May 2022

Posted by Anton Murray Consulting on . Posted in 2022

Over the past few years there has been an increasing trend of FinFluencers being used to market financial products. In this marketing grey area, social media influencers use their broad reach to promote retail investment and trading products. Even celebrities are getting in on the act, with some high-profile influencers skirting quite closely to offering financial advice especially in the booming area of retail trading in crypto and NTF products. FinFluencers are increasingly being used to promote and target a younger demographic, with a recent ASIC survey suggesting that 64% of young people have changed their financial behaviour because of an influencer. Many of the FinFluencers with large numbers of followers in Singapore, HK and Australia will promote a range of fashion, lifestyle and financial products – so the marketing of financial products by influencers can appear subtle and integrated. Further, many influencers reside in one country but may promote content or products in another so social media allows influencers to promote products freely across borders and, indeed, across the globe.

As you would expect, the regulators are all closely watching the rising impact of FinFluencers, especially when it comes to offering riskier investments in crypto or derivative products. In Australia, ASIC has recently introduced guidelines for influencers promoting financial products, as has the FCA in the UK. Additionally, the Monetary Authority of Singapore [MAS] last year issued revised guidelines for FinFluencers, who now need to ensure they abide by clear rules to not offer financial advice to their followers. This is quite a new area, and its regulation and compliance in this space is evolving.

In a way, the prevalence of social media combined with the rise of retail crypto trading has created a unique situation where a younger audience is being sold the prospect of ‘get rich quick’ investments via social platforms such as TikTok and Instagram. As such, the regulators are suitably watching the space closely to ensure that especially young, impressionable consumers understand the risks of speculative trading products, and also to set clear guidelines for FinFluencers to ensure they know when they are offering direct financial advice. So FinFluencers appear to be here to stay, with regulators attempting to keep up as best as they can.

April 2022

Posted by Anton Murray Consulting on . Posted in 2022

With the date for the Australian federal election now set for 21 May, the Federal Budget was a highly anticipated one, especially after such a tumultuous couple of years. A Budget in an election year can often be the political springboard governments and oppositions utilise to get on the front foot with voters. So what happened with the 2022 Budget?

Global political and economic uncertainty with war in Ukraine and the continued social and financial costs associated with the pandemic seemed to cajole the government into reiterating its previously stated notions of economic stability and its sound track record, particularly in comparison to other western nations’ economic response and recovery from COVID. In this endeavour the government has tried to address short cost pressures at the bowser by reducing fuel excises and additional tax offsets.

Similarly, for small business comes tax offsets for technology take ups and staff training. Government spending and debt as a proportion of GDP are still quite significant even though the plan to reduce these figures has been taken into account. We’ll likely see an interest rate rise on the cards soon, and inflation is beginning to increase. But despite a difficult couple of years, the Australian economy has experienced strong growth and low unemployment. So it was hard for the Labor opposition to really go hard against any of the government’s measures beyond adding their own, particularly in aged care.

Overall this was a sound budget without too much of a shake up and no real reform built in, making some business groups nervous. Whilst it was a platform for the government to begin its election campaign, much of this has been washed away or ignored with the media’s focus firmly on “Mean Girls” in the ALP and the style and even legitimacy of the Prime Minister’s leadership. These are important issues no doubt, but not matters that should take precedence over how Australia continues to rebuild post-COVID or how we deal with growing global economic jitters and a fragile geopolitical environment. With a month until Australia goes to the polls, the debate will begin to ramp up as both parties, and both leaders, vie for the top job.

March 2022

Posted by Anton Murray Consulting on . Posted in 2022

After two years of uncertainty and chaos associated with Covid-19, Europe has been pushed into further turmoil. The horrible human toll of the conflict in Ukraine is shocking to say the least, and the global ramifications of Russia’s invasion are likely to be felt for the next decade.

The conflict has brought Europe’s reliance on Russian energy to the fore and has presented Vladimir Putin with a militarily united NATO block that has begun increasing individual nations’ defence budgets; undoubtedly the opposite of Putin’s aspirations. Interestingly, if Russia is to achieve what it appears to seek, that being a subjugated Ukraine with a Russian proxy government, it would then have a border along Europe with a defensive military arsenal not seen for decades.

Further to the military conflict itself, Russia is reeling from global sanctions placed on its economy. Notably the Rouble has fluctuated wildly, the stock exchange has remained closed from the outset of the conflict and now it looks as though Russia will likely default on its foreign debt, unable to pay down the liabilities with US Dollars. In a piece for Livewire Markets, Christopher Joye of Coolabah Capital highlights the, “large lazy longs in Russia and China because assets located in these regions appear superficially cheap”. Joye goes on to describe some of the large exposures that global asset managers have in Russian emerging debt.

