Weekly investor roundup March 7: China urges insurers to perform urgent checks on Russia exposure

Even China is concerned about its Russia exposure; AIA puts on its acquisition hat; SFC fines HSBC Securities Brokers (Asia) HK$6.3 million; HKMA issues bonds; Canada Pension Plan Investment Board (CPPIB) invests $350 million into Indian commercial space; and more ...
Weekly investor roundup March 7: China urges insurers to perform urgent checks on Russia exposure



China has told top state insurers to perform urgent checks on their exposure to Russia and Ukraine, as concerns swirl about the damage to the two economies amid intense fighting, according to two sources and documents seen by Reuters.

The move was also triggered by sweeping sanctions that have been imposed by many countries on Russia, the sources said, after its invasion of Ukraine last Thursday in the biggest attack on a European state since World War Two.

At least two large state-owned insurance firms have been asked by regulators to conduct internal checks on their business and investment portfolios' exposure to Russia and Ukraine, said the sources.

Source: Reuters


AIA Group has agreed to acquire 100% of the shares in Blue Cross (Asia-Pacific) Insurance and 80% of the shares in Blue Care JV Holdings from The Bank of East Asia (BEA), the life insurer announced on March 4.

AIA and BEA have also agreed to extend the scope of their existing exclusive bancassurance partnership. Through the acquisition of Blue Cross, their partnership will include a 15-year agreement covering personal lines general insurance products. This will provide a comprehensive suite of AIA’s insurance solutions, including health insurance, to BEA’s personal banking customers in Hong Kong.

Blue Cross is a well-established insurer in Hong Kong focused on providing leading health insurance products. Blue Care operates medical centres with a large medical network in Hong Kong.

Source: AIA

The Securities and Futures Commission (SFC) has reprimanded and fined HSBC Securities Brokers (Asia) (HCCB) HK$6.3 million for internal control failures and breaches of the Code of Conduct, the regulator said on March 3.

The SFC found that between September 2018 and September 2021, HCCB failed to ensure compliance with the Rules of the Exchange of the Stock Exchange of Hong Kong (SEHK). As a result, incorrect information in relation to 92 clients were submitted to SEHK, involving 3,379,065 orders and 4,202,534 trades.

HCCB made multiple errors in the assignment of the Broker-to-Client Assigned Number (BCAN) to its clients who traded A-shares eligible for trading under northbound trading link of Stock Connect, also known as China Connect Securities, in the mapping of Client Identification Data to BCAN and in the tagging of BCAN to its clients’ orders.

Source: SFC

The Hong Kong Monetary Authority (HKMA) announced that a tender of 15-year government bonds through the re-opening of existing 15-year government bond issue under the Institutional Bond Issuance Programme was held on March 2.

A total of HK$800 million ($102 million) 15-year government bonds were offered. 

A total of HK$2.537 billion tender applications were received. The bid-to-cover ratio, i.e. the ratio of bonds applied for to bonds issued, is 3.17. The average price accepted is 94.43, implying an annualised yield of 2.060%

Source: HKMA


The Canada Pension Plan Investment Board (CPPIB) has invested $350 million into a second joint venture with Bangalore’s RMZ Corp to develop and hold commercial office space in key cities across India, according to an official release on March 1.

The JV is seeded with RMZ’s StarTech grade A office tower in the southern India city of Bangalore, with CPPIB buying a 51% stake in the property from local developer Prestige Estates, while RMZ will retain the remaining 49%.

The Canadian pension fund is expanding its partnership with RMZ after committing $210 million to its first office venture — a little less than a year ago — as it continues to pursue opportunities in India’s southern region.

The region has been an area of focus for CPPIB over the last 7 years.

Source: CPP Investments


President Joko Widodo has postponed the launch of the unemployment benefits program (JKP) scheduled on Tuesday (Mar 1) amid strong criticism from labour unions and politicians over the age withdrawal requirement.

The regulation, introduced in February, said workers would only be allowed to withdraw their pension funds when they reach the age of 56. It is a significant change from the previous 2015 regulation that set no age threshold but required the funds to be disbursed a month after the worker had been laid off or resigned.

The new regulation, which will come into effect on May 4, has met with widespread opposition from unionists and politicians, including those in Widodo’s political party.

