Ed Chin, CFA

When there are complaints of regulatory arbitrage, it usually means that there are some needs unmet by incumbent players. With the private car hire industry, for example. Or platform gig work where platforms don’t pay CPF like employers do (until some recent changes). This is not to say that it is right, in this case, for unlicensed persons to give financial advice - actual recommendations on what to buy and what to sell. (That’s a simple way of understanding what constitutes advice.) Money decisions have a long tail. They affect people profoundly and some of the repercussions will not be experienced for years to come. When someone acts on your advice, guidance or information, they are entrusting their hard-earned assets as well as the future of their own life, retirement and the well-being of their children to you. Financial advice is a profession. A professional is one who needs to have sufficient training, and knows more than the one engaging their service. The asymmetry imposes a duty on the professional only. The recipient need not know anything for the professional to be obliged to act with care and skill. Here are my thoughts for three different groups: 1. For finfluencers - Please go beyond thinking about whether you fall afoul of regulations, to the impact on people’s lives. If you are not qualified to give advice, by professional training, competence and intention, don’t. Be a platform, but don’t do what you aren’t qualified to do. 2. For fellow advisers - Is there some unmet need, causing finfluencers who aren’t licensed to gain more traction than licensed advisers? Is it really only to do with tech savvy and the use of social media? Are we trusted - both competent and trustworthy enough, just like all othe professionals? As the trust equation goes, it is credibility, reliability and intimacy, discounted by self-interest. Have we handled the conflict of interest well and do we hold ourselves to the fiduciary standard of acting in the clients’ best interest always, versus just fulfilling preferences, no matter what the impact on our income? 3. For the public - It would be advisable to be more discerning in terms of the intentions and motives of people who are “advising” us - be they finfluencers or advisers - and look beyond the surface. Please consider not depending only on someone presenting financial products before you take action. The fact is that many financial products are still sold, not bought, despite the proliferation of technology and online DIY options. Ultimately, financial advice is not a replacement for #financial literacy. Build up your financial knowledge and capability, and you’ll have better instincts about who to trust, what to do, and how to do it.

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https://lnkd.in/ga7PkrVF Just like Asian Contagion 1.0 started with the butterfly-flapping of the USD Wrecking Ball causing a wave of SE Asian Currency Devaluations that eventually caused Russia to default, which then careened into a leveraged unwind at LTCM, you are witnessing Asian Contagion 2.0 finally materialize — also stemming originally from the USD Wrecking Ball exporting Inflation to RoW and causing unpredictable ripple effects. Everyone points to the Yen Carry Trade Unwind as the proximate cause of the Global Risk-Off right now, but you have to go much further back and think about root causes.

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So a lot of what I post are messages in a bottle. I know people from #SFC #HKMA #InvestHK #FTAHK and from crypto firms are in Linkedin. I don't know if they are reading my stuff, but part of what I am doing is trying to make public policy in HK a bit more transparent. So part of the reason that I wrote my document is that I *don't* want the SFC to be involved in regulating OTC transactions outside of the securities industry, and I *don't* want the type of heavy weight VASP regulation which I happen to think was a total disaster. The thing is that I would really, really like to have a discussion with whoever wants the #SFC to regulate VAOTC so that we can at least see if we are on the same side or not, and what we agree and disagree on. The thing is that since I am in the cryptoworld and the defi world, people are used to having these conversations in public on chat groups. People in tradfi aren't used to this. Right now, I have some guesses as to who is talking with the SFC, and what their agenda is, and I am also guessing about what the #SFC wants. https://lnkd.in/gg3ZqFkQ

