"Any company can produce a hit." — South Korea’s Hana Financial Investment analyst Lee Kihoon, on the difficulties predicting which studio will produce the next big hit, such as the most-viewed Netflix series Squid Game. As such, he has “buy” ratings on Studio Dragon, CJ ENM and Jcontentree.
Covid-19 a ‘dress rehearsal’ for climate emergency, expect revised carbon tax rate at Budget 2022: Wong
Covid-19 may turn out to be a dress rehearsal for the tragedies that the climate emergency could bring, says Finance Minister Lawrence Wong, but the pandemic may also bring greater attention to reducing global emissions.
In his opening remarks at the Singapore Sustainable Investing & Financing Conference (SSIFC) on Sept 30, Wong stopped short of discussing Singapore’s pandemic response, instead focusing on Singapore’s carbon tax.
“The right carbon price is critical in ensuring that the cost of carbon properly internalises and helps bring about a reduction in emissions. So, MOF is presently reviewing the level and trajectory of our carbon tax and we will give an update on this important matter in next year’s Budget,” Wong adds.
Wong follows President Halimah Yacob and Deputy Prime Minister Heng Swee Keat in delivering addresses at Temasek’s three-day Ecosperity Week 2021, which ends today. Organised by BlackRock, the International Finance Corporation (IFC) and Temasek, the inaugural edition of the SSIFC is held as part of Ecosperity Week 2021, a hybrid event at the Marina Bay Sands.
Heng spoke about the review of Singapore’s carbon tax at the unveiling of Budget 2021 in February. “We will announce the outcome of the review at Budget 2022 to give time for businesses to adjust to any revision in the carbon tax trajectory,” he said.
First announced at Budget 2018, Singapore’s carbon tax rate is fixed at $5 per tonne of carbon dioxide equivalent until 2023.
In July, Monetary Authority of Singapore managing director Ravi Menon called Singapore’s rate an “outlier”. “Carbon taxes in Singapore will have to move to a steeper trajectory, to help us meet our climate commitments,” said Menon.
In comparison, Sweden’s carbon tax, which was introduced in 1991, has gradually increased to SEK1,200 ($185.56) in 2021.
In a subsequent discussion with Png Chin Yee, deputy chief financial officer at Temasek, Wong stressed the importance of setting the “right” carbon price.
“Getting the carbon price right is absolutely critical. [When] you internalise the cost of carbon, it will influence business and government decisions. Businesses can then decide whether or not, based on the carbon price, certain investments and projects are worth doing,” he says.
Wong also urged viewers to “look beyond the headline price” when comparing Singapore to Sweden. “Headline prices are, of course, important. But it’s also important to understand how comprehensive the coverage is. If you look at the data, it’s not always the case that the highest headline prices have the widest coverage… In fact, Singapore has one of the widest, most comprehensive coverages of carbon tax frameworks around the world. We cover about 80% of our national emissions.
“But there’s a balance to be struck with cost competitiveness as well. We also need to realise that not all demand can adjust to this new price. So raising the price of carbon will simply end up with higher business costs for some businesses,” says Wong.
Here, Wong highlights two solutions. For one, governments need to phase out “inefficient ways of doing things”, he says. “We are already talking about phasing out some appliances that are energy-inefficient [like] phasing out internal combustion engine vehicles, and moving to cleaner vehicles.”
Governments also have to think about carbon border adjustments, says Wong. “If one country is virtuous, but around you, other countries do not adopt similar moves, activities high in carbon emissions are just moving to another place; it doesn’t help. So internationally, we will need to work through some of these mechanisms and conversations are already being undertaken in G20 and other platforms.” — Jovi Ho
Mapletree Investments acquires two portfolios of logistics assets in US for $4 bil
Mapletree Investments announced on Sept 30 that it has acquired two portfolios of 141 high-quality, income-producing logistics assets in the US for approximately US$3 billion ($4 billion).
The first portfolio was acquired in July. It comprises 24 assets that have a total of 6.1 million sq ft of net lettable area (NLA) across Dallas, Memphis, Greater Chicago, Central Florida and Boston. It has an occupancy rate of 98.9% and a weighted average lease expiry (WALE) of 3.3 years.
The second portfolio was acquired in September. It comprises 117 assets that span 22.3 million sq ft of NLA across Greater Chicago, the Carolinas, Memphis, Houston and Washington DC/Baltimore. The portfolio is 94.1% occupied and has a WALE of 4.1 years.
The assets are strategically situated along key transportation nodes, with excellent connectivity to highways, air and sea ports. They are also within close proximity to large population catchments.
The portfolios have a well-diversified tenant base that includes companies in third-party logistics, consumer goods, wholesale and e-commerce sectors, among others.
With the acquisitions, Mapletree will now manage approximately $25.5 billion of assets under management (AUM) in the logistics sector with an estimated NLA of 224 million sq ft across Asia, Europe and the US. It will also manage around US$14.8 billion worth of real estate across the US.
“The US logistics sector is amongst the best-performing and most resilient of all the real estate markets in which Mapletree operates globally,” says Michael Smith, regional CEO of Europe and USA of Mapletree Investments.
“By combining these recently acquired assets with 14 logistics facilities that we currently own, we have attained sufficient scale and investor interest to create a fourth US-focused private fund with a fully seeded portfolio of 155 logistics assets,” he adds.
“Together with the assets under Mapletree US & EU Logistics Private Trust, or MUSEL, which we successfully syndicated in 2019, we now manage 355 logistics facilities with an AUM of US$6.9 billion, totalling 70 million sq ft of NLA, propelling Mapletree into the top 10 managers of logistics real estate in the US.” — Felicia Tan
Exodus of Hong Kong bankers accelerates in chase for China deals
Global lenders are speeding up a relocation of bankers from Hong Kong to China to expand dealmaking in the world’s second-largest economy, partly spurred on further by tight quarantine restrictions.
UBS Group has recently shifted two senior bankers and is in discussions to move another six to eight to China, according to a person familiar with the move who asked not to be named discussing an internal matter. Credit Suisse Group has moved a handful in recent months and JPMorgan Chase & Co plans to move more dealmakers to growing offices in Shanghai and Beijing, people familiar said.
While global banks have been beefing up as China opened its US$54 trillion ($72.45 trillion) market further last year, the strict quarantine rules in Hong Kong and on the mainland are now accelerating a shift out of the financial hub. With Hong Kong following China’s zero-Covid push, and with Beijing reluctant to ease travel between the city and the mainland, hope is scant that the situation will change any time soon.
Hong Kong’s and China’s quarantine rules require a minimum of two weeks in isolation. They mean that a banker based in Hong Kong must set aside two to three months on a single trip to the mainland. They must also limit themselves to three China trips a year to avoid breaching a 183-day stay rule that would make them a resident and get hit by a higher tax rate than what they pay in Hong Kong.
Among recent departures from UBS in Hong Kong are Solomon Li, who moved in July, and Guo Xinyu, who relocated in August. Li moved to lead global banking in Shanghai, while Guo shifted to Beijing where he continues to head up China FinTech services.
All in all, Credit Suisse has moved about a dozen bankers in 2020, shifting two managing directors to Beijing to head its securities venture and advisory business. In a push for deals, JPMorgan is in discussions with several bankers, according to a person familiar. Its China investment-banking head, Huston Huang, left Hong Kong for Shanghai in February to become CEO of the US bank’s securities venture. Spokespeople at the banks declined to comment. — Bloomberg
Photo: Bloomberg
