Thursday 5th March 2015
NEWS TICKER – THURSDAY, MARCH 5TH 2015: Following a recent Morningstar Analyst Ratings meeting, Morningstar has moved the Henderson Horizon Japanese Equity fund and the Henderson Japan Capital Growth fund to a Morningstar Analyst Rating™ of Neutral. Both funds were previously Under Review due to a change in the lead portfolio manager. Prior to being placed Under Review, both funds were rated Bronze. The funds were solely managed by Michael Wood-Martin, who took over in 2005. However, in October 2014 Henderson decided to adopt a team-based approach. They are now run by the Japanese Equities team consisting of four investment professionals, including William Garnett, Michael Wood-Martin, Jeremy Hall, and Yun-Young Lee. Given this change to the investment process, Morningstar says it has less clarity around the likely shape of the portfolios and little evidence that the strategy can be implemented effectively. Morningstar believes a Neutral rating is appropriate at the current time —Moody's Investors Service has today republished a number of asset-backed securities (ABS) and residential mortgage-backed securities (RMBS) rating methodology reports. The updated ABS and RMBS methodology reports consolidate the secondary rating methodology "Revising default/loss assumptions over the life of an EMEA ABS/RMBS transaction" and which the agency will now retire; for RMBS specifically sees updates to the surveillance section; and for Consumer Loan-Backed ABS specifically a new appendix describing how Moody's will tailor its approach to rating consumer loans for marketplace lending loans. The republications do not represent a change in methodology and will not result in any rating changes —BATS Chi-X Europe reports a 23.7% market share, with average notional value traded at €12.3bn up substantially from €8.9bn in February 2014. Market share rose in 14 of the 15 markets the firm covers. Its trade reporting facility, BXTR, had its second-most successful month ever with more than €369.3bn reported in total during the month; an average of €18.5bn each trading day. In total, BATS Chi-X systems touched €616.1bn of trades in February—The Straits Times Index (STI) ended -20.26 points lower or -0.59% to 3395.27, taking the year-to-date performance to +0.90%. The FTSE ST Mid Cap Index declined -0.18% while the FTSE ST Small Cap Index declined -0.17%. The top active stocks were SingTel (-1.20%), DBS (+0.05%), Keppel Land (-0.44%), OCBC Bank (-0.48%) and Global Logistic (unchanged). The outperforming sectors today were represented by the FTSE ST Utilities Index (+1.66%). The two biggest stocks of the FTSE ST Utilities Index are United Envirotech (unchanged) and Hyflux (+0.58%). The underperforming sector was the FTSE ST Consumer Goods Index, which declined -1.31% with Wilmar International’s share price declining -0.61% and Thai Beverage’s share price declining -2.06%.The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (-1.22%), SPDR Gold Shares (-0.31%), DBXT MSCI Thailand TRN ETF (-0.38%). The three most active Real Estate Investment Trusts (REITs) by value were CapitaMall Trust (+0.94%), Ascendas REIT (+2.02%), CapitaCom Trust (+0.28%).The most active index warrants by value today were HSI25000MBeCW150429 (-14.16%), HSI24200MBePW150429 (+10.53%), HSI23800MBePW150330 (+16.92%)—Commerz Real and RFR Holding have signed an agreement to purchase the real estate Atlas Plaza in Miami/Florida for its open-ended real estate fund hausInvest. The retail trade complex, located in the burgeoning Design District and in part on two storeys, comprises two existing buildings and a new construction, scheduled to be completed by May 2015. Upon the completion of the building work the leasable area will total approximately 1,600 square metres. The total investment volume for the acquisition and extension of “Atlas Plaza” amounts to around 68 million US dollars (approximately €60m)—Malaysia’s corporate sukuk sales will rebound from the worst start to a year since 2010 as a recovery in oil prices spurs issuance before the US raises interest rates, according to investment bank CIMB. Islamic bond offerings to date are down MYR9.7bn on a year on year basis. Kuala Lumpur-based AmInvestment Bank Bhd predicts sales could surpass last year’s MYR62bn as more projects come on stream under the government’s 10-year development programme. A 34% rally in Brent crude from January’s six-year low will shore up the country’s finances after Fitch Ratings warned the loss of revenue for oil-exporting Malaysia puts its credit ranking at risk. The average yield on AAA rated Malaysian corporate securities has dropped to a three-month low, cutting costs for issuers involved in Prime Minister Datuk Seri Najib Razak’s $444bn spending drive and those seeking to refinance debt—Bahrain’s BIBF has announced the launch of the region’s first Islamic Finance and Muslim Lifestyle Convergence Training programme, developed as part of the Waqf Fund’s initiatives to enhance Islamic Finance training in the region, in partnership with New York-based DinarStandard, at a press conference yesterday. The burgeoning Halal food and Muslim Lifestyle sectors is estimated to be worth $2trn in 2013, and is expected to reach $2.47trn by 2018, based on the State of the Global Islamic Economy 2014 report, produced by Thomson Reuters in collaboration with DinarStandard. This represents a huge opportunity for Islamic Finance, which has been for the most part, untapped—Kames Capital is to lower the annual management charge on the Kames Investment Grade Global Bond Fund following a review of the fund’s positioning in the European markets. The move will see the AMC on the Kames Investment Grade Global Bond Fund B share class fall to 0.65% from its current rate of 0.80%, while for the A share class the charge will drop to 1.15% from 1.30%. The changes will take effect from the 1st April 2015. As part of the review, Kames will also be changing the benchmark of the fund to the Barclays Global Aggregate Corporate Index from the Lipper Global Bond Global Corporate Median. The changes are intended to bring the fund into line with its peer group particularly in Continental Europe. Whilet there will be no change to the investment process of the fund, there will be a slight change to the fund’s duration. In order to maintain its index-neutral duration, the Fund will now be aligned to the Barclays Global Aggregate Corporate Index which has a duration of around 6.4 years. This compares to the existing Lipper peer group which has an estimated duration of 5 years.