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Hong Kong real estate firm ESR Group with $154 billion portfolio has received a $7.1 billion privatization buyout offer from founder-included consortium, offering HKD 13 per share or option for share swap or both cash & share swap.  The price is 13.6% higher prior to trading halt.  The buyout consortiuminclude founders of ESR, Starwood Capital, Sixth Street, SSW Partners, Warburg Pincus & Qatar Investment Authority.  Japan MUFG, Mizuho & UOBwill provide a $1.5 billion loan facility. Read - https://lnkd.in/gktkSeTh follow Caproasia | Driving the future of Asia Hong Kong real estate firm ESR Group with $154 billion portfolio has received a $7.1 billion privatization buyout offer from founder-included consortium, offering HKD 13 per share or option for share swap or both cash & share swap.  The price is 13.6% higher prior to trading halt.  The buyout consortium include founders of ESR, Starwood Capital, Sixth Street, SSW Partners, Warburg Pincus & Qatar Investment Authority.  Japan MUFG, Mizuho & UOB will provide a $1.5 billion loan facility.  ESR Group is Asia-Pacific’s leading New Economy real asset manager and one of the largest listed real estate investment managers globally. Our fully integrated fund management and development platform extends across Australia and New Zealand, Japan, South Korea, Greater China, Southeast Asia, and India, including a presence in Europe. We provide investors with a diverse range of real asset investment and development solutions across private and public investment vehicles. Our focus on New Economy real assets offers customers modern solutions for logistics, data centres, and infrastructure and renewables. Our purpose, Space and Investment Solutions for a Sustainable Future, drives us to manage sustainably and impactfully for the communities where we operate and the spaces we develop to thrive for generations to come. ESR Group is listed on The Stock Exchange of Hong Kong (HKSE: 1821.HK).

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An excellent take from The FT on NFP yearly revisions post the ZH story. This obviously caused front running sellers of USD. I made it free to the first 10 people as a FREE gift. BAML nicely added: Are these figures final? No. "This is a preliminary estimate of the annual benchmark revision. The actual revision might be different, based on revisions to the QCEW data. Last year’s preliminary estimate was -306k, but the final revision was just -266k." What does this mean for the unemployment rate? Nothing. "The unemployment rate is calculated from the household survey. The QCEW impacts the establishment survey. What are the broader labor market implications? Even after these large downward revisions, the labor market looks to have been on solid footing last year and in 1Q 2024. That is consistent with the resilience in consumer spending." By contrast, employment growth in the household survey looks too weak relative to the rest of the macro data (54k on average from April 2023 to March 2024). That said, the revisions do help close the gap between the two surveys. My 3 key considerations: 1. USD sold on the ZH story rumour and bought the "fact" but we need the doves to come out AKA Dec 2023 for EURUSD to crack 1.1276 which is the 50% fib on the DAILY CHART. 2. Forget the yearly revisions and focus on lead indicators like LMCI (Kansas City FED) which looks smelly to say the least. NAIRU getting hit on my radar too. 3. Labor Costs nose diving which should drag Core PCE lower (dare I say it below 2% Happy Friday!

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Margin Syndicate Bot Report - 13 November 2024 UTC PM Open P&L: 7.59% Following a significant market drop, the OpenPNL has reduced to 7.59%. This is expected, as it usually takes a day or two after a sharp dip for all Dollar-Cost Average (DCA) positions to rotate out. #OpenPNL #DCA Net Gain: 1.88% The current net gain stands at 1.88%. This rate is slightly below the usual pace but is suitable for this stage of the market cycle, with expectations for an acceleration in gains as conditions stabilize. #NetGain #SteadyGrowth #MarketCycle Case Study Highlight - BDBClub Performance: We are sharing a case study that illustrates the impact of the updated strategy on recent performance. Over the past 21 days, the strategy has generated a total return of 38.38%, equating to an average of 1.83% per day. This consistent return rate underscores the strategy's effectiveness and provides strong potential for sustained growth. Annualised Projection: The average daily return of 1.83% theoretically translates to an annualised return of 74,828.4% due to compounding effects. While this figure represents an idealised scenario, it highlights the robustness of the strategy. Even capturing a portion of this projection would significantly exceed typical benchmarks, such as the 150% annual target pursued by many core solutions. Disclaimer on Projections: It’s essential to approach annual projections with caution. Real-world trading dynamics rarely support uninterrupted compounding at this scale. However, the consistent daily returns achieved so far reinforce confidence in the strategy’s performance, especially as we remain disciplined and adapt to market conditions. #CaseStudy #BDBClub #StrategyPerformance #AnnualizedProjection #Compounding Strategy Focus: The updated strategy has demonstrated strong performance and consistency. By managing risk carefully and adapting to market volatility, we are positioned for sustained gains. The approach is to maintain discipline and refine adjustments as market conditions evolve, balancing compound growth with risk control. #StrategyFocus #SustainedGrowth #RiskControl #MarketAdaptation Summary: The current OpenPNL is at 7.59% with a net gain of 1.88%, reflecting a stable performance during a market pullback. The recent performance of the BDBClub strategy highlights an impressive 38.38% total return over 21 days, with an average daily gain of 1.83%. This consistent return suggests robust potential for compound growth, though caution is advised regarding annualised projections. The strategy’s effectiveness is evident, and we remain focused on disciplined, adaptive trading.

