U.S. money manager VanEck eyes China mutual fund license: sources By Reuters


© Reuters.

SHANGHAI/HONG KONG (Reuters) – New York-based money manager VanEck is eyeing a mutual fund license in China, two sources told Reuters, which will allow it tap the country’s $2.6 trillion retail fund market that Beijing fully opened up for foreigners this year.

The company is also considering launching products under the so-called Qualified Domestic Limited Partnership (QDLP), an outbound investment scheme, to help mainland Chinese invest offshore, said the people with direct knowledge of the plans.

China fully opened its fast-growing mutual fund sector to foreign companies by removing ownership restrictions on April 1 as part of an interim trade deal with the United States signed in January.

BlackRock (N:), Neuberger Berman and Fidelity International have applied to set up fully-owned mutual fund subsidiaries in China, while Vanguard Group and Schroders (LON:) will follow suit.

VanEck, whose strategies include emerging market equity and fixed income, gold and exchange-traded funds (ETFs), started planning for China entry late last year, when Beijing vowed to fully open its financial sector in 2020, a source said.

The coronavirus outbreak slowed VanEck’s China strategy, but in recent months the company had been in active contact with Chinese regulators. It hasn’t yet submitted an application though, the sources said.

Representatives at VanEck’s Shanghai unit declined to comment. The sources declined to be named as the company’s plans are not public yet.

VanEck, which runs both actively- and passively-managed funds, has not finalized its China product strategy yet, and its mutual fund plans are also subject to change, the sources said.

Separately, VanEck, whose founder John van Eck was a well-known pioneer in gold investments, is also exploring businesses under China’s QDLP scheme, the sources said, tapping into Chinese investors’ penchant for gold.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Millennials to redistribute wealth from older generations to the young in new ‘age of disorder’, warns Deutsche strategist


It probably won’t take a great deal of persuasion to convince investors that there’s an “age of disorder.”

That’s the title of a new Deutsche Bank research note, which says the world is entering its sixth distinct era of modern times.

So say goodbye to the “era of globalisation” and brace yourself for the “age of disorder” where millennials, firmly established as the generation of ‘have nots’, take their revenge and redistribute wealth from the old to young. Millennials are usually defined as those between the ages of 22 and 38 years old in 2019, according to Nielsen Media Research .

The note by strategist Jim Reid warns the discussion of inequality within and between countries will not be limited to wealth and income.

“In fact, an issue that is quickly emerging as a political force is the intergenerational gap,” the report says. “Assuming life does not become more economically favourable for Millennials as they age (many find house prices increasingly out of reach), this could be a potential turning point for society and start to change election results and thus change policy.”

Read: Millennials’ shifting tastes are boosting sales of whiskey and tequila

The votes for Brexit in the U.K. and President Donald Trump in the U.S. in 2016 left many younger people feeling angry and alienated by political decisions that a sizable majority of them were against, the report says.

This could see the revenge of the millennials as they take more control and skew policies to redistribute wealth away from older generations to the young.

“Such a shift in the balance of power could include a harsher inheritance tax regime, less income protection for pensioners, more property taxes, along with greater income and corporates taxes . . . and all-round more redistributive policies”, the Deutsche Bank report said.

The ‘new’ generation might also be more tolerant of inflation insofar as it will erode the debt burden they are inheriting and put the pain on bond holders which tend to have a bias towards the pensioner generation and the more wealthy.

“The older generation may also have to be content with lower (or even negative) asset price growth if the younger generation does not have a sudden income boost. This will be a big break from the status quo and lead to far more disorder than in the prior era of globalisation.”

Read: Gen Z, Millennial Investors Embrace Risk Amid Covid: E*Trade

The report suggests 2020 may be the start of a new era, as the coronavirus pandemic brings the era of globalization since 1980 to a close.

“The era of globalisation to we are likely waving goodbye saw the best combined asset price growth of any era in history, with equity and bond returns very strong across the board. The Age of Disorder threatens the current high global valuations, especially in real terms,” said the report.

What will this new age bring?
• Deteriorating US/China relations and the reversal of unfettered
globalisation.
• A make-or-break decade for Europe, with muddle-through less likely
following the economic shock of COVID-19.
• Even higher debt.
• Inflation or deflation? As a minimum, it is unlikely it will calibrate as easily as we saw over the last few decades.
• Inequality worsening before a backlash and reversal takes place.
• The intergenerational divide also widening before millennials and younger voters soon start having the numbers to win elections and, in turn, reverse decades of policy.
• Linked to the above, the climate debate will build, with more voters
sympathetic and thus creating disorder.

