TheEdge
KUALA LUMPUR: The worst of the current economic crisis may be over in 2010 but asset managers have not ruled out further upheavals within the next decade.
According to a survey on 225 asset managers in 30 countries carried out by Principal Global Investors, most respondents do not rule out more systemic crises in the next decade. It said the scale of recent economic stimulus in G20 countries was expected to stoke inflation.
“We are not completely out of the credit crunch yet. Getting credit going is the key initiative for central banks for the next year. They have been flooding the market with liquidity in hope of getting credit moving again.
“But a lot of times, this is just simply liquidity. It is not generating new credit. And there is recognition that credit is a necessary evil in the economy,” COO of Principal Global Investors Barbara McKenzie said at a CIMB Principal Asset Management Bhd media briefing yesterday.
She added that until the market could get back on its feet again, it would continue to need access to credit and thus more government aid.
NEW CREDIT NEEDED TO FUEL ECONOMY... Markets need access to credit until they get back on their feet again, says Principal Global Investors COO Barbara McKenzie (right) at CIMB-Principal Asset Management Bhd media briefing in Kuala Lumpur yesterday. Also present were CIMB-Principal Asset Management chief executive Datuk Noripah Kamso (left) and Principal Global Investors (S) Ltd MD for Asia ex Japan Kirk West. Photo by Suhaimi Yusuf
The survey also found that 45% of its respondents did not expect the worst of the crisis to be over till the first half of next year while 25% expected it to be even later.
The 225 asset managers and pension funds surveyed were responsible for collective assets worth US$18.2 trillion (RM63.9 trillion) as at April 2009.
“We are now primarily driven by retail industries locally, significant fiscal stimulus and low interest rates. All these will naturally fade.
“However, the stimulus will eventually have to be removed and the key timing to withdraw this stimulus and how it is removed are important to consider as we are juggling between growth and potential inflation.
“But that will be in the second half of 2010,” Principal Global Investors (S) Ltd managing director for Asia ex Japan, Kirk West said.
On the survey findings, West added that although it was carried out during “the eye of the storm”, the results could be used to study investor behaviour moving forward.
“People have lost confidence in a lot of the longer-term growth assets. The whole concept of equity risk premium has made people feel uncomfortable. They will now be looking at increased liquidity.
“Several things eroded investor confidence during the crisis, especially the fact that diversification of assets hasn’t worked in the short term because of deleveraging. Going forward, however, we still believe in diversification,” said West.
He added that asset managers also expected further regulatory pressures to intensify over the next three years which may result in fee compression.
Consequently, West said a majority of firms had shown a significant revenue decline of 35%.
“One of the key issues we’ve seen in the last 12 months is compensation within the finance industry. We expect one outcome will be greater alignment in terms of compensation. So, maybe people will have lower fixed compensation, and a higher component of variable compensation and this will be more aligned with the performance of the underlying funds,” he said.
McKenzie said there was already a movement of money away from some of the traditional hedge funds centre that had light regulations to other offshore jurisdictions with higher regulatory standard as investors started understanding a need for greater regulation post crisis.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
Wednesday, August 26, 2009
Singapore's UOB Asset, India's UTI in funds tie-up
BusinessTimes
SINGAPORE: Singapore's United Overseas Bank (UOB) said yesterday its fund management arm has formed an alliance with a unit of India's UTI Asset Management to jointly launch and distribute mutual funds.
"The first initiative of the alliance is an equity fund that both parties have jointly developed," UOB Asset Management (UOBAM) said in a statement.
"The features of the fund will be announced at a later date."
UOBAM manages about S$13.5 billion (S$1 = RM2.44) in assets and has business operations in Singapore, Brunei, Japan, Malaysia, Taiwan and Thailand.
Its partner UTI International (Singapore) is a joint venture involving India's largest mutual fund company UTI, Shinsei Investments and another company.
UTI manages around US$15 billion (US$1 = RM3.51) and its funds are distributed in 450 of India's 620 districts, UOBAM said. - Reuters
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
SINGAPORE: Singapore's United Overseas Bank (UOB) said yesterday its fund management arm has formed an alliance with a unit of India's UTI Asset Management to jointly launch and distribute mutual funds.
"The first initiative of the alliance is an equity fund that both parties have jointly developed," UOB Asset Management (UOBAM) said in a statement.
"The features of the fund will be announced at a later date."
UOBAM manages about S$13.5 billion (S$1 = RM2.44) in assets and has business operations in Singapore, Brunei, Japan, Malaysia, Taiwan and Thailand.
Its partner UTI International (Singapore) is a joint venture involving India's largest mutual fund company UTI, Shinsei Investments and another company.
UTI manages around US$15 billion (US$1 = RM3.51) and its funds are distributed in 450 of India's 620 districts, UOBAM said. - Reuters
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
Monday, August 24, 2009
Fund managers cut exposure on China
TheEdge
KUALA LUMPUR: Fund managers have recently shifted their investment focus to Europe, the Middle East and Africa (EMEA) away from Asia, especially China, according to one Bank of America Merill Lynch (BOA-ML) survey.
