Asia Pacific Media Coverage

Transcription

1 Asia Pacific Media Coverage 3 October 2016 Australia The Australian: Big disruptions will take time, admits Silicon Valley veteran An article noted that State Street s emerging technologies centre, which explores and prototypes disruptive technologies, said it is simply not realistic to expect big companies to focus most of their efforts on disruption rather than innovation that will quickly bring cash through the door and cut costs. Hu Liang, senior managing director and head of the Emerging Technologies Center at State Street, commented in an interview, The incremental stuff is what actually generates immediate revenue and for any large company you have to have that. o Hu noted that institutional-focused players like State Street find it easier to try new things while generating solutions for the short-term as opposed to companies like banks servicing retail clients. In the institutional financial space we re not like the retail side, which is actually more susceptible to disruption because a start-up company can go directly to the customer and disintermediate, he said. o According to a survey by State Street last month, Australian asset owners and managers are leading the way on blockchain. 44% have initiatives under way to support the new technology s rise, above the 33% in the Asia-Pacific. Hu said that while the blockchain distributed ledger technology would probably end up being used differently to how people expect today, various efforts to promote usage would soon bear fruit. o The article also mentioned that State Street, which has USD 28 trillion in assets under custody and administration, and USD 2 trillion under management, was one of the first institutions to sign up to global blockchain consortium, R3. Australian Financial Review: Stock pickers left out of $50 billion emerging-markets rush AFR cited a Bloomberg article which mentioned that emerging-market stocks have rallied 15% this year while many money managers are still holding less than recommended by benchmarks. The article noted Antoine Lesne, Head of ETF sales strategy EMEA at SSGA, as saying, While a pension fund may use an ETF from a tactical standpoint, they might start to look at investing larger sums, maybe through segregating mandates and actively managed funds as well. The largest flows may be still waiting to be triggered. Singapore BT Weekend: Stock-pickers left out as US$50b rushes to EM The Business Times Weekend picked up on a Bloomberg report on the popularity of passive funds as a means to accessing emerging markets stocks in light of this year s EM rally. The article quoted Antoine Lesne, an ETF strategist for Europe, the Middle East and Africa at State Street Global Advisors, as STATE STREET CORPORATION 1

2 saying, While a pension fund may use an ETF from a tactical standpoint, they might start to look at investing large sums, maybe through segregating mandates and actively managed funds as well. The largest flows may still be waiting to be triggered. Hong Kong Asia Asset Management: JPI establishes alternative investment division The article reported that Japan Post Insurance has launched an alternatives division in order to seek investment opportunities in plain vanilla asset classes. The article noted that as a result of the persistent negative interest rate environment, an increasing number of Japanese institutional investors have been seeking out investment opportunities in alternatives to boost their returns. The Government Pension Investment Fund unveiled an initiative in June 2015 to enlarge its allocation to alternatives, going up to 5% of its total assets in the long-run. The fund hired State Street Trust and Banking Co. in April as custodians for its alternative investments. Asia Asset Management (Print version): No pain, no gain The article noted that State Street s survey, entitled Pensions with Purpose: Meeting the Retirement Challenge, revealed that managing longevity risk forms a key priority in developed markets across Asia Pacific. Beng-Eu Lim, APAC head of asset owner sector solutions at State Street, remarked, Asset owners are adopting more sophisticated investment strategies, [and are] chasing yields in a low-rate environment via more complex and illiquid alternative asset classes. This, in turn, is making it harder to assess their portfolio s true value. Asia Asset Management (Print version): Working with a blank canvas The article discussed the impact and development of Fintech in financial industry, and quoted Ian Martin, executive vice president and head of global markets and global exchange APAC at State Street, who commented, At the moment, the vast majority of Fintech start-up attention, and therefore investment, is in five areas: payments and banking; blockchain; P2P financing; robo-advice; and regulatory-focused technology They are creating services focused on payments, banking and investing using mobile devices, P2P payments, and in some cases, cross-border payments that include low-cost foreignexchange services. Asia Asset Management (Print version): Japanese institutional investors demonstrate increasing appetite for ETFs In an interview with Asia Asset Management on the growing interest in global ETFs in Japan, Masaki Sugihara, vice president and head of ETFs at SSGA Japan, noted that Japanese institutions have continued to invest in traditional fixed-income products, particularly Japanese government bonds, as a core part of their portfolios, seeking stable incomes even as yields continue to decline. Sugihara said, We ve seen an increase from Japanese institutions for information on ETF trends, strategies and product options, in particular from asset managers, to use ETFs in their multi-asset portfolios to achieve absolute returns. Asia Asset Management (Print version): Delivering the goods Asia Asset Management spoke to experts, including Julien Lepine, vice president, senior investment strategist at SSGA, on trends related to institutional investing in alternative asset classes in Asia. He commented that the reality of a low and slow growth outlook is starting to sink in with investors. In STATE STREET CORPORATION 2

