ANZ promotes Yeekei Chan to FIG head for Asia, India & Middle East | FinanceAsia

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Yeekei Chan has been appointed head of the financial institutions group ( FIG), Southeast Asia, India, and the Middle East, by ANZ. &nbsp,

A spokeswoman for ANZ told FinanceAsia told the areas that Chan may include are: Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam, India, Laos and the United Arab Emirates. &nbsp,

Chan ( pictured ) started the role on March 27 and will continue to be based at ANZ’s office in Singapore. He did report to Mark Harding, ANZ’s worldwide head of FIG. Harding is likewise based in Singapore. &nbsp,

Chan has 20 years of foreign banks expertise, most recently as head of FIG, Singapore at ANZ. According to a declaration from the bank, he began his career at ANZ as a graduate student in Sydney before working for JP Morgan for 11 years in London. &nbsp,

In his new position, Chan takes on responsibility for leading the extended- term strategic direction of the FIG business in the region, focusing on banks, funds, economic sponsors, insurance, open sector and varied financials. According to the statement, he will even look at ways to boost the company’s viability and generate long-term income. &nbsp,

Regarding Chan’s session, Harding stated:” Yeekei is a very experienced global lender with a proven track record of delivering solid successful progress for the FIG business in Singapore. I’m pleased that we are able to assign talent from within the company to this crucial role for the lender because FIG is a priority for the lender.

Click here for more FinanceAsia people techniques. &nbsp,

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AstraZeneca invests .5bn in Singapore facility for next-generation cancer drugs | FinanceAsia

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AstraZeneca, a global pharmaceutical company, has stated plans to build a$ 1.5 billion manufacturing facility in Singapore for antibody drug conjugates ( ADCs ), in order to increase the global supply of its ADC portfolio, according to a May 20 media release.

ADCs are the newest treatments that use a targeted antibody to deliver cancer-killing agents instantly to cancer cells. The production of ADCs is a multiple- step process that includes antibodies manufacturing, production of chemotherapy drug and linker, conjugation of drug- linker to the antibody, and filling of the completed ADC substance.

AstraZeneca wants to start building the manufacturing service by the end of 2024, with a goal of functional preparation starting in 2029. AstraZeneca added that it will collaborate with the government of Singapore and other parties to develop efficient solutions for the ADC service. The service will be constructed to produce no coal from its first time of operation.

The planned new service is supported by the Singapore Economic Development Board ( EDB), and it will be AstraZeneca’s second “end- to- end” ADC manufacturing site.

EDB’s president Png Cheong said in the discharge:” We welcome AstraZeneca’s decision to establish a manufacturing appearance in Singapore for the first time. AstraZeneca will also have a first in the world by having an end-to-end manufacturing facility for book antibodies drug conjugates that enable precise cancer treatments.

Cheong continued,” This new purchase is a powerful show of confidence in Singapore’s biotech production capabilities and talent, strengthens our ecosystem in supporting the development and manufacturing of precision medicines, and creates important jobs and economic opportunities for Singapore. We look forward to a successful relationship with AstraZeneca”.

Pascal Soriot, chief executive officer, AstraZeneca, said:” Singapore is one of the country’s most beautiful countries for funding given its reputation for excellence in difficult production, and I’m excited for AstraZeneca to find our$ 1.5 billion ADC production facility in the country”.

AstraZeneca has a broad portfolio of in- house ADCs, including six wholly owned ADCs, and “many more” in preclinical development, the release said.

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Asian central banks to continue gold purchasing | FinanceAsia

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Annual demand of gold in 2023 fell by 5 %, compared to that in 2022, to 4, 448 tonnes, excluding over the counter ( OTC ) transactions. According to data from the World Gold Council ( WGC), central banks contributed to 1, 037 tonnes of the gold demand last year, which is the second-highest on record.

In the first fourth of 2024, world gold demand, including OTC, was off 3 % year- on- year to accomplish 1, 238 tonnes, marking the strongest second quarter since 2016. Excluding OTC, first quarter’s demand fell by 5 % to 1, 102 tonnes.

China, India and Singapore were among the Asian markets that added the most to their golden getting during the first quarter, with an increase of 27.06, 18.51 and 6.57 kilograms both. These include both key banks and financial transactions.

The story is also about the skyrocketing metal price, which rose by as much as$ 2,300 per ounce in April and remained at its all-time high despite a minor decline at the beginning of May.

One of the main causes of a rising interest rate in gold is Shaokai Fan, mind of central bankers at WGC, who quoted Shaokai Fan as saying, is because of the confidence in the US Fed’s future rate cuts.

” Gold has reached a new all-time higher thanks to a number of different things. Although interest rate reduction anticipation are most definitely raising interest, he said there is a solid real demand for silver underlying this.

Fan claimed that the central banks that have purchased “historic levels” of silver over the past two centuries have remained significant customers this time. For instance, the curiosity in China is related to the landscape of investors ‘ attempts to expand in response to weak performance in other asset classes.

