Banking and Finance News & Trends: July Week 4

Banking and Finance News & Trends: July Week 4

Banking and Finance News & Trends: July Week 4

Table of contents

  1. Investment, PE & VC News
  2. Finance Industry News

 

Investment, PE & VC News

1. Markets

i. China’s Politburo Meeting Boosts Investor Confidence

What: The recent Politburo meeting chaired by President Xi Jinping sent positive signals to investors, a welcomed contrast with the sentiments after the Third Plenum. The meeting recognised China’s economic challenges and demonstrated the country’s commitment to implementing strong supportive measures to achieve its growth target of around 5% for the year. Key strategies include:

  • Countercyclical measures.
  • Proactive fiscal and monetary policies.
  • Initiatives to boost household consumption.

Implications: The Politburo’s pledge for immediate, substantial support measures has reinvigorated investor confidence, with notable stock market gains following the announcements.

Read the full paid article about the Chinese Politburo’s meeting.

 

ii. Indonesia Makes a Bet with New Golden Visa Scheme

What: Indonesia launched a new golden visa scheme to attract wealthy investors by offering residency in exchange for substantial financial investments. The programme aims to get global investors, talents, and the Indonesian diaspora to contribute their wealth and expertise. However, analysts caution that the scheme could lead to cross-border money laundering and increased housing prices. Indonesia’s move diverges from the trend in Europe, where EU countries are progressively discontinuing their golden visa or passport programmes in response to Russia’s war in Ukraine and soaring housing prices.

Implications: Indonesia’s golden visa scheme holds promise for attracting significant foreign investment. Nonetheless, the long-term efficacy remains to be seen, especially given that potential challenges may arise during the upcoming government transition.

Read the full paid analysis of the concerns with Indonesia’s golden visa.

 

iii. Yen Hits Highest Level Since March Following Japan’s Interest Rate Hike

What: The yen surged to its strongest level since March against the US dollar after the Bank of Japan (BOJ) raised interest rates and announced plans to reduce bond purchases. This move has reignited an aggressive rally in the yen, pushing it through the key 150-per-dollar level. The currency’s climb began in anticipation of a hawkish stance by the BOJ, resulting in a significant increase in Japanese government bond yields and a rapid unwinding of carry trades, which use low-yielding currencies to fund higher-yielding ones. This rally marks a significant shift from the yen’s 38-year low earlier in July. Despite the initial slower-than-expected pace of bond-buying reductions, the BOJ’s overall plan appears more aggressive than some forecasts.

Implications: While the BOJ’s rate hike to 0.25% is small, it could signal the beginning of a larger trend if market expectations become more hawkish. The yen’s value also benefited from geopolitical risks in the Middle East and expectations of potential rate cuts by the US Federal Reserve, which could narrow the rate gap between the US and Japan.

Read the full article about the increase in Yen.

 

2. Trends

i. Chinese Investors Buy Saudi ETFs Amidst Closer Economic Ties

Chinese investors are increasingly investing in two new ETFs focused on Saudi Arabian stocks due to the poor performance of local equities and a desire for better returns. These ETFs, launched in Shanghai and Shenzhen, saw significant initial gains, leading to temporary trading suspensions due to high premiums over their net asset value (NAV). This enthusiasm is driven by strengthening economic ties between China and Saudi Arabia, alongside strategic moves by Chinese entities to invest in the Middle East and billion-dollar deals spanning the tech, solar power, and electric vehicles sectors. The ETFs, tracking the FTSE Saudi Arabia Index, are heavily weighted towards financials, basic materials, and energy companies. They offer attractive dividends and align with the current risk preferences of Chinese investors.

Read the full article about Chinese investors’ interest in Saudi ETFs.

 

ii. Private Equity Firms Eye Lucrative Investment Prospects in Japan

Private equity giants such as KKR, Carlyle, and Blackstone increasingly focus on Japan. They see significant potential due to a large portion of individual assets held in cash and favourable regulatory shifts. The Japanese government’s promotion of investment and the expanded investment limits of the Nippon Individual Savings Account (NISA) further support this trend. Meanwhile, Japan’s market size and emerging inflation make it ripe for long-term investments.

Implications: Japan’s evolving investment landscape offers a promising avenue for private equity firms with the right talent to help firms penetrate and localise in the market.

Read the full paid article about private equity firms’ interest in Japan.