3 search for yield, investors are considering new sources of returns and diversification, and ultimately are moving their allocations from traditional listed investments to alternative asset classes. Asia Asset Management (Print version): Striking it rich In an interview with Asia Asset Management on gold investment, Robin Tsui, ETF gold specialist at SSGA, noted that Brexit was a key event in the first half of 2016 that led to a significant sell-off in equities and a massive inflow to gold ETFs. He noted that continuous market uncertainty will fuel the flight to defensive asset classes going forward. Finet.hk: Bond veterans: investors may not realise 35 years of bond market gains may be over The article cited Reuters report on bond bubbles which noted that economists argue that shifts in demographics and globalisation are finally turning the tide, while policy-watchers say the Bank of Japan s commitment to draw a line under further falls in yield is the watershed moment they have been waiting for. Michael Metcalfe, head of global macro strategy at State Street, said, You can easily imagine looking back on last week in two or three years time and saying the BOJ was the start of this. Japan Asahi Shimbun: Succession of low-cost funds appearing A column on investment trusts mentioned that a succession of new investment trusts that have low trust fees are being launched, which is also reaching investment trusts that invest in real estate investment trusts (REITs). The article is accompanied by a table showing three low-cost fund series, including State Street Index Open. The series and its trust fees are: domestic equities (0.170%), domestic bonds (0.130%), developed countries equities (0.200%), developed countries bonds (0.170%), emerging countries equities (0.290%), and emerging countries bonds (0.120%). STATE STREET CORPORATION 3

4 Full Articles The Australian Big disruptions will take time, admits Silicon Valley veteran Large companies will inevitably spend the majority of their time and investment on incremental innovation and there s nothing hugely wrong with that, says Silicon Valley veteran Hu Liang. The San Francisco-based head of State Street s emerging technologies centre that explores and prototypes disruptive technologies says it s simply not realistic to expect big companies to focus most of their efforts on disruption rather than innovation that can quickly bring cash in the door and cut costs. The incremental stuff is what actually generates immediate revenue and for any large company you have to have that, he told The Australian on a visit to Sydney last month. For us really it s a pipeline of ideas, so part of it is figuring out how you really create these disruptive ideas for the long term and through looking at these you re going to distil it down to more reasonable ideas you can put into product development pipelines. Hu, however, notes that institutional-focused players like State Street can more easily try new things, while also generating solutions for the short term, than companies like banks servicing retail clients. In the institutional financial space we re not like the retail side, which is actually more susceptible to disruption because a start-up company can go directly to the customer and disintermediate, he notes. In the institutional space, there is a bit of a barrier, which institutions themselves have, which is regulators and the knowledge of how institutional investment works. The comments add to the long-running debate about sustaining versus disruptive innovations, with many companies criticised for prioritising the former or too slowly embracing the latter. Hu s views are also topical for Australia as financial services companies including the major banks increasingly set up internal innovation labs and venture capital arms to keep abreast of changing technology and disruption in retail banking and wealth management. According to a survey by State Street last month, Australian asset owners and managers are leading the way on so-called blockchain, with 44 per cent having initiatives under way to support the new technology s rise, above 33 per cent in the Asia-Pacific. Hu, who has been closely involved in State Street s work with global blockchain consortium R3, which features Australia s banks, says that while the blockchain distributed ledger technology would probably end up being used differently to current expectations, various efforts to promote usage would soon bear fruit. I would think if, in the next couple of years, we don t see some smaller-use cases that are blockchaininspired, then as an industry we re probably falling behind, he says. But if we are starting to see those use cases between limited counterparties, then I do see we will have a faster adoption rate, and hopefully groups like R3 will be able to provide that uniforming platform for people to jump on. State Street, which has $US28 trillion in assets under custody and administration, and $US2 trillion under management, was one of the first institutions to sign up to R3. STATE STREET CORPORATION 4