It said based on its August survey, there was a "big rotation" to EMEA and away from Asia.
In a statement last Thursday, the bank said the main driver of this investment pattern was the "switching" to Russia and out of China, which saw its stock market entering bear territory last week, having plunged over 20% from the year’s peak.
A total of 204 fund managers, managing a total of US$554 billion (RM1.95 trillion), participated in the global survey from Aug 7-12. A total of 177 managers, armed with US$370 billion, participated in the regional surveys.
BOA-ML noted that in two years, China saw the lowest number of overweight positions by fund managers while South Korea got its first overweight call.
It added that investors had also sharply cut exposure to Chinese equities to "neutral".
The survey also showed more investors were becoming less optimistic in August on China economic growth compared to June while optimism on European growth prospects surged in August.
The most favoured global emerging market (GEM) markets are growth or liquidity plays such as Russia, Turkey, and Indonesia while the least favoured are the defensive markets such as Chile and Malaysia.
On specific sectors, BOA-ML said "consumer discretionary" and financials were the only sectors tagged with overweight calls.
"Most unloved sectors in GEM portfolios are utilities and healthcare," it said, adding that TECHNOLOGY [] stocks were the strongest engines behind the early recovery of GEM markets.
BOA-ML said globally, technology too remained the number one sector, with 28% of the global panel putting an overweight stance on the industry.
The bank said investors within GEM were positive about banks with a net 17% of fund managers in the regional survey overweight on bank stocks. It said 60% of the fund managers believed global corporate earnings could rise by over 10% over the next 12 months. Interestingly, it added, balance sheet repair was becoming less of a concern to investors.
Meanwhile, on the local front, fund managers like HwangDBS Investment Management Bhd is also bullish on finance stocks.
Its head of equities Gan Eng Peng told The Edge Financial Daily that the finance sector offered one of the best exposures to the economic recovery story.
Gan said despite a recent increase in volatility within the financial sector, valuations remained attractive over the next one to three years.
"Even at current valuations, the global financial sector represents a window of opportunity which has not been open for the last 10 to 20 years," he added.
Gan said as for the PLANTATION [] sector, shares of large-cap plantation companies in Malaysia had hardly corrected and their valuations remained too high.
"We think investors can get much better value and faster returns in the Indonesian names listed in Singapore," he added.
Gan said it also remained positive on the CONSTRUCTION [] sector, as it had performed relatively well in the current market rebound.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
KUALA LUMPUR: Fund managers have recently shifted their investment focus to Europe, the Middle East and Africa (EMEA) away from Asia, especially China, according to one Bank of America Merill Lynch (BOA-ML) survey.
It said based on its August survey, there was a "big rotation" to EMEA and away from Asia.
In a statement last Thursday, the bank said the main driver of this investment pattern was the "switching" to Russia and out of China, which saw its stock market entering bear territory last week, having plunged over 20% from the year’s peak.
A total of 204 fund managers, managing a total of US$554 billion (RM1.95 trillion), participated in the global survey from Aug 7-12. A total of 177 managers, armed with US$370 billion, participated in the regional surveys.
BOA-ML noted that in two years, China saw the lowest number of overweight positions by fund managers while South Korea got its first overweight call.
It added that investors had also sharply cut exposure to Chinese equities to "neutral".
The survey also showed more investors were becoming less optimistic in August on China economic growth compared to June while optimism on European growth prospects surged in August.
The most favoured global emerging market (GEM) markets are growth or liquidity plays such as Russia, Turkey, and Indonesia while the least favoured are the defensive markets such as Chile and Malaysia.
On specific sectors, BOA-ML said "consumer discretionary" and financials were the only sectors tagged with overweight calls.
"Most unloved sectors in GEM portfolios are utilities and healthcare," it said, adding that TECHNOLOGY [] stocks were the strongest engines behind the early recovery of GEM markets.
BOA-ML said globally, technology too remained the number one sector, with 28% of the global panel putting an overweight stance on the industry.
The bank said investors within GEM were positive about banks with a net 17% of fund managers in the regional survey overweight on bank stocks. It said 60% of the fund managers believed global corporate earnings could rise by over 10% over the next 12 months. Interestingly, it added, balance sheet repair was becoming less of a concern to investors.
Meanwhile, on the local front, fund managers like HwangDBS Investment Management Bhd is also bullish on finance stocks.
Its head of equities Gan Eng Peng told The Edge Financial Daily that the finance sector offered one of the best exposures to the economic recovery story.
Gan said despite a recent increase in volatility within the financial sector, valuations remained attractive over the next one to three years.
"Even at current valuations, the global financial sector represents a window of opportunity which has not been open for the last 10 to 20 years," he added.
Gan said as for the PLANTATION [] sector, shares of large-cap plantation companies in Malaysia had hardly corrected and their valuations remained too high.
"We think investors can get much better value and faster returns in the Indonesian names listed in Singapore," he added.