Source: The Jakarta Post


Nippon Life Insurance has executed a syndicated loan agreement to finance a rolling stock project in Australia, amounting to A$250 million ($185 million) with Reliance Rail Finance, the life insurer said on March 1. This is Nippon Life’s first sustainability-linked loan in project finance.

The purpose of the loan is to finance the replacement and maintenance of trains operating in Sydney through a public-private partnership with the New South Wales government.

Source: Nippon Life Insurance

Taiju Life Insurance will transfer credit and alternative investment functions to Nissay Asset Management, the asset management arm of Nippon Life Insurance, by March 25 this year, Nippon Life announced on March 2.

Amid low interest rates and a harsh investment environment globally, Nippon Life Group is looking to boost investment yield with a focus on strengthening credit and alternative investment.

To transfer Taiju Life’s functions will further strengthen investment systems, including gathering specialized investment managers and exchange expertise, Nippon Life said.

Source: Nippon Life Insurance

Manulife Investment Management and Kenedix will launch a 19.8 billion yen ($172 million) joint venture pursuing acquisitions of multifamily assets in Japan’s major cities. The JV has entered into sale and purchase agreements to acquire a seed portfolio comprising nine assets with acquisition of four assets completed.  The JV also targets a pipeline of assets to be purchased in the near future.

The seed portfolio consists of stabilised institutional-grade multifamily assets with over 250,000 square feet of net rentable area. Five of the properties are located in Tokyo 23 Wards and the rest are in the Greater Tokyo Area, Osaka and Nagoya. All are high-quality stabilised assets with convenient access to railway stations and nearby neighborhood amenities.

This transaction marks Manulife’s first standalone multifamily investment in Japan, demonstrating its commitment to growing its real estate exposure in the Asia Pacific region. The acquisition brings Manulife’s real estate portfolio in the region to 580,000 square feet.

Source: Manulife Investment Management


Korea Investment Corporation announced on March 3 that it is hiring eight alternative investment managers globally to speed up investment in the private market and improve returns, including two for private equity, two for real estate, three for infrastructure investment, and one for private debt.

The sovereign wealth fund will receive application from March 3 to 24. Two rounds of interviews will be conducted from April to May. Finalists will be announced in late May.

Source: KIC        

National Pension Service (NPS) said on Feb 28 that it selected Millennium Management, Starboard Value LP and Systematica Investments during the fourth quarter of 2021 as hedge fund managers.

Meanwhile, it selected Adams Street Partners, Benefit Street Partners and Clearlake Capital Group LP as overseas private equity and private debt managers during the fourth quarter.

As of the end of December 2021, NPS has hired 12 external managers for overseas hedge fund investment, and 71 asset managers for overseas private equity and debts.

Source: NPS

Korea Post is seeking four local and foreign asset managers for a one-year domestic equity fund mandate of unspecified value in its first tender of 2022, it said in a request for proposal on February 24. The mandate is benchmarked against the KOSPI Total Return Index.

Applicants must have at least three years of experience managing Korea equity funds, which must have a minimum 50 billion won ($41.4 million) of total assets. Applications are open until March 11, with evaluation and manager selection scheduled between March 14 and April 12.

Source: Asia Asset Management


Malaysia’s sovereign wealth fund Khazanah Nasional reported a 77% drop in operating profit in 2021 due to Covid-related financial assistance to the tourism sector and poor investment gains.

In its annual review released on Wednesday (March 2), the fund reported a fall in operating profits to RM670 million ($160 million) in 2021 from RM2.9 billion in 2020 - already a 61% slump from the year before.

Khazanah attributed the 2021 drop to financial aid that it had extended to airlines and tourism companies affected by pandemic movement restrictions, as well as lower value gains and dividend income.

During the year, Khazanah put RM8.7 billion into new investments and divested RM4.8 billion of assets to raise liquidity.

Source: AsianInvestor

The head of Malaysia’s Employees Provident Fund (EPF) said it has allocated RM1 billion ($239 million) for investments in domestic asset classes in 2022.

The strategy aims to reap the gains of economic recovery as the latest statistics show that the labour market is recovering from the Covid-19 pandemic.