 

3. Business Moves

i. Temasek Looks to Invest US$30b in US Over the Next Five Years

What: Temasek Holdings, Singapore’s state-owned investment company, plans to invest US$30 billion in the US market over the next five years. This year, investments in the Americas surpassed those in China for the first time in over a decade, now making up 22% of Temasek’s portfolio. Temasek will concentrate on AI, semiconductor, and infrastructure investments in the US, leveraging real estate subsidiaries and investing alongside private equity firms.

Implications: The move marks a shift in the firm’s focus to avoid geopolitical tensions, particularly in sensitive sectors like semiconductors.

Read the full article about Temasek’s investment in the US.

 

ii. Hedge fund Keystone Grows to US$2.6b

Keystone Investors, a Singapore-based hedge fund launched two years ago, has grown its assets to over US$2.6 billion despite the challenging pandemic-era environment. The firm, which focuses on Asia and has a strong expertise in China, has decided to stop accepting new investments after reaching near its US$3 billion cap. This success is notable given the difficulties faced by China-focused hedge funds due to regulatory crackdowns and broader economic challenges.

Keystone’s performance has been exceptional, returning 20.2% in the first half of the year, significantly outperforming its peers. This success is attributed to the leadership of Liu Xuan, who previously worked at several top multi-manager firms before establishing Keystone. While the global trend has shifted towards multi-manager firms, Keystone has managed to thrive independently.

Read the full article about Keystone’s growth.

 

iii. Franklin Templeton and SBI Holdings to Launch Joint Venture in Japan

Franklin Templeton and SBI Holdings have agreed to form a joint venture to offer integrated financial services in Japan, focusing on emerging asset classes like digital assets and cryptocurrencies. The partnership will leverage Franklin Templeton’s expertise in tokenised money market funds and digital assets-backed ETFs, combined with SBI’s leadership in Japan’s digital asset sector. This partnership aims to provide innovative and diversified investment solutions to Japanese investors, particularly targeting younger audiences.

Read the full paid article about Franklin and SBI’s JV in Japan.

 

4. People Moves: AllianzGI, ASK Private, Northern Trust, HPC and Brown Advisory

Allianz GI: Jeremy Gleeson, a seasoned technology equity specialist, will join Allianz Global Investors (AllianzGI) to lead a newly established global technology team after he departs from AXA Investment Managers. Gleeson has 17 years of experience at AXA IM and will assume the role of Chief Investment Officer (CIO) for global technology equity at AllianzGI. He will focus on capturing long-term trends such as AI and digital evolution and manage the Allianz Global Hi-Tech Growth fund.

ASK Private Wealth: ASK Private Wealth appointed two market heads to spearhead its global expansion and enhance its wealth management services:

  • Prashant Tayal was named the partner and market head for Singapore. Tayal has over 23 years of wealth management and private banking expertise in Southeast Asia and the Middle East. He has served at Union Bancaire Privee, Standard Chartered Bank, Deutsche Bank, JP Morgan, Kotak Bank and Citi Private Bank.
  • Prateek Pant was named the market head for the Middle East and Africa. Pant, who has 28 years of experience, will focus on serving NRI clients in collaboration with relationship managers in India. He previously served at WhiteOak Capital and co-founded Sanctum Wealth Management.

Northern Trust: Chicago-based Northern Trust appointed two key executives in Singapore.

  • Kai Jebens was named head of client development for Southeast Asia, and he will oversee the growth of custody, fund accounting, data, and digital services. He previously served at Collibra, BNY Mellon, Fidelity National Information Services, Intercontinental Exchange, and Bloomberg.
  • Chris Vera joined as a senior digital solutions consultant for APAC’s asset servicing business. Vera has 20 years of experience in investment data, technology, operations, and consulting. He previously worked at BlackRock, AIA, BNY Mellon, and a Singaporean sovereign wealth fund.

Hunter Point Capital: Hunter Point Capital (HPC), an independent investment firm based in New York, made two hires.

  • SD Chu will join as the managing director in Singapore. Chu has over 30 years of fundraising experience at firms like Carlyle.
  • Akira Takahashi will serve as a senior advisor in Japan. Takahashi has over 40 years of experience and previously managed Credit Suisse Asset Management in Japan.

Brown Advisory: Brown Advisory, a US investment manager, appointed Yoon Bean Kim as the new head of North Asia (excluding Japan). Kim, who previously worked at Fullerton Asset Management and J.P. Morgan Asset Management, will focus on expanding opportunities with institutional investors and financial intermediaries and opening new markets in the region.

