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NEWS TICKER, FRIDAY, NOVEMBER 27TH: The Taiwan Stock Exchange (TWSE) has launched an online ‘Rules & Regulations Directory’, providing international investors and the media with a centralised location for all 238 Taiwan capital market regulations in both English and Chinese. Regulations available via the Directory include rules for: primary and secondary listings, corporate governance, clearing and settlement, margin trading, ETFs, market monitoring and regulation, among others. The Directory features an easy-to-navigate graphical interface, allowing investors to locate regulations by category or by tree structure, as well as a comprehensive search function that automatically suggests laws and regulations based on key words. The English translation of the regulations was provided by multinational law firms -The European Parliament’s negotiation team has informed the European Commission that it is ready to accept a one-year delay of the entry into force of MiFID II. However, this only applies if the Commission finalises the implementing legislation swiftly and thereby takes into account the European Parliament’s priorities. Furthermore, Commission and ESMA need to come up with a clear roadmap on the implementation work and especially for setting up the IT-systems. That’s telling them! - China shares fell 5.5% in trading today; it’s a big fall, the biggest since August. Analysts say it is related to the regulator’s announced determination to enforce good practice on the securities industry. Hong Kong's Hang Seng Index fell 1.9% today and 3% over the week. Elsewhere, Japan shares fell 0.3% after the Nikkei neared the 20000 barrier on Thursday. Australia's S&P/ASX 200 fell 0.2% and South Korea's Kospi slipped 0.1%. The Straits Times Index (STI) ended 25.57 points or 0.89% lower to 2859.12, taking the year-to-date performance to -15.04%. The top active stocks today were OCBC Bank, which declined 0.46%, SingTel, which declined 0.26%, UOB, which declined 0.10%, DBS, which declined 0.36% and Global Logistic, with a 2.44% fall. The FTSE ST Mid Cap Index declined 0.48%, while the FTSE ST Small Cap Index rose 0.03%.Brent crude was last down 0.2% at $45.38 a barrel. U.S. oil prices fell 0.4% on Thursday amid signs of robust US production despite data showing a lower-than-expected increase in US oil inventories and a decline in the number of working oil-rigs in the country. Gold prices were down 0.3% at $1,066.70 a troy ounce - The EBRD has extended a total of $70m in loans to Mongolia’s Khan Bank, aimed at small and medium-sized enterprises (SMEs). The EBRD package will include financing for SMEs and their value chains, sustainable energy projects designed to improve energy efficiency, a risk-sharing facility that will help Khan Bank clients access longer-term financing, and an increase in the trade finance facility, which helps companies perform export and import operations. The sustainable energy part of the financing package, which is $10m, is part of the special financing framework, Mongolian Sustainable Energy Financing Facility. The EBRD has such facilities in many countries of operations; they are part of the Bank’s drive for green economy transition. The EBRD is also providing technical cooperation as part of the sustainable energy financing portion, funded by the multi-donor EBRD Shareholder Special Fund. Khan Bank, which has around 500 offices across Mongolia, is one of the largest commercial banks in the country. The loan agreements were signed by Khan Bank CEO Norihiko Kato and the head of the EBRD office in Mongolia, Matthieu Le Blan.

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BNY Mellon releases outlook for Asian hedge funds

Wednesday, 06 February 2013
BNY Mellon releases outlook for Asian hedge funds According to a market outlook report released by BNY Mellon today, the year ahead will likely remain sharply challenging for Asian hedge fund managers looking to raise new investor capital.

According to a market outlook report released by BNY Mellon today, the year ahead will likely remain sharply challenging for Asian hedge fund managers looking to raise new investor capital.

The “stars” of recent years that have lodged standout gains will continue to see moderate inflows from their traditional investors – US institutions – while new entrants are turning to ultra-high net worth investors, family offices and their own friends amid a dearth of institutional seed capital.

Commenting on the issues in the continued evolution of Asia’s hedge funds market, Aidan Houlihan, managing director for BNY Mellon’s alternative investment services says: “From my vantage point here in Hong Kong, I believe the gathering trend for 2013 is the continued gradual evolution of Asia’s hedge fund community. Although we expect fewer fund launches over the next 12 months, we do anticipate that the new crop will be more diverse in its range of investment strategies.  This will support Asia’s gradual shifting away from a monolithic emphasis on equity long-short strategies. Already, more esoteric credit and macro-oriented strategies as well as multi-strategy funds have entered the market. Today, equity long-short funds account for roughly 75% of hedge fund assets under management, down from 90% just a few years ago.

“We believe the hedge fund industry in Asia will continue to grow and evolve and provide investors with more options. Whilst it is certainly true that we expect to see fewer launches in 2013, we believe the quality of the funds coming to market and level of assets under management they will raise on launch date will continue to increase.

“In my opinion, one of the main headwinds for the average hedge fund in Asia in the year ahead will continue to be raising capital. The new capital coming into Asia will largely be limited to outliers that have significantly outperformed both peers and the broader market. These fund managers have consistently been rewarded with capital inflows, and investor interest in them remains high.

“Seeding arrangements for early stage hedge funds in Asia have become harder to secure. The spate of high profile launches in the first half of 2012 ultimately proved short-lived. Many, however, have found success tapping less conventional capital raising channels such as family offices, ultra-high net worth individuals and personal friends.  Smaller funds have also adapted by becoming creative in their investor targeting. And renewed interest in hedge funds in general should trickle down to the start-up space, both globally and in Asia. He added.

Investor Concentration

A tricky issue for funds in Asia is the over reliance on US investment,  with 80% of funds currently being raised for Asian products coming from American investment, the majority of the remaining 20% is from European sources, leaving a small amount from regional sources.

Mr Houlihan says : “I believe Asian hedge funds need to try and cultivate a deeper base of investors in their home markets. The majority are overly reliant on foreign capital, which is a trend we expect to continue into 2013.

“The formula for diversifying their shareholder base may be quite simple: better performance. The challenge for the hedge fund industry overall will be maintaining – and in some cases re-establishing – its reputation as an asset class that can outperform the broader market and provide uncorrelated returns. The last couple of years have challenged that reputation. But if hedge funds regain their footing this year, we expect fundraising to improve apace, and Asian fund managers should definitely participate in that trend.”

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