from Russia
For most of the financial world, divesting Russian assets has become something of a badge of honour. Investors in APAC and elsewhere, meanwhile, are for the most part remaining tight-lipped.
More than half of the major global investors contacted by AsianInvestor would not reveal whether they are divesting from Russian assets - Temasek, AustralianSuper, LGIA Super, Allianz, APG, OMERS all declined to say.
AwareSuper and four New Zealand superannuation funds, however, said they were divesting.