Read the full paid article about Allianz GI’s global tech equity team.

Read the full article about ASK Private Wealth’s market heads.

 

Finance Sector News

finance strategies, mergers and acquisitions

1. Trends

i. Treasury and Finance Roles Play a Key Role in Corporate Strategy

What: The survey by DBS reveals that treasury and finance functions in multinational companies are shifting from support roles to strategic leadership. The survey, involving 570 senior executives across the Asia Pacific (APAC), Europe and North American markets, found that:

  • 94% see treasury and finance as crucial in shaping corporate strategy.
  • 79 to 80% view these functions as key to innovation, product development, procurement, and supply chain reconfiguration.
  • 76% emphasise the importance of diversifying financing sources.
  • 74% see the importance of selecting regional treasury centres, with Singapore, Hong Kong and Shanghai emerging as the top destinations.

Why: This transition is driven by the need for enhanced strategic planning, risk management, and data-driven decision-making in response to challenges like tech outages and supply chain disruptions.

Implications: The report highlights a need for companies to upskill employees, adopt new technologies, and foster the right culture to leverage these expanded roles effectively.

Read the full article about DBS’s survey on corporate strategy.

 

ii. Japan’s Corporate Overhaul Spurs Surge in Record Debt Sales

What: A shift in economic conditions and Japanese corporate governance reforms to enhance corporate value and efficiency have significantly boosted investor interest in stocks and bonds. The greater interest by global equity and credit investors has seen the Japanese corporate US dollar bonds outperform US peers, achieving record bond sales in recent months.

Implications: The trend of issuing bonds in foreign currencies will continue as Japanese companies seek funds for overseas investments.

Read the full article about the demand for Japanese corporate bonds.

 

iii. BOJ Takes Market by Surprise with Increase in Key Interest Rate

What: The Bank of Japan (BOJ) has taken significant steps to unwind its extensive monetary easing programme by increasing interest rates for the second time in 17 years, raising the rate to 0.25%. This move, following a previous hike in March, marks a departure from its longstanding ultra-loose policies aimed at stimulating growth. The decision aligns with BOJ’s plans to continue raising rates if economic conditions meet expectations. Additionally, the BOJ announced plans to halve its government bond purchases by early 2026. While this is a step toward policy normalisation, it surprised many analysts who believe the current economic conditions do not favour tighter monetary policy.

  • Market Reaction: The Nikkei fell 2.5%, and the yen appreciated against the dollar.
  • Interest Rates and Bonds: The 10-year Japanese government bond yield fluctuated but remained relatively low.
  • Analyst Opinions:
    • BlackRock: Recommends staying overweight on Tokyo shares due to mild inflation and strong corporate pricing power.
    • Eastspring Investments: Despite short-term equity impacts, the long-term outlook remains positive due to favourable valuations and corporate financial health.
    • Morgan Stanley MUFG: Views the economic impact of the rate increase as negligible due to low real interest rates.
    • PGIM Fixed Income: Maintains a bearish view on JGB yields but sees potential for higher yields in the mid-term.
    • Maybank: Sceptical about the yen’s return as a safe haven, given expected yield differentials with the US.
    • OCBC: Predicts higher JPY rates and yields in the coming months, which are aligned with the BOJ’s tightening measures.

However, the move will lead to higher borrowing costs for millions of homeowners with floating-rate mortgages. Following this move, Mitsubishi UFJ Financial Group (MUFG) plans to raise its short-term prime rate in September, with other banks likely to follow. This change will impact approximately 75% of personal mortgages in Japan, which are tied to these rates. Existing homeowners might not feel immediate pressure as Japanese banks typically only adjust monthly mortgage payments every five years. Nonetheless, real estate shares have already seen a decline, with leading developers experiencing significant drops.

Implications: The long-term impact on Japanese equities and the yen remains to be seen, but there is general optimism for medium to long-term growth. Market anticipation of further hawkish moves could lead to additional strengthening of the yen. Meanwhile, financial institutions may see improved margins on mortgage loans due to higher interest rates. However, this development could dampen consumer confidence and cool the housing market.

Read the full article about Japan’s interest rate hike.

Read the full analysis of BOJ’s interest rate hike.

