Weekly Digest: China wealth fund to hold meeting in Hong Kong
TOP NEWS OF THE WEEK
China Investment Corporation (CIC) plans to assemble its global advisers in Hong Kong in September for their first meeting outside the mainland since the council was established 14 years ago.
The meeting is sest for September 19 to 20, with the latter date being an investment forum with key political figures. It will be front lined by Zhou Xiaochuan, the former governor of the People’s Bank of China, who headed the central bank for 16 years until March 2018, according to a programme obtained by the Post.
Over 600 participants are expected to join the forum, which will be held at the Ritz Carlton hotel in West Kowloon. A gala dinner will be held on the 18th to welcome the delegates.
Source: South China Morning Post
Malaysia’s Employees’ Provident Fund (EPF) has recorded a jump of almost 40% in its total investment income, to MYR33.19 billion ($7.1 billion) for the first half of the year ended 30 June 2023.
The increase of MYR9.44 billion followed investment income of MYR23.75 billion recorded during the same period in 2022.
Total investment income for the second quarter was MYR18.03 billion, up MYR9.05 billion from the MYR8.98 billion recorded in the same quarter last year.
Equity investments continued to be the main contributor to income during Q2 2023, at MYR9.60 billion. The asset class generated RM4.07 billion of income during the same quarter last year.
A significant portion of the improvement was due to proactive and timely realisations of profit, supported by the mark-to-market securities gains. After taking into account writedowns, those numbers accounted for 53% of the EPF’s total investment income for the quarter.
Source: EPF
Aware Super announced that it has bought the remaining 30% of Brisbane-based retirement living provider Oak Tree Group for an undisclosed sum.
The third largest Australian superannuation fund previously bought a 70% stake in the business in 2017 while the founders retained 30%.
Aware Super’s A$5 billion portfolio includes an existing A$850 million commitment in the build-to-rent sector within Australia, as well as substantial investments in the US, the UK, the Netherlands, and Spain.
Source: Aware Super; The Weekly Source
The Australian Securities and Investments Commission (ASIC) has filed a suit against Active Super over greenwashing claims, according to a release by the regulator.
ASIC alleges, among other charges, that the Australian super fund was invested in Russian assets after the invasion of Ukraine while purporting otherwise to members.
The markets regulator has commenced civil penalty proceedings alleging "misleading conduct and misrepresentations to the market relating to claims it was an ethical and responsible superannuation fund."
ASIC alleges that from February 1, 2021 to June 30, 2023, Active Super "held 28 holdings, either directly or indirectly, which exposed members to securities it claimed to restrict."
Source: ASIC
CHINA
China’s securities regulator is soliciting suggestions from market participants about how to speed up development of the asset management industry, people familiar with the matter said, after leaders recently vowed to boost investor confidence.
China Securities Regulatory Commission (CSRC) has asked some asset managers to come up with research reports on the topic, according to the people, who asked not to be identified as the matter is private.
The steps come after a gathering in July of the Communist Party’s 24-member top decision-making body resulted in a rare pledge to “invigorate capital markets and boost investor confidence.”
The CSRC is making the requests specifically about the asset management business of securities firms, fund managers and futures companies—the areas it oversees. Assets under management by such firms stood at 67 trillion yuan ($9.2 trillion) as of March 31, according to data from the Asset Management Association of China.
Source: Bloomberg
JAPAN
Japanese insurance giants are shifting more of their $2.6 trillion in investment money to private credit, giving a further boost to the growing asset class.
Dai-ichi Life Insurance and Nippon Life Insurance are among companies that are seeking more investments in private credit, attracted to their floating interest rates as global borrowing costs jump.
Others are weighing making allocations for the first time as Japanese insurers wrestle with dramatically surging hedging costs for their foreign investments.
With the Bank of Japan’s monetary policy out of sync with other major central banks around the world, the yen has weakened and made the cost of hedging foreign bond investments prohibitively expensive.
That IS pushing Japanese insurers to grab premiums offered by illiquid assets such as private credit.
Source: Bloomberg
KOREA
Korea Development Bank’s alternative investment unit, KDB Infrastructure Investments Asset Management Co, is looking to hire a sub-manager for its 50 billion won ($37.2 million) corporate renewable energy fund of funds.
The fund, which has a 25-year investment period, invests in Korean companies which are recognised by Renewable Energy 100, a global corporate renewable energy initiative that aims to get influential businesses in the world to commit 100% to renewable electricity by 2050.
It is led by Climate Group, a London-based group that promotes net zero carbon emissions.
According to KDB Infrastructure’s request for proposal on August 11, the fund will be required to allocate at least 80% of its assets to investment trusts, and a maximum of 20% to equities.
Source: Asia Asset Management
SINGAPORE
The Monetary Authority of Singapore (MAS) has unveiled a new regulatory framework for stablecoins, following a public consultation in October last year.
MAS’s stablecoin regulatory framework will apply to single-currency stablecoins pegged to the Singapore dollar or any G10 currency that are issued in Singapore.
Many jurisdictions have or are setting up regulatory frameworks for stablecoins, including the US, where a bill to establish a rules framework for stablecoins is before Congress.
Source: MAS
Singapore state investment company GIC, in partnership with real estate management and development firm Barzel Properties, has completed the acquisition of five distribution centres and four retail stores through a sale-leaseback contract with Carrefour Brazil Group in a transaction valued at approximately BRL$1.2 billion ($241 million).
The transaction is supported by a 20-year renewable lease contract with retail and private employer Carrefour Brazil Group.
Lee Kok Sun, GIC’s chief investment officer for real estate, said the company was is confident in the portfolio’s long-term potential, which he said was underscored by the stores’ strong operational performance and warehouses’ strategic locations in major logistics markets.
GIC opened its first office in Brazil in 2014, seeking more investment opportunities in Latin America. The office focuss on areas such as real estate, healthcare, financial services, natural resources and infrastructure.
Sources: GIC, Business Times
TAIWAN
Taiwanese banks, insurers and securities firms have NT$1.12 trillion ($35 billion) exposure to China’s financial and property sector, a level that the Financial Supervisory Commission (FSC) considers “controllable”.
Taiwan’s banking, insurance, and securities and futures industries have no exposure to Zhongzhi Enterprise Group, the commission said.
As for Country Garden Holdings, there are only 22 professional investors who are clients of five Taiwanese banks that have bonds issued by the Chinese property developer, totaling NT$170 million, while one local bank reported US$9.02 million in loans to the firm, the commission said.
Source: Taipei Times
THE PHILIPPINES
The Philippines’ Department of Finance is considering an asset transfer to the Government Service Insurance System (GSIS) to improve the state-run pension fund's balance sheet for when it takes responsibility for managing the country’s military pension system.
A House panel last week gave the go-ahead to a plan to consolidate 12 earlier bills that had sought to reform what Finance Secretary Ben Diokno described as an "unsustainable" system that could result in a "fiscal collapse".
The newly approved system requires new scheme members to contribute a portion of their monthly salary to the fund. At present, military and uniformed personnel are not required to contribute to pension funds since their pensions are covered in the Philippines’ national budget.
Under the plan, GSIS will manage and invest the contributions made by scheme members.
Source: CNN Philippines