There is an “investment trap” – a funding gap between the time a company moves from the venture capital market and enters the pre-initial public offering stage, said chief executive Amir Hamzah Azizan at a media briefing last Wednesday (Mar 2) on the EPF’s 2021 financial results.

He added this gap presented investment opportunities that the EPF will explore with specific fund managers. He also announced the EPF will pay a dividend of 6.1% to its more than 14 million members for 2021, its highest rate in three years.

The EPF portfolio has increased 0.8% to RM1.01 trillion despite emergency withdrawals of RM110 billion to help Malaysian workers battle the impact of the pandemic over the past two years. The dividend for 2021 exceeded the previous year's 5.2% as well as the 5.45% for 2019.

Source: The Sun Daily

Ex-Goldman Sachs banker Tom Leissner said fugitive Malaysian financier Jho Low, the alleged mastermind of the scheme to defraud Malaysia’s sovereign wealth fund 1MDB, had told him that he had won support from allies of former US President Donald Trump for a possible settlement of a probe to drop charges against several accused persons.

According to Leissner, the star witness in an ongoing trial of Roger Ng, another former Goldman banker, Low had told him in a meeting in 2017 that he had met with Jared Kushner, Trump's son-in-law, in Beijing, and had hired Chris Christie, the former Republican governor of New Jersey, as his lawyer with the promise of a $10 million fee if the settlement was successful.

Meanwhile, Christie, who had represented Low in civil forfeiture actions in California previously, has denied the allegation, while Kushner could not be reached for comment.

Leissner has pleaded guilty to money laundering and bribery charges in connection with the case and is helping the authorities in their investigations.  

Source: Reuters


Singapore’s sovereign wealth fund GIC said it will comply with economic sanctions imposed by its government on Russia in response to its invasion of Ukraine.

Among the sanctions announced on Saturday (Mar 5) were financial measures targeted at Russian banks, entities and activities in Russia, as well as fundraising activities benefitting the Russian government.

The prohibitions apply to buying and selling new securities, providing financial services that facilitate new fundraising, and making or participating in the making of any new loan to the entities owned or controlled by the Russian government and the Central Bank of the Russian Federation.

"Our client, the Government of Singapore, has said ... that it will cease investing in newly issued securities by the Russian government; the Central Bank of the Russian Federation; or any entity owned or controlled by them or acting on their direction or behalf,” said a GIC spokesperson.

"This includes investments of government’s funds managed by GIC. GIC continues to assess the Russian-Ukrainian situation and will ensure compliance with all applicable laws and regulations." 

According to a Business Times report on Thursday (Mar 3) that quoted the Global SWF’s March newsletter, GIC’s exposure to Russia is estimated at $0.2 billion while Temasek Holdings, another Singapore sovereign wealth fund, is exposed to about $0.3 billion.

Source: CNA  Business Times

Singapore state-owned investment firm Temasek Holdings has committed capital to New Forests Tropical Asia Forest Fund 2, a new Southeast Asia forestry fund managed by Sydney-based New Forests.

Temasek is among investors including Sumitomo Mitsui Trust Bank that are investing $120 million into the Fund, according to Sydney-based New Forests Chief Executive David Brand. He told Bloomberg that he anticipates an annualised return of between 14% and 18% over its 10-year life.

The forestry fund will search for higher value hardwood timber assets, such as teak, that can be used for furniture and flooring, rubber. The investment comes as Singapore plans to ratchet up the tax it charges on green-house gas pollution to S$25 (74 cents) a ton from S$5 when it was first implemented by 2024.

Source: SWFI; Bloomberg


Taiwan pension funds supervised by the Bureau of Labor Funds (BLF) incurred an investment loss of NT$118.1 billion ($4.2 billion) in January, dragged down by market volatility amid concerns about US rate hikes, the coronavirus pandemic, supply chain woes and geopolitical risks.

That was a turnaround from the NT$29.55 billion investment gain a year ago. The eight pension and annuity funds registered an average loss of 2.2% in January versus a 0.61% gain 12 months ago.

“The US Fed is set to raise interest rate with the mounting inflationary pressure. This, coupled with the ongoing Covid-19 impact, as well as the worsening of global supply chain and geopolitical risks, is deteriorating global market volatility,” BLF says in a monthly report on March 1.

Source: Asia Asset Management

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