 

2. Business Moves

i. UBS Forays into Debt Swap Market Pioneered by Credit Suisse

What: UBS Group is entering the ESG debt swap market, leveraging expertise from Credit Suisse. The company is part of a consortium raising US$300 million for Barbados to fund climate-resilient infrastructure. This deal, set to close in September, represents UBS’s first involvement in debt-for-nature swaps, a market pioneered by Credit Suisse. These swaps allow governments to replace old debt with cheaper loans, with savings directed towards environmental protection. The Barbados deal aims to improve a sewage treatment plant, reduce pollution and support national climate goals under the Paris Agreement.

Implications: UBS’s involvement in the Barbados debt-for-climate swap signifies its growing interest in nature finance, mirroring other big global banks.

Read the full article about UBS’s involvement in the ESG debt swap market.

 

ii. Dubai Conglomerate National Pulse Partners with Fintech Firm Aleta Planet

What: Fintech company Aleta Planet received investment from Dubai conglomerate National Pulse, enabling it to capitalise on the UAE’s expanding financial services sector. Although the investment amount is undisclosed, it will facilitate several joint ventures. Aleta Planet is known for trade financing in perishable goods. The company’s expertise in handling multi-currency transactions and strong presence in China were key factors attracting National Pulse, given that 60% of Chinese trade in the region passes through the Emirati city.

Implications: The partnership taps into the UAE’s new Open Finance Regulations, which enhances data access for fintechs and shows another field of opportunity for fintechs to expand into a market like the UAE.Top of FormBottom of Form

Read the full article about National Pulse’s partnership with Aleta.

 

iii. Japan’s Largest IPO in 2024 Addresses Labour Shortage

What: Timee, a pioneering job matchmaking app addressing Japan’s labour shortage, goes public on the Tokyo Stock Exchange’s Growth market at a valuation of around 138 billion yen. This marks Japan’s largest IPO of the year and the biggest for an application software company since 1994. With Japan facing severe labour constraints due to a low birth rate, an ageing population, and strict immigration policies, Timee’s platform facilitates “spot work,” providing flexible job matches for specific times and locations. The IPO will not provide new capital to the company but will enhance Timee’s visibility among clients, job seekers, and investors.

Implications: Despite new competitors, Timee is positioned as a leader in this emerging market, with significant growth potential indicated by initial strong stock performance.

Read the full article about Timee’s IPO in Japan.

 

iv. BNP Paribas Explores €5.1b Acquisition of AXA’s Asset Management Division

What: French insurer AXA is in exclusive talks to sell its investment management arm to BNP Paribas for €5.1 billion. The move aligns with the trend of consolidation in the European asset management industry. AXA will simplify its operations to focus on its core insurance business while maintaining a long-term partnership with BNP Paribas for investment services. The sale will provide AXA with significant cash proceeds, partially used for share buybacks, and result in a one-off net income gain but reduce annual earnings.

Implications: The move will create one of Europe’s largest asset managers with €1.5 trillion in assets under management, though Amundi remains Europe’s largest pure-play investment management firm.

Read the full article about BNP Paribus’s interest in AXA.

 

3. People Moves

i. Government: MAS

MAS: Transport Minister Chee Hong Tat will become the deputy chairman of the Monetary Authority of Singapore (MAS) starting August 23. He will serve in this role until May 31, 2027, while also holding the position of Second Minister for Finance. Chee’s appointment to the MAS board of directors began on June 1, with a three-year term. He replaces Deputy Prime Minister Gan Kim Yong, who held the deputy chairman position from July 2023 to May 2024. Gan succeeded Lawrence Wong as MAS chairman after Wong became prime minister on May 15.

Read the full article about MAS’s new deputy chair.

 

ii. Banks: Maybank, JPMorgan, BofA, LGT and GXS

Maybank: Maybank Singapore appointed Alice Tan as its head of group wealth management, effective August 1. She will maintain her current role as head of wealth management in Singapore. Tan will oversee the group’s wealth-management segments, including privilege, premier, private, and Islamic wealth, and will integrate Maybank Singapore’s regional strategy. Tan joined Maybank in 2014 and helped establish its private wealth-management business. She later led the private wealth segment in Singapore. She has managed three wealth segments in her current role, achieving S$176 million in revenue and 64% year-on-year growth within six months.

