Tag: Finance

  • UBS China Fund Caught in Tech Maelstrom

    UBS China Fund Caught in Tech Maelstrom

    UBS’s $10 billion China Opportunity fund caught in the downdraft of the country’s harsh tech crackdown.

    It was only last April that Bin Shi gave a fireside chat on a UBS asset management hosted website. The bank’s head of China equities appeared optimistic about the outlook for Chinese equities, saying it was likely the tech sector had seen the worst in terms of anti-trust penalties.

    As a result, he felt confident buying high-quality A-share titles listed in Shanghai and Shenzhen.

    And when Shi talks, investors tend to listen – given he currently manages four different vehicles focusing on Chinese equities, the largest being the China Opportunity Fund.

    It is one of the most important equity funds at UBS. It has a highly successful track record, and assets under management were $14.4 billion at the end of 2020. Over the past five years, it posted an annualized return of more than 12 percent.

    Until this year, Morningstar ranked it as a five-star fund while Citywire has long rated Shi highly.

    What that means is that Shi gets talked about. In Switzerland, the fund seemed to attract new money almost by magnetic force, envious market competitors say.

    But over the past few months that force has likely weakened significantly. Things have not turned out as Shi expected. A-shares continue to tank, as do Chinese securities listed overseas. In summer, the fund recorded double-digit declines and it lost a Morningstar star in July. As of right now, the fund is down almost 22 percent this year.

    That means that it trails the MSCI China Index and many of its peer funds. It still managed $10.4 billion in assets in June with the first half report recording redemptions of about $3.8 billion, although that was still more than offset by inflows of $4.2 billion. But if you factor in market performance, the current shortfall is more likely to be about $1.2 billion.

    That is more than likely to be a big hit for Shi. When asked by finews.com, UBS said that it takes the long-term view when it comes to identifying market prospects and it invests in companies with strong management and a long-term vision that allow them to ably manage geopolitical, regulatory and other external events.

    China is more volatile than other markets, and such an environment creates opportunities for active managers to create value,, a spokesperson said.

    It appears that the fund bet billions of dollars on the Chinese companies bearing the brunt of the anti-cartel and regulatory crackdown. Its holdings of Tencent comprise 9.76 percent of the portfolio, Alibaba and other Jack Ma companies, including Ant, which is being split up, make up 5.74 percent. In comparison to peers, it appears to be overweight in financials.

    In the meantime, the Chinese government seems to be ramping up scrutiny of the insurance sector. One of the largest insurers is Ping An, which is 5.29 percent of the portfolio. Authorities are also taking steps against video games, which is likely to impact major games producer Netease (4.97 percent of the portfolio).

    The brutal decline in Chinese equities has proven controversial, given that it has become mixed up in the U.S.-China trade war, the pandemic and violations of human rights in China. Market legend George Soros has called Blackrock’s recent move into China a «tragic mistake». He warned that the world’s largest asset manager was likely to lose money as a result, warning that the recent steps against the tech sector are a symbol that Chinese President Xi Jinping will do anything to remain in power.

    One of the world’s mostly closely watched investors, Cathie Woods, recently sold off a sizeable chunk of her funds holdings in China tech.

    Blackrock and UBS have no choice but to grin and bear it. The Chinese investment market is a long-term gamble and one in which UBS managed to position itself before other competitors. UBS is also intent on making more investments there. That also holds for the funds business. It is expanding its palette of products and it is shortly expected to launch a new China Healthcare fund.

    But if UBS China funds continue to bleed, that could change. It is mostly investors outside the mainland that have been burned by the tech crash and they make most of their money from them.

    They seem to have had enough of the way Chinese authorities have been acting, which they see as unpredictable and overly draconian.

  • Deutsche Bank Wealth Management Hires Ex-DBS Duo

    Deutsche Bank Wealth Management Hires Ex-DBS Duo

    Deutsche Bank Wealth Management has hired two former executives from DBS Private Bank to bolster its South Asia business.  Shankar Jha joins the German private bank’s global South Asia (GSA) team in Singapore as a managing director and group head, according to a statement, reporting to global South Asia head Amrit Singh.

    Jha has over 20 years of private banking experience, most recently with DBS Private Bank where he spent six years, last as a senior director and team leader. Previously, he also worked for UBS Wealth Management and Citi Private Bank.

    Deutsche Bank Wealth Management also hired Sachin Thussu as a director and senior investment advisor.

