Weekly investor roundup: Hong Kong's Exchange Fund posts HK$13.2 billion loss; MAS tightens monetary policy in surprise move
TOP NEWS OF THE WEEK
Hong Kong's Exchange Fund, which backs the local dollar, posted a third-quarter investment loss of HK$13.2 billion ($1.70 billion), its first after five consecutive quarters of gains, the Hong Kong Monetary Authority said on October 18. That compared with an HK$81.2 billion investment gain in the same period a year earlier.
The Exchange Fund recorded investment income of HK$126.5 billion during the January-September period this year.
Among the investment income, the loss from Hong Kong equities was at HK$26.3 billion in the third quarter after three straight quarters of gains, and amounted to a HK$13.8 billion loss for the first nine months of 2021.
The Monetary Authority of Singapore (MAS) tightened its monetary policy on Thursday (October 14), taking market watchers by surprise as it marked the central bank's first such move in three years.
The central bank said it would raise the slope of its currency policy band, up from 0%.
MAS cited mounting cost pressure caused by supply constraints and economic recovery as reasons for the change.
Source: Reuters
The Korea Investment Corporation’s assets under management have surpassed $200 billion for the first time, reaching $201 billion by the end of August, which returned 8.05% in the eight months ended August, the sovereign wealth fund said in an annual audit report submitted to the National Assembly.
Alternative assets delivered an annualized return of 8.57% as of end-August, outperforming the 6.68% return from traditional assets.
It has increased US public equity positions from $46.7 billion to $52.5 billion as of August.
To fulfil its public role as a state agency, KIC will establish joint ventures with domestic financial institutions to co-invest in overseas private equities and debts, as well as hedge funds, KIC said in the report.
Source: The Korea Economic Daily; Business Korea
Porcelain Hotel, which comprises 12 four-storey conservation shophouses in Singapore’s Chinatown, is reportedly about to be sold for S$90 million to RB Family Office of property tycoons Raj Kumar and his son.
The 10,143 square foot property has a balance lease term of about 80 years and is currently owned by entities controlled by Jason Lee Boon Leng of JForte Group of Companies.
Source: The Business Times
The National Pension Service (NPS) will hold assets in its venture capital portfolio estimated to exceed 1 trillion won ($842 million) for the first time by the end of this year, since it began investing in the venture capital market in 2002.
According to local investment banking sources, NPS has made more than 500 billion won venture capital investments so far this year, more than double previous investments of 200 billion to 300 billion won. With the increased riskier investments, the venture capital assets total held by the NPS will be increased by more than 10% from last year's 910 billion won.
Source: The Korea Times
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AUSTRALIA
AustralianSuper has joined a consortium to acquire an A$802 million ($592.95 million) logistics development site in Sydney from Qantas Airways.
The 13.8-hectare site is located near Sydney Airport and will undergo redevelopment, pending planning approval, that will include a mix of logistics and office facilities with access to major transport infrastructure and population centres.
The A$233 billion AustralianSuper has over $10 billion invested in property globally with 42% of the portfolio managed by the Fund internally.
Source: AustralianSuper
The EU$108 billion IFM Investors, which is owned by several Australian superannuation funds, has acquired a 10.83% stake in Naturgy Energy Group.
A total of 105,021,887 shares have been tendered at a price of 22.07 euros, representing a total of EUR 2.3 billion.
The fund will actively support Naturgy to help realise its long-term vision which includes a commitment to the energy transition, the fund said in a statement.
Source: IFM Investors
Institutions including super funds Hesta and property investment firm Lendlease have launched an initiative that will work towards strengthening Australia’s First People’s heritage laws.
The Dhawura Ngilan Business and Investor Initiative was launched in response to the destruction of the Juukan Gorge in Western Australia.
The initiative will also work to create and enforce standards for the private sector to uphold the human rights of First Peoples.
Source: Financial Standard
CHINA
China is inspecting the nation's financial regulators, biggest state-run banks, insurers and bad-debt managers for the first time in six years to root out corruption in its $54 trillion financial system.
A team led by the Central Commission for Discipline Inspection (CCDI) will start a two-month anti-graft check of the China Banking and Insurance Regulatory Commission (CBIRC), and accept complaint reports from whistleblowers until Dec 15, said a statement late on Oct 11.
CBIRC chairman Guo Shuqing said the move is a reflection of the Communist Party's focus on financial regulation and told his staff that cooperation with inspectors will be their top priority at the moment.
Goldman Sachs has won approval to take 100% ownership of its securities joint venture in China, bringing the firm one step close to its expansion plans in the country, which includes doubling its staff numbers to 600.
The firm has been looking to strengthen its foothold in the world’s second-largest economy, It boosted its stake in the venture from 33% to 51% in March 2020 and is now the second Wall Street firm to be given approval to have full ownership of its securities operations in China after JP Morgan Chase.
Source: Bloomberg
JAPAN
Japan’s large life insurer Nippon Life Insurance on October 15 announced that it would join the UN-convened Net-Zero Asset Owner Alliance, which means it has set a goal of having net-zero greenhouse gas emissions (GHG) in its investment portfolio by 2050.