JPMorgan Chase: JPMorgan Chase appointed Sunil Dhupelia and Huang Peihao as co-heads of Equity Capital Markets (ECM) for APAC in a regional restructuring of its equity capital markets (ECM) division. Other reshuffles include:

  • Simone Haslinger, the co-head of Australia ECM, is leaving the bank for other opportunities, and Jonas Troeber will become the only head of Australia ECM.
  • Sophie Qian, head of South-East Asia ECM, will transition to the Asia private bank and relocate to Hong Kong.
  • Satish Arcot was appointed head of India’s private capital markets.

BofA: Winnie Chen, a seasoned professional with over 20 years of experience in financial services, was appointed as the head of APAC Global Payment Solution (GPS) at Bank of America, effective September. Chen was previously the Singapore CEO at BNY Mellon. She will be based in Singapore and will join the APAC executive committee. Her new responsibilities include:

  • Driving the global payments strategy.
  • Fostering client relationships and ensuring collaboration with the bank’s corporate and investment banking unit.
  • Manage the GPS business across 12 APAC markets and seven additional markets through strategic alliances.

LGT: Mark Lim, currently the head of legal for APAC at LGT, was appointed the deputy CEO of LGT Singapore, effective August 1. Lim will continue his role in legal alongside his new responsibilities. His career includes nearly two years at LGT and close to 15 years at Citi.

GXS: GXS Bank CEO Charles Wong stepped down after four years of leading the digital bank and will remain as an advisor. During his tenure, Wong spearheaded the development of key products, such as the GXS Savings Account and GXS FlexiLoan, and integrated the digital bank with popular apps like Grab and Singtel. Muthukrishnan Ramaswami will take over as the new Group CEO. Despite securing S$229.5 million in additional funding, GXS Bank has faced financial challenges, with significant losses driven by increased operating expenses, particularly staff costs. The bank’s total income tripled in 2023, but losses also increased substantially due to these rising expenses.

Read the full article about Alice Tan’s promotion in Maybank.

Read the full article about Huang and Duphelia’s expanded roles.

Read the full paid article about BofA’s CEO from BNY Mellon.

Read the full paid article about LGT’s deputy CEO in Singapore.

Read the full article about GXS Bank’s change of CEO.

 

iii. Wealth & Assets: JPMorgan AM, UBS GWM, KGI, Indosuez, BNP Paribas WM

JPMorgan AM: Guangyu Zhang recently joined JP Morgan Asset Management’s (JPMAM) APAC ETF specialists team to lead its China ETF business. Zhang will chair the China ETF working group, focusing on strategy, product development, and growth for the ETF business. Zhang brings extensive experience from his previous role at Harvest Fund Management, where he significantly contributed to their ETF ecosystem. The China ETF market has seen remarkable growth, with annual inflows increasing nearly five-fold over the past three years, driven by institutional investment and sector performance.

UBS GWM: Tng Hui Leong was appointed the Market Team Head of UBS Global Wealth Management’s (UBS GWM) private client Singapore team and Executive Director, effective July 29. Tng has over a decade of experience at OCBC Bank, where he has held various positions, including his most recent role as Head of Premier Private Client. He began his banking career at Citi in 2007 and served as Vice President during his tenure there.

KGI: KGI Securities Hong Kong appointed James Wey as the new head of international wealth management for Hong Kong and Singapore, effective August 1. Wey, formerly from JP Morgan Private Bank, will focus on driving growth and expanding the firm’s services to high-net-worth (HNW) clients in the region. Wey has also worked at Yi Capital and brings much experience from his time in the finance industry and management consulting.

Indosuez: Indosuez Wealth Management, part of Crédit Agricole Group, appointed Francis Tan as its new chief strategist for Asia. Tan, previously with United Overseas Bank Group, has over 20 years of experience in financial services and economic research and focuses on Asia and ASEAN. Tan’s expertise will now benefit Indosuez’s HNW clients by developing and implementing tailored investment strategies.

BNP Paribas WM: Agnes Sng, the regional head of investment funds advisory at BNP Paribas Wealth Management, has departed after 17 years. She was responsible for selecting and distributing long-only funds and hedge funds in Hong Kong and Singapore. Her extensive experience includes positions at HSBC Private Bank, Standard Chartered, Maybank, and Citi. No replacement has been announced.

Read the full paid article about KGI’s wealth management head from JP Morgan.

Read the full article about Indosuez’s chief strategist from UOB.

 

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  • CNA
  • Ismi Damayanti
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