5 Since being developed to record transactions for the digital currency bitcoin, blockchain has received some of the greatest interest and funding from financial services companies trying to leverage its ability to process transactions of assets much faster, potentially without the need for a central party for settlement. National Australia Bank recently successfully used the blockchain technology powered by global start-up Ripple to test an international transfer of $10 with Canadian Imperial Bank of Commerce. State Street s survey found 77 per cent of Australian asset owners and managers expect blockchain to be widely adopted in the investment industry in the next five years. But 43 per cent said they didn t know enough about blockchain and needed more education. Almost two-thirds also worried about security, a key hurdle the industry is trying to overcome to drive widescale adoption. Hu says despite some observers claiming blockchain is at a similar stage to the internet in the 1990s, it s more like the internet in the 80s we re still at the academic (stage). He says the main benefit for banks will be cost reductions and forecasts that blockchain could first be widely adopted in the counter derivatives market because transactions are often between two parties. STATE STREET CORPORATION 5

6 Australian Financial Review Stock pickers left out of $50 billion emerging-markets rush A glance under the hood of this year's emerging-market rally signals many investors aren't yet convinced an economic rebound in developing countries has taken hold. While a net $US50 billion rushed into developing-country stock and bond funds in 2016, only 20 per cent went into shares and all of that to lower-cost passive exchange-traded funds tracking indexes. Active moneymanagers of equity portfolios suffered outflows of almost $US11 billion this year through September 23, according to data company EPFR Global. These stock-pickers charge more and typically only attract clients once they're convinced an investment case has legs. By favouring bonds and passive strategies, the flows signal that although major emerging economies such as Brazil and Russia will probably pull out of recession next year, investors aren't yet ready to bet that growth will be fast enough to drive a rebound in corporate profits. Projected earnings per share for companies in the MSCI Emerging Markets Index are still 18 per cent below their five-year average, even after rising 2.4 per cent in "Investors see opportunities, but they have reservations about the longer-term prospects for emerging-market equities," said Maarten-Jan Bakkum, a senior strategist who recommends buying Indian and Indonesian stocks at money manager NN Investment Partners in The Hague, which has about $219 billion in assets. "To invest in an actively managed fund with a higher management fee, conviction also about the longer term must be higher." Emerging-market stocks have rallied 15 per cent this year, on course to beat peers in industrialised countries for the first time since When shares started climbing this year, many money managers were still holding less than recommended by benchmarks. The quickest way to reverse underweight positions is to buy into an ETF, said Thomas de Saint-Seine, who oversees about $4.2 billion in stocks at RAM Active Investments SA in Geneva. "A lot of institutional investors were underweight that market, so they're catching up," he said. Growth in emerging economies will probably accelerate to a four-year high of 4.9 per cent on average in 2017, according to estimates compiled by Bloomberg, an outlook supporting the rally in stocks. That's short of 7.8 per cent in 2010 and Goldman Sachs Group Inc. said this month it doesn't expect a return to those "halcyon days" any time soon with Chinese expansion at a quarter-century low. Investors can still find shelter in emerging stocks from sub-2 per cent developed country growth and slower European corporate profits. While the MSCI Emerging Markets Index retreated 0.9 per cent on Friday, analysts project an almost 10 per cent gain in the next 12 months, bringing it above 1000 for the first time since June 2015, data compiled by Bloomberg shows. That advance may start to benefit active managers more than ETFs. MSCI Inc. said on Wednesday some countries and industries are beginning to perform better than others. When there is disparity of returns within an index, active managers have an opportunity to outperform because they can discard stocks they expect will lag whereas ETFs must track the entire benchmark. STATE STREET CORPORATION 6

