It is reported that the company’s assets under management target will lead to an increased focus on Asia. This is especially important as the demerger of Prudential’s fund management and insurance arm M&G in Asia and the US is completed. 

Eastspring is strengthening its Asia presence with a line of major acquisitions in the asset management sector. Earlier this month, the company acquired 50.1 percent of Thanachart Fund Management for $137 million. The company has established its presence in more than ten Asian markets. With that, Eastspring becomes Thailand’s fourth largest asset manager, with a market share of 12 percent. Its combined assets under management are worth $21.6 billion. 

More recently, the company had finalised a deal to acquire 65 percent of TMB Asset Management, which is Thailand’s fifth largest asset manager. Eastspring has an option to acquire full ownership of TMB Asset Management in the future — and has established a distribution partnership with TMB Bank. 

TMB Bank is Thailand’s seventh largest bank by assets. The partnership will add value to Eastspring’s Asia presence as it enables TMB customers to explore and invest in the company’s investment opportunities. 

Prudential has had its presence in Thailand for more than 20 years through its subsidiary Prudential Life Assurance. It currently serves 1.6 million customers in the country.

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The policy was proclaimed by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA).

Drafted to provide fund management companies extra leeway for issuing of shares and dividend payouts, the policy is slated to be introduced as an offshoot of the Variable Capital Companies (VCC) structure.

Meanwhile, the MAS declared the unveiling of a grant policy to bolster the structure and motivate fund managers to join the bandwagon. To signify the unveiling of the policy, 20 investment funds were incorporated.

MAS assistant managing director, Development and International, Benny Chey said that this was indeed a remarkable development in the emergence of Singapore as an epicentre of full-service international fund management and domiciliation.

The VCC Act is expected to facilitate asset managers to domicile their funds in Singapore by enabling the creation of a solitary guideline to contain a reservoir of assets and various sub-funds, and providing more privacy.

Although several asset management firms have their establishments based in Singapore, a large portion of their funds are still registered in offshore destinations. The latest policy provides investors more leeway and can be utilised for both conventional as well as substitutive tactics.

In 2018, the city-state’s asset management sector expanded over 5 percent to SGD 3.4 trillion ($2.5 trillion), according to a report by the MAS.

Apart from that, Singapore also looks to cash in on the turmoil currently occurring from several months in Hong Kong, its adversary in the neighbourhood over a long period of time.

As more and more asset management organisations based in Hong Kong are gradually turning their attention towards Singapore, the latest policy acts as the ideal foil for the nation state’s prevailing legal guidelines of limited collaborations, unit trusts and private entities.

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Accordingly, UFI was among the five-member funds that organised the Philippine Investment Funds Association (PIFA) in 1996. The management of UFI was then transferred to COCOLIFE (United Coconut Planters Life Assurance Corporation) in 2001. Two years later, CAMCI was incorporated and was appointed as the investment manager and principal distributor of United Fund, Inc.  Soon afterward, Cocolife Asset Management launched the second fund, Cocolife Fixed Income Fund, Inc. (CFIFI)

In 2008, CAMCI also launched the Cocolife Dollar Fund Builder, Inc. (C$FB) and in 2011, it reached a milestone when CAMCI’s total assets under management (AUM) breached the P1 billion mark. The company reached yet another milestone when Cocolife Fixed Income Fund Inc.’s total assets under management hit P2 billion in 2017. And in 2018, CAMCI celebrated its fifteenth year of operations. At the same time, the three funds also commemorated anniversaries: United Fund reaching 25 years; Cocolife Fixed Income Fund, Inc., 15 years; and Cocolife Dollar Fund Builder Inc., ten years.

In an exclusive interview with International Finance, Artemio A. Tanchoco Jr., President, and Mirasol Z. Sanchez, Senior Manager and Head of Portfolio Management at Cocolife Asset Management Company Inc., explained how the company’s funds achieved their leadership positions in the Philippines asset management market, its investment strategy, and its outlook for the Philippines market.

International Finance: Could you please tell us more about Cocolife Asset Management’s investment strategy?

Artemio A. Tanchoco Jr. and Mirasol Z. Sanchez: In general, our investment strategy is to stay long enough to weather the inevitable ups and downs of the market. Nevertheless, it also depends on the objective of the funds we are managing. For our equity fund, our strategy is to trade the volatility of the stock market and employ stock selection and allocation. For our fixed income fund, the company is keen on maintaining its accrual-based investments so as to minimise the impact of interest rate volatility, consistent with its policy to preserve capital.

How have Cocolife Asset Management’s key funds performed over ten, five and one years?

