Latest news with #MSCIAllCountryWorldIndex
Saudi Gazette
7 hours ago
- Business
- Saudi Gazette
Saudi stock market may open to global investors, regulator says
Saudi Gazette report RIYADH — Saudi Arabia's Capital Market Authority (CMA) is currently studying the feasibility of opening the Saudi stock market to all investors worldwide, according to a statement given to Bloomberg. The CMA said that the recent move to allow residents of Gulf Cooperation Council (GCC) countries to trade directly in the Saudi market was a 'logical and natural' step, citing strong economic, social, and regulatory ties across the region. Notably, these residents will remain eligible to trade even if they relocate outside the Gulf. The move comes amid broader efforts by the Kingdom to liberalize its financial markets, attract global investors, and diversify sources of capital. Foreign investors from outside the GCC accounted for a record 35% of Saudi equity purchases during the second quarter of 2025, according to Bloomberg Intelligence. Saudi Arabia has ramped up its push to attract high-frequency trading firms, broadened the diversity of its IPO pipeline, and relaxed some restrictions for foreign participation in the equity market. In July, Saudi-listed shares on the Tadawul All Share Index (TASI) were trading at a 32% discount compared to stocks on the MSCI All Country World Index (ACWI), based on forward price-to-earnings ratios.
Business Times
10 hours ago
- Business
- Business Times
China stocks a source of ‘sustainable alpha', says veteran fund manager
[SINGAPORE] Veteran investor Wong Kok Hoi, founder of APS Asset Management, has weathered more than three decades of investment cycles and crises. But APS' enviable performance streak, six years since it pivoted to focus only on China stocks, must be the most gratifying yet for Wong. The APS All China Alpha Fund has chalked up net returns of 25.7 per cent year to date as at end-July, compared to the MSCI China All Shares Index return of 17 per cent. Elsewhere, the S&P 500 returned 7 per cent and the MSCI All Country World Index 10.2 per cent. Over one year, the fund's return was a stunning 50.5 per cent. Wong is convinced that China holds the key to the 'sustainable alpha' coveted by all active managers. That is why he decided in February 2020 – just a month before Covid was declared a global pandemic – to exit all Asian equity mandates and focus only on China. 'Of course, some clients were upset. We forced them to take back their assets. We felt strongly that the future is in China,' he said. Still, 70 per cent of the current assets under management of US$2.2 billion were invested prior to the change in focus. In a letter to investors in February 2020, Wong wrote: 'We ... believe our odds of success in investing in (China) are much better if we totally immerse ourselves in understanding the challenges and opportunities in China as it rises.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Wong believes the China-only focus has helped differentiate it from other Asian managers. 'There is no reason for a big investor to invest in you if you are an average manager, or even above average. You have to be outstanding. Then maybe there's a chance you can make a living.' As part of succession planning, Wong relinquished his role as APS' chief investment officer. He is chief strategist, and the CIO is Wong Kangning, who joined in 2004. Shortly after the pivot towards China, the firm found itself in a proverbial perfect storm. In addition to severe Covid restrictions, China's property bubble burst in 2021 with China Evergrande's debt default, sparking debate on whether the country's stock market was investible. On top of that, there was intense pressure on pension funds in US and Canada to divest from China. Wong said: 'We believe that when China turns convincingly, investors will return. What is needed is for China to outperform the US for, say, two years. Most fund managers are career investors, whether for public pensions or endowments. If performance falters, there is a risk they may be fired. 'Obviously, we must be patient. We can't change our politics. We just have to continue to do very good work.' Investing in China has claimed high-profile casualties among Singapore fund managers. In 2024, Asia Genesis Asset Management wound up its macro fund as wrong bets on China and Japan caused a 'significant and unprecedented drawdown'. More recently, New Silk Road Investment shuttered following weak returns and redemptions by institutional clients. Four alpha hats APS eschews leverage and manages mainly long-only funds, which surely helps its longevity. But its stock discipline, rooted in what Wong calls 'four-alpha hats', is arguably the key to its performance. The four hats comprise fundamental analysis ('Benjamin Graham' hat); investigative work into companies ('Sherlock Holmes' hat); business dynamics ('Robert Kuok' hat); and finally, portfolio construction (APS hat). Investigative work involves more than interviews with company founders. It includes visits to the factory floor and ferreting out feedback from industry sources including competitors and former staff. These efforts build a company profile beyond financial accounts to include elements such as integrity and business practices. 