Retail traders now have greater access to the business. Using distributed ledger technology ( DLT), HSBC in Hong Kong has created the first bank-issued tokenized gold. It is supported by vaults in London that are owned by HSBC.

Flee for surety

At the end of next year, market was first expecting nearly six 25- basis- point cuts within a 12- month timeframe. Christian Scherrmann, US economist at DWS, expects two rate cuts by the US Fed by the end of the year. Curbing inflation in the world’s largest economy has proved to be slower than expected, with the consumer price index ( CPI ) for March seeing a 0.4 % month- over- month core inflation increase.

Lower interest rates generally benefit the gold market because they lower the opportunity cost of holding gold, according to Fan. In a more volatile environment, the team anticipates inflows into gold exchange-traded funds ( ETFs ).

In Q1 2024, the global gold ETF holdings dropped by 114 tonnes, primarily as a result of an outflow from European and North American funds.

Asian gold ETFs, on contrast, witnessed an increase in assets under management by 16 % to$ 11 billion, mainly generated by participants in China, due to a weakening yuan and other domestic assets.

Meanwhile, global geopolitical risks are rising: tensions between China and the US are stillrounding, and global supply chains and general market sentiment are being affected by ongoing conflicts in Ukraine and the Middle East. Gold, as a’ safe have n’, has therefore attracted wide interest.

The People’s Bank of China purchased more gold from the central bank in Asia in 2023, according to Fan. The PBOC currently has 2, 262.45 tonnes of gold reserves, followed by Japan and India, which have each over 800 tonnes.

The PBOC has added gold for the first 18 months in a row, but the price increase has slowed as the price rises have slowed.

The Reserve Bank of India’s ( RBI ) gold reserves, as of March this year, saw a 34 % increase compared to that in March 2019, reaching a total holding of 822 tonnes of gold. In addition, the Monetary Authority of Singapore’s ( MAS ) gold reserves increased by 2 tons in the first quarter.

The shift in geopolitical attitudes following the Russian’s attempted invasion of Ukraine and the subsequent sanctions placed on Russia’s foreign exchange reserves have resulted in a significant increase in central bank gold buying, according to Fan.

” We anticipate that central banks will continue to be gold’s main sources of income this year,” he continued. The US Fed’s rate cuts decisions, however, will still have the biggest immediate impact on the price of gold.

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Herbert Smith Freehills hires partner in Thailand; six make counsel in Asia | FinanceAsia

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Law firm Herbert Smith Freehills (HSF) has appointed Pariyapol Kamolsilp as a partner in Bangkok. Kamolsilp (pictured) will join the firm on May 2, according to a company announcement. 

In Thailand, HSF is led by managing partner Warathorn Wongsawangsiri. The practice handles large litigation, class actions and arbitration matters for Thai, regional and international clients.

Kamolsilp has over 16 years of experience in domestic and international arbitration, with expertise in construction disputes and insolvency and bankruptcy matters. He began his legal career in 2007, focussing on commercial disputes, including securities matters and M&A.

“Thailand’s economy is growing and Bangkok is also a business hub for Cambodia, Laos and Vietnam investment, so client demand for our services is rising,” said Wongsawangsiri in the announcement. “Pariyapol’s skills will help us meet that demand, particularly in construction, energy, consumer goods and TMT disputes.”
 
Asia managing partner Graeme Preston added: “Bangkok is essential to the growth of our Southeast Asia business, as it attracts investors across sectors and is a hub for onward investment.” 

Six promotions 
 
HSF has also promoted six of their team to counsel in Asia as part of a global promotion of 34 new counsel at the law firm, according to another company announcement. 

The six lawyers are: capital markets lawyer Maisie Ko, who is based in Hong Kong; commercial litigation laywer Saornnarin Kongkasem in Bangkok; Chee Hian Kwah, a specialist in financial services regulation at HSF’s network partner Prolegis in Singapore; Junyeon Park, who is a corporate crime and investigations lawyer based in Tokyo; Hong Kong-based Marcus Wong, who works in debt capital markets; and Yida Xu, also based in Hong Kong, who works in energy. 

They will all be promoted from May 1 and the move follows the promotion of six HSF lawyers in Asia to partners, also from the beginning of May. 


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Decarbonising energy in Southeast Asia: A bank and regulator’s perspective | FinanceAsia

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The need to connect the world energy system with the 1 is essential. 5°C purpose has never been more powerful. August 2023 marked the hottest month on record, surpassing even the document set in July 2023 by a substantial margin. The severity and frequency of climate change impacts are rising, highlighting the urgent need for activity.

According to the International Energy Agency ( “IEA” ), global carbon dioxide ( CO2 ) emissions from the energy sector reached a new record high of 37 billion tonnes ( Gt ) in 2022, 1 % above their pre-pandemic level, but are set to peak this decade.

Piyush Gupta, the CEO of DBS Bank, highlighted some of the important difficulties financial institutions are facing as they move to the energy market.