Sovereign wealth funds move to real estate investments

Monday, 11 March 2013
Sovereign wealth funds move to real estate investments Sovereign wealth funds around the world are moving to diversify their portfolios, according to TheCityUK’s Sovereign Wealth Funds 2013 report, with deal transaction sizes getting smaller and emerging markets accounting for a growing share of investments.  http://www.ftseglobalmarkets.com/

Sovereign wealth funds around the world are moving to diversify their portfolios, according to TheCityUK’s Sovereign Wealth Funds 2013 report, with deal transaction sizes getting smaller and emerging markets accounting for a growing share of investments. 

The trend towards diversification has resulted in a 30% increase in investment into real estate globally by SWFs over the past twelve months, with information technology and consumer goods also seeing rises in allocation. The allocation increase is largely down to low bond yields in some developed countries and the volatility in equity markets.

The UK, particularly London, has benefited from SWFs’ increased allocation to real estate. Recent transactions include China Investment Corporation’s £245m purchase of Winchester House, the London headquarters of Deutsche Bank.  Gingko Tree Investment, part of China’s State Administration of Foreign Exchange, has also invested more than $1.6bn in at least four deals including water utility, student housing, and office buildings in London and Manchester.



Other funds which have made real-estate investments in London during 2012 include The Korea Investment Corporation, the State Oil Fund of the Republic of Azerbaijan and Norway’s Government Pension Fund Global.

TheCityUK’s report also found that overall direct investments by SWFs dropped to a six-year low of $57bn globally in 2012. This was down more than a third on 2011 and 46% below the peak level of activity three years earlier, as SWFs focused more on their domestic markets. However, investments picked up in the fourth quarter of the year.

Chris Cummings, chief executive of TheCityUK, says the increased investment in property by SWFs is a blessing for London, which is a prime real estate location and seen as a safe haven market for investors.

“The UK is a leading destination for SWF investments, accounting for one sixth of global investments since 2005, second only to the US, and attracting more capital than France, Germany and Spain combined,” explains Cummings. “These investments bring numerous benefits to the UK economy, including new jobs and capital for vital infrastructure projects.

“But the UK is also an important centre for the SWF industry as a clearing house for transactions and a location from where funds are managed. Our strong position stems from the structural strengths associated with the cluster of financial and related professional services firms, broad skills base, open market and pivotal international position of English law.”

TheCityUK’s report revealed that global SWF assets under management increased for the fourth year running in 2012, hitting a record $5.2tn, due to growth in existing assets as well as the launch of a number of new funds during the year. TheCityUK’s projections are for total global SWF assets to grow to $5.6tn by the end of 2013.

There was an additional $7.7tn held in other sovereign investment vehicles, such as pension reserve funds, development funds and state-owned corporations' funds, and $8.4tn in other official foreign exchange reserves.

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