News Brief: Asia cost synergy hurdles – 'Chilling effect' of US-China tech investment curbs – Taiwan's BLF defends Russian investments
The cost synergies in Asia of BNP Paribas' expected acquisition of French rival AXA IM may be "challenging to realise", experts say. The task is complicated by the fact that the two firms operate multiple joint ventures with local partners in markets such as China, South Korea and India.
In China, BNP Paribas may have to sell its stake in one of its joint ventures due to restrictions on the number and size of the stake holdings one ultimate shareholder can have in multiple public fund companies. Read more about the potential challenges of the deal here.
Asia's fund firms are concerned that rules restricting U.S. investment into Chinese tech firms could have a "chilling effect" on investments in the region. The finalised rules from President Joe Biden's executive order, which are expected to be rolled out before the end of 2024, could increase due diligence and compliance burdens for alternative investment firms.
In a letter to the U.S. Treasury department seen by Ignites Asia, the Alternative Investment Management Association, said the final version of the rules as currently drafted "underestimates its scope and negative impact on investment managers". Read more about the possible impact of the investment curbs here.
Taiwan's Bureau of Labour Funds has defended the investment it still has in the Russian market following criticism from lawmakers. The pension fund said its US$242 million allocation, which cannot be remitted due to Russia's foreign exchange controls, was made by an external manager via a passive index before the invasion of Ukraine.
"There has been no apology from any of the government officials," Kuomintang lawmaker Liao Wei-hsiang said. "Will the US$224 million investment just go down the drain?" Read more about the questions being asked of the BLF here.
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Graph of the week
Offshore funds investing in India's equities market have seen record-high inflows from global investors following the conclusion of country's general election in early June. Two of BlackRock's U.S.-listed iShares India ETFs have benefited the most, but Wisdom Tree and Franklin Templeton have also seen strong inflows. Read more about the global firms with highest India fund flows here.
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