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Should developers measure #ROCE rather than #ROE? In short, yes. ROCE, or Return on Capital Employed, shows how effectively a company uses its capital— debt and equity—to generate profits. Unlike metrics such as Return on Equity (ROE), which only considers equity, or Return on Assets (#ROA), which only focuses on assets, ROCE is calculated by considering both debt and equity, providing a balanced and comprehensive view into profitability and capital efficiency. At a time when every penny counts, ROCE is a powerful tool for assessing a site's efficiency and profitability, ensuring that every penny invested is working hard. A higher ROCE value usually implies better investment quality, as it suggests that a company can generate a higher return on each unit of capital employed. As more #developers (and #lenders) move towards using ROCE to measure the viability of their sites and make informed investment decisions, Brickflow now shows ROCE in the search results against every #DevelopmentFinance and #RefurbishmentBridging search.

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Post-scandal Livedoor in 2007, immediately after the AGM I faced a problem. What do you do as an ind. director when many hedge funds demand you to fire the CEO ASAP but there is no good replacement except someone who is extremely conflicted, and you haven't even assessed the current CEO yet? In my experience the hardest things about terminating a CEO in Japan "early" are that: (a) depending on your #corpgov structure, he can remain on the board (because only shareholders can terminate him as director); and (b) finding and agreeing upon a replacement. If there is no one good internally, it is a mess unless you have the 3-commitee structure. You can read all 10 posts about my early experiences as an outside director in #Japan , by scrolling to the bottom and clicking on the links. https://lnkd.in/dY6JUkh7 https://lnkd.in/dY6JUkh7 #corpgov #esg

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Haize Capital Insights of the Day https://lnkd.in/gU47psd2 #OTA #Japan #TCOM #Ctrip #TongCheng #0780 #DAU #MAU #Investment Internationalization: The Only Opportunity for Tongcheng to Surpass an $8 Billion Market Cap Q3 2024 has been a prosperous quarter for the global travel industry, with Tongcheng Travel (HK: 0780) achieving record highs in both revenue and net profit. Revenue grew by 51.3% year-over-year to RMB 4.99 billion, while operating profit increased by 63.1% year-over-year to RMB 980 million. At first glance, the financial metrics appear flawless. However, from the perspective of operational indicators or in comparison to its competitor Trip.com (NASDAQ: TCOM), shortcomings become evident. Even though Tongcheng’s outbound travel segment lags far behind Trip.com, internationalization remains the only opportunity for Tongcheng to break past its peak value and achieve a 30% increase in market cap—a journey filled with challenges and potential. Growth Bottleneck Starts with User Engagement Analyzing Tongcheng’s operational indicators, its growth bottleneck is increasingly apparent. First, user engagement growth is modest. In Q3, the average monthly paying users (MPUs) increased by only 5% year-over-year, while Q2 even saw a quarter-on-quarter decline. Although its massive base of 46.4 million MPUs makes single-digit growth reasonable, considering that Tongcheng integrated its "Vacation" business into its financials at the start of 2024, dramatic improvements in user engagement, transaction volume, purchase frequency, cross-selling rates, and average revenue per user (ARPU) were theoretically expected. Understanding the following data from the perspective of "Vacation" consolidation explains why Haize Capital views these growth rates as a bottleneck: Transaction volume grew by 2.4% year-over-year. User purchase frequency increased from 5.5 times annually in 2019 to 8 times in 2024. Cross-selling rates rose from 10% in Q3 2023 to 12% in Q3 2024. ARPU grew by 54% compared to the end of September 2023. It appears that profit growth has relied more on cost reduction and efficiency improvements. Internationalization: The Driving Force Behind Trip.com’s Success In comparison to Trip.com, Tongcheng’s weaknesses are even more evident. In Q3, Trip.com reported revenue of RMB 15.9 billion and an operating profit of RMB 5.01 billion, while Tongcheng’s revenue of RMB 4.99 billion is roughly one-third of Trip.com’s, yet its operating profit of RMB 980 million is only one-tenth. Breaking it down by segments: Tongcheng’s accommodation services revenue was RMB 1.38 billion, 20% of Trip.com’s. Transportation ticketing revenue reached RMB 2.03 billion, 36% of Trip.com’s. Vacation revenue was RMB 980 million, even 63% of Trip.com’s corresponding segment. (The full article is available on our official website.)