    Based in Singapore, he will be part of the investment management team and report to head of investment management global GSA Ritesh Goenka.

    Thussu has over 20 years of experience across financial markets – most notably, FX and precious metals – and cross-asset advisory. Prior to joining Deutsche Bank, he worked for DBS Private Bank, Credit Suisse, Standard Chartered Private Bank and Citi covering private wealth and quasi institutional clients from London, Zurich and Singapore.

    Year-to-date, Deutsche Bank’s GSA unit has hired 14 relationship managers across Dubai, Geneva and Singapore.

    Notable additions include ex-Julius Baer bankers Dhananjay Rathore as a managing director and Rajasekar Ayyalu as a director based in India where four relationship managers have been hired thus far this year. Other newly hired directors include Richard Van-Dirmen, Hervé Alykhan Ladak, Randeep Singh and Harshin Shah.

    The GSA unit also added three investment advisors in Dubai and Singapore.

    At Deutsche Bank Wealth Management, we value the importance of the GSA market to the Bank’s Asia strategy, and will continue investing, said Singh in the statement.

  • DBS Digital Exchange to Grow Security Token Offerings

    DBS Digital Exchange to Grow Security Token Offerings

    The platform plans to tap on the growing popularity of cryptocurrencies and digital assets among corporate investors, accredited individuals and family offices.

    DBS plans to list at least half a dozen security tokens by end-2022 on DDEx, the bank’s institutional-focused digital asset exchange, the exchange’s chairman said on Monday.

    According to Eng-Kwok Seat Moey, who is also head of capital markets, the bank’s position as one of the biggest wealth managers in Asia and its expertise in originating deals in capital markets would help it attract users and grow trading volume.

    The bank listed its first security token on the platform in May 2021, in the form of a S$15 million digital bond.

    Eng-Kwok repeated CEO Piyush Gupta’s target of growing the digital exchange’s investor base to about 1,000 customers this year, and said DBS wants to grow this number by 20-30 percent annually for the next three years as digital tokens gain acceptability.

    DDEx was launched in December 2020 with an initial offering that covered cryptocurrency trading. As of August 2021, it housed around 400 investors with close to S$130 million ($95.8 million) of digital assets in its custodial services.

  • PayPal Inks Deal to Expand Asia Reach

    PayPal Inks Deal to Expand Asia Reach

    The U.S. fintech giant announced a mostly cash deal to acquire Japan’s buy now, pay later (BNPL) payments platform Paidy for ¥300 billion (about $2.7 billion) on Wednesday.

    The acquisition will expand PayPal’s capabilities, distribution and relevance in the domestic payments market in Japan, the third-largest e-commerce market in the world, complementing the company’s existing cross-border e-commerce business in the country, PayPal said in a statement.

    According to an investor presentation, shopping volume in Japan more than tripled to around $200 billion in the last 10 years, with more than two-thirds of all purchases paid for in cash, thereby presenting a huge opportunity for BNPL to proliferate.

    Founded in 2008, Paidy has 6 million users. PayPal already has stakes in other BNPL businesses, including Sezzle and Z1P.AX.

    Under the BNPL model, unsecured loans are extended to online shoppers similar to a credit card, but these are smaller in amount and have a shorter repayment schedule. Such platforms have seen a boom in popularity over the past year, though critics see them as a debt trap.

    In another major deal in the space, Square, run by Twitter CEO Jack Dorsey bought Australian Afterpay for $29 billion last month.

  • Citi Commercial Bank Opens China Desk in Singapore

    Citi Commercial Bank Opens China Desk in Singapore

    The new China desk in Singapore adds to CCB’s network of six Asia desks in the region, which supports clients’ banking needs across intra-Asia growth corridors.

    Citi Commercial Bank (CCB) Asia Pacific has set up a China desk in Singapore, facilitating access to the cit-state and wider ASEAN region for emerging corporates from China, it announced on Monday.

    Mona Zhang, previously parent account manager for mid corporates in CCB China’s office, is leading the desk. Zhang brings a wealth of knowledge and experience in understanding the business landscape in China and serving the needs of Chinese corporates.

    She will build the bank’s relationships with China-based clients and support their expansion plans into Singapore and as well as the rest of ASEAN, Citi said in a statement.

    Citi highlighted CCB’s growth across China to Singapore as well as China to ASEAN corridors. Last year, it more than doubled revenue in the China to Singapore corridor, supported by 35 percent growth in new client acquisition. Momentum in new client acquisition also resulted in a doubling of revenue in the China to ASEAN corridor last year, Citi said.

