The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Ting oversees Pictet Asset ManagementÆs Asian bonds group within the global emerging debt team headed by London-based Simon Lue-Fong.
Pictet Asset Management manages around $2.2 billion in global and local emerging debt. Around 30% of that is invested in Asia, including a $235 million fund benchmarked against the HSBC Asia Local Bond Index. Across all asset classes, Pictet Asset Management manages around $220 billion in assets.
Pictet Asset Management believes that Asian fixed income could become another pioneering asset class for the asset management company, just like emerging markets, water, small caps, Japanese equities or European corporate debt.
Being part of the global emerging debt team creates good synergy in investment decision-making, Ting says. ôAsia bonds do not trade in isolation and can be affected by developments in other emerging markets.ö
Before joining Pictet Asset Management, Ting was a senior portfolio manager for the Investment Company of the PeopleÆs Republic of China, where he managed a range of fixed income portfolios including emerging market sovereigns, corporate, asset-backed securities, and inflation-lined bonds.
Prior to that, he spent two years at ChinaÆs State Administration of Foreign Exchange (Safe) covering US dollar fixed income and corporate credit. Ting began his career as a foreign exchange trader with UBS in Singapore.
The difference with his new job at Pictet Asset Management is he will be more focused on the opportunities in this region.
ôAt Pictet Asset Management, I will be specializing in both in hard currency and local currency emerging market sovereigns and credits, with special focus on Asia,ö he says.
His new role comes with several challenges.
ôOne challenge is that the emerging debt market has developed more maturely over the years and it is no longer enough to lump FX and interest rate risks together in analyzing local currency emerging debts,ö he says.
ôPictetÆs approach is to separate out the risks in FX, rates, credits or structured products and looking at them individually. The broader experiences and skill-sets I had previously allow me to embrace this approach and better exploit market opportunities individually.ö he adds.
Another challenge is the need to educate investors so that they can fully embrace local currency products.
Ting notes that the fundamentals of many emerging markets, including Asia, have improved over the years. The external debt over foreign reserves ratio of many Asian countries have declined over the last 10 years. More countries are adopting some form of inflation-targeting regime. More countries have balanced or surplus current account. The debt-servicing profile of many countries also improved significantly.
ôSuch information needs to get out to the investors,ö he says, adding that the US credit crisis will hopefully serve as an awakening for many would-be fixed income investors.
ôPerhaps the resilient and high-return performance of the Asia or global local currency debts amid the recent US sub-prime and liquidity crisis can help to convince investors that this is an excellent good risk-reward asset class,ö he says.
Ting expects Asian currencies, as a whole, to appreciate further in the medium-term.
ôReserves are building up in many Asian currencies which means that they have a lot of resources to defend their currencies if under attack,ö he says. ôCountries in Asia are also having higher inflation. Many countries, such as Indonesia, Malaysia and Singapore, demonstrated a willingness to allow a stronger local currency to fight against inflation.ö
On the other hand, Ting cites what he calls patient trades. ôThe fundamentals of some countries dictate that their currencies should be appreciating more. But, for social or other reasons, the authorities have decided to cap their appreciation for the time being,ö he says, giving the Chinese yuan, Vietnamese dong and Indian rupee as examples.
Ting replaced Rajeev de Mello, who relocated from Geneva where he was head of Pictet Asset ManagementÆs fixed income team to Singapore in 2006 to establish and build the companyÆs Asian fixed income business. The company couldnÆt say where de Mello moved.
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