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January Capital, a Singapore-based asset manager, raised $85 million in an initial funding round for its growth credit fund. This fund aims to bridge the gap in lending for Asia-Pacific tech firms, offering loans between $5 million and $20 million for expansion, product development, or acquisitions. The growth-stage technology firms face challenges in securing credit due to their size. January Capital’s fund targets companies too large for early-stage lenders and too small for big-ticket loans over $50 million. Interest rates range between 12% and 16%, with warrants included for future equity participation.

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Temasek has established a wholly-owned private credit entity with an initial portfolio of US$10 billion, comprising direct investments and credit funds. The entity will be led by Nicolas Debetencourt, who has headed Temasek’s credit and hybrid solutions team since 2016. Around 15 credit investment professionals across New York, London, and Singapore have been transferred to manage this portfolio. This move aligns with the booming private credit market, projected to grow to US$2.6 trillion by 2029 (Preqin data). Temasek’s focus on scaling global credit opportunities complements its asset management arm, Seviora Group, and SeaTown Holdings International, which provides private credit solutions in Asia. This development follows a broader trend in private credit, with BlackRock recently announcing its US$12 billion acquisition of HPS Investment Partners. Temasek, managing a US$389 billion portfolio as of March 31, continues to focus on long-term investments in digitalisation and sustainability. Original article by Bloomberg, published in The Straits Times. Read more here: https://lnkd.in/e62FqDfa Straits Advisory is part of the Straits42 Group of Companies. Follow Straits Advisory now for more curated insights. #PrivateCredit #Temasek #AssetManagement #GlobalInvestments #PrivateMarkets #Finance #Singapore #Singaporebiz

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"What we are seeing is the re-tranching of the banking system, where banks parcel the riskiest slice to private credit and provide the less risky lending themselves. Private credit could be the Ozempic to help banks on yet another diet." My latest Financial Times Private credit firms have enjoyed a “golden moment” - funding a whopping 86% of leveraged loans in 2023, up from 61% in 2019. But one year on from the failures of SVB and Credit Suisse, the strongest banks are ramping up their lending. In the first quarter, 28 companies arranged bank loans to refinance $11.8bn of debt that was previously provided by private credit firms, according to PitchBook data. Put another way, banks have been able to claw back just over half of the $20bn that shifted in favour of private credit firms in 2023. So, have we reached peak private credit? The history of banking suggests that, on the contrary, another wave of bank disintermediation is likely. The shift of lending away from banks has a long history. Bank lending as a share of total borrowing has been falling for fifty years. Private credit’s next act? Specialty finance – a $5.5tr opportunity in the US alone — which includes equipment leases, trade finance, and royalty agreements — is greater diversification and the specialist skills required. Views? Link to the full article in the Financial Times here: https://on.ft.com/4b3zyxp #banking #investing #privatecredit

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To engage on capital allocation "you do need to understand the company really well", says Jenn-Hui Tan, and stewardship teams are sometimes accused of being too divorced from investee companies, while the range of what they're expected to cover is almost impossibly broad. "Why isn't an investment professional a stewardship professional?" asks Leon Kamhi. If we are real about the transition, he says, it requires a lot of investment and "we're going to have to move from simply disclosure...to capital allocation on investing in the transition", but it's critical that those companies also make money. He sees this as a challenge for stewardship going forward. "For an active manager, it should be relatively easy" says Michiel van Esch, CFA to understand what companies you hold and where the issues are - it's more difficult where you don't have active management. "It's an easy path to take" says Ariella Levine for stewardship and investment teams to become more separate, and that companies report getting different feedback from those, which makes it very difficult for them to understand what investors are looking for. "We're working really hard to integrate ESG across different investment desks", she says, and your investment decisions need to be aligned to what you're doing in terms of stewardship. The panel are now taking questions from the floor. #GSF #stewardship #governance #corpgov #ICGN2024 #investors #assetowners #assetmanagers

