Weekly Digest: HKMA, MAS monitor SVB fallout; NPS takes hit
TOP NEWS OF THE WEEK
Ripples from the collapse of Silicon Valley Bank (SVB) has reached Hong Kong’s shores, prompting the local monetary authority to assure depositors that the city’s banking system is sufficiently protected from the second major collapse of a US bank since 2008.
At least 13 Hong Kong-listed technology and biotech firms have deposits totalling $217.23 million at SVB, with amounts ranging from $400,000 to US$175.5 million.
SVB’s Hong Kong office in Jardine House was empty on Monday morning.
The Hong Kong Monetary Authority (HKMA) said that SVB is not authorised to carry out banking operations or take deposits in Hong Kong.
Source: South China Morning Post
The Monetary Authority of Singapore (MAS) said the country’s banking system has insignificant exposures to the failed banks - SVB, Silvergate Bank and Signature Bank - in the US, the central bank said.
MAS is in close touch with Enterprise Singapore to assess any potential impact of international developments on Singapore start-ups, including those with operations in the US.
The initial feedback indicates that the impact is limited. MAS and other government agencies will continue to monitor the situation closely for any signs of stress, the statement said.
Korea's National Pension Service (NPS) has taken a hit from the recent collapse of SVB.
The NPS, manager of the world’s third-largest public pension fund, owns some 100,000 shares in the Silicon Valley Bank, which was valued at around $23.2 million as of the end of last year.
The NPS said it is looking for ways to respond to the Silicon Valley Bank incident, according to local media reports.
Source: Korea JoongAng Daily
OTHER INVESTMENT NEWS
QIC has submitted designs for a mixed-use complex worth A$750 million (~$500 million) that will be located directly across from the Albert Street Cross River Rail station in Brisbane.
The proposed 101 Albert Street 40-story structure blends commuter amenities and services with a mix of commercial, retail, and residential spaces, as well as adaptable layouts made to accommodate a variety of tenants.
Subject to approvals, construction of the Albert Street precinct is expected to be completed by late 2027.
China will set up a new financial regulatory body, National Financial Regulatory Administration, to replace the China Banking and Insurance Regulatory Commission (CBIRC) and bring supervision of the industry, excluding the securities sector, into a body directly under the State Council, according to the just-concluded National People’s Congress in Beijing.
China's financial sector is overseen by the People's Bank of China (PBOC), the CBIRC, and the China Securities Regulatory Commission (CSRC), with the State Council's Financial Stability and Development Committee having overall responsibility.
Under the new plan, CBIRC's responsibilities would move to the new entity along with certain functions of the PBOC and CSRC.
Source: National People’s Congress
Canada's Manulife Financial plans at least two more top-tier hires in China this month as it targets the pensions business after taking full control of a joint venture, senior executives said.
After becoming the first foreign financial firm in November to receive regulatory approval to wholly own a mutual fund joint venture, Canada's largest insurer has shaken up the unit's management by appointing a new chairman and an interim general manager, and, for the first time, a chief operating officer.
It is now hiring for two roles - a general manager to lead the unit after a transition period and a newly created role of deputy general manager for fixed income - which it hopes to fill before the end of March.
Hong Kong billionaire Richard Li’s insurance company FWD Group Holdings on Monday announced that it has refiled, for a third time, the initial public offering application with the Stock Exchange of Hong Kong.
The company resubmitted listing documents with updated financial data, after its September application lapsed. The insurer is still seeking to raise about $1 billion in a share sale, said people familiar with the matter. The IPO, whose proceeds will be used to fuel the firm’s growth, could come as soon as in the second quarter depending on market conditions, the people said, asking not to be identified as the information is private.
FWD was initially looking to go public in the US, where it had filed for an IPO that could have raised as much as $3 billion in 2021. The company in December 2021 decided to switch its listing venue to Hong Kong and applied for a share sale in the Asian financial hub two months later. The insurer refiled in September after the first application lapsed.
