Weekly roundup: Australia super mergers; FWD's Malaysian life insurer stake acquisition
TOP NEWS OF THE WEEK
Australian Retirement Trust and AvSuper have signed a Memorandum of Understanding (MoU) to explore a merger, and have already commenced the due diligence process.
The expectation is that the merger, if approved, will be completed later this year.
The previously proposed merger between AvSuper and Commonwealth Superannuation Corporation was unable to proceed under the current legislative timetable as required changes were unlikely to be delivered in 2023.
OTHER INVESTMENT NEWS
The Australian government published a consultation paper to legislate the objective of superannuation funds to deliver sustainable retirement outcomes.
The proposed objective is to preserve savings to deliver income for a “dignified retirement” in an equitable and sustainable way, with government support.
The reforms would enable investment by funds in projects that boost housing supply, manage climate change and spur digital transformation, Treasurer Jim Chalmers said during a business breakfast in Sydney.
The consultation recommends that the proposed objective of superannuation funds be written in to law to provide stability and certainty for regulators, policymakers, and government.
This action could improve accountability and transparency in policy development as well as strengthen the community's trust in the super system, benefiting both members and funds, according to the Treasury document.
The consultation period ends on March 31.
Source: Treasury.gov.au; AFR
China abruptly removed the Communist Party chiefs from two of its biggest state-owned financial firms, sparking concerns of a renewed clampdown on the sector.
Luo Xi, 62, will no longer serve as party secretary of the People’s Insurance Co. Group of China (PICC) said in a statement on its WeChat account on February 17. No reason was provided.
The announcement came days after online criticism that Luo, who remains chairman of the firm, was building a personality cult when the company demanded employees recite his “golden quotes.”
PICC Group’s life insurance unit posted an internal notice on its WeChat account early this month, requiring all employees to memorise Luo’s quotes before taking a test on them, local media reported.
The Hong Kong government on February 15 announced the members of the Hong Kong Investment Corporation’s (HKIC) board of directors.
The board is responsible for formulating the corporation’s investment strategies and mandate, taking decisions on investment projects, and ensuring and upholding good corporate governance.
Except for eight government officials, including Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue, other members include businessman, chairman of the Fung Group Victor Fung, Chinese University of Hong Kong professor Lawrence Lau, and former Securities and Futures Commission (SFC) chairman Carlson Tong. Non-official board members are appointed for two years.
The HKIC will manage the Hong Kong Growth Portfolio, the Greater Bay Area Investment Fund and the Strategic Tech Fund set up under the Future Fund, as well as the newly established Co-Investment Fund.
In the initial stage of the HKIC's operation, the HKMA will render support on investment, logistics and operational matters. The HKIC will gradually expand its management team as the business develops.
Source: Hong Kong SAR Government
Nippon Life Insurance, along with major financial institutions in Japan, is preparing emergency loans of ¥ 400 billion ($3 billion) for Tokyo Electric Power Company Holdings, or TEPCO. The loans are aimed at helping the utility cope with higher fuel costs.
The loans are currently under consideration by the government-affiliated Development Bank of Japan, as well as Sumitomo Mitsui Banking and Mizuho Bank, among others.
The loans could be paid out as early as April.
TEPCO's group companies posted a record net loss for the April-to-December period of ¥650 billion ($4.9 billion). Liquefied natural gas and coal used in thermal power generation remain expensive.
Source: Asahi Shimbun
California’s Kern County Employees' Retirement Association (KCERA) is requesting proposals from qualified firms interested in providing a dedicated long-only Japan public equity investment strategy.
Prospective firms must submit their proposals via email by March 1, 2023.
Japanese investors turned net buyers of overseas bonds in January for the first time in five months, as US bond yields retreated on signs that slowing inflation would prompt major central banks to reduce their pace of rate hikes.
According to data from Japan's Ministry of Finance, Japanese investors purchased a net ¥1.56 trillion ($11.79 billion) worth of foreign bonds in January, marking their biggest buying spree since September 2021.
Life insurance companies sold about ¥1.1 billion yen of long-term debt, while trust banks and investment trusts, or “toshins”, bought ¥1.3 billion and ¥550 million, respectively.
Saudi sovereign wealth fund the Public Investment Fund (PIF) has increased its stake in gaming giant Nintendo from 7.08% to 8.26% according to Japanese regulatory filings. The increase makes PIF the largest stakeholder outside of Japan.
The is the latest signal that the Middle Eastern kingdom is seeking to expand and diversify its financial reach beyond oil.
In recent years, PIF has made large investments into an array of business interests outside the petroleum trade, including taking large stakes in Boeing, Citigroup, Disney and Uber, financial filings show.
Source: The Washington Post
National Pension Service (NPS) has reportedly made a request to local companies that operate its stock investment funds on a consignment basis to actively exercise voting rights in shareholder meetings this year.
The pension fund has delivered a detailed guideline to officials from 30 stock management firms on exercising shareholder voting rights this year.
NPS also ordered the stock management firms to be more active based on their own decisions by checking shareholding meeting schedules of small- and mid-size companies.
It asked the firms to come up with a detailed document when there are issues like merger and acquisitions and spinoffs that bring big changes to a corporate value to improve quality of the content,” according to another unnamed official from another firm.
Source: Maeil Business News Korea
FWD Group will enter the Malaysian life insurance market following the signing of an agreement to acquire a majority stake in Gibraltar BSN Life Berhad (Gibraltar BSN).
The transaction is expected to close in the second quarter of 2023.
FWD Group, and other investors, will together hold an effective 70% stake in Gibraltar BSN, which was sold by The Prudential Insurance Company of America, the wholly owned subsidiary of US-based Prudential Financial.
Bank Simpanan Nasional (BSN) will hold the remaining 30% stake in Gibraltar BSN. Post-completion, FWD Group will partner with BSN to further develop Gibraltar BSN.
Source: FWD Group
Temasek Holdings has appointed the deputy head of its North American business, Jane Atherton, to jointly lead its North America team along with joint head John Marren.
The change comes as Head of Americas John Vaske steps down on March 31 to take on a new role outside the company.
Temasek's Deputy Chief Executive Officer Chia Song Hwee will oversee its investment activities in the wider Americas outside of North America, the investment firm said.
GIC said it continues to scout for long-term investment opportunities in China, looking at a wide range of industries, adding that it maintains significant exposure to large markets such as China.
The statement comes after the Financial Times reported that GIC had pulled back on private investments in the world's second-biggest economy.