One important issue, according to Gupta, is the untested economy of many new technology. While some industries have fairly good systems solutions, others lack feasible options. Although hydrogen may hold promise, it is now too far beyond the reach of use. Even where there is systems, these innovative solutions ‘ cost points and economics frequently differ from those of fossil-based energy sources or different segments.

The economy are different when comparing the cost of solar production in regions with high thermal efficiency, like China or India, to those with cloud cover, like the tropic, according to Gupta. Elements such as the cost of land, which can be considerable for tasks requiring large places, and the costs associated with store, intermittency, and network upgrades further complicate the financial viability of projects.

In fact, some initiatives are not simple to finance based only on commercial viability.

Gupta was speaking at a screen debate at the Singapore state investment Temasek’s monthly sustainability-focused function, Ecosperity, from April 15 to 17.

The need for relevant infrastructure spending is the next problem identified by Gupta. While a job may be initiated, if the necessary investments in another system components, such as the network, are not made continuously, the site’s potential is compromised. Thus, it is crucial for a financial institution to take into account the wider communication and infrastructure requirements beyond the task itself in order to assess the viability of the investment.

The Asean nations ‘ risk prices, as discussed by Gupta, have an impact on project viability and prices. Foreign exchange threat and royal risk are included in these risk premiums. Some nations in the area are not regarded as investment-grade, which adds to the sovereign risk premium. Foreign trade risk is another important issue, as funding for these projects frequently is in US dollars while profits are generated in regional currency. Significant financial difficulties can be caused by this gap.

Finally, Gupta shared that project funding is influenced by the off-takers reliability, especially in the energy sector, where political considerations may affect payment reliability. Regime modifications can add another layer of complexity to venture financing by raising doubts about the off-taker’s commitment to completing its legal obligations. Together, these problems add to the difficulty and complexity of funding regional system jobs.

But, while difficulties exist, concerted efforts are underway to mitigate them, with continued growth of remedies aimed at overcoming these roadblocks.

Gupta, who spoke to FinanceAsia on the outside of the occasion, put forth one like solution, which he believes can have a significant influence on the sector’s journey to zero.

One of the most important components of a toolbox of solutions to climate change is establishing a reliable and open global graphite market. A strong global carbon market is a powerful tool for the personal sector to move money from developed to developing areas. This in turn has the potential to have a significant effect by enabling emerging markets to obtain funding for sustainable development tasks, which are required to speed up the transition to a low-carbon business. ”

According to Gupta, pursuing the implementation of cross-border and export industry also offers a considerable option. “These areas enable resource countries to develop capacity, size, and engineering without bearing the price, as other states purchase their authority, ” he noted.

To put this in perspective, the demand for coal funds could increase by 15 days or more by 2030 and up to 100 days by 2050. By 2030, the use and buying of carbon credits was reach$ 50 billion, subject to the successful implementation of the Article 6 code adopted at COP26.

Singapore’s online zero journey 

Singapore has set a goal of achieving net zero emissions by 2050. Singapore aims to have net-zero emissions from this industry by the same deadline given that its energy sector accounts for 40 % of its emissions. By importing fresh power from the Asean area, the nation intends to accomplish this goal.

Ngiam Shih Chun, chief executive, of the Energy Market Authority ( EMA ) of Singapore, said that while “Singapore has limited renewable energy resources, the country can access low-carbon electricity that is abundant in the region by connecting to regional power grids. This also encourages the growth of solar energy in the area and opens the door for the Asean Power Grid vision to become a reality. ”

The country has the target set to import up to fourgigawatts ( GW ) of low-carbon electricity by 2035, making up around 30 % of Singapore’s electricity supply then. EMA granted contingent certifications to trade up to 4 in 2023. 2 GW of low-carbon energy from Cambodia, Indonesia, and Vietnam. Companies are now completing feasibility studies and obtaining regulatory approvals from transit and source nations.

The projects are physically and economically feasible, and the source nation and Singapore are working together in a beneficial way, Chun said.

As Singapore actions steps down from its energy sector, Chun mentioned that these jobs are also pioneering because cross-border power trading is now constrained in the area. Their large size is also something to keep in mind, for instance, a 1,000-kilometer high voltage direct current wire from Vietnam. They are thus facing regulatory problems.

But, once cleared, they are expected to accelerate the development of cross-border buying, according to Chun.

The Laos-Thailand-Malaysia-Singapore power project, for example, took years to negotiate but is now the first successful cross-border power trading initiative across four Southeast Asian ( SEA ) countries. To improve trading volume and make multi-directional trading more profitable, discussions are currently being conducted. This advancement is in line with the Asian power grid’s goal, which promotes cross-border trading and benefits various SEA nations.

A national hydrogen strategy, which outlines the potential pathways for gas to be adopted in the energy sector, which could account for up to 50 % of the power mix, is another initiative being taken in the nation. Recognising the price differential for innovative solutions, Singapore is seeking “Pathfinder projects”. As a part of this action, Singapore aims to work with the business to experiment with and build up abilities in superior gas technologies, and identify and address any professional, protection, or regulatory issues that may arise.