Source: FWD Group; Bloomberg
Hong Kong tycoons Richard Li Tzar-kai and Ronnie Chan Chi-chung, as well as a number of global financial and philanthropic heavyweights, are expected to attend a high-level forum aimed at attracting the world’s biggest family offices to Hong Kong.
The Wealth for Good in Hong Kong Summit will be held at the Hong Kong Palace Museum in West Kowloon Cultural District on March 24.
Other unconfirmed speakers for the session on philanthropy include Cao Dewang, chairman of Fuyao Glass, and Robert Rosen, the director of the Bill & Melinda Gates Foundation. Cherie Blair, wife of former UK prime minister Tony Blair, is also on the list of proposed speakers.
Source: HKSAR Government; South China Morning Post
AIA invested $6.3 billion and $4.3 billion in healthcare and ESG bonds, respectively in 2022 as part of sustainable investments under its ESG strategy.
The strategy allocates capital to companies that commit to sustainable outcomes, investing for the future, and lowering AIA’s exposure to the rest of stranded assets in a future low-carbon economy.
The expansion comes after Prudential’s inclusion in the Shenzhen-Hong Kong Stock Connect programme and the Hang Seng Composite Index in September last year.
Sovereign wealth fund, Abu Dhabi Investment Authority (ADIA), is close to investing $500 million in Indian eyewear unicorn Lenskart, Bloomberg reported.
The investment is already being finalised, according to the report. Bloomberg sources said the deal will boost Lenskart’s valuation to more than $4 billion and may be announced soon.
National Pension Service's (NPS) will consider climate change as part of its stewardship activities going forward, the welfare ministry said on March 7.
A panel that oversees the NPS fund management policies decided to add climate change, along with industrial accidents, to its list of focus areas for responsible investment activities, the ministry said in a statement.
The South Korean government is pushing to create a second sovereign wealth fund, following Korea Investment Corporation (KIC), that focuses on startups and venture companies in a bid to discover new growth engines, moving away from the semiconductor and automobile-centered industrial structure.
This move is aiming to bring vitality to the domestic venture business market, which recently saw investment fall significantly amid a global economic slowdown and high interest rates. The Ministry of Trade, Industry and Energy will announce an industrial transformation plan as early as May, according to a government source on March 12.
“The conservative investment culture that does not want to lose money is holding back the growth of startups,” a high-ranking government official said. “Separately from KIC, we are considering creating a so-called KIC II to invest in growth capital.”
Source: Maeil Business News Korea
Lotte Insurance and Meritz Securities are locked in a heated tug-of-war over the brokerage's sale of $160 million (W210 billion) of risky fund products which incurred huge losses. The controversial fund was established in December 2018. The Lotte affiliate invested $50 million in the fund about two months later.
In early March, Lotte Insurance brought its complaints to the Financial Supervisory Service (FSS) and asked the authority to review possible illegalities in the sales of the fund in which a group of other Korean institutional investors, such as the KDB Life Insurance, Korea Exchange and Korean Teachers' Credit Union, also invested.
Source: The Korea Times
The stewardship committee of South Korea’s National Pension Service (NPS), which decides on how it will exercise voting rights at shareholder meetings for major listed companies, is set to reinforce its expertise by filling some of its seats with financial and investment experts.
The new committee will decide on the exercise of voting rights at a shareholder meeting of major companies this month and is expected to play a direct role in deciding the direction of votes for companies which do not have a dominant shareholder.
Source: Maeil Business News Korea
Investors need to expand their expertise and knowledge beyond mainstream asset classes amid inflation and become well-versed in ESG, according to GIC's fixed-income CIO.
Speaking at the IMAS-Bloomberg Investment Conference and Masterclass 2023, held in Singapore last week, Liew Tzu Mi said the days of low interest rates and low inflation are behind investors, so they must now consider assets previously not needed in a traditional 60-40 portfolio.
"Every investor must eventually become an ESG expert. I just feel that you cannot externalise this to your ESG team or your dedicated team,” she said during a panel discussion at the event.
Source: Pensions & Investments