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Learn about investing in the world's fastest growing markets with FSSA Investment Managers. We invest in high quality equities that outperform over the long term.
Learn about investing in Asian equities with FSSA Investment Managers today. Our Asia funds invest in high quality companies that outperform over the long term.
Podcast: Coronavirus - Asian markets corrections and resilience
Mr Aditya Puri, who had only recently retired as the CEO of HDFC Bank, had joined the board of a small, unlisted pharmaceutical company, Stelis Biopharma. Given Mr Puri’s remarkable leadership at HDFC Bank, we dug deeper into his new role. In addition to his board role at Stelis, he had accepted the position of an advisor to the broader Strides Group.
As bottom-up investors, the FSSA team carry out well over 1,500 meetings each year to assess company managements’ capabilities and the underlying strength of the franchises they run. These Monthly Manager Views are based on the team’s discussions with company management and the in-depth analysis that follows.
China made headlines for watering down coal reduction targets during COP26 , but we think the criticism is unfair. The nation’s own targets set by President Xi Jinping last year – for peak emissions before 2030 and carbon neutrality by 2060 – are still ambitious and noteworthy considering China’s faster economic growth compared to developed countries. Much of China’s carbon-intensive activities over the years, especially in manufacturing, had been outsourced from the West. This makes China’s goals more impressive, considering the scale of change the country needs to make while retaining many of its core industries. And more domestic companies are taking steps to reduce emissions, which suggests the direction of travel is positive and still gathering steam.
The Sustainable Finance Disclosure Regulation (SFDR) requires asset managers to report on up to 20 Principal Adverse Impact (PAI) indicators. PAIs are the negative impacts caused by a firm or an asset on the environment and society.
Leading global investment manager, First Sentier Investors (FSI), today announced the outcome of a review of its existing investment capabilities against its strategy.
The Sustainable Finance Disclosure Regulation (SFDR) for the European Union Mandates the disclosure of the Principal Adverse Impacts (PAI) that investment decisions have on sustainability factors.
This article focuses on three of the PAIs related to Biodiversity Areas, Emissions to Water, and Hazardous and Radioactive Waste. Each PAI provides details about the measures, some of the challenges related to them, and how investors may use the information they provide.
Every company we speak to these days tells us about the cost pressure that they are facing, emanating from rising global commodity prices. Domestic steel prices have risen by 35% y/y, copper by over 50% y/y and palm oil by over 60% y/y through February 2021. Indian corporates are being forced to reckon with sharp increases in input costs for the first time in almost a decade. We believe that pricing power is often the critical litmus test of a franchise’s quality.
From report writing and gathering information to the more technical side of pattern recognition and natural language processing, David Walsh, Head of Investment at RQI Investors recently joined Ausbiz to highlight how AI will affect wealth and investment management.
Given its size and influence, China remains a key investment destination despite ongoing trade disputes and diplomatic tensions with the US and Australia. With a GDP equivalent to around 70% of the United States, many global portfolios continue to feature Chinese equities. Against this background, Martin Lau, Managing Partner at FSSA Investment Managers, provides five insights into the current and future trends shaping the Chinese economy.
First Sentier Investors, a leading global investment manager is pleased to announce the appointment of Adele Swan as the new Chief People and Culture Officer, effective 24 June. Ms Swan is based in Edinburgh, reporting to the CEO, Mark Steinberg.
In almost every meeting that we have with management teams, we will ask about incentivisation. In our view, it is an important question and the answer can be highly revealing about an organisation’s culture and behaviour. While it can be easy to be deceived by articulate CEOs talking up a big game with lots of investor-friendly buzzwords, in our experience what ultimately drives outcomes (at least the ones that management teams can influence) are the incentives. As with most things, striking the right balance is key. If there are no incentives to good performance (and no disincentive for poor performance), companies often end up with capital being systematically mis-allocated without any accountability. This tends to be the case with most State-Owned Enterprises (SOEs), which is one of the reasons we are generally cautious on them. On the other hand, too much of a good thing can also have adverse consequences, which we often see in turbo-charged incentive schemes concentrated among just a few senior executives. While they might lead to exponential growth for a short period of time, the growth is usually not sustainable. After a rapid period of expansion, imbalances are typically built up and when growth inevitably slows it is usually not just one skeleton that falls out of the closet.
Podcast: China, ray of hope and pockets of opportunities
First Sentier Investors, a leading global investment manager, today announces that it is setting its first nature targets as a Taskforce on Nature-related Financial Disclosures (TNFD) Adopter, in the lead up to the inaugural Global Nature Positive Summit hosted in Sydney this week.
First Sentier Investors, a leading global investment manager, is pleased to announce the appointment of Jamie Downing as the new Head of Distribution in EMEA, as the business continues to strengthen its global distribution team.
Mon 29 Nov 2021: David Allen has been appointed to the role of Global Head of Investment Management. David brings with him over 20 years of global asset management experience where he specialised in building investment businesses and leading investment teams.