There is no doubt that a Russian debt default will have global ramifications. Further, a tightening of ties between Russia and China, both militarily and economically, could result in fresh tensions for the global geo-political environment. A further tightening of China-Russia relations could potentially draw the West and primarily the United States into further action. Regardless of which side of the fence one sits, the consequences of this growing tension is high for both global investors and nations, even those without a geographic footprint in Europe.

February 2022

Posted by Anton Murray Consulting on . Posted in 2022

An interesting phenomenon is occurring in Australia, with a reverse migration of workers from sea or rural-change locations back to the major CBDs. People are in search of higher quality work and employment prospects as there is a gradual return to in-office employment. As discussed recently in an AFR article, and supported by a PwC survey, as life returns to normal there is a realisation that there will be an ongoing requirement for face-to-face work, and being based in a regional location can be career limiting. There are high-profile exceptions to this rule such as Atlassian who are allowing workers to work from home indefinitely. A rural location can be an idyllic setup for many but when there is an ongoing, weekly commute to a CBD location to factor in, this setup can be difficult to manage on an ongoing basis.

As a result there has been an uptick in rental demand in the CBD centres, as some workers seek to maintain both a rural base as well as a CBD ‘bolthole’ to engineer an ongoing hybrid sea-change setting. There are other factors at play too, notably high-quality high school education [either private or selective schools] is often based in the capital cities. As such we may see a demand for ongoing work-from-home from younger workers with young (or no) children, while staff with high-school aged kids may be more likely to return back to capital-city locations.

This sea-change migration and the following reverse migration is a somewhat unique Australian phenomenon in APAC, given the wide-open spaces available. In our other coverage locations of Singapore and Hong Kong, most folk live in quite close-quarters and in these small city-states there isn’t really a feasible option to move to a rural setting. In HK and SG, there is a huge appeal to spending time away from your home and in a comfortable office setting. Further, office interaction and socialising at lunch or after work for a quick drink with colleagues in both HK and SG is very much part of the work culture.

As this reverse migration takes place in Australia, we may see a reduction in demand for rural and regional property, combined with an increase in demand for city-based rentals. Aside from outlier companies it is becoming clear that most companies and employees have a preference for hybrid or full in-office employment. Some workers seeking to retain a full WFH employment may find their career prospects limited, as firms gradually hire staff who can simply head in to work in the office like the ‘olden days’.

January 2022

Posted by Anton Murray Consulting on . Posted in 2022

Peloton Interactive is a high-profile company that is riding the highs and lows of CV19 trends that are changing, as consumers balance at-home versus in-gym exercise preferences. Famously, in a recent Sex and the City episode, Mr Big dropped dead after a Peloton class. With a case of art imitating life, the share price of Peloton dropped heavily after the episode went to air. So is Peloton changing our workout habits or will this ‘at-home-workout’ trend ride out of our lives just as quickly as it arrived?!

There is a broader ongoing debate that is reflective in the Peloton share price, as to how much life will ‘return to normal’ once the virus passes by for good. Some pundits predict Peloton’s value proposition is questionable, as folks will naturally want to return to gym classes and interact with others as soon as it’s safe to do so. Others argue that we are headed toward a medium-term ‘at-home workout preference’ where Peloton users will adjust their work-out routine permanently as they commit to working out at home for convenience and safety from this ongoing virus. In a way, Peloton’s share price is oscillating between these two view points. Exercise bikes have been widely available [for decades] at a fraction of the price with no ongoing subscription cost, so the product is not particularly new or innovative. Peloton’s advertising is compelling, and the revenue has been flowing over the past few years, but the high profile advertising is pricey, and recently Peloton has called in consultants McKinsey to help work toward profitability. This has resulted in drastic measures such as cutting staff and halting production in an attempt to adjust to a reduced demand for their ride-at-home bikes.

So will Peloton shine brightly then come crashing down as life returns back to normal and everyone heads back to their favourite gym and exercise class? Or are our exercise habits changing in a long-term way, with everyone with space dedicating a room to our at-home Peloton workout space? There is likely to be ongoing medium-term demand for Peloton and their competitors, although it appears there may be a slow fading of interest in at-home exercise subscription services as we seek a return to normality and in-person fitness interaction. At the moment the market’s view seems to be unfavourable toward Peloton and their high-profile attempt to encourage us to get on our bikes and stay at home.

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