'We know from experience that crooks will sooner or later get their investors into trouble. The people behind the business may be mediocre, and most decisions they make may be bad… Even if a company has been massaging its accounts, (weaknesses) will show up somewhere because you can't hide all your skeletons.' The Robert Kuok hat examines companies from a business standpoint. This includes companies' core competencies and industry dynamics, including barriers of entry and growth rates. 'When you've done your investigative research and find problems, obviously you should stay away. I don't think I'm smart enough to exit before a crash.' Stocks are grouped into four types of alpha oppotunities: structural or growth which is stable and durable; economic alpha or value which is cyclical; dynamic alpha where stock prices are typically unstable; and opportunistic. Portfolio construction involves decisions on the weightings of each alpha type. Following the China market downturn in 2021, APS shifted the dominant portfolio weight from growth towards economic alpha or value. 'Some stocks were neglected and became very cheap, no matter how you analyse them. But about 18 months ago those stocks began to outperform. Now we have sold (some stocks) in favour of growth stocks. 'We believe the future of China lies in tech industries, not in property or infrastructure but in hard tech. Now we have a much larger exposure to growth stocks or the industries of tomorrow.' Currently, more than 69 per cent of the portfolio is in structural alpha stocks and around 23 per cent in economic alpha. The top five holdings include SMIC (Semiconductor Manufacturing International Corp) and Tencent. Rare earths a game changer Wong believes the trade war has entered a 'new chapter' for China in terms of its dealings with the US and the rest of the world. He believes China's dominance in critical minerals, including rare earth elements (REE) which are used in tech industries, is a game changer. China dominates supply chains relating to critical minerals, including 70 per cent of REE and 85 per cent of global graphite processing. This gives it leverage in tariff negotiations. 'The Chinese are now more confident coming out of talks in London, partly because of rare earths and a better economy, and partly because of the Tibet dam project,' said Wong. Following trade talks in London in June, the US and China agreed on a 'framework' on trade. China in July announced the start of building works for a mega dam project in Tibet, which is expected to be the world's largest source of hydroelectric power when completed. 'Confidence among the Chinese has risen; sentiment has changed. Even US investors are asking whether it's time to invest.'
Business Times
3 days ago
- Business
- Business Times
Will the Singapore stock market continue to outperform?
[SINGAPORE] Last year, Singapore was one of the best performing markets globally with the Straits Times Index (STI) hitting record highs. How much more upside is there, and can it continue to outperform its regional peers? This year, the index has underperformed some markets such as South Korea, China and Hong Kong, but it remains one of the best performers. Many forget that the STI's outperformance follows a sustained period of underperformance. Many other markets are also at historic highs. The question may not be whether to invest or not. Instead, how much of our portfolio should be invested in our home market? Why invest in our home market It is human nature to favour something that is familiar to us. This is known as mere exposure bias. It describes our tendency to develop preferences for or dislike things simply because we are familiar with them. It is also known as familiarity bias. In the context of financial markets, this is expressed in the form of home or home-country bias, which is the tendency to invest the majority of assets into domestic equities, despite evidence that diversification can produce a more optimal portfolio. To be sure, there may be other barriers to investing overseas, such as regulations, costs or foreign exchange risks. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up US exceptionalism alive and well Home bias exists in every market including the US and across Asia. However, the effect differs because some markets are bigger and have broader representation than others. There is only one market that is big enough with globally competitive companies, is diversified across geography, sector and size, and allows for a meaningful and consistent outperformance over time. That is the US stock market. Whether it is the S&P 500 index or the broader Russell indexes, the US represents more than half of the global stock market capitalisation, and comprises 64 per cent of MSCI All Country World Index (ACWI). The next largest is Japan whose share is less than 5 per cent. This attests to the big gap the US has over every other market in the world, and shows how exceptional and unique the US market is. It is also why in the past two decades, investment flows into the US as a form of diversification for local non-US investors have risen. The average annual foreign capital inflow into the US stock markets has increased from an average US$50 billion in the 1970s to more than US$500 billion in recent years. This, in turn, has resulted in better