Chen said that the private sector and financial institutions are closely involved in this phased approach. Currently, the focus is on shortlisting consultants and conducting pre-field studies, with funding secured to support these initiatives. The goal of the approach is to address the cost disparities brought on by new technologies and ensure the project’s viability and bankability.

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HSBC launches bn fund for Asean’s digital economy | FinanceAsia

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HSBC has launched a$ 1 billion Asean Growth Fund to help scale up “platform players” in the region’s digital economy.

The goal is to enable electronic businesses to expand their asset portfolios and achieve scale. The fund intends to support “new-economy names”, well-established corporations, and non-bank economic institutions by “evaluating working metrics tied to their cashflow-generative asset portfolio, rather than only relying on conventional financial metrics,” according to a media release. &nbsp,

In Asean, the London- headquartered world institution has a reputation in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and the bank will be looking to support companies in these countries, a spokeswoman told&nbsp, FinanceAsia.

In recent years, the lender has provided significant funding to a number of online gamers. In August 2023, the Philippines-based consumer finance digital platform Atome Financial announced plans to expand its$ 100 million debt facility. Earlier this month, HSBC agreed a$ 100 million credit facility with the Akulalu Group, a bank and digital software group with activities across Indonesia, the Philippines, Thailand and Malaysia. &nbsp,

Individually, HSBC has set apart$ 150 million to provide financing to earlier- stage, higher- growth companies in Singapore that are backed by venture capital or personal equity investors.

” Like so many other internationally minded businesses, we are excited about Asean’s booming digital economy”, said Amanda Murphy, head of commercial banking for South and Southeast Asia ( SEA ) at HSBC, in a statement. Asean has” so much potential for growth” with a working population that is digitally native, growing in size, and poised to consume more goods and services, especially in e-commerce.

Murphy continued,” The introduction of our most recent offerings makes us better able to support new-economy companies in Asean as they spread throughout the region and advance along the corporate lifecycle.”

Digitalising operations

SEA’s digital economy is among the world’s fastest- growing and was worth around$ 218 billion in 2023. By the end of this decade, it is anticipated to have a value of$ 600 billion, with a compound annual growth rate of 16 %. &nbsp,

HSBC recently surveyed 600 companies operating in SEA and found that 42 % said that “digitalising operations” is their top business priority. This was followed by “growth in SEA”, at 40 %, while 37 % of businesses said&nbsp, “research and development” is their top priority. &nbsp,

As Asean’s economies integrate more, 66 % of respondents said they want to expand into new markets within SEA, and 65 % of respondents said they plan to increase their investment in the digitalization of their businesses. &nbsp,

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AI’s rapid evolution | FinanceAsia

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Asian listed technology stocks outperformed world indices in 2023. While lingering geopolitical worries and supply chain constraints muffled the industry’s early year outlook, the sector was buoyed by the near overnight mass adoption of generative artificial intelligence (AI).

The release of user-friendly chatbots found an immediate audience. Within two months of its official launch, ChatGPT reached 100 million monthly active users, making it the fastest-growing consumer application in history, according to Similarweb data. The popularity of the OpenAI-designed chatbot spurred other notable rivals, including Google’s Bard and graphic designer Midjourney. AI systems are now capable of producing digital art designs, college-level essays and software coding – all in just a matter of seconds.

Unsure which generative AI platform will ultimately reign supreme, investors have been adopting a “picks and shovels” approach, a mining analogy favouring equipment makers. The Philadelphia Semiconductor Index returned almost 50% in 2023. Asian tech companies followed, with the MSCI AC Asia Pacific Information Technology Index rallying more than a fifth, compared to a 10% gain for the MSCI World Index.

Looking into 2024, there is little to believe tech’s outperformance will reverse, said Mazen Salhab, chief market strategist, MENA for BDSwiss, speaking to FinanceAsia. Salhab foresees the trend continuing beyond the next 12 months, considering the urgency for corporations to leverage innovative technologies capable of addressing headwinds such as tightening labour dynamics and higher costs.

Given its technological reach, experts see generative AI’s transformative properties creating significant economic value across a spectrum of industries. Bloomberg Intelligence predicts generative AI sales to reach $1.3 trillion over the next decade from a market size of $40 billion in 2022, representing a compounded annual growth rate (CAGR) of 42%, with rising demand for AI products adding $280 billion in new software revenues. 

These numbers are hard to ignore, explained Hong Kong-based Robert Zhan, director of financial risk management for KPMG China, to FA. He added that companies harnessing AI would not only establish a competitive advantage for themselves, but would also unlock substantial client and shareholder values, enriching the entire business ecosystem.

Concentrated gains

Yet, despite the broad-based optimism, generative AI value creation has been narrowly focussed with select names. The market cap of US-listed Nvidia, the graphic processing unit (GPU) chipmaker behind chatbots like ChatGPT, tripled in 2023, breaching the trillion-dollar level and quickly becoming the industry’s benchmark for AI sentiment.