Cocolife Asset Management’s mutual funds have shown their resilience over the past years, overcoming the extreme volatility in the mutual fund industry and the financial markets as a whole. The funds under its management have historically yielded superior returns since their inception. In fact, they won individual recognitions for their 2018 performances in terms of one-year, three-year, five-year, and ten-year returns.

Notably, CFIFI topped the rankings of peso-denominated bond funds as it garnered first place in all the one-year, three-year, and five-year return categories, surpassing ten other competing funds in the industry. UFI was also awarded third place for the one-year return category of the peso-denominated equity funds. Likewise, it placed second for both three-year and five-year returns. C$FB, meanwhile, bagged first place for the one-year, five-year and ten-year return categories, displaying excellence in the dollar-denominated balanced funds category.

Could you please tell us more about the performance of Cocolife’s Peso denominated equity fund and Cocolife Fixed Income Fund and how they have delivered value to customers over time?

In the previous years, United Fund, Inc. (equity fund) was a ‘lag¬gard’ among the company’s funds. But we have already corrected our strategy. We made alterations to our stock selection strategy to be at par with the index in terms of sectoral and company weight. This strategy was aimed at minimising the deviation between the index and fund’s performance. True enough, the management’s strategy shift did bode well for the fund, as UFI’s performance in the past five years was in synch with the local index. In fact, UFI has even outperformed the local market.

Tagged as the ‘consistently consistent fund’, Cocolife Fixed Income Fund, Inc. (CFIFI) topped the ranking of the peso bond funds in the Philippine Investments Funds Association (PIFA) rankings under one-year, three-year and five-year categories, notably for two consecutive years now. Also, since 2014, the fund has been the leader in the one-year performance ranking as it continues to keep hold of the first spot.

Furthermore, the fund has been awarded by international bodies including the International Finance and Thomson Reuters Lipper Fund as the best peso fixed income fund in the Philippines.

What is Cocolife Asset Management’s investment focus for the next year?

Cocolife Asset Management shares the responsibility of helping the Filipino people become financially strong and sound through financial education and financial solutions. The company plays a vital role in the capital markets and the Philippine economy, especially in mobilising resources and channeling investments to help drive inclusive growth and prosperity for the nation.

Cocolife Asset Management has been taking part in the industry-wide efforts to improve the financial literacy of Filipinos. It conducts financial literacy campaigns all year round targeted at specific groups of individuals, such as overseas Filipino workers and graduating college students.

Cocolife Asset Management strongly believes that good stewardship is a good business practice. The company is guided by the principle of empathy, putting it into practice by making its services personalised. The company seeks to understand what the specific needs and requirements of its clients are and tries to provide them in ways that will meet their budgets.

Over the years, Cocolife Asset Management has grown to be one of the leading asset management companies in the Philippines, committed to providing customer service of the highest standards along with quality investment advisory services, putting Filipinos on a path to wealth-building and prosperity.

Moving forward, the company will continue to uphold its vision “leading the way toward financial freedom”.

What is your outlook for the stock market in the Philippines for in the short term and what are the factors that could influence the stock market’s performance in the short term?

For the Philippine stock market, 2020 will most likely be another challenging year in the backdrop of heightened regulatory risk tied with the political factors in the local front. This overhang could continue especially in the short-term, although a few surprises, such as the GDP’s potential outperformance and benign inflation data in the first half of 2020 could provide momentary relief to Philippine equities.

Overseas, trade and global growth uncertainties could serve as market drags especially on emerging markets like the Philippines. Thus, in this scenario, we can infer that the trading circumstances may be difficult, but opportunities will still be available since the recent correction wave has pushed valuations to attractive levels.

Which sectors are likely to outperform in the next year in the Philippines market?

Given the potential cuts in local interest rates and required reserves for banks, we are looking at the banking sector as the bright spot in the Philippine stock market. The property sector could also be on the positive side, although this could be balanced out in case the unsolved POGO issue and slowdown in office take-ups resurfaces.

For consumer stocks (food, beverage and retail), earnings could recover but will be tamed by headwinds such as tight competition and price shocks. Regulatory issues will most likely keep power and utility companies at bay, with related conglomerates being on the tail-end of uncertainties.

What is your outlook for the stock market in the Philippines for the long term and what are the factors that could affect the stock market’s performance in the long term?

For the long-term, our view on the local stock market is tied with out optimistic view on the Philippine economy. Currently, infrastructure projects are being rolled out, regulations are being improved, and the foundation for sustainable growth is being set through structural reforms.

We are also on the eleventh year of a bull run that commenced in March 2009, and as of March 23, the ten-year return of the PSEi is at 160 percent. It has also weathered the changes of the times, including the Fed’s winding down of its asset purchases, geopolitical tensions, and slowing global growth concerns. Therefore, we think that as long as the Philippine growth story is intact, the PSEi will continue to deliver.

