A gathering of leading asset owners and investment industry executives convened in Singapore to discuss the outlook for global investment markets on December 3, following a surprisingly strong year for asset performance.
AsianInvestor held its 11th Southeast Asia Institutional Investment Forum with an emphasis on the outlook for 2020 and how it could be affected by issues such as ongoing US-China tensions. Indeed, Bo Zhuang, chief China economist for TS Lombard, told the audience that the desire of offshore investors to get into China's debt market was very unlikely to be affected by this.
“The US may move to stop US pension funds [investing] in China. But if you look at European pension funds, they are flooding into Chinese bonds,” he said. Jonathan Armitage, CIO for MLC Asset Management, added that the appeal of China's slowly opening capital markets would only expand in the coming years.
“If you look over for the next 10 to 15 years, whether or not it's in equity market or particularly in the credit markets, you're going to see ... very significant changes as the Chinese economy continue to evolve and develop."
The forum also featured chief investment officers from several leading asset owners.
These included Sophia Cheng, CIO of Cathay Life. She took to the stage to discuss how her company had become one of the region's most progressive insurers when it comes to adopting environmental, social and governance standards in its investment approach.
Cheng said her team tried to place themselves in the shoes of the companies they invest in.
“Try to convince people with information and data, and try to motivate people to see the meaning of that, and never go to someone and criticise them without a solution,” she told the attendees.
Jang Dong-hun, CIO of the Public Officials Benefit Association (Poba), told the audience about how his Korean pension fund has increasingly sought to increase its already sizeable weighting in private assets, weighing up in infrastructure and real estate assets.
As his pension fund continues to venture outside its domestic market, diversifying investments in real assets into more regions and sectors form part of Poba’s new goal for next year: 2020 will be a "symbolic year" in which Poba aims to make over half of its investment returns from overseas, Jang said. It will also need to be careful how it hedges this risk; dollar-won swaps have become extremely expensive, he explained.
The forum also saw the first time attendance of the National Bank of Cambodia. Vibunrith Long, deputy director of the central bank's exchange management department described how it had seen assets swell from $500 million in 1998 to over $15 billion today, necessitating it investing more in US corporate debt and Asian sovereign bonds, as well as in gold. He offered an interesting perspective from one of Asia's more recent by fast-developing asset owners.
Please click here to view the photo gallery from the event.