As the Japanese government has raised its 2030 GHG emissions reduction target, Nippon Life will set an interim target for the 2030 goal for its investment portfolio. It will also expand net-zero target from current domestic public equities and corporate bonds to those assets overseas.
Source: Nippon Life Insurance
On the same day, Meiji Yasuda Life Insurance also announced that it has joined the Net-Zero Asset Owner Alliance, to contribute to the creation of a sustainable society stated in its 10-year plan “My Mutual Way 2030”.
It will also promote decarbonisation efforts by also joining Glasgow Financial Alliance for Net Zero, through joining Net-Zero Asset Owner Alliance, in preparation for COP26, the annual UN climate change conference that opens on Oct 31.
Meiji Yasuda Life manages $373 billion of assets as of March 31.
Source: Meiji Yasuda Life Insurance
AXA IM Alts, the alternative investment unit of AXA Investment Managers, has acquired two residential assets in Osaka, Japan, from PGIM Real Estate Japan, for ¥10.6 billion ($92.7 million), AXA IM said on Oct 11.
The portfolio consists of two well-located residential buildings offering a total of 346 studio to four-bedroom apartments for the rental market. This acquisition forms part of AXA IM Alts’ wider long-term strategy to invest in residential asset classes which it believes are supported by strong demographic drivers.
AXA IM is one of the most active real assets investors in Japan.
Source: AXA IM
KOREA
The California State Teachers’ Retirement System (CalSTRS) and Korea's Public Officials Benefit Association (POBA) have invested a combined $317.2 million in US real estate debts so far this year via their $600 million co-investment fund, according to a local media report.
The debt investments were made on three multifamily housing facilities and a multi-asset portfolio, the Financial News said on Oct 15.
Source: The Korea Economic Daily; Financial News
Korea Post Insurance announced on Monday that it has selected Mirae Asset Management and Korea Investment Trust Management as its managers for socially responsible investments in its overseas stocks portfolio.
Korea Post Insurance manages $50 billion of assets, according to its website.
Source: Korea Post
Korea Post Savings recorded an 8.45% investment return in the first half of this year, broadly in line with the average rate of return reported by other major Korean pension funds during the same period.
As of the end of June, it manages 83.7 trillion won ($70.5 billion) of assets. Double-digit returns from equities and alternative assets offset flat to negative gains from fixed-income investments, according to Korea Post's announcement on Oct. 8.
Source: The Korea Economic Daily
Teachers’ Pension has opened its third tender of 2021, which is an 80 billion won ($67.4 million) venture capital mandate focusing on the new technology sector. It will select four asset managers for the blind fund with an eight-year investment period, the pension fund says in a request for proposal on October 5.
Each manager will be appointed for a four-year term, with the possibility of an extension subject to performance. Applications are open until October 19, with evaluation and manager selection scheduled by the end of November.
Source: Asia Asset Management
MALAYSIA
The Employees Provident Fund (EPF) disposed 43.47 million shares in four glove companies, amid reports of dwindling prices of rubber gloves that are expected to return to pre-Covid levels.
The glove companies were Top Glove, Hartalega, Kossan Rubber Industries, and Supermax Corp, with Top Glove having the largest sell off by EPF.
Earlier, Maybank Investment Bank and Hong Leong Investment Bank reported an expected slowdown in glovemakers’ average selling price that would lead to a significant decline in earnings.
Source: The Malaysian Reserve
SINGAPORE
State investment firm Temasek will set aside S$1 billion a year to invest into deep-tech, which include advance manufacturing, disruptive materials, net-zero tech, life sciences and food tech.
Deputy Prime Minister Heng Swee Keat revealed the news on Friday (October 15) at the RIE Industry Day 2021 event in Marina Bay. Temasek confirmed to The Business Times that the allocation is an annual one, and part of its plans to invest in innovation.
Source: The Business Times
Czech investment group PPF will sell a 30% stake in telecommunications infrastructure group CETIN to Singapore’s GIC in a deal that would value the group at EU$6.7 billion ($7.76 billion).
CETIN operates in the Czech Republic, Bulgaria, Hungary and Serbia, and the deal is subject to regulatory approvals. PPF will retain the remaining 70% stake, and GIC will be represented on the company’s board.
Source: Reuters
INTERNATIONAL
Omers Infrastructure has acquired a 49% interest in FRV´s Australian renewable energy platform.
Fotowatio Renewable Ventures (FRV), a global developer of utility-scale renewable energy projects and part of Abdul Latif Jameel Energy, announced the sale of a 49% interest in FRV Australia Group to OMERS Infrastructure on Oct 17.
The transaction includes 637 MWDC of six operational and under construction solar PV assets, located in strong parts of the National Electricity Market and whose energy and green products are contracted with high-quality counterparties, as well as a development pipeline comprising of ~2.7GWDC of solar PV projects and ~1.3GWh of Battery Energy Storage Systems assets.
The collaborative partnership investment from OMERS Infrastructure represents an important milestone for FRV who has been active in Australia since 2010. It followed a fundraising process started earlier this year and it will allow the company to achieve ambitious further growth plans in the country.
The transaction is subject to customary regulatory approvals with financial close expected by year end.
Source: Omers