The excitement surrounding AI pushed Nvidia’s current price-to-earnings (P/E) multiple to 120 times, compared to Nasdaq’s market multiple of just 25 times, with analysts justifying AI premiums due to the sector’s rising income profile and robust sales outlook. While historical productivity cycles have often inflated speculative prices, even at the current trading multiples, Salhab doesn’t believe an asset bubble exists, arguing that visible efficiency gains are set to materialise in the near future.

Timing when those AI-related gains appear is riddled with obstacles for asset allocators. Chip designer Arm Holdings, which listed on the Nasdaq in September 2023, has been trading with a P/E as much of 200 times, nearly double that of Nvidia’s, reflecting the widening gap investors are assigning to companies with AI linked revenues.

Despite the elevated valuations, fund managers see generative AI investments as just one catalyst for the tech sector. 

The outlook is particularly promising for semiconductors, said Matthew Cioppa, co-portfolio manager of Franklin Templeton’s technology fund, in a conversation with FA. Cioppa highlights ongoing drivers such as proliferating demand for electric vehicles, internet of things (IoT), and cloud computing, noting that these technologies are at the early growth stages of their innovation, offering catalysts for semiconductor stocks.

The politics of chips 

There are also many political considerations for AI investors. 

As semiconductors serve as the underlying hardware for AI, experts say the technology will inevitably always be related to political decisions that can quickly rattle markets. In October 2023, the US tightened export controls on advanced chip sales to China, hampering Beijing’s AI ambitions and fuelling US-Sino tensions ahead of the US 2024 presidential election.

The US-China trade dispute has diminished the Chinese semiconductor market for US suppliers, acknowledged Cioppa. Although he argues that export restrictions are already priced into the market, Cioppa believes that the political fallout linked to semiconductor chips and AI technology remains a volatile factor that can never be ignored, especially when the world’s two largest economies are directly involved.

Nvidia’s share price has bucked the trend. While the company has thus far overcome trading hurdles by offering alternative chips, that balancing act appears vulnerable following the group’s third-quarter earnings announcement which mentioned a more challenging operating environment ahead. That caution is now being echoed by Nvidia’s Chinese customers who are also concerned about their own generative AI aspirations.

In late November 2023, e-commerce giant Alibaba reversed its decision to spin off its Cloud Intelligence Group, citing the US export controls of advanced Nvidia chips, while China’s Tencent said it would look to domestic semiconductor manufacturers to meet its demand. Even as Nvidia coordinates with the US government on developing approved chip designs compliant with the existing rules, the outcome and timing of decisions remains unclear.

This matters for any technical development, said KPMG’s Zhan. “[Because] geopolitics impacts which AI vendor is selected, companies will be cautious to ensure they meet local regulatory requirements, particularly across data privacy and security.”

Rapid development of Chinese-produced semiconductors may test market sentiment if incumbents like Nvidia underestimate those capabilities. While supply may meet chip demand in the current market, Nvidia believes those alternatives may not provide sufficient computing power to train the next generation of AI systems, as stated in the earnings report.

Technological challenges are also occurring alongside policymaker efforts to incubate a regulatory landscape that supports AI platforms without derailing its potential. In October 2023, London initiated a summit aimed at establishing an AI oversight committee, but soon discovered that Washington had similar intentions, reflecting a lost coordination opportunity. 

What regulations are ultimately introduced is uncertain, but it’s anticipated that numerous discussions and obstacles will arise in the years ahead, said Zhan. When asked what type of regulation works best, he shared: “I would like to compare AI to a human. Right now, AI technology is still in its infancy, so it makes sense that it should get more supervision and more controls to help it learn and grow. But as AI matures and learns, such controls should adjust proportionately according to the risk.”

It is a sentiment underscored by Franklin Templeton’s Cioppa, who said that “over time a combination of sovereign regulatory frameworks and private market solutions would effectively provide AI guardrails as not to stifle innovation or make it too difficult for smaller companies to compete with the mega cap companies on any advancements.”

2024 outlook

The uncertainties facing AI investors for the year ahead are magnified by higher capital costs such as elevated interest expenses as central bankers grapple with inflation, and also the increasing need for expensive data centres.

It will be interesting to see how AI stocks’ performance compare to non-tech companies in an overall weaker investment environment. Any company looking to bring AI into their businesses will have an expensive journey which could weigh on their earnings’ outlook.

As the market undergoes tapering, venture capital and private equity firms are adjusting their expectations. Hong Kong-based Alex Wong, head of M&A advisory at FTI Capital Advisors, told FA:

“Our clients, particularly those considering Hong Kong initial public offerings (IPOs), have recalibrated their expectations. Impacted by the weaker local market, some are exploring various alternatives at reduced exit valuations. Others are studying different listing venues, or altogether, deferring IPO plans and choosing direct exit strategies like trade sales.”