What is your outlook for the debt funds in the Philippines in a three to five-year horizon and what are the factors that could affect the performance of debt funds in that horizon?

We maintain our bullish view on the fixed income market for the next three to five years as the benign inflation provides leeway for more accommodative policy. We expect the BSP to cut policy rates at least twice in 2020 and RRR between 200bps to 400bps, in line with the BSP’s target of single-digit RRR by 2023.  Likewise, policy tightening pressures externally have been showing signs of moderation, particularly the dovish statements from the world’s largest market.  We expect a dovish move from the Federal Reserve in 2020, with another rate cut on the horizon.

Will the PSEi breach 9000 levels in 2020? If so, why?

With earnings catching up, valuations looking attractive and GDP appearing to be at a stable level, a revisit of the 9,000-level is not a far-fetched idea.  Listed corporations appeared to have faced growing pains this 2019, and we will see recoveries across these sectors this coming year, as bottlenecks are addressed. We believe valuations will play a key role in bringing the PSEi back near its all-time high. At 9,000, the PSEi will most likely trade within its 10-year historical average of 17 times.

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With this new takeover, Eastspring has emerged as Thailand’s fourth biggest asset management company with a market share of 12 percent and overall assets under management of THB653 billion.

Eastspring now has control over 50.1 percent of Thanachart Fund Management while the rest 49.9 percent is owned by Thanachart Bank Public Company. The deal was executed through Eastspring Investments, which is the FTSE 100-listed company Prudential’s Asian asset management subsidiary.

Eastspring also has a possibility to fully acquire Thanachart Fund Management in the forthcoming years. With THB206 billion ($6.8 billion) of mutual funds under its belt, Thanachart Fund Management is Thailand’s eighth biggest mutual fund organisation.

In September 2018, Eastspring had bought 65 percent of TMB Asset Management (now known as TMBAM Eastspring). With over two decades of offering its services in Thailand under the banner of Prudential Life Assurance (Thailand) Public Company Limited, Prudential caters to over 1.6 billion Thai customers and monitors over THB107 billion of their assets. 

The post Eastspring completes buyout of Thai mutual fund firm Thanachart appeared first on International Finance.

The acquisition will boost UOBAM’s Asian presence which is in line with its regionalisation plans. VAM Vietnam will become a subsidiary of UOBAM after completion of the acquisition. Also, the acquisition will not have a material impact on UOBAM’s earnings or net tangible assets for the current financial year.

UOBAM has managed 54 units in Singapore and nearly $35 billion in clients’ assets as of September 30, 2019. 

“The consideration was arrived at on a willing-buyer-willing-seller basis and took into account various factors including the capital, net asset value and assets under management of VAM Vietnam,” UOB said in a statement. 

Nguyen Xuan Minh is the co-founder and chairman of VAM Vietnam. The company mainly invests in public equities, in addition to convertible debt and other equity‐linked instruments.

VAM Vietnam has a net asset value of S$1.53 million. It has assets under management of S$6.72 million, as of October 2019. 

In September, UOBAM announced a 75 percent acquisition of an Indonesia-based PT PG Asset Management. Earlier this year, it launched the United Global Innovation Fund to encourage retail investors to invest in different markets across sectors and industries, the local media reported. 

UOBAM offers investment management expertise to institutions, corporations and individuals through personalised portfolio management services and unit trusts. 

The post UOB asset management to acquire VAM Vietnam for $4.9 mn appeared first on International Finance.

The Philippines decided to widen its investments amid a slump in the stock market. The net assets of the Pag IBIG fund are worth 570 billion pesos or $10.8 billion.

The Philippines’ Pag IBIG fund has deployed an additional 570 million pesos to its five external fund managers. According to chief executive Acmad Rizaldy Moti, the additional investment allows external parties to invest in total assets worth 4.5 billion pesos.

He added that the volatile market scenario gives the fund an opportunity to diversify its portfolio and it is trying to take advantage of the situation to achieve its goal.

The Philippines Stock Exchange Index saw a 3 percent fall on Thursday which is considered to be the biggest loss in Asia that occurred in a single day. The trading closed at a 0.4 percent lower valuation, the lowest in three months.

“Smart money comes in whenever the market hits extremes that we could be building a bottom at 7,700 already.  Some value is emerging for long term investors,” said Justino Calaycay, an analyst at Philstocks Financial Inc.

The on-going US- China trade war, a devaluation in the Chinese currency yuan and slow economic growth in Philippines have affected the Philippines stock exchange market which has slumped more than 6.4 percent this year until Thursday.

Established in 1978, Pag IBIG is responsible for the administration of the national savings program. The fund provides financing for housing facilities for Filipinos employed by local as well as foreign employers.

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