Weekly Digest: HK incentives for family offices; Thai billionaire family mulls HK base
TOP NEWS OF THE WEEK
The Hong Kong government on March 24 announced a series of policy incentives for developing family office businesses in the city including a visa scheme, tax breaks, talent training, as well as measures to boost art and philanthropy ahead of its widely publicised Wealth for Good in Hong Kong Summit on the same day,
These policies include a new capital investment entrant scheme that allows eligible investors in the city’s equities, bonds, investment-linked assurance scheme, etc, to reside and pursue development in the city.
Besides assets denominated in Hong Kong dollar, assets denominated in RMB will also be considered.
Other measures include the establishment a Hong Kong Academy for Wealth Legacy to train local talent in the family office industry, and art storage facilities at the airport to help global family offices to invest and purchase art.
Source: HKSAR Government
The Chearavanonts, whose members have dominated Thailand’s billionaires list for decades, plan to set up an entity in Hong Kong to invest the family's fortunes, becoming one of the biggest names in the rarefied world of family offices to heed the city’s ambition of becoming Asia’s wealth management hub.
Dhanin Chearavanont, the senior chairman and second-generation scion of the Charoen Pokphand Group, was reported to fly in with his eldest son Soopakij – the CP Group’s chairman – to join a Friday gala dinner at the Palace Museum, the highlight of the city’s inaugural Wealth for Good summit, said a family member.
The Chearavanont clan, whose wealth was estimated at US$33.7 billion in 2017 by Forbes, does not operate a family office in Hong Kong, even though it has been among the biggest and earliest investors in China.
Source: South China Morning Post
OTHER INVESTMENT NEWS
NGS Super's systems faced a cyber attack briefly on March 17, the fund said in a statement.
Investigations revealed some data was accessed during the attack. However, member super savings and the fund's assets remain secure on a separate platform, NGS Super said.
NGS Super is a superannuation fund for those independent education and community sectors in the country.
Source: NGS Super
Vanguard Group, the US asset management giant, has decided to shutter its remaining business in China after a retreat two years ago, according to people familiar with the matter, abandoning a 27 trillion-yuan ($3.9 trillion) fund market that global competitors are embracing.
The Malvern, Pennsylvania-based firm has notified the Chinese government of intentions to close its unit in Shanghai, the people said, requesting not to be named because the matter is private.
The company also is planning to exit a robo-advisory joint venture with Jack Ma-backed Ant Group, they added.
The moves will mark a complete exit from China for the $7.1 trillion giant, which once saw significant potential in the world’s second-largest economy.
The Hong Kong Exchanges and Clearing (HKEX) announced the expansion of the stock exchange's listing framework for pre-revenue specialist technology companies, lowering the threshold it proposed during market consultation.
Effective March 31, new listing rules will allow companies with at least HK$10 billion ($1.3 billion) in valuation to sell shares in initial public offerings (IPOs).
The proposed threshold earlier was HK$15 billion.
For companies with at least HK$250 million in sales in the financial year before their IPOs, the minimum valuation was slashed to HK$6 billion from HK$8 billion.
Source: Hong Kong Exchanges and Clearing
National Investment and Infrastructure Fund Limited (NIIF), India's strategic investment fund, is set to launch its first infrastructure investment trust (InvIT) for its road assets.
It plans to raise growth capital of $500 million from both global and domestic investors, said multiple people aware of the development.
Initial discussions with merchant bankers have taken place and a couple of bankers will be hired soon, they said.
An InvIT is similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the generated income as returns.
Source: Economic Times
Temasek, Warburg Pincus and Canada Pension Plan Investment Board (CPPIB) are keen to participate in Niva Bupa Health Insurance’s upcoming $100 million fundraising, a report said quoting people familiar with the deal.
The health insurer expects a $2 billion valuation for the pre-IPO capital raising, sources said.
Temasek Holdings may sign a deal with Indian billionaire entrepreneur Ranjan Pai to buy a large proportion of his holding in Manipal Health Enterprises (MHE) to take a majority stake in the hospital chain, people aware of the negotiations told local media.
The transaction can be completed only after it wins approval from the Competition Commission of India, the sources said.
Source: The Economic Times
The National Pension Service (NPS) has been hit hard by the global banking crisis, as the state-run pension fund holds stocks and bonds worth hundreds of billions of won in ill-fated overseas financial institutions, which are teetering on the brink of collapse.
According to data from the fund, the NPS invested in Credit Suisse bonds worth W135.4 billion ($103.5 million) as of the end of 2022.
The pension fund also has stocks and bonds in the now-bankrupt Silicon Valley Bank worth W138.9 billion. It also invested W3.5 billion in Signature Bank stocks.
"More than 99%of Credit Suisse bonds we invested in are senior bonds (which take priority over unsecured debt)," a spokesperson at the NPS said. "We will keep watching the global financial market carefully and do our utmost for risk management."
Other data from the U.S. Securities and Exchange Commission also showed that the NPS holds stocks in the crisis-hit First Republic Bank worth more than W40 billion as of the end of 2022.
Source: The Korea Times
The National Pension Service (NPS) invested in 5,642 stocks in 49 countries as of August 2022.
The 5,642 stocks include 1,565 U.S. stocks, with Apple being the top stock by value. The fund's share in the company amounted to 9.2 trillion won (US$7.0 billion) in August last year.
The loan exposure of Korean nonbanking financial companies to real estate project financing has spiked to an alarming level in recent years, posing potential credit risks amid a decline in the housing market, industry data showed.
The volume of exposure by insurance companies, securities firms, credit card companies and savings banks stood at W115.5 trillion ($88.8 billion) at the end of September 2022, according to data from the Bank of Korea (BOK).
That includes W91.2 trillion in loans and W24.3 trillion in loan guarantees. Taking the average exposure level of 100 in 2017, the current exposure level in financing and credit card companies reached 432.6, followed by savings banks at 249.8, insurers at 204.8 and securities firms at 167.
"The exposure in almost all the nonbanking sector is practically at a record-high level," a BOK official said.
Source: Yonhap News Agency
State-run pension fund Social Security System (SSS) is expected to face funding challenges by 2039, amid demographic shifts.
SSS chief actuary Edgar Cruz said the pension fund is expected to develop a large unfunded liability after 2054 of a little over four trillion Philippine pesos ($73.8 billion) at a hearing of the house committee on governent enterprises and privatisation.
Source: Philippine Star
The Monetary Authority of Singapore has clarified that it will abide by the hierarchy of claims in the case of liquidation of an entity.
That means equity holders will absorb losses before holders of additional tier 1 (AT1) and tier 2 capital instruments.
Creditors who receive less in a resolution compared to what they would have received had the financial entity been liquidated will be able to claim the difference from a resolution fund that will be funded by the financial industry.
The clarification came after the Credit Suisse takeover by UBS, in which AT1 bond holders saw their holdings wiped out as part of the takeover deal.