7 RAM's de Saint-Seine turned away potential clients last month from the $2.9 billion Systematic Emerging Markets Equities fund he manages after it attracted $400 million in net inflows this year. He allocates more than 50 per cent of assets to small and medium-sized companies which are less easy to trade than larger stocks and expanding the fund threatened to stoke volatility. "While a pension fund may use an ETF from a tactical standpoint, they might start to look at investing larger sums, maybe through segregating mandates and actively managed funds as well," said Antoine Lesne, an exchange-traded fund strategist for Europe the Middle East and Africa at State Street Global Advisors in Brussels. "The largest flows may be still waiting to be triggered." For now, passive funds are the most popular way to access emerging stocks that are on course for their biggest quarterly return since Investments in developing-country ETFs listed in the U.S. that buy equities and bonds have topped $21 billion over 17 weeks, according to data compiled by Bloomberg. "The growth outlook is still too meagre to really believe that we will have some great years ahead," said Bakkum at NN Investment Partners. "But by year-end I think emerging-market equities will be higher than current levels" and active funds will start joining the party, he said. Bloomberg STATE STREET CORPORATION 7

8 BT Weekend to Stock-pickers left out as US$50b rushes to EM STATE STREET CORPORATION 8

9 Asia Asset Management JPI establishes alternative investment division Japan Post Insurance (JPI), an affiliate of state-owned Japan Post Holdings (JPH), has launched an alternatives division in order to seek investment opportunities out of plain vanilla asset classes. According to Private Equity International, the new alternatives division would operate out of JPI s head office in Tokyo. However, JPI has not revealed the proportion of assets it intends to allocate to alternative investments, which includes private equity, real estate, infrastructure and hedge funds. JPI, also known as Kampo, is the life insurance arm of the Japan Post Group, which is mainly engaged in offering a range of insurance products such as endowments, whole life, accident, and annuities from more than 20,000 post offices nationwide. It currently manages approximately US$800 million worth of life insurance assets. JPI s formation of an alternatives division comes ten months after its sister company, Japan Post Bank (JPB), established a private equity division in December last year. Its aim is to generate higher returns and diversify beyond its domestic bond holdings, which have been hit by negative yields. JPB, which manages a portfolio of about $1.8 trillion, previously stated that it would allocate up to 5% or roughly $90 billion to alternatives. Earlier this year, the bank also established a new division for real estate assets. According to JPI s latest financial report, the company recorded 44.3 billion yen ($438 million) in ordinary profit for the three months ended June 30, 2016, down 58.7% from billion yen in the same period a year earlier. Both JPB and JPI were listed on the Tokyo Stock Exchange through the JPH s initial public offering in September Under the persistent negative rate environment, an increasing number of Japanese institutional investors have been seeking out investment opportunities in alternatives to boost their returns. For example, the Government Pension Government Fund (GPIF), the world largest pension with total assets of $1.33 trillion, unveiled an initiative in June 2015 to enlarge its allocation to alternatives to up to 5% its total assets in the long run. In doing so, the GPIF hired State Street Trust and Banking Co in April as custodian for its alternative investments. STATE STREET CORPORATION 9

10 Asia Asset Management(September Issue) No pain, no gain STATE STREET CORPORATION 10

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12 Asia Asset Management(September Issue) Working with a blank canvas STATE STREET CORPORATION 12

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15 Asia Asset Management(September Issue) Japanese institutional investors demonstrate increasing appetite for ETFs STATE STREET CORPORATION 15

16 Asia Asset Management(September Issue) Delivering the goods STATE STREET CORPORATION 16

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19 Asia Asset Management(September Issue) Striking it rich STATE STREET CORPORATION 19

