Weekly Digest: Qatar fund invests $1bn in India; CSRC urges pension fund, insurers to boost stock bets
TOP NEWS OF THE WEEK
Qatar’s sovereign wealth fund is set to invest $1bn in Indian billionaire Mukesh Ambani’s retail unit, valuing the shopping company at $100 billion.
The $450bn Qatar Investment Authority will take a 0.99 per cent stake in Reliance Retail Ventures Limited, the Reliance Industries subsidiary announced.
“QIA is committed to supporting innovative companies with high growth potential in India’s fast growing retail market,” QIA chief executive Mansoor Ebrahim al-Mahmoud said in a statement.
He added that Reliance Retail joined the fund’s “growing and diverse portfolio of investments in India”.
The investment will be one of the biggest bets made on Indian retail by the gas-rich Gulf state’s sovereign wealth fund, which has also invested in Indian start-ups including online restaurant company Rebel Foods and delivery group Swiggy.
Source: Reliance Industries; Financial Times
China’s securities regulator called for the national pension fund and some large banks and insurers to expand mid- to long-term investment in the stock market as a prolonged housing slump and sluggish economic growth make China’s stock market among the worst global performers this year.
The China Securities Regulatory Commission (CSRC) summoned executives of financial institutions on August 24 to increase support for the market.
Representatives of the participating financial institutions vowed to help stabilise shares and boost economic development.
Source: China Securities and Regulatory Commission
OTHER INVESTMENT NEWS
AUSTRALIA
The merger between AvSuper and Australian Retirement Trust (ART) has progressed with the super funds agreeing to enter into a heads of agreement (HOA).
This development marks a significant milestone in prioritising the financial interests of their respective members and follows a comprehensive due diligence process.
The merger is expected to be finalised by April 30, 2024.
Although there is still considerable work to be done prior to the completion of the merger, both organisations have established working groups to carefully plan and execute the necessary steps for a seamless transition. These efforts include facilitating the transfer of Defined Benefits accounts to ART.
Source: AV Super
Australian Retirement Trust (ART), the second-largest pension fund in Australia with A$240 billion ($154 billion) in assets, is planning to establish its first overseas office in London by mid-2024, the fund’s chief investment officer Ian Patrick said.
With the London office, ART aims to get closer to its private equity and debt managers and help clinch more co-investment deals, where private managers offer investors direct stakes.
Establishing a physical presence in international markets will enable ART to foster closer relationships with managers and seize potential investment opportunities.
Source: Reuters
CHINA
China's securities regulator met with representatives from top global asset managers to reassure them about the country's economic prospects, as its post-Covid recovery falters, two people with knowledge of the matter told Reuters.
The China Securities and Regulatory Commission (CSRC) held a virtual meeting with at least half a dozen global financial institutions, the sources said.
Fang Xinghai, a vice chairman of the CSRC hosted the meeting from Beijing.
An executive from Fidelity International was among those from the large funds attending, according to one of the sources.
Blackstone's newly established China unit has received regulatory approval to raise funds from domestic investors to invest overseas, joining other global asset managers in seeking to tap Chinese investor demand for foreign assets.
Blackstone registered a fund management unit with the Asset Management Association of China under the qualified domestic limited partnership (QDLP) programme, a notice from the regulator showed.
The unit, which was established in March, has seven full-time employees, including five fund professionals, the notice said.
Source: Asset Management Association of China
Allianz Global Investors received regulatory approval to set up a wholly owned onshore public fund-management company in Shanghai, making it the ninth wholly foreign owned mutual fund manager in China.
The greenlight came five months after the firm filed its application with the China Securities Regulatory Commission (CSRC) in March, making it the fastest approval among other foreign competitors.
It committed Rmb300 million ($41.1 million) to establish the unit.
Source: China Securities Regulatory Commission
HONG KONG
The Hong Kong Monetary Authority (HKMA) will expand the scope of its fintech push in the next 12 months by teaming up with securities and insurance regulators to encourage financial institutions to invest in technology to enhance their services in wealth management, insurance and green finance.
The roadmap announced on August 25 will target banks, brokers and insurance companies. HKMA will work with the Securities and Futures Commission and the Insurance Authority.
The goal is to encourage financial firms to adopt new technologies, including artificial intelligence (AI) and distributed ledger technology (DLT), to enhance their services, reduce costs, and enhance the city’s capabilities as an international financial centre.
Source: Hong Kong Monetary Authority
KOREA
The National Pension Service (NPS) is poised to give investment experts full rights over mid-term asset allocation, in efforts to ramp up the profitability of the fund predicted to be completely drained by 2055 under the current management system.
NPS’ committee for financial calculations included the suggestion in a final report that will be submitted to Ministry of Health and Welfare, according to government sources on August 25.
The report also proposes that NPS should maintain the gross pension replacement rate of 40% and raise the contribution rate, currently 9%, by 3 percentage points every five years to 18%.
It additionally suggests the state pension age should be increased from the current 62-65 to 66-68 to strengthen the financial stability of the fund.
Source: Korea Economic Daily
Teachers’ Pension launched a request for proposals (RFPs) for emerging markets equities mandates of up to W250 billion ($188.4 million).
The pension fund for employees at private schools aims to select four or five managers, with W50 billion each. The mandates’ performances will be benchmarked against the MSCI Emerging Market Index.
The mandates will invest in Ireland- or Luxembourg- UCITS funds at least $200 million each. Deadline for submission of proposals is September 7.
Source: Teachers’ Pension
Korea Post is looking for a manager for a W100 billion ($75.4 million) domestic private market fund mandate for its savings unit.
The fund will be structured as a blind fund, focusing on companies that provide acquisition financing. The fund is required to be established within six months of the manager selection. The fund will mature in eight years, with a four-year investment period.
The deadline for applications is September 4.
Source: Korea Post
PHILIPPINES
The Philippines’ Government Service Insurance System (GSIS) is eyeing a nearly 60% boost to its net income this year, according to local media outlet PhilStar Global.
According to the report, which quoted GSIS executive vice president Michael Praxedes, the public service pension fund has set an internal target of PHP120 billion ($2.12 billion) in net income for 2023, 58% higher than the PHP75.99 billion it made last year.
GSIS’s net income soared to PHP61 billion in the first half of the year from PHP3 billion during the same period in 2022, the report said. Its revenue leapt 84% to PHP144 billion, thanks to double-digit increases in gains on equities, interest income and stock dividends.
As of the end of June, GSIS’s total assets under management were worth PHP1.6 trillion, up 8% on a year earlier.
Source: PhilStar Global
SINGAPORE
Funds linked to Singapore’s Central Provident Fund Investment Scheme (CPFIS) rose 2.55% during the second quarter of the year, according to a report by the Singapore Business Review that quoted data from Morningstar.
That performance was down from a 3.39% return in Q1, according to Morningstar data.
During the second quarter, the CPFIS’s equity funds gained 3.4%, following a 4.01% rise during the first quarter. Its bond funds rose by 0.21%, allocation funds gained 1.71%, and money market funds were 0.89% higher.
The report quoted Morningstar associate director of manager research Bryan Cheung as having said that the CPFIS’s gains may come under pressure going forward as Singapore’s economic growth is expected to slow in the third and fourth quarters of 2023.
Source: Singapore Business Review