Banking and Finance News & Trends: Nov Week 4

Banking and Finance News & Trends: Nov Week 4

Banking and Finance News & Trends: Nov Week 4

1. Markets

i. Crypto Ownership Deemed Legal under China Law as Bitcoin Price Rises

A recent ruling from a Shanghai court clarifies the legal standing of cryptocurrency ownership in China. The court confirmed that individuals can legally own cryptocurrencies, as they are recognised as virtual commodities with the attributes of property. However, the court emphasised that while personal ownership is permitted, businesses are prohibited from engaging in cryptocurrency activities, such as investment or token issuance, due to concerns over financial stability and illegal activities.

Takeaway: This ruling comes amid a surge in Bitcoin prices, offering legal clarity in a country where cryptocurrency-related commercial activities have been banned since 2017. The Chinese government continues to crack down on speculative trading in cryptocurrencies to prevent economic disruption.

 

ii. Asia’s Crypto Hubs Benefit from Record Rally Sparked by Trump

The recent crypto rally, fuelled by optimism surrounding Donald Trump’s pro-crypto policies, made Bitcoin’s value soar and significantly impacted Asia. Notably, it boosted Bhutan’s holdings to over US$1 billion, as the country mines Bitcoin using its abundant hydroelectric power. South Korea has also seen increased digital asset trading, with a rise in speculative interest in smaller tokens. Meanwhile, Singapore and Hong Kong are actively developing digital asset hubs, and despite China’s crypto ban, there are signs of grey-market demand. Other countries, including Japan and Singapore, are experiencing surges in related asset values.

Takeaway: The rally has overshadowed previous risks in the sector, creating a renewed sense of optimism and fuelling the expansion of digital asset businesses in the region.

 

iii. Alibaba Gets US$5b from Dual-Currency Bond Issue

Alibaba Group raised US$5 billion through a dual-currency bond issue, marking the largest corporate bond offering in Asia Pacific (APAC) this year. The deal consists of US$2.65 billion in US dollar-denominated bonds and 17 billion yuan (US$2.35 billion) in offshore yuan-denominated bonds. The proceeds will be used for general corporate purposes, including debt repayment and share buybacks.

Takeaway: The offering is the largest of its kind in the region for 2024 and highlights Alibaba’s return to the public dollar-bond market. The move reflects Alibaba’s efforts to strengthen Hong Kong’s position as an international financial hub, particularly for yuan-denominated assets. It also aligns with China’s broader strategy to reinforce Hong Kong’s role as an offshore yuan centre.

 

iv. Confidence in Hong Kong’s Private Wealth Grows as AUM Rebounds

Hong Kong’s private wealth industry experienced a modest rebound in 2023, with assets under management (AUM) growing 0.6% year-on-year to HK$9 trillion ($1.2 trillion). This marks its first growth since 2020 and a turning point after two years of contraction in 2021 and 2022. Net inflows surged to HK$341 billion, triple the inflows of 2021, mitigating a 3.2% decline in asset performance.

Takeaway: Mainland Chinese and Hong Kong clients dominate the market, comprising 67% of AUM. However, firms are increasingly targeting growth in Southeast Asia (21%) and the Middle East (15%). Client acquisition efforts are focused on individuals with assets ranging from $5 million to $50 million over the next three to five years. Key business priorities include:

  • Preparing for inter-generational wealth transfer;
  • Engaging next-generation clients;
  • Enhancing digital platforms; and
  • Expanding product offerings.

Challenges for the sector revolve around macroeconomic volatility, geopolitical risks, and regulatory pressures.

 

2. Business Moves

i. Blackstone Launches Private Market Training for Wealth Managers

Alternative asset manager Blackstone launched a certification programme in Hong Kong in partnership with the Private Wealth Management Association (PWMA). Part of its Blackstone University initiative, the programme is designed to equip wealth managers with the knowledge to guide individual investors into private markets.

Takeaway: The move comes amidst rising demand for alternative assets like private equity, real estate, and infrastructure, and an anticipated increase in allocations as wealth managers and individuals pursue greater portfolio diversification and seek risk-adjusted returns. This initiative also strengthens Hong Kong’s position as a wealth-management hub.

 

ii. CLI Buys 40% Stake in SCCP

CapitaLand Investment (CLI) has announced the acquisition of a 40% stake in SC Capital Partners Group (SCCP) for $280 million, with a commitment to invest at least $524 million in the firm. Over the next five years, CLI will gradually acquire the remaining 60% of SCCP. The move aligns with CLI’s strategy to expand capabilities, enhance diversification, and strengthen its asset management and investment strategies in key markets.