    Singapore and the broader ASEAN region are key markets for growth for expanding Chinese emerging corporates. A majority of these clients set up holding companies in Singapore for their ASEAN units, with the market serving as a treasury and funding hub, Lin Hsiu-Yi, CCB ASEAN and Singapore head, said.

    Other CCB desks in the region include a Korea desk in China, Hong Kong, India and Vietnam; a Greater China desk in Hong Kong; and a China desk in India.

  • HSBC Plans for Permanent Hybrid Work Model

    HSBC Plans for Permanent Hybrid Work Model

    HSBC is the latest to embrace hybrid working with plans to make it a permanent model for the bank worldwide.

    My own view on the return to office is it would be a waste if we didn’t learn from the last 18 months, said HSBC group chief executive Noel Quinn.

    The bank’s work-from-home embracement is part of broader plans to cut costs including a 40 percent reduction in property footprint in the coming years. It also changed its office policy to include two employees per desk, excluding branches, and scrapped the executive floor of its London-based headquarter.

    We’ve learned to live and operate in a very different way, Quinn said, though he noted that he didn’t want to be overly prescriptive.

    Despite the plans, Quinn highlighted some of the advantages of the physical workspace such as social relationships or spontaneity.

    I don’t want to lose that DNA and that teamwork, he said. I’m really glad to be back in the office, seeing colleagues and having conversations in the corridor or in getting stuff done on the spur of the moment, rather than having to book a VC call or a telephone call.

    Quinn also highlighted traveling in the pandemic era, with the bank expecting budget in this area to shrink by 50 percent.

    I remember one day sitting at home, I traveled the world in a day, talking to clients in different parts of the world, he said. You can’t do that forever. You still want to have face-to-face interaction.

    Global banks remain divided on work-from-home measures with some like Citi and Standard Chartered signaling or planning a permanent shift while others like Goldman Sachs and Morgan Stanley preferring a return to the office.

  • BNP Paribas in Talks to Form China Wealth Management JV

    BNP Paribas in Talks to Form China Wealth Management JV

    BNP Paribas’ asset management arm is reportedly in talks with a Chinese «big four» bank to form a wealth management joint venture in the mainland.

    BNP Paribas is in talks with Agricultural Bank of China’s (AgBank) wealth unit to form a wealth management joint venture, according to a report citing unnamed sources.

    BNP Paribas is expected to hold majority stakes in the joint venture.

    BNP Paribas joins the likes of Blackrock, Goldman Sachs and other global financial institutions seeking to tap into China’s $19 trillion wealth management market.

    French rival Amundi had initially discussed venture plans with AgBank but ultimately chose Bank of China as its partner.

    AgBank and other major state banks face political pressure to form wealth management joint ventures, the report added, indicating China’s willingness to open up.

    Within mainland China, BNP Paribas Asset Management already owns a Chinese mutual fund venture.

  • UBS Takes Stake in AI Advisor Platform

    UBS Takes Stake in AI Advisor Platform

    UBS is taking a stake in an artificial intelligence platform that matches institutional clients with investment experts.

    UBS has invested $5 million in Lynk in its latest funding round, taking the technology company’s total funding to $35 million, Lynk said in a press release Wednesday. Lynk says it has a network of more than 840,000 global experts. Its proprietary technology is driven by an AI data engine that indexes individuals based on their experience and expertise to match users with subject matter experts on its platform.

    Lynk was founded by Peggy Choi in 2015. The firm has eight offices, including New York, Hong Kong, Singapore, Mumbai, Shanghai and Toronto.

    UBS announced a global alliance with Lynk in May for its institutional investor clients and subscribed to the platform in 2020. The collaboration is run via UBS Investment Bank’s principal investment team.

  • Nordea AM to Open ESG Hub in Singapore

    Nordea AM to Open ESG Hub in Singapore

    The hub will enable Nordea to to enhance its local servicing, ESG capabilities, investment platform and distribution reach in the region.

    The asset management arm of financial services group Nordea is planning to open an ESG hub – its first outside its Nordic headquarters – in Singapore, in response to its growth and successes in the region, the firm announced on Wednesday.

    The hub will allow NAM to be closer to clients in the Asia-Pacific region and better understand how companies are embracing sustainability in the region, Nordea Asset Management said in the statement.

