Brief : Financial markets around the world are waking up to the risks of another coronavirus flare-up. Asian markets, blighted by rising cases from Japan to India, have underperformed their global peers since the start of March, just when they looked set to benefit from an acceleration in the global recovery. Currencies of nations stung by the virus have been underperforming those where vaccinations are surging ahead. And now the angst is starting to spread, with recovery trades under pressure and U.S. stocks sliding for two successive days. “Markets that have become too comfortable with the re-opening trade and have loosened social restrictions can be in jeopardy with any Covid spike and variants,” said Paul Sandhu, head of multi-asset quant solutions Asia Pacific at BNP Paribas Asset Management. “Markets with high vaccination rates somewhat circumvent this downside risk.” The World Health Organization said Tuesday that cases are rising in all regions except Europe, with the largest increase last week seen in Asia as India battles its biggest wave. Japan moved closer to declaring a virus emergency as infections spread in its two-biggest and economically important urban areas, Tokyo and Osaka, while health authorities in Toronto will order workplaces across Canada’s biggest city to close if they have more than five confirmed cases.
Brief: Neuberger Berman Group employees have been asked to return to the office in September yet they will still be allowed some flexibility to work remotely, Chief Executive Officer George Walker said. The New York-based firm “asked folks to find a way to start to reconnect with the office,” Walker said in a Bloomberg Television interview on Wednesday. “That can be team meetings, that can be coming in a day a week. And we’re starting to see that as more folks come back in,” he said. “Work from home has worked really well,” he said. “Our performance has never been better, our flows have never been better. But there’s going to be a new normal that’s in between, and that’s going to be trickier than people realize.” Neuberger is not mandating that returning workers obtain vaccinations, just that they have been tested for Covid-19, he said. The company manages $429 billion for institutions, advisers and individual investors.
Brief: The majority of wealth management platforms are failing to live up to customers’ demands when it comes to digital features, according to recent research from data provider Refinitiv. In its wealth management report, “The Race for Digital Differentiation”, Refinitiv found that only 37% of the 1,030 investors surveyed gave their platforms top marks for the digital experience. The study also found that investors are placing greater importance on digital capability with 72% calling for better integration of news updates and 80% asking for real-time data to enhance their analysis. In addition, 20% of investors are not receiving alerts they would find helpful. In response to the findings, Refinitiv called on wealth managers to accelerate their digital initiatives in order to meet customers’ heightened expectations. “The consequences of Covid-19 have emphasised just how vital it is to have a robust, customer-centric digital experience enriched with deep insights and analytics,” said Charles Smith, head of digital solutions, wealth at Refinitiv.
Brief: It was the kind of moment that would normally sink a hedge fund: Dan Sundheim was on Zoom, apologizing to clients for losing $4 billion in a single month. He ticked off strategy changes, noted he wasn’t going to dock his team’s pay and then headed back to work. Now, mere weeks later, the episode is behind him. Sundheim has recouped about 90% of what he lost in January when retail investors attacked his short bets on the likes of GameStop Corp. That recovery has put his D1 Capital Partners back into one of the most rapid ascents ever seen in money management. His presentation that February day fit what investors have come to expect from the 44-year-old billionaire -- unemotional yet sincere, supportive of his 51-member team, and unfazed by risk -- attributes they say helped him amass $20 billion in less than three years since setting up shop. Sundheim, who’s posted annualized returns of nearly 30%, is among stock pickers helping to reanimate an industry hit by client defections over mediocre returns.
Brief: Saudi Arabia is hoping to speed up privatizations to narrow a budget deficit that ballooned last year due to the pandemic and a slump in oil revenue. The kingdom aims to strike around 15 billion riyals ($4 billion) worth of infrastructure deals with private investors this year, the head of the National Center for Privatization, Rayyan Nagadi, said in an interview. That would be the most since the body was established to accelerate privatizations in 2017. It also aims to complete several asset sales this year, he said, declining to give a value for how much could be raised. Progress on Saudi Arabia’s privatization plan has been much slower than anticipated when Crown Prince Mohammed Bin Salman launched his economic transformation plan in 2016 and outlined plans to sell stakes in utilities, soccer clubs, flour mills and medical facilities. Since then the government has managed to sell stakes in assets including Saudi Aramco and flour mills. It has also signed deals with private investors to build new schools, but it has fallen short of hopes of raising $200 billion in the first few years of its privatization push.
Brief: Insurers plan to increase the overall risk in their investment portfolios as they emerge from the precarious market environment of the pandemic, according to Goldman Sachs Asset Management. The firm’s annual insurance survey, expected to be released on Wednesday, found a 34 percent increase in insurers looking to take on more portfolio risk. This year’s survey aggregated the views of 286 CIOs and CFOs representing over $13 trillion in global balance sheet assets, a study sample which, according to GSAM, accounts for about half of the global insurance industry. “We have not seen the kinds of readings that we have in the survey since the last time we came out of the Great Recession in 2012 and 2013,” Mike Siegel, global head of insurance asset management, said at a virtual press conference held on Tuesday. In the survey, insurers indicated an inclination to increase risk across all types, including equity, credit, liquidity, and duration. While plans to increase risk are trending positive across the globe, insurers based in the Asia Pacific region expressed the most risk-on views, with a net 58 percent of Asia Pacific respondents planning to take on more credit risk over the next 12 months.