The pandemic has accelerated certain long-term shifts in consumer behaviour, such as using more online orders for everything from clothing to food. The latest battleground appears to be groceries, but the disrupter emerged from a not-so-new technology — WeChat groups. China’s online e-commerce giants such as Meituan and Pinduoduo are now taking market share from the traditional grocers via community group buying (CGB), which began only four years ago and went mainstream during Covid-19. In this form of e-commerce, leaders of WeChat — or other platforms which recently entered the market — collect orders and have the goods delivered the next day to pick-up spots in their members’ communities. In between, the orders are aggregated by the platforms and transmitted to the upstream suppliers which deliver the goods.
Global investment manager, First Sentier Investors, today announced changes to its investment capabilities within Australia.
As many economies have bounced back from the worst of the pandemic, concerns about central banks, the rate of money-printing and inflation have returned. Markets have responded to the arrival of better times by selling off bonds and bond-like equities. The stocks that benefited most from lower discount rates, have fallen. The most speculative, Covid-bolstered, technological and crowded end of the market have been hit the hardest. Against this backdrop, many investors are considering how to position their portfolio for the post-pandemic world. In our view, the key is to remain focused on our investment philosophy, which is to seek high-quality companies to invest in for the long term.
First Sentier Investors today announced unit holders have voted in favour of a change in responsible entity (RE) for a number of funds from Colonial First State to The Trust Company.
We have closely followed earnings across our India Subcontinent portfolio companies to assess how successfully they have emerged from the initial impact of the pandemic.
First Sentier Investors is the world-leading provider of specialist investment capabilities. Discover how we provide research-led active investment management.
Firstly, regulations are nothing new — it has always been a part of the investment equation. If we look at Hong Kong or Singapore for example, the government would introduce new regulations on the property market from time to time; and in China, the government has introduced a number of new regulations for banks and insurance companies over the years. In fact, last year the government changed the pricing policy on automobile insurance, affecting quite a few Chinese general insurers. Therefore, regulation risk is always something to consider. Secondly, we believe the Chinese government has indeed changed — in terms of their priorities and focus — over the last three to four years. China was particularly focused on economic growth previously; and by all accounts, China has been a major economic miracle. From poverty, it has become the second-largest economy in the world. However, in recent years under the leadership of President Xi Jinping, the Chinese government has started to focus much more on social stability and equality. Thus, the underlying spirit of the recently announced regulations seems to be targeting wealthy entrepreneurs and conglomerates. The goal is to help improve the lives of workers, for parents to ease their burden with children, and so forth. Then, there is the environmental aspect too, with the Chinese government increasingly focused on pollution and carbon neutrality. From that perspective, it certainly looks like the Chinese government is becoming more socialist than it was before. I think that is the trend and to some extent, investors will need to acknowledge and accept it when investing in China.
Leading global investment manager, First Sentier Investors, today announced the completion of its corporate rebrand from First State Investments to First Sentier Investors in all markets ex Australia, effective today. In Australia, the firm has operated as First Sentier Investors since September 2019, where it was earlier known as Colonial First State Global Asset Management.
We believe financial markets, critical to society’s ability to function, are under threat. For too long, it has been widely accepted that short-term performance, growth, risks and financial returns should be maximised at the expense of environmental and social outcomes.
First Sentier Investors has today announced it will apply to list its first Exchange Traded Fund (ETF) on the ASX, the First Sentier Geared Australian Share Fund Complex ETF (The Fund, ASX:LEVR), which is expected to commence trading mid-May 2025.
First Sentier Investors recently presented at the Responsible Investment Association Australasia (RIAA) annual conference and hosted a design lab on how responsible investors can shape the future of Electric Vehicles (EV). This paper outlines the key challenges for EV acceptance, analyses the rollout of EV charging infrastructure around the world, and considers practical ideas for investors to super-charge the uptake of EV.
First Sentier Investors is pleased to announce two key leadership appointments, effective 1 January 2025. Harry Moore is appointed to the newly created role of Chief Commercial Officer; and Lauren Prendiville is appointed as the new Global Head of Distribution and Marketing.
Leading global investment manager, Colonial First State Global Asset Management today announced the rebrand of its business to First Sentier Investors (First Sentier).
Leading global investment manager, Colonial First State Global Asset Management today announced the rebrand of its business to First Sentier Investors (First Sentier).
In 2020, one group of companies has done particularly well – the popular digital technology companies focused on e-commerce, delivery and entertainment, to name a few industries. In emerging markets, they dominate the Chinese market; but they can also be found in Korea, Southeast Asia, Eastern Europe and Latin America. We do not own many of these in the strategy; and as such, we are often asked: What holds us back? After all, they have performed well and – at least on paper – should have the prerequisite to generate strong returns and free cash flow, given their often high gross margins, negative working capital profiles and asset light nature. While we are not disputing the potential for this in the future, we would argue for cautiousness on most of these projections.
This letter forms the first in a series designed to introduce and explain our approach to sustainability, and the lessons learned so far. We hope that these reflections, drawing on the team’s combined experience, will provide a useful insight.