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21 Finet.hk 債市老將警告投資者或許尚未意識到 35 年牛市行情告終 路透倫敦雹 9 月 30 日, 目前還沒有人因為預測全球債市 35 年牛市行情終結而賺到錢, 但這無法讓投資者 停止擔心央行慷慨大放送時期已接近尾聲, 全球市場巨震已經在醞釀之中 當最大的債券基金說出債券價格將下跌, 眾多報紙專欄紛紛警告泡沫即將破滅 重創民眾儲蓄財產時, 即便是 懷疑論者也很難嗤之以鼻, 只把最新這波恐慌情緒視為又一個不靠譜的牛市見底論 一些經濟學家認為, 人口結構以及全球化的變遷, 終於扭轉了債券牛市局面, 而政策觀察家更指出, 日本央行 上周對收益率跌勢畫下一道底線, 正是他們一直在等待出現的分水嶺時刻 但即便對於那些敢於承認轉折的人來說, 在全球缺乏增長和通脹的情況下, 轉折的速度可能會非常慢, 慢得要 讓他們等上數年才能知道自己的判斷是否正確 很容易想象兩三年後, 當你回想起上周的事, 就能知道日本央行是轉折的開端了, 道富環球宏觀策略主管 Michael Metcalfe 說 在全球最大經濟體美國,10 年期公債收益率從 1980 年代初的約 15%, 穩步下降到今年稍早的紀錄低位 1.37% 在日本和德國, 幾十年前 8% 左右的收益率, 到目前已降至尚不足零 這表明對他們債券的需求是如此之高, 以至於投資者寧願付錢來獲得借錢給這些政府的特權 M&G 的分析師團隊稱, 之所以出現這樣的大趨勢, 是因為二戰後人口激增推高了 20 世紀末的勞動力人口數量, 導致薪資通脹低迷, 而對債券等儲蓄資產的需求卻高漲 自 2008 年全球金融危機以來, 央行在維持收益率處於低位方面發揮了更直接的作用 -- 調降利率並推出數以萬億 美元計的購債措施, 盡力提振脆弱的經濟覆蘇 過去十年, 路透調查顯示分析師一直高估債券收益率, 預期央行提振經濟增長和通脹的努力最終將得到回報 所以, 德意志銀行關於拉動市場走勢的人口變化趨勢即將到達 拐點 的斷言, 或者是太平洋投資管理公司 (PIMCO) 關於隨著央行招數用盡債券收益率將升高的預期, 為何現在聽起來更有說服力? 看起來, 發出這些警告部分是因為投資者對金融資產進一步升值的能力正喪失信心 美銀美林公布的最新月度調查顯示, 基金經理認為股市和債市整體而言接近最為高估的水準, 因此大量增持現 金 當 債券泡沫 等字眼開始成為公共討論議題時, 投資者也會憂心忡忡 最近幾周 債券泡沫 在谷歌的搜索 次數創下逾一年以來最高水準, 從悉尼先驅晨報 到德國世界報和英國泰晤士報, 債券泡沫 也出現在眾多 媒體報導上 人們討論地越多, 就變得越有可能發生 投資者的決定是綜合情緒和分析而作出, 因此這是可以變成自我應 驗的, LNG Capital 的首席投資長 Louis Gargour 說 雖然一些債市資深人士都認為, 持續了 30 年的債市漲勢或許已經到頭, 但他們並不認為債市會發生急劇逆轉 STATE STREET CORPORATION 21

22 他們表示, 即便日本央行上周的政策調整是變相承認貨幣政策已達到極限, 但許多政府負債累累, 並沒有什麽空間能夠以財政刺激接下重擔 再加上這些國家的銀行業持有大量債券, 如果收益率急升, 這些債券將大受打擊, 因此政府應該會努力讓通脹處於可控狀態 M&G 的零售固定收益負責人 Jim Leavis 稱, 向貿易保護和勞動政策轉變的跡象, 或將通過薪資方式令某些國家的通脹壓力升高 從英國脫歐公投和美國總統候選人特朗普的言論中就可窺見這類跡象 如果全球化出現倒退, 我想將出現通脹升高, 債市也將處境艱難, Leavis 說道 我們認為現在收益率過低, 但可能在比人們預期更長的時間裏處於低位 但 Leavis 表示, 另一方面, 科技發展或將使很多工作實現自動化, 令薪資承受下行壓力 外界似乎一致認為反通脹的力量占據上風, 這不僅僅因為全球第二大經濟體中國經濟增長放緩 標準人壽的 Andrew Milligan 已從事投資 30 年, 對他而言, 這種情況產生了一種預期, 即雖然債市的火熱或將結束, 但還要等很長時間才會出現逆轉 雖然債市的牛市行情或將終結, 但這並不意味著熊市即將登場 STATE STREET CORPORATION 22

23 Asahi Shimbun Succession of low-cost funds appearing STATE STREET CORPORATION 23