For fund managers preparing for the year ahead, these factors may bode well again for Asia’s technology stocks over non-tech names, particularly innovative companies backed by reliable cash flows and visible dividend payouts to shareholders. For investors that may mean holding onto 2023’s winner in 2024.

Peter Choi, a senior analyst at Vontobel, favours firms such as Taiwan Semiconductor Manufacturing Company (TSMC), the largest constituent for MSCI AC Asia Pacific Information Technology Index which returned more than a third to investors last year, highlighting that TMSC powers AI businesses not only for Nvidia, but also for tech giants such as Google and Microsoft.

Yet, no matter which AI-related companies lead stock market returns, the generative AI attention will unlikely fade, explained Andrew Pearson, managing director of Intellligencia, an AI and analytics company in Hong Kong and Macau.  

“Fundamentally, generative AI is anything that can be imagined even if it doesn’t currently exist, making it good marketing material inside a PowerPoint presentation or even a book,” said Pearson, who recently published The Dead Chip Syndicate. Ominously, he added: “There will always be an audience for something that carries a 10% chance of destroying the human race. It is too big to disregard at this point.”

For investors, there may be a sense of irony by sticking to the same investment strategy in 2024, as arguably the most prudent approach to capture the market upside for a constantly evolving technology, is to repeat what has worked before. Will this trade work again? We will find out over the next 12 months.

This article first appeared in the print publication Volume One 2024 of Finance Asia.


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HQ Capital opens Singapore office; announces head of Asia | FinanceAsia

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According to a business statement, international private equity firm HQ Capital has opened a new business in Singapore and appointed Michael Hu as Asia’s managing director.

Hu, based in Singapore, joined HQ Capital’s world executive council in soon 2023 and is in charge of Asia’s investment and business development activities. The new Singapore office will serve its private wealth and institutional investors in the region, whilst acting as a “gateway” for investment activities in markets including Australia, Greater China, Japan, Korea, India and Southeast Asia ( SEA ), according to the statement.

Since 1997, HQ Capital has invested in Asia and has an company there since 2007. HQ Capital invests worldwide with private collateral managers, focusing on the little- to middle- market. The agency also has offices in New York, Frankfurt, London, Shanghai and Tokyo, according to its site. &nbsp,

Hu served as a senior member of the secondaries & primaries investment group and oversaw investment relations and personal success solutions at private funding house Ardian, which is based in Singapore. Hu served as a principal at Greenhill &amp, Co. in Singapore and Hong Kong before becoming a director of the Asia Pacific ( Apac ) capital advisory business. I have 15 years of financial and personal ownership experience.

Marc Brugger, chief executive officer and chief financial officer of HQ Capital, said in the declaration:” Michael has a tremendous track record in secret capital investment, on both a primary and secondary basis, as well as co- investments, and a solid network in the region. Our existence in Asia, a growing market with unfilled investor demand, is further strengthened by the starting of our innovative Singapore office.

With a global software and a specialized investment focus, Hu added,” We will provide long-term, bespoke purchase solutions to personal wealth and institutional investors looking for different access to private markets. I look forward to working closely with our investors, HQ Capital’s global team, and top- tier private equity managers in Asia”.

The Monetary Authority of Singapore ( MAS ), which is pending approval, has approved HQ Capital’s application for a capital markets services license. &nbsp,

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HQ Capital opens Singapore office; appoints head of Asia | FinanceAsia

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According to a business statement, international private equity firm HQ Capital has opened a new business in Singapore and appointed Michael Hu as managing producer and nose of Asia.

Hu will take over HQ Capital’s world professional commission and will be in charge of the Asia-focused investment and business growth activities. The new Singapore office will serve its private wealth and institutional investors in the region, whilst acting as a “gateway” for investment activities in markets including Australia, Greater China, Japan, Korea, India and Southeast Asia ( SEA ), according to the statement.

HQ Capital has invested in Asia since 1997 and has an company there since 2007. HQ Capital invests worldwide with private collateral managers, focusing on the little- to middle- market. The agency also has offices in New York, Frankfurt, London, Shanghai and Tokyo, according to its site. &nbsp,

Hu served as a senior member of the secondaries &amp, primaries funding group and led investment relations and personal success solutions before becoming a controlling director at secret investment house Ardian, which is based in Singapore. Hu served as a principal at Greenhill &amp, Co. in Singapore and Hong Kong before becoming a director of the Asia Pacific ( Apac ) capital advisory business. I have 15 years of financial and personal ownership experience.

Marc Brugger, chief executive officer and chief financial officer of HQ Capital, said in the declaration:” Michael has a tremendous track record in secret capital investment, on both a primary and secondary basis, as well as co- investments, and a solid network in the region. Our presence in Asia, a growing market with unmet investor demands, is further strengthened by the opening of our new Singapore office.

With a global platform and a specialized investment focus, Hu added,” We will offer long-term, bespoke investment solutions to private wealth and institutional investors looking for different access to private markets. I look forward to working closely with our investors, HQ Capital’s global team, and top- tier private equity managers in Asia”.