returns for these investors. Home bias investing in Singapore The benchmark STI is a collection of the 30 largest and most liquid companies listed on the Singapore Exchange, which comprises more than 600 listings. The STI represents a meaningful S$622 billion of market capitalisation. The Monetary Authority of Singapore recently announced its Equity Market Development Plan to revitalise and broaden the Singapore equity market, especially the mid and small-cap segment outside the STI. It has allocated S$5 billion to co-invest alongside private capital; some initial capital was awarded to Avanda, Fullerton and JP Morgan Asset Management. Separately, Amundi, the largest European asset manager, launched an STI index fund with the lowest cost of 0.15 per cent in Singapore. Both initiatives are happening in time for SG60 celebrations. As the STI touches new historic highs and interest is resurgent due to new product launches and government support, many investors wonder whether the current rally has more legs. Historically, the STI has been a perennial underperformer. Over the past 15 years, it has lagged the S&P 500, gaining 2.4 times compared to 8.7 times by the S&P 500. Of course, the real question is whether this trend will continue. Between 2002 and 2012, the STI outperformed the S&P 500 in nine out of 11 years. When home bias is positive While no other economy is comparable to the US, some regional players do set themselves apart. India offers growth and diversified sectoral exposures, and Taiwan has tech and entrepreneurial companies which generate high returns on equity through cycles. Those are two examples of economies with good equity culture that have generated better returns. They also exhibit strong home bias. Another good example of a positive home bias is Australia, with its ageing and wealthy population and its superannuation pension system. Like Australia, Singapore has among the highest GDP per capita, a large savings pool, an ageing population and a high rate of home ownership, as well as the CPF Investment Scheme. Singaporeans have the wherewithal to invest consistently into their local market too. What sets Singapore apart is that its companies have lowest dependence on the local economy and highest overseas revenue contribution, compared to the other major stock market indexes in Asia and the US. Most of Singapore companies' revenues are generated in South-east Asia; this growing diversification in its revenue source is a positive. What drives change? The world is evidently changing. There is continued noise around tariffs; concerns over US economic growth and the US Federal Reserve's interest rate policy abound. However, those are cyclical issues. The underlying current of structural changes points to a new global regime and the end of an US-led post-war international order which could reshape many things, among which is international cross-border investment flows. Countries which turn inwards may start to keep more of their capital at home. A structural change of this order and magnitude could reshape investor behaviour and patterns which could be positive for the Singapore market and the Singapore dollar over the long term. But investing in our home also goes beyond the stock market. That is, supporting the social sector is just as important as investing in the financial sector. That is why as we kick off the SG60 celebrations, the Community Chest, National Volunteer and Philanthropy Centre and Endowus have teamed up to launch the Invest in our Home campaign to raise awareness and raise funds for local charities and non-profit organisations. This effort will strengthen the fabric of our society and generate greater social returns alongside financial returns. Samuel Rhee is group chief investment officer, and Hugh Chung is chief investment officer at Endowus, a digital wealth platform with more than S$10 billion in client assets across public, private markets and pension (CPF and SRS)
The Sun
7 days ago
- Business
- The Sun
Markets rattle as tariffs hit tech stocks in Asia
SINGAPORE: U.S. President Donald Trump's Friday tariff deadline brought little reprieve for markets, with tech stocks in South Korea and Taiwan hit hard as investors fretted over the cost of disrupting global supply chains and the outcome of talks with China. For traders inured to Trump's repeated threats, his follow-through on blanket tariffs for dozens of nations may be a wake-up call, as the deadline to strike trade deals with the United States expired and new levies arrived in Asia right on cue. While the new export duties are below the 'Liberation Day' tariffs unveiled on April 2, they fuel uncertainty, as several countries are still in talks with the United States. Investors are also still on edge over whether the United States and China will be able to clinch a deal to avert a tariff of 55% tariff before their trade truce ends on August 12. 'There are no real winners here,' said Charu Chanana, chief investment strategist at Saxo in Singapore. 'The U.S. administration can claim a political win, having followed through on its threats, but economically the impact will be felt in higher prices, disrupted supply chains, and slower growth,' she said. 