We’re in the midst of a technology revolution with astonishing equity valuations reflecting expectations for a serious disruption to the status quo, the report says, questioning whether this is a revolution or bubble?
Much depends on whether working from home becomes more permanent, and if so it predicts it will cause major changes to societies and economies.

Tesla
TSLA,
-21.06%
,
Amazon
AMZN,
-4.39%

and Facebook
FB,
-4.09%

are all companies that have seen their valuations soar in recent times on Nasdaq
COMP,
-4.11%
.

Read: Opinion: China’s economy may be back on track, but problems plague it elsewhere

The most worrying prediction is an economic battle between the U.S. and China.

“The result of the US election in November is unlikely to change the direction of travel,” the report says. “Over the course of this decade, relations will likely deteriorate into a bipolar standoff as both the US and China seek to prevent encirclement by the other. Companies that have embraced globalisation will be stuck in the middle if relations sour as we fear.”

There have been 16 occasions over the last 500 years, when a rising power has challenged the ruling one, and on 12 occasions it ended with war. One piece of solace is the report notes that military conflict is unlikely.

Watch: Donald Trump suggests ‘decoupling’ US economy from China



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New China ban threat puts U.S. chip-equipment makers at forefront of tech stock rout



MARKETWATCH PHOTO ILLUSTRATION/ISTOCKPHOTO

Chip equipment makers led technology stocks lower Tuesday following reports that U.S. sanctions could spread to businesses like Semiconductor Manufacturing International Corp., China’s largest chip fabricator.

Shares of KLA Corp.
KLAC,
-7.74%
,
Lam Research Corp.
LRCX,
-6.86%
,
and Applied Materials Inc. AMAT all fell more than 6% as U.S. stock markets opened on Tuesday following Labor Day holiday weekend, while the PHLX Semiconductor Index SOX was down nearly 3%.

Over the weekend, reports surfaced that SMIC could be added to a U.S. “entity list” like telecom equipment maker Huawei back in May. On Monday, when U.S. markets were closed, SMIC
981,
+3.07%

shares dropped more than 20% in Hong Kong trading.

Meanwhile, the U.S. tech-heavy Nasdaq Composite Index
COMP,
-2.33%

was down 2.6% and the S&P 500 index
SPX,
-1.50%

was off 1.8% Tuesday.

Investors may be worrying that SMIC is just another one of many Chinese companies to get added to the list, given President Donald Trump’s recent bellicosity toward Chinese-owned apps TikTok and WeChat .

“Will the Trump Administration stop with only Huawei and SMIC?” speculated Evercore ISI analyst C.J. Muse in a Tuesday note. “Hard to say,” he said, warning that other chip makers in China could be next. Should the potential ban be limited to SMIC, then chip-related stocks have been oversold, Muse said.

Tech stocks have been getting battered since last week, when the tech sector gave up in two sessions at least half of seven week’s worth of gains from a strong earnings season .

Morgan Stanley analyst Joseph Moore said adding SMIC to the list “certainly would be a negative impact to our semiconductor capital equipment coverage”. Moore noted that SMIC had plans of spending $6.7 billion in capital equipment this year alone.

“The bigger issue is that the China risk factor for semiconductor capital equipment continues to grow, as U.S. Commerce Department actions continue to impact new areas,” Moore said.

Susquehanna Financial analyst Mehdi Hosseini took a much less fearful view of the development, remarking that “policy has also proven a double edged sword as efforts of the past few years in isolating China have not really proven a winning strategy”.

Hosseini said “with secular trends suggesting a bright future for chip consumption and thus [semiconductor capital equipment], especially as more of the demand shifts to cloud/commercial end markets, the pull backs caused by such headline risks can also offer a buying opportunity, in our view.



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Asian Stocks Mostly Down, China Releases Mixed Export and Import Data By Investing.com


© Reuters.

By Gina Lee

Investing.com – Asian stocks were mostly down on Monday morning, with markets slowly recovering from the biggest two-day slide since June and investors digesting data released by China.