    Sustainability issues have gained significant interest in Asia in recent years, and investors are increasingly asking for ESG solutions. The time is right to meet that demand, Nils Bolmstrand, CEO of Nordea Asset Management, said.

    NAM’s local Singapore distribution office was established in 2013, and will be fully integrated with NAM’s ESG-focused internal investment boutiques as well as NAM’s Responsible Investments team.

    The hub is slated to be launched in the latter part of 2021.

  • UBS Misses Mark With Coffee-Coded Survey

    UBS Misses Mark With Coffee-Coded Survey

    The Swiss bank wants its domestic employees to talk about their ethnicity – coming uncomfortably close to long-held stereotypes in the process.

    Zurich-based UBS asked its 21,598 Swiss-based employees to fill out a survey describing their ethnicity, telling them ethnic diversity is a key pillar in achieving its strategic goals.

    The survey – ethnic diversity is important to us – is illustrated with eight espresso cups of varying shades from black to milky white. UBS is asking its employees to categorize their ethnicity as Asian, Black, Hispanic, or White.

    Other options include two or more ethnic groups and other ethnic groups. Employees also have the option of demurring on disclosing their ethnic heritage or presumably not filling out the survey at all.

    UBS’ intentions in the survey are commendable: it can only reach its diversity goals if it tackles the issue of discrimination internally. And of course, to do so, it needs data.

    The way UBS – which employs 73,000 people in more than 50 countries – is gathering this data is inept and eerily reminiscent of colonial-era stereotypes. The bank’s human resources officers seem to believe that the global population can be grouped into four ethnicities. Modern ethnology has identified more than 1,300 ethnicities worldwide.

    UBS has chosen to group ethnicities along geographies – Asia, Latin America – and along with race: white, black. It avoided stumbling identifying all four of the survey’s ethnicities with a race, but it isn’t clear why it views white and black alone as ethnicities.

    The link between ethnic identity and skin color is rooted in a racially tinged stereotype popularized by Carl Linnaeus, a Swedish botanist. In the 18th century, Linnaeus divided humans according to race: white, black, red, and yellow.

    He also baked in how he perceived social and emotional features, a view that favored white Europeans like him. Linnaeus’ views took root during the Enlightenment and established themselves for some years afterward. Immanuel Kant and other enlightenment thinkers viewed dark skin as inferior to white.

    UBS’ likening race to espresso cups also leans hard into stereotypes prevalent in advertising, where black skin was frequently used to sell products like chocolate or coffee. Using imagery of black people, advertisers attempted to portray these consumer goods as something exotic or wild.

    The advertising industry has largely abandoned this practice. One would have wished for a similar light-bulb moment of age-old stereotypes from UBS’ diversity team.

  • Vietcombank gets new chairman

    Vietcombank gets new chairman

    Vietnam’s biggest state-owned lender, Vietcombank, has named Pham Quang Dung as its new chairman until 2023.

    Dung, 48, has been its CEO and a member of the board since 2014.

    Nguyen Thanh Tung, deputy director, temporarily takes over as CEO until a new person is appointed.

    Dung has 27 years’ experience in the financial and banking industry.

    He joined Vietcombank in 1994, and has served in various positions including deputy director of a financial division in Hong Kong and deputy director of the bank.

    The previous chairman of the bank, Nghiem Xuan Thanh, was appointed the Secretary of the Party Committee of Hau Giang Province in early July.

    Vietcombank is 74.8 percent owned by the government, 15 percent by Japan’s Mizuho Corporate Bank and the rest by other shareholders.

  • UBS Replaces Veteran Intermediaries Head

    UBS Replaces Veteran Intermediaries Head

    The Swiss wealth manager is replacing the head of its business with financial intermediaries, after a 40-year veteran of the bank retires.

    Zurich-based UBS is appointing Thomas Frauenlob as the head of its business with other financial institutions such as independent asset managers, effective October 1, according to a memo seen by finews.com. The Swiss banker replaces Stefano Veri, who has overseen the so-called FIM business globally since 2015 and is retiring.

    Veri is uniquely heavyweight: he is a 40-year veteran of UBS’ private bank and part of a cadre of elite managing directors. A UBS spokesman confirmed the Ticino native’s retirement. Late last year, Veri was forced to postpone a push in Miami with intermediaries which is led by Mariana Gregori, who is responsible for international business.

    Frauenlob, Veri’s successor, is a former equities banker who moved into the wealth arm in 2016 when he was tasked with UBS’ business with Switzerland’s wealthy and family offices. The role was reduced to family office responsibilities in a restructuring 20 months ago. Frauenlob will be replaced by Josef «Joe» Stadler in this role, a spokesman said.

