CHINA Onshow
Total Page：16
File Type：pdf, Size：1020Kb
FTwealth CHINA oN sHow wHy CHINEsE gAllErIEs ArE bUyINg ArT oN AN INDUsTrIAl sCAlE by DALyA ALbERGE Sifang Art Museum Nanjing, China SOUTH KOREAN LITERATURE | CRICKET’S LAST OvER | INvESTING IN KAZAKHSTAN | MEXICO’S MASKED wRESTLERS www.ft.com/wealth Summer2014 FT WEALTH JUNE 2014 CHINESE COLLECTORS WA“ NT TO“INTEGRATE THEIR OWN HISTORY WITH THE WEST’S Adjustable focus Special reports editor Michael Skapinker Head of editorial content Hugo Greenhalgh Deputy editor Rohit Jaggi Production editor George Kyriakos Sub-editor Philip Parrish Art director Sheila Jack Picture editors Michael Crabtree, Andy Mears Global sales director Dominic Good Advertising Mariam Lolavar Publishing systems manager Andrea Frias-Andrade Advertising production Daniel Lesar CONTRIBUTORS Dalya Alberge is a freelance arts journalist Helen Barrett is an FT commissioning editor for special reports Daniel Ben-Ami is an author and journalist Yuri Bender is editor in chief of Professional This issue of FT Wealth ranges far and wide across the globe. Wealth Management, an FT Group publication From China and its explosion of impressive private museums Maya Jaggi is a cultural journalist, critic and that seek to connect the country with its rich and varied past – literary prize judge described in detail by Dalya Alberge – to Maya Jaggi’s insightful Rohit Jaggi is the FT’s aircraft, car and motorcycle columnist report on South Korea’s cultural expansionism through James Mackintosh is the FT’s investment editor literature. “Building an economy without culture is like building Attracta Mooney is a reporter at Ignites Europe a house on the sand,” South Korea’s minister of culture tells her. Adam Palin is the acting online FT Money editor And from Kazakhstan’s tricky balancing act between mighty Lucia van der Post is an associate editor of the neighbours, to our investment focus spotlight on Russia’s FT’s How To Spend It magazine Matthew Sherry and Steve McDowell are economic chill. contributors to All Out Cricket magazine Meanwhile, as the northern hemisphere emerges blinking Matthew Vincent is the FT’s personal into its summer, we look at the economics of those two finance editor quintessentially British sports, cricket and tennis. One is on a Jude Webber is the FT’s Mexico and Central America correspondent sticky financial wicket, while the other offers investors buoyant David White is a freelance journalist returns. Ben Woodhouse is a freelance journalist There is much more and, as ever, it is a varied fare. Please send us any comments, or ideas for other areas that demand as keen a focus in upcoming issues. YOUR NEXT Hugo Greenhalgh, Editor [email protected] FT WEALTH Follow us on Twitter @FTReports September 19 2014 4 FT.COMWEALTH CONTENTS 56 OPENINGS XX 6 INVESTMENT FOCUS News and statistics, and comment by Ben Yearsley 8 THE IDEAS COLUMN Bearish stock market commentators are not necessarily reassuring XX 10 THE RICH COLUMN Art collectors are discovering the 6 potential of their works as collateral FEATURES 12 DOWN BUT NOT OUT Cricketers are the poor relations XX of British sport, as the game seeks ways to ensure its long-term financial security 44XX 18 LITERARY LEVERAGE South Korea is investing in its book INSIGHT publishing industry as a means of exerting ‘soft‘soft power’ internationally 36 EQUITIES The false sense of security that arises KER; GETTY 24 EMPIRES OF CULTURE when stock markets go quiet TA China’s rich are building new 40 GLOBAL INEQUALITY museums not just to display their Can the inequality between billionaires collections but also to educate and the world’s poor be redressed? 42 CORRESPONDENT 30 UNCERTAIN STEPPES Lucha libre – Mexican wrestling – is a As Kazakhstan’s economy grows, tough game physically and financially some are concerned at the power 44 PLANNING some are concerned at the power 18 of its elites and the competing 50 A well-organised personal archive can inflinfluences uences of RussiaRussia and ChinaChina offer tantalising historical insights 46 INVESTMENT The Ironbridge Trust is showing how museums can boost their revenues FT WEALTH ONLINE 48 INVESTMENT VIDEO Outlet villages expand in China Rohit Jaggi tries the Seabreacher watercraft INVESTMENT at California’s Shasta Lake 50 Why sports debenture holders might FEATURE be sitting on a goldmine Andres Schipani looks into how Colombia 52 BOOK REVIEW is transforming into a glittering hotspot for Big Money by Kenneth Vogel investments, expats, tourists, and shoppers 54 ON THE ROAD VIDEO Rohit Jaggi rides the Saietta R Premier Rohit Jaggi reviews the Saietta R Premier 56 LIFESTYLE Taking to the waves in the Seabreacher 54 58 BUSINESS GURU www.ft.com/wealth Marilyn Carlson Nelson PHOTOS: CHARLIE BIBBY; RICK PUSHINSKY; BLOOMBERG; AFP/GETTY; MAX WHIT FT.COMWEALTH5 INVESTMENT FOCUS ADAM PALIN THE ROAD Moscow feels chill AHEAD BEN of sanctions threat YEARSLEY t may have been a mild winter by the index – meaning investment in a The ongoing