The Monetary Authority of Singapore ( MAS ), which is pending approval, has approved HQ Capital’s application for a capital markets services license. &nbsp,

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IWD Deal Analysis: How IIX’s WLB6 Orange bond helps women’s livelihoods in Asia | FinanceAsia

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In a growing regional trend, December 2023 saw the sixth issuance of Impact Investment Exchange (IIX)’s Women’s Livelihood Bond (WLB) Series, the $100 million Women’s Livelihood Bond 6 (WLB6).

Altogether the IIX, since 2017, has raised $228 million to support women’s economic empowerment in Asia, with the overall trend in deal size on an upward trend. FinanceAsia discussed the investors, the rationale and the processes involved in order to celebrate International Women’s Day (IWD) 2024 on Friday, March 9 and the drive towards diversity, equity and inclusion (DEI) across the region. 

The closing of WLB6 marked the world’s largest sustainable debt security and was issued in compliance with the Orange Bond Principles and aims to uplift over 880,000 women and girls in the Global South.

Global law firm Clifford Chance advised Australia and New Zealand Banking Group (ANZ) and Standard Chartered Bank pro bono as placement agents.

Proceeds from WLB6 will be used to promote the growth of women-focused businesses and sustainable livelihoods across six sectors: agriculture; water and sanitation; clean energy; affordable housing; SME lending and microfinance across India, Cambodia, Indonesia, Kenya and Vietnam. 100% of the $100 million proceeds designed to advance UN’s Sustainable Development Goals (SDG) 5: gender equality and 25-30% designed to advance SDG 13 — climate action.

Robert Kraybill, chief investment officer, IIX, told FA: “The Women’s Livelihood Bond (WLB) Series is a blended finance instrument that pools capital from public-sector development finance institutions and private-sector investors. The public sector investors provide risk-tolerant “first-loss” capital in the form of subordinated notes, while the private sector investors purchase the senior bonds.”

“The WLB Series targets a range of private sector investors seeking a combination of high impact with low risk and an appropriate return. From the outset, beginning with the WLB1, the bonds have attracted both family offices and institutional investors. Initially, this was skewed towards family offices. As the WLB issuances increased, we saw increased interest from institutional investors, such that over 90% of the WLB6 was placed with institutions,” added Kraybill. 

For WLB6, there were global investors on the deal including from the US, Europe and Asia Pacific (Apac). The WLB6 bonds comply with the EU and UK securitisation regulations, making it easier for European institutional investors to participate. For example, one of the investors was Dutch pension fund APG Asset Management which invested $30 million.

Kraybill said: “Throughout building the loan portfolios for the WLBs – from sourcing and screening to due diligence – we integrate traditional credit criteria with impact criteria. We look to invest in companies meeting our credit and financial criteria while delivering meaningful positive impact.”

“We are proud that we have not experienced any payment defaults or credit losses on any of the WLB loan portfolios, demonstrating the resilience of the high-impact women-focused businesses that we work with, even in the face of challenges posed by the Covid-19 pandemic. The first two bonds in the WLB Series – WLB1 and WLB2 – have matured and been fully retired, meeting all of their obligations to bondholders,” Kraybill added. 

The IIX, which is headquartered in Singapore and has offices in Australia, Bangladesh, Brunei, India, Indonesia, the Philippines, Sri Lanka and Vietnam, also tracks the impact outcomes generated by its investment throughout the life of the bonds and reports on the targets. WLB1 and WLB2 exceeded impact projections, according to IIX.   

Complex deal

Given the number of parties involved and a myriad of regulations and compliance, the deal was not easy to put together. 

Gareth Deiner, partner at Clifford Chance, explained to FA the law firm’s role in the deal: “We’ve been involved for several years on these transactions, and this is not the first woman’s livelihood bond that the IIX team has put together.”

Singapore-based Deiner continued: “Historically, we have acted on the trustee side, but we have been advising the lead managers of the transaction for the last three offerings. It’s approximately a three to four month execution process to make sure we get the documentation agreed and the structure in place. IIX do the underlying due diligence on the borrowers, which is necessary given that the financing is raised from the international capital markets. Together with their counsel, they work on the disclosure in the offering document for the bond transaction.”

“As counsel to the lead managers, we are responsible for the underlying contractual documentation for the notes and the offering, but it’s IIX who retain control over the loan documentation with the notes proceeds end-users, and putting the loan pool together. They’re doing due diligence on the on the underlying borrowers of the deal,” he explained. 

This is backed up by IIX’s due diligence. IIX’s Kraybill explained: “The financial due diligence conducted by our credit team is similar to that of other emerging market lenders. What sets us apart is the upfront impact due diligence and ongoing impact monitoring and reporting conducted by our impact assessment team. Our team screens potential investments against rigorous eligibility criteria to ensure they contribute to positive outcomes for underserved women and gender minorities in the Global South while often empowering women as agents of climate action.”