    In the wider FIM team, Andreas Moser last September replaced Severin Rupp in overseeing institutional intermediaries. Rupp defected to Vontobel, where he runs business with external asset managers.

    UBS’ remaining FIM management team besides Gregori is Claudio Scarfone for Switzerland, Beat Bachmann for Europe, and Hugo Kattendijke for Asia-Pacific.

    Frauenlob, who moves to the FIM business on Wednesday before taking over fully in October, will report to Anton Simonet, UBS head of wealth management in Switzerland as well as the FIM business, and to Iqbal Khan, who co-runs the wider wealth management unit together with Tom Naratil.

  • UOB Shuffles Board

    UOB Shuffles Board

    UOB has announced changes to its board, including the addition of a 40-year banking veteran as its new independent director.

    Tracey Woon joins UOB as an independent director as well as a member of its audit committee and board risk management committee, according to a statement, effective September 1.

    Woon, 65, is currently a director at Singapore Press Holdings, a member of the Securities Industry Council and the Listings Advisory Committee of the Singapore Exchange amongst other roles.

    Woon is a 40-year banking veteran in the region and was previously UBS’ APAC global wealth management vice-chair from 2016 until her retirement in 2020 and Citibank’s ASEAN corporate and investment banking vice-chair and UBS’ APAC global wealth management vice-chair.

    Other changes to UOB’s board include the addition of Dinh Ba Thanh and the exit of James Koh, 75, who will step down effective August 31 after nine years as an independent director since 2012.

    Thanh, 64, is the founder and chief executive of Vietnam’s largest integrated media tech group DatVietVAC Group Holdings, which was established in 1993 as the country’s first privately-owned advertising and media company. Thanh currently also serves on the board of trustees at the Asia Business Council and is also a member of the World Economic Forum.

    The appointment of the two new directors will further enhance the diversity of the board,» said UOB chairman Wong Kan Seng. In guiding the group in its regional strategy, the board will benefit from Tracey’s extensive background in banking across the region and Thanh’s insights in transforming his business into a successful media entertainment technology company in Vietnam.

  • UBS Poaches Middle East Team From Rival

    UBS Poaches Middle East Team From Rival

    The Swiss wealth giant nabbed five wealth managers from Credit Suisse in the United Arab Emirates.

    Zurich-based UBS is expanding in the Middle East by hiring Georges El Khoury, currently country head in the U.A.E. for Credit Suisse. El Khoury will report to Ali Janoudi, an influential UBS group managing director who oversees the Middle East and Africa private bank, and to Niels Zilkens, the Dubai head.

    The region is both a boon for private banks as well as – reportedly – a source of huge staffing tension. The U.S. outlet five weeks ago published a blistering report about Credit Suisse’s Middle East boss Bruno Daher.

    El Khoury is walking from Credit Suisse to UBS with four staff including Raoul Rahme, another managing director, and Iyad Tamim Jundi, Abdullatif Karami, and Sarika Chandwani.

    A Credit Suisse spokesman said the bank had promoted Saad Osseiran as head of wealth management in the U.A.E. and in Oman, and Fahad Al-Ebrahim as market leader for Kuwait as a result of the team leaving.

  • SHB sells consumer finance unit to Thai lender

    SHB sells consumer finance unit to Thai lender

    The Saigon-Hanoi Commercial Joint Stock Bank will sell a 50 percent stake in its consumer finance division, SHB Finance, to Thailand’s Bank of Ayudhya.

    Vietnam’s fifth-largest bank said in a statement it would sell the remaining 50 percent to Bank of Ayudhya after three years.

    Bank of Ayudhya said in a stock market filing that the deal is worth VND3.59 trillion ($157.75 million), adding: “The acquisition will enable the bank to capture growth outside of Thailand.”

    Japan’s Mitsubishi UFJ Financial Group holds a 76.9 percent stake in the lender, Thailand’s fifth-largest by assets.

    After more than three years since inception, SHB Finance has a presence in 46 provinces and cities and almost 300,000 borrowers.

    Another private lender, VPBank, sold a 49 percent stake in its consumer finance unit, FE Credit, in April to Japan’s Sumitomo Mitsui Finance Group for $1.4 billion.

    Other Vietnamese lenders like VietinBank and MSB are also looking to sell their consumer finance operations.