situation in Ukraine Russian standards, but it has been Micex tracker is essentially a play on 0.8% has highlighted one of the significant a chilling few months for investors volatile energy and commodity prices. fall in prices problems when considering Russian in the country. The annexation of A key attraction for long-term of prime equities: politics. Contrary to Crimea prompted huge net capital investors is Russia’s growing middle residential international law, Crimea is now part outflows – an estimated $50.6bn in class. The likes of supermarket group property in of Russia, and tensions have shifted to Ithe first three months of the year. Magnit are well placed to tap into its eastern Ukraine. Moscow in The stock market, the Micex, fell more demand for goods and services. the irst three From an investment perspective, the than 16 per cent in early March. Domestic growth is slowing, months of 2014 past few months have been tumultuous. Although the index has regained however. The International Monetary At the start of the Ukrainian crisis most of the value lost in the spring, Fund downgraded its forecast for SOURCE: the stock market and the rouble fell investor concerns about the lasting 2014 growth to just 0.2 per cent. The KNIGHT FRANK sharply. The former fell initially around impact of Moscow’s revisionist foreign prospect of deeper economic sanctions PRIME PROPERTY 10 per cent and has drifted a bit lower policy are unabated. against Russian business threatens GLOBAL CITIES since. This left the Micex index trading The Micex is heavily concentrated to compromise growth further. The INDEX on a price/earnings multiple of five and on a handful of companies – Gazprom appeal of Russian shares therefore lies a dividend yield of 4.8 per cent. alone accounts for around one-fifth of primarily in their cheapness. Although this is remarkably cheap, it seems there is no catalyst for a sustained rerating in the short term. Politics rather than fundamentals is still driving returns. When there is calm in Ukraine, the market responds positively; when there is increased violence it slips back. Yet the Russian market has a deeper structural problem. If investors have little faith in the rule of law, it doesn’t matter how cheap the market is – they simply won’t invest. This is not a situation that will change overnight. In my view, when buying Russian equities you are doing so for the long term. In the meantime, from the yield $877bn on offer you are effectively being paid for Financial wealth of Russian the risk that the Ukraine crisis escalates. The weaker currency is helping high-net-worth individuals Russian exporters, including mining (with more than $1m of and energy companies, so earnings could grow. This could mean decent investable assets) income prospects for brave investors. Ben Yearsley is head of investment SOURCE: CAPGEMINI AND RBC WEALTH research at Charles Stanley Direct MANAGEMENT 2014 WORLD WEALTH REPORT 6 FT.COMWEALTH $50.6BN ESTIMATED NET CAPI“ TAL OU“TFLOWS FROM RUSSIA IN THE FIRST THREE MONTHS OF 2014 SOURCE: CENTRAL BANK OF RUSSIA 17.6% Investing in... of the world’s proven natural gas reserves lie in Russia Russia SOURCE: BP STATISTICAL REVIEW OF WORLD ENERGY 2013 Performance over the past three years What is the fund? Jupiter’s Emerging (Russian funds, cumulative returns, European Opportunities Fund invests % to end of May 2014) in central and eastern European The top three equities with almost half its capital is invested in Russia. The £165m fund invests in some 40 stocks across a spread of sectors, predominantly -12.3 inancials and oil and gas. -19.7 Why should I buy it? The fund Prosperity Russian invests in several promising Russian Prosperity companies, such as Sberbank and Magnit, which are well positioned -22.7 Carnegie Rysslandsfond to gain from structural economic Swedbank Robur Rysslandsfond growth. Through diversiication of holdings across other economies, including Poland and Turkey, investors’ exposure to political risks -29.8 in Russia is mitigated. Why shouldn’t I buy it? In the year Neptune -30.5 to the end of March, the fund lost Russia & Greater Russia 20 per cent of its value as a result of political turbulence in Russia. East Capital -34.9 While returns over the ive years to Russian Fund March 31 were 39 per cent, this is JPMorgan Funds – Russia A signiicantly below its benchmark, the MSCI Emerging Markets Europe The bottom three index, which posted growth of 85 per cent. SOURCE: MORNINGSTAR 10.8% FALL IN MICEX SHARE INDEX ON MARCH 3, 2014, AFTER PRESIDENT VLADIMIR PUTIN WON DUMA APPROVAL TO DEPLOY RUSSIAN FORCES IN CRIMEA AND UKRAINE BLOOMBERG; CHARLIE BIBBY; AFP/GETTY. GRAPHIC: RUSSELL BIRKETT SOURCE: FINANCIAL TIMES PHOTOS: FT.COMWEALTH7 THE IDEAS COLUMN JAMES MACKINTOSH Beware the bears t is not true a watched pot never Those who can sell when the crowd views, notably David Rosenberg, chief boils (I checked this morning, just only wants to hear good news and buy economist of Canada’s Gluskin Sheff.