Takeaway: This acquisition increases CLI’s funds under management (FUM) by $11 billion, bringing its total FUM to $113 billion, with a significant portion in Japan. The deal boosts CLI’s presence in Japan and introduces its first foray into the Japan Real Estate Investment Trust (Reit) market. This deal is expected to increase CLI’s market capitalisation and the FUM of its listed funds. The transaction is set to close by Q1 2025.

 

iii. Keppel Strikes Two Mega Deals to Boost Monetisation

Keppel announced two strategic deals to enhance its position as a global asset manager and drive monetisation efforts.

  • Control over Legacy Rigs: Keppel will gain control of 13 legacy rigs held by Rigco Holding through a selective capital reduction (SCR) by end-2024, making Rigco a wholly owned subsidiary.
    • Scope: With $843 million in cash in Rigco, Keppel plans to accelerate the monetisation of these rigs, reducing debt and reinvesting in growth.
    • Outcome: The company is also establishing a new offshore infrastructure private fund to manage these rigs and attract third-party capital, offering greater flexibility and potentially earning asset management fees. The company also expressed that it has no intention to re-enter the offshore and marine business.
  • Spin-off of Data Centre Joint Venture: Keppel is spinning off its data centre joint venture to Keppel DC REIT for $1.38 billion, making it one of Southeast Asia’s largest data centre transactions.
    • Scope: This includes the Keppel Data Centre Campus in Singapore, which houses two operational data centres and a plot of land for a third. While Keppel DC REIT will own the data centres, Keppel will continue to earn recurring income through asset management and the development of the third data centre.
    • Outcome: This transaction is expected to be accretive to Keppel DC REIT’s distribution per unit (DPU) by 8.1%, bolstering its portfolio with AI-ready hyperscale data centres.

Takeaway: Both moves align with Keppel’s strategy to streamline operations, enhance financial flexibility, and position itself for long-term growth, with the stock rising by 2.1% following the announcements.

 

iv. 65 Equity Buys Stake in IoT Specialist, Eyes SGX Listing

Temasek-backed global investment firm 65 Equity Partners is investing US$100 million (S$134 million) to acquire a 13% stake in Tuya Inc., an IoT specialist.

Takeaway: With a market capitalisation of over US$1 billion, Tuya is positioned for potential international expansion, especially in Southeast Asia, which offers significant growth opportunities. This move aligns with 65 Equity Partners’ strategy to support high-growth, mid-cap companies aiming for a Singapore Exchange (SGX) listing. 65 Equity Partners manages $4.5 billion and invests in various sectors, including technology, business services, and healthcare. It has previously invested in companies such as AvePoint and Carsome.

 

v. Expansions: Morgan Stanley, WRISE and Pictet

Morgan Stanley: Morgan Stanley launched its new Southeast Asia headquarters in Singapore. The 107,000-square-foot office, spanning five floors at IOI Central Boulevard Towers, builds on Morgan Stanley’s 34-year legacy in the city-state, where it offers a wide range of financial services. Beyond Singapore, the bank maintains regional offices in Jakarta, Bangkok, and Manila.

WRISE: Singapore-headquartered WRISE Group launched the WRISE Prestige Middle East. This move comes after the success of its Hong Kong counterpart earlier this year, and it aligns with a broader trend of Asian wealth management firms targeting the Gulf region. The Middle East unit aims to differentiate itself by simplifying wealth management for ultra-high-net-worth (UHNW) clients, addressing gaps left by traditional private banks.

  • Offerings: Offerings for the region span global securities, structured products, mutual funds, fixed income, and insurance.
  • What to expect: The firm plans to grow its Dubai team to over 100 by the end of 2025 and has already secured significant mandates from UAE family offices.

Pictet: Swiss private bank Pictet will launch a new Asia Desk in Zurich in early 2025. This new team will complement Pictet’s existing operations in Singapore and Hong Kong. The desk aims to serve clients from North and Southeast Asia who prefer Switzerland for its geopolitical stability, asset diversification, and European investment expertise. The team will include experts in relationship management, investment, and Asian markets, ensuring tailored solutions for high-net-worth (HNW) clients.

 

3. People Moves

i. Banks: OCBC, BOS and UBP

OBCB: OCBC Bank Hong Kong appointed Josephine Lee as the new head of consumer financial services, starting next week.