Gan said it also remained positive on the CONSTRUCTION [] sector, as it had performed relatively well in the current market rebound.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
3.56 sen payout for Pru fund unit holders
BusinessTimes
PRUDENTIAL Fund Management Bhd (PFMB) has declared an income distribution of 3.56 sen per unit to unit holders of Prudential Balanced Fund. The distribution is equivalent to 5 per cent on Net Asset Value of the Fund as at 31 July 2009.
All unit holders who have maintained their unit holdings as at 24 August 2009 will be entitled to this income distribution.
PRUbalanced fund invests in a mixed portfolio of companies with good dividend yield and low price volatility and a portfolio of investment-grade fixed-income securities.
The Fund has met is objective of providing investors with capital appreciation and a reasonable level of income over the longer term. The Fund charted a 1, 3 and 5-year return of 5.01 per cent, 32.27 per cent and 41.30 per cent respectively.
Since its inception on 29 May 2001, the Fund recorded a return of 117.98 per cent, outperforming its benchmark, by 48.20 per cent.
This would be the fourth income distribution for the Fund since its inception.
“The Fund benefited from selected big-cap holdings especially the banks, as investors positioned their funds to reflect the new weighting in the new FBMKLCI index. The banking sector comprises a major sector weighting for the new index. The Fund’s exposure in corporate bonds also helped the Fund’s relative performance as corporate bonds yield higher returns than the benchmark RAM quant shop Medium Index in June,” PFMB CEO-Designate Thomas Cheong said in a statement.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
PRUDENTIAL Fund Management Bhd (PFMB) has declared an income distribution of 3.56 sen per unit to unit holders of Prudential Balanced Fund. The distribution is equivalent to 5 per cent on Net Asset Value of the Fund as at 31 July 2009.
All unit holders who have maintained their unit holdings as at 24 August 2009 will be entitled to this income distribution.
PRUbalanced fund invests in a mixed portfolio of companies with good dividend yield and low price volatility and a portfolio of investment-grade fixed-income securities.
The Fund has met is objective of providing investors with capital appreciation and a reasonable level of income over the longer term. The Fund charted a 1, 3 and 5-year return of 5.01 per cent, 32.27 per cent and 41.30 per cent respectively.
Since its inception on 29 May 2001, the Fund recorded a return of 117.98 per cent, outperforming its benchmark, by 48.20 per cent.
This would be the fourth income distribution for the Fund since its inception.
“The Fund benefited from selected big-cap holdings especially the banks, as investors positioned their funds to reflect the new weighting in the new FBMKLCI index. The banking sector comprises a major sector weighting for the new index. The Fund’s exposure in corporate bonds also helped the Fund’s relative performance as corporate bonds yield higher returns than the benchmark RAM quant shop Medium Index in June,” PFMB CEO-Designate Thomas Cheong said in a statement.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
AmFirst REIT posts moderate Q1 growth
BusinessTimes
Am ARA REIT Managers Sdn Bhd, the Manager of AmFIRST Real Estate Investment Trust (AmFIRST), has posted revenue of RM23.65 million for the first quarter ended 30 June 2009, a 5 per cent increase from RM22.52 million registered in the previous corresponding quarter.
Net property income for the period grew marginally to RM15.23 million compared to RM15.07 million in the corresponding period last year, while profit after tax rose 10 per cent to RM10.58 million against RM9.60 million before. Earnings per unit was 2.47 sen.
The improved performance arose from the contribution of income derived from positive rental reversions recorded from its three properties - Kelana Brem Towers, The Summit Subang USJ and Menara AmBank.
“AmFIRST achieved a set of favourable income for the first quarter despite the current global economic slowdown, that have also impacted the REITs industry worldwide,” chief executive officer Lim Yoon Peng said in a statement.
He said the properties also continue to attract and retain quality tenants, thus generating steady rental income for the Trust.
For this year, the manager has lined up enhancement and repositioning works for its properties. The first building involved – Menara Merais in Petaling Jaya - should see its renovation works completed by November this year.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
Am ARA REIT Managers Sdn Bhd, the Manager of AmFIRST Real Estate Investment Trust (AmFIRST), has posted revenue of RM23.65 million for the first quarter ended 30 June 2009, a 5 per cent increase from RM22.52 million registered in the previous corresponding quarter.
Net property income for the period grew marginally to RM15.23 million compared to RM15.07 million in the corresponding period last year, while profit after tax rose 10 per cent to RM10.58 million against RM9.60 million before. Earnings per unit was 2.47 sen.
The improved performance arose from the contribution of income derived from positive rental reversions recorded from its three properties - Kelana Brem Towers, The Summit Subang USJ and Menara AmBank.
“AmFIRST achieved a set of favourable income for the first quarter despite the current global economic slowdown, that have also impacted the REITs industry worldwide,” chief executive officer Lim Yoon Peng said in a statement.
He said the properties also continue to attract and retain quality tenants, thus generating steady rental income for the Trust.
For this year, the manager has lined up enhancement and repositioning works for its properties. The first building involved – Menara Merais in Petaling Jaya - should see its renovation works completed by November this year.
Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.
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