'Even countries that got away with 10% duties aren't celebrating.' The move is a reminder that a U.S. president who has consistently advocated protectionist policies for decades now has the power to force higher costs on companies across complex global supply chains that took just as long to build. That is unless foreign governments are prepared to accept deals that prioritise American interests. Stocks have rallied substantially from lows hit after the tariffs were first threatened, as Trump offered a temporary reprieve and countries such as Britain, Japan, and South Korea reached trade deals. The MSCI All Country World Index is up 28.4% from a bottom hit on April 7. But the gauge has now fallen for the past four consecutive sessions. The average tariff rate is going from about 2.5% to 15.3%, said Prashant Bhayani, chief investment officer for Asia at BNP Paribas Wealth Management. 'That's a step change,' he said. 'But if everyone's getting tariffed, it's more about that relative (level), because that affects how much you get, and perhaps relative to your competitors.' Underscoring investors' worry were comments by U.S. Treasury Secretary Scott Bessent to CNBC on Thursday that China's trade deal was 'not 100% done,' adding that he would talk to President Trump later the same day. 'Until the China deal comes out, you don't really know which country has a comparative advantage,' said Gary Tan, a portfolio manager at Allspring Global Investments in Singapore. 'There's limited ways to judge whether a tariff rate for these emerging Asia developing market economies is a good rate or a bad rate.' TECH SHOCK Stocks in Asia-Pacific's biggest tech hardware makers suffered the brunt of the selling, with South Korea's Kospi index dropping as much as 3.7% and Taiwan's benchmark index down as much as 1.6% before recovering. Trump hit Taiwan with a tariff of 20% on Friday, higher than the 15% the United States agreed with Japan and South Korea, though the government said it would continue to negotiate for a lower duty. Taiwan and South Korea are critical links in the supply chain of advanced logic chips and memory chips respectively. Taiwan Semiconductor Manufacturing Company shed 1.7%, as shares in its supplier Tokyo Electron plunged 18% after cutting its profit forecasts by a fifth. SK Hynix fell 5.5% amid a broader rout in South Korean stocks as the government said it would raise taxes on corporate income and stock investments. The declines also rattled currency markets, with the South Korean won weakening past 1,400 per dollar for the first time since May 19 and the Taiwan dollar weakening past 30 against the greenback for the first time since June 4. The sector shrugged off better-than-expected earnings from Apple and focused instead on a warning from CEO Tim Cook that U.S. tariffs would add $1.1 billion in costs over the period. Weaker-than-expected results from cloud-computing unit added to the gloom. But even after the tariff deadline, some market participants said they expected agreements to remain in flux. 'I expect that the rates will continue to be changed between now and maybe even up until next year,' said Jeff Ng, head of Asia macro strategy at SMBC in Singapore. 'Trump will continue to make some changes to the tariffs.' - Reuters
India.com
18-07-2025
- Business
- India.com
Germany, China, Japan, France... this US company dominates all countries in..., makes...
Germany, China, Japan, France..., this US company dominates all countries in…, makes… Nvidia: American multinational tech company Nvidia has made history by achieving a market cap of USD 4 trillion (approx Rs 34,43,91,45,60,00,000), becoming the first company on the globe to achieve this milestone. Following the achievement, the weight of this company in the MSCI All Country World Index (MSCI ACWI) has reached a record 4.73 percent. The status and weightage of Nvidia can be guessed from the fact that the weightage of Japan — which has the third-largest stock market in the world — is 4.65 percent in this index, which is less than the American tech giant. What Is MSCI ACWI Index? The MSCI All Country World Index covers about 85 percent of the global equity market, including large- and mid-cap stocks. As per the index, Britain's weightage is 3.28 percent, China's is 2.97 percent, and Canada's is 2.87 percent. Nvidia's weightage is equal to the combined weight of France (2.50 percent) and Germany (2.32 percent). The company has also surpassed the wealth of Warren Buffett and has a place in the top 10 for the first time. Market Cap Jensen Huang founded Nvidia in the year 1993 and took the company to new heights with his vision and innovative approach. He is currently serving as Chief Executive Officer and a member of the board of directors of the company. 'Since its founding, NVIDIA has pioneered accelerated computing. The company's invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, and ignited the era of modern AI. NVIDIA is now driving the platform shift of accelerated computing and generative AI, transforming the world's largest industries and profoundly impacting society,' stated. The market cap of the American tech company on Wednesday was USD4.179 trillion. Notably, stands second with USD3.758 trillion, and Apple secured the third position with a market cap of USD3.138 trillion. Mukesh Ambani's Reliance Industries is ranked 54th in the world with USD241.22 billion.