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So I've been getting invites to Hong Kong #HKFintechWeek and it looks like it is going to be a blast. But I'd like to let people know what I think is happening back stage. A lot of practical law and lobbying involves resource management. What can you get done and by when. The nice thing about #HKFintechWeek is that it gives you a schedule for when things are going to happen. So the Legco panel as scheduled the next legislative panel for 28 October and that puts it right into Fintech week. My guess is that #HKMA is going to give a lot of talks about Hong Kong's new stablecoin regulations, and for the #HKMA and #SFC, announcing new legislation at a trade show is sort of like Steven Jobs announcing the new Iphone. My concern is that the #SFC looks like it is getting involved in VA OTC regulation and I am very strongly opposed to VA OTC licensing because I think this will be a total disaster like VASP licensing. One thing that I've noticed is that no one in HK bureaucracy seems to be that enthusiastic about VASP licensing. The issue is that if the #SFC might want to make an annoucement at fintech week, which means I need to write a letter objecting to the #SFC's regulatory philosophy in the next week. Part of this is to stir the pot, I think that VA OTC licensing is a very, very bad idea and I want to see who disagrees with that, and then this gets argued in Legco since this is what legislatures are for. In my filings, I make a lot of reference to the Basic Law, and that is so that I get attention. Legislators have limited time, and if they have to choose between having lunch with Jamie Dimon and Elon Musk or meeting with me, then I think I lose. But one reason I invoke the Basic Law is to make it clear that if no one talks to me then after the law gets passed, I will be heading to the Court of First Instance with Form 86A application for judicial review. That is going to waste everyone's time so we need to have the conversation before the law gets passed. Worst case scenario, we can't resolve the argument in Legco so we end up in court, but if that happens, we will know exactly what the argument is, what we want the judge to decide, and everyone will have their filings done on day one. At that point you will have a happy judge to see that everyone has all the forms nicely written, and all the arguments prepared so that they can make a decision as quickly as possible (and quick means two to three years). https://lnkd.in/gg3ZqFkQ

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A joint survey by the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) on the sales of non-exchange-traded investment products by licensed corporations and registered institutions showed a 14% increase in total transaction to $4,338 billion in 2023 from $3,799 billion in 2022. Respondent firms saw an improvement in overall market sentiment in 2023 amid market recovery from the pandemic, easing of inflationary pressures and anticipation of the end of the monetary tightening cycle in major economies. Against this backdrop, the number of firms engaged in the sale of investment products grew to 380 in 2023 from 371 in 2022. About 68% of these firms reported year-on-year increases in transaction amount, and about 29% of them expanded their sales force by 50% or more to meet growing business needs. The number of participating clients also grew by 15% to over 940,000. The solid sales growth of investment products was fuelled largely by an increase in the sales of collective investment schemes (up $394 billion), debt securities (up $80 billion) and structured products (up $59 billion). According to the survey, sales of money market funds increased in 2023 and accounted for 76% of the total transaction amount of the top five CIS reported by the large firms, up from 61% in 2022. Sales of sovereign bonds also rose, representing 44% of total debt securities sold in 2023, up from 29% in 2022. The rise in popularity of money market funds and sovereign bonds was attributable to investors’ preference for lower risk products with more stable yields amid the persistent high interest rate environment. Other major observations from the survey included: 🔹 Structured products continued to be the top product type sold by the respondent firms, representing 46% ($1,980 billion) of the total transaction amount in 2023. CIS and debt securities rounded out the top three spots, accounting for 29% ($1,278 billion) and 17% ($728 billion) respectively. 🔹 The transaction amount of equity-linked products stood at $1,206 billion, representing 61% of all structured products sold in 2023, up from 53% in 2022. The major underlying equities of the top five products sold by the large firms were from the internet (29%), automotive (27%) and technology (20%) sectors. 🔹 There was an upward trend in utilising online platforms for distributing investment products. The number of firms distributing investment products online increased by 11% to 92 in 2023, up from 83 in 2022. Online sales accounted for 12% of the aggregate transaction amount of all respondent firms, as compared to 7% in 2022. CIS represented 72% of all online sales, followed by debt securities, which accounted for 25%.

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""It’s a legitimate point to ask the company to boost its corporate value by investing in its core business and buying back shares,” said Naoki Fujiwara, a senior fund manager at Shinkin Asset Management. "It’s fine to hold onto some properties for data centers, but the company doesn’t need office buildings and real estate for lease.” Tokyo Gas has made real estate development a key part of its current midterm management plan, saying it will bolster its "ESG-oriented” development. The firm’s subsidiary, Tokyo Gas Real Estate, has been managing the properties and assets the firm owns for more than 70 years, and has been working to build a virtually carbon emissions-free town near Tokyo’s main fish market."

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