The advent of Artificial Intelligence (AI) is affecting ever expanding fields of human activity. And the way we invest is no exception. It’s never been more timely for investors, advisors and investment managers to take deep stock of the impacts, real and potential, of AI, so we can better prepare to manage them – whether by leveraging opportunities, managing new risks or, more likely, both.
Incorporated in 1885, BHP began as a silver, lead and zinc mine in Broken Hill, Australia. Over the next century the company grew into one of the largest diversified resource companies in the world with operations including oil and gas, steel production and mining of a variety of commodities including copper, potash, coal and diamonds. It listed on the Australian stock exchange in July 1961, making it the oldest company currently trading, and throughout much of this time it has been the largest company on the ASX by market capitalisation (currently it is ranked third). In 2001 BHP announced it would merge with fellow resource powerhouse Billiton. Billiton also had a long history dating back to a single tin mine in 1851 before growing into a major producer of aluminium, alumina, chrome, manganese, steaming coal, nickel and titanium. The company was Dutch controlled from inception before being acquired by South African firm Gencor in 1994. As the world’s largest metals and mining corporation, BHP Billiton began trading in July 2002 and operates as a dual listed company (DLC) – a corporate structure in which two companies have merged into a single operating business but retain separate legal identities and stock exchange listings (in this case Australia and the United Kingdom ).
What will 2021 look like for China? 2021 will be a year of recovery. This is not surprising given last year’s economic downturn. If vaccines are being rolled out gradually during the year, we believe the economy will recover, especially those sectors that have been hit hard like travel. Hong Kong’s travel sector declined by 99.9% last year so there really isn’t much room left to decline.
In our last client update, written through the depths of Covid-despair, we observed that real life and the world of markets are seldom so intimately entwined. With markets swinging violently to the downside on a riptide of fear, it was clear even then that activity was being driven by short-term anxiety rather than a real evaluation of Asia’s longer-term value-accretion prospects.
Our recent paper on Extreme Concentration focussed on the US (and so Developed Markets). This was the natural as the central issue of concentration was among the top 10 stocks in the US, among them, the “Magnificent 7”.
We are entering a new era. The year 2024 will be unpredictable and clouded by many uncertainties. It will be marked by geopolitical risks, the ongoing taming of the inflation beast, and how the US Presidential election will impact markets.
The cascading impacts of climate change and society’s overexploitation of the land and sea is giving rise to unprecedented devastation of nature and biodiversity. In the last 50 years, there has been a devastating 69% drop in wildlife populations[1]. The unfolding crisis is risking the very foundations of our economy, society and life itself, impacting humankind’s food security and access to clean water and air.
In September 2023, I met more than 30 global listed infrastructure companies and stakeholders from the UK, Europe and China. The following travel diary summarises my impressions and findings from these meetings.
Recently I attended the largest US utility conference, the 2024 Edison Electric Institute (EEI) Financial Conference, in Hollywood, Florida. I met with management teams from 26 regulated electric and gas utility companies.
Last quarter I visited infrastructure companies in Tokyo, Osaka and Nagoya. The trip included visits to ten corporate head offices and three site tours. This paper seeks to share some of the key findings from my meetings with Japanese passenger rail and utility companies.
Though Covid hasn’t yet finished with us, the markets have finished with Covid. In real life, there is still plenty of misery to go around, but in our opinion things have seldom been better for investors. Optimism has served us well, as the money-printing presses have rolled to counter the “unprecedented” threat. In investment, perhaps it is better to be a stupid optimist than a clever pessimist. And, we believe markets do indeed go up most of the time.
Since our last update, global markets have not been short of action and the manic behaviour characterising today’s markets has taken investors on another rollercoaster ride. While not quite comparable to the market movements seen during the dark days of March 2020, the recent correction — especially in China-related companies — has been notable. Yet, from a market perspective, a sense of normality is finally starting to emerge after the more speculative phases over the past 12-18 months. Companies related to the Work- or Consumed-From-Home environment are starting to discount a more realistic outlook and, equally, franchises with good long-term prospects that were experiencing temporary uncertainties caused by the pandemic have, for the most part, regained some of the lost ground as their underlying business fundamentals continue to improve.
Public policy support for infrastructure investment to remain strong globally, especially for the replacement of aged infrastructure assets and buildout of renewables. Utilities are in the midst of a multi-decade structural growth story. But higher capex needs to be managed in the context of affordability, reliability and sustainability. Earnings likely to be more resilient than global equities, albeit growth tempered by higher debt costs and increased regulatory and political risks. We expect the asset class to deliver mid-single digit EBITDA, EPS and DPS1 growth over the next two years despite a potentially challenging economic backdrop.
2024 was a year marked by global inflation and economic growth concerns against a backdrop of worldwide elections. As we head into 2025, volatility will remain an enduring constant.
Pricing power is now a major consideration with inflation is on the rise. Equal consideration needs to be given to the social license of companies to raise prices in line with community expectations.
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