Navigating US legal rules and dealing with investors from around the world also added to the complexity. 

Deiner said: “Dealing with a wide range of investors, including qualified institutional buyers in the US, we needed to comply with US federal securities law, including limiting the sale of the notes to qualified purchasers under the US Investment Company Act. There were also certain structural considerations raised by the EU and UK securitisation regulation.”

“From a legal perspective, it was an interesting deal because there’s a wide range of highly technical substantive law, which required the input from specialists across the Clifford Chance network. We have the expertise across the globe and do a lot of sustainable financing work,” continued Deiner. 

“Recently we’ve advised on some market-leading and groundbreaking transactions in terms of bringing sustainability finance technology to capital markets transactions,” he added.

However, this deal, in particular, involved social governance goals. 

Deiner explained: “What we like about this particular transaction is that so much of the Environmental Social and Governance (ESG) agenda is about the environmental (E) angle, such as green bonds related to carbon transition and climate action. That encompasses sustainable  development goal 13 of the UN Sustainable Development Goals (SDG).”

“However, you rarely hear about sustainable finance transactions that focus on the S and the G in ESG, which IIX champions. Each of the sustainable development goals (SDG) has its own hue, its own colour. This transaction focusses on SDG 5, which is gender equality, and are referred to as Orange bonds – orange being the hue for SGD 5. In addition, IIX has developed its own framework and principles to really drive that S in the ESG,” he added.

Tracking societal impact

There is still a key issue on how to track the impact of where the money ends up.

IIX’s due diligence process includes interviews with beneficiaries and stakeholders of investees,  using its own digital impact assessment tool to incorporate input from a broad group of female beneficiaries. This verifies impact claims while giving a voice and value to the women it is assisting, according to Kraybill.

He continued: “Our selection process for projects funded through WLB6 closely aligns with the objectives of The Orange Movement. Each of the bonds in the WLB Series adheres to The Orange Bond Principles, which focuses on empowering women, girls, and gender minorities, particularly in climate action and adaptation.”

IIX looks at the potential of each project’s mission, vision, goals, and business structure, to evaluate alignment with the core values of the WLB Series and The Orange Movement. Its impact assessment team conducts due diligence to ensure selected projects meet criteria outlined by The Orange Movement and contribute to promoting gender equity and addressing climate challenges in emerging markets, according to Kraybill.

With the rise of bonds connected to ESG and DEI, the scrutiny from investors is also increasing, especially with the prevalence of greenwashing. 

Clifford Chance’s Deiner said: “The legal landscape for green bonds and sustainability-linked bonds has evolved considerably in recent years, particularly regarding due diligence. When a company issues a green bond under a green bond framework, substantial work is required to ensure the bond’s integrity. This diligence has become a critical factor in investment decisions, as investors need to be confident that the environmental credentials are genuine and not merely an instance of greenwashing.”

“One of the key parts of the Orange bond initiative is achieving transparency in the investment process and decision, and the subsequent reporting, as the proceeds are going to an issuer who is on-lending it again, to, for example, a microfinance lender. It’s a combination of seeking an investment return and a view on the credit profile. The funds have specific objectives regarding capital allocation, and the appeal of the Orange bond aspect aligns with this focus,” Deiner added. 

$10 billion goal

The IIX has an ambitious goal of mobilising $10 billion by 2030 and optimism abounds. 

Kraybill said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”

“Partnerships with the Orange Bond Steering Committee organisations, like the Australian government’s Department of Foreign Affairs and Trade (DFAT), the UN Capital Development Fund (UNCDF), Nuveen, and others, are vital in this endeavour. Together, we aim to build a gender-empowered financing system, mobilise new capital, and accelerate progress toward gender equality and women’s empowerment globally,” Kraybill added.

The Orange Movement is also building “Orange Alliances” at regional and national levels to bring together gender lens investors and other stakeholders. IIX is conducting training programs to train and certify Orange Bond verification agents.

“We’re introducing an “Orange Seal” for MSMEs and other organisations, which enhances their gender, DEI, and climate bona fides. We have expanded our transaction tagging functionality to include innovative finance instruments that adhere to the Orange Bond Principles framework. Furthermore, we’re eagerly anticipating the launch of the Orange Loan Facility, alongside numerous other initiatives to further the Orange Movement’s mission,” Kraybill said. 

He said: “We remain optimistic about reaching our ambitious goal through sustained collaboration and concerted action, empowering women and girls worldwide while fostering inclusive and sustainable development.”

The next bond could potentially be much larger than WLB6’s $100 million. 

Clifford Chance’s Deiner is also optimistic: “There’s a flow of transactions that we’re going to see over the next 12 months, and this an area that people are paying more attention to. The transactions have grown considerably over the years. These transactions have involved deals from around $20 million up to the latest offering of $100 million. So, there is clearly increasing demand for these transactions each year.”

Standard Chartered declined to provide a comment for the article.


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