  • Experience: Lee has over 25 years of experience in banking and wealth management. She previously held senior roles at Citibank Hong Kong and Citibank Singapore, where she drove strategic growth in wealth management, digital transformation, and retail banking.
  • Expertise: Her expertise spans multiple markets, including Hong Kong, Singapore, and mainland China.
  • Responsibilities: Lee will oversee OCBC’s consumer banking and wealth management businesses in Hong Kong and Macau, and drive OCBC Hong Kong’s digital transformation.

Her appointment aligns with OCBC’s strategic focus on capitalising on the growing wealth flows between Greater China and ASEAN.

BOS: Bank of Singapore is streamlining its leadership structure at its Singapore hub following the retirement of Robin Heng, one of its co-heads. The bank will discontinue the co-head model for market coverage in Singapore, consolidating leadership under CEO Jason Moo, who will temporarily oversee private banking operations until a successor is appointed.

Rodney Sin, the other co-head, will assume a newly created role as Vice-Chair for Global Client Engagement, focusing on UHNW strategies and aligning the bank’s operations across its group. To enhance strategic execution and maintain a strong connection with the core business, a new tier of market group heads will report directly to Moo.

These changes, effective 1 January 2025, align with the bank’s broader three-hub strategy introduced last year to boost efficiency across its Singapore, Hong Kong, and Middle East operations. This includes leadership updates in Hong Kong and Dubai, alongside the closure of its Luxembourg branch.

UBP: UBP has bolstered its leadership in the Middle East with the appointment of Antony Avinash Louis as Market Head.

  • Experience: Louis has over two decades of private banking experience from roles across the UAE and Singapore. He previously led Santander Private Banking’s global non-resident Indian (NRI) and international client team. His career also includes senior roles at Julius Baer, Société Générale, and DBS.

 

ii. Wealth: Manulife, Indosuez and AllianzGI

Manulife WAM: Manulife Wealth and Asset Management (Manulife WAM) appointed Fabio Fontainha as the new Head of Asia. Fontainha succeeds Michael Dommermuth, who will be departing the firm by the end of 2024. Fontainha has over 30 years of experience from Citigroup, where he focused on consumer and private wealth and retail markets. He most recently held the role of Global Business Execution Head at Citi Private Bank. Based in Hong Kong, Fontainha will report to Paul Lorentz and will be accountable to Phil Witherington, CEO of Manulife Asia.

Indosuez: Omar Shokur, the Asia CEO of Indosuez Wealth Management, has resigned after 15 years with the French private bank, including five years in his current role. A successor will be announced soon, and Shokur will remain in his position until January 2025 to ensure a smooth leadership transition. Shokur previously held key roles at Indosuez’s parent company, Credit Agricole, including heading commodity derivatives and structured product sales in Switzerland.

AllianzGI: Allianz Global Investors (AllianzGI) appointed Wilfred Sit as Chief Investment Officer (CIO) for APAC equities, effective January 2025. Sit has over 30 years of asset management experience. He previously served as CIO at Hang Seng Investment Management and oversaw a portfolio of $45 billion. Sit will be based in Hong Kong. He succeeds Raymond Chan, who is retiring after a long career at AllianzGI, where he helped expand the firm’s APAC equity platform, particularly into China A-shares and Indian equity markets.

 

iii. Others: KGI, Qiming and OSL

KGI: KGI Securities Hong Kong appointed Cusson Leung as CIO for KGI Asia. In this newly created position, Leung will lead the firm’s investment and asset allocation strategy. Leung previously held positions at JP Morgan, Credit Suisse, and Merrill Lynch.

Qiming: China’s venture capital (VC) industry is undergoing a pivotal transition as founding leaders of key firms plan leadership succession. Qiming Venture Partners, a prominent player in the sector, has unveiled a 10-year succession plan to pass on the baton to a younger team. Founding Managing Partner Nisa Leung will be the first to step down, with a new leadership team, averaging 40 years old, taking over. This move reflects a broader trend among Chinese VC/PE firms, as ageing founders face the challenge of handing over control to ensure longevity. For Chinese firms, the task is particularly pressing due to their relatively young history and reliance on founding partners.

OSL: Hong Kong-listed digital asset firm OSL appointed Ivan Wong as its new CFO.

  • Experience: Wong has over 16 years of experience in banking, technology, and capital markets and previously worked at Morgan Stanley, Ant Group, and Boston Consulting Group.
  • Expertise: His expertise in strategic investment and financial management will be key as OSL navigates the evolving digital asset landscape in Asia.

This appointment comes as OSL prepares for its next growth phase, positioning itself to capitalise on post-Trump crypto market developments.

 

Discover More Industry Trends with JC

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Image Credits:

  • Reuters
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