China’s inched down 0.09% by 11:20 PM ET (4:20 AM GMT) and the fell 1.10%. The country released mixed export and import data for August earlier in the day, with up 9.5% year-on-year from July’s 7.2% increase but down 2.1% year-on-year, more than July’s 1.4% fall. The decreased to $58.93 billion, down from the previous month’s $62.33 billion.

Japan’s edged down 0.18%, ahead of a slew of economic data to be released on Tuesday, including figures on household spending, current account and gross domestic product.

Some investors also expected more stimulus measures before the end of the year and expected incumbent prime minister Shinzo Abe’s Abenomics policy to be continued by his replacement.

Hong Kong’s edged up 0.19%, reversing its earlier losses. Police reportedly made 289 arrests in the aftermath of protests that took place in the city on Sunday, the original date of the Legislative Council elections. The elections have been postponed to 2021 due to COVID-19.

South Korea’s rose 0.64%

Australia’s inched down 0.02%. Australian biotechnology company CSL Ltd (ASX:) said earlier in the day that it would manufacture COVID-19 vaccine candidate being developed by AstraZeneca (NYSE:) and Oxford University upon the completion of successful trials. The first doses for Australian are expected by early 2021.

CSL will also develop a second vaccine candidate, which it is developing alongside the University of Queensland, with first doses also expected by mid-2021.

But some investors remained cautious over the global recovery from Thursday’s slide.

“Risk assets remain fragile following Thursday’s tech-led rout and volatility spike … with stimulus having been key for supporting equities and such lofty valuations, its renewal will be crucial not only for the recovery, but as a driver for equities as job risks mount,” Medley Global Advisors managing director for global macro strategy Ben Emons told Bloomberg.

Meanwhile, U.S. Treasury Secretary Steven Mnuchin on Sunday said a deal between the White House and Congress would finalize details on a spending bill by the end of the week and fund the federal government through the beginning of December, boosting investor hopes that a shutdown

Mnuchin and U.S. House Speaker Nancy Pelosi have reportedly agreed to extend funding, with the measure set to avert a government shutdown when current funding dried up at the end of the month.

“We’re going to move forward with a clean continuing resolution, hopefully through the beginning of December,” Mnuchin said adding: “I hope by the end of the week we’ll have something firmed up.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Asian markets mixed as China export data offsets impact of Wall Street’s retreat


Asian markets were mixed in early trading Monday, following a sharp selloff on Wall Street last week.

Japan’s Nikkei 225
NIK,
-0.33%

dipped 0.3% while Hong Kong’s Hang Seng index
HSI,
+0.05%

gained 0.1%. The Shanghai Composite
SHCOMP,
-0.15%

declined 0.2% while the smaller-cap Shenzhen Composite
399106,
-0.25%

retreated 0.2%. South Korea’s Kospi
180721,
+0.76%

rose 0.7%, while benchmark indexes in Taiwan
Y9999,
-0.14%

, Singapore
STI,
+0.11%

and Indonesia
JAKIDX,
-0.13%

were mixed. Australia’s S&P/ASX 200
XJO,
+0.14%

were little changed.

Stocks in Hong Kong and mainland China improved after the release of data that showed China’s August exports were stronger than expected from the prior year, after another strong increase in July.

Shares of Chinese chip maker Semiconductor Manufacturing International Corp.
981,
-19.74%

tumbled about 20% in Hong Kong trading after a Wall Street Journal report that the Trump administration is considering placing export restrictions against it, as it has with fellow chip maker Huawei Technologies.

U.S. markets are closed Monday for the Labor Day holiday. Last week, the tech-heavy Nasdaq Composite
COMP,
-1.26%

saw a 3.3% weekly decline, its largest since March, while the Dow Jones Industrial Average
DJIA,
-0.56%

fell 1.8% and the S&P 500
SPX,
-0.81%

lost 2.3%.

“We view the latest selloff as a bout of profit-taking after a strong run,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note Friday.

“Stocks have had a nervy start to trading Monday after the massive two-day slide for global equities since June left investors on edge,” Stephen Innes, chief global markets strategist at AxiCorp, wrote in a note Monday. “In the short-term, more so with U.S. markets closed today, it should remain an extremely choppy affair, with bounces likely being sold by design.”

In energy trading, U.S. benchmark crude
CLV20,
-1.30%

fell to $39.34 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude
BRNX20,
-1.10%

, the international standard, slipped to $42.30 a barrel.

The dollar
USDJPY,
+0.01%

inched up to 106.29 Japanese yen from 106.24 yen Friday.



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