Summit Notebook

Geneva is for wealth management

Even for an American who’s not wealthy, Geneva has a reputation as a global centre for wealth management – the place the world’s rich come to stash their money and (they hope) make it grow.

    But you don’t necessarily expect it to be so aggressive — after all, the rich tend to be demure when it comes to their banking.

    Imagine one reporter’s surprise, then, on arriving in the airport in Geneva and seeing bank ads everywhere. Think of the casino adds in Las Vegas’s McCarron Airport or the technology ads in San Jose’s Mineta Airport: it’s the exactly the same in Geneva, only with wealth managers.

    Look left – there’s UBS. Look right – there’s Julius Baer. Look up in the baggage queue – there’s a Swiss bank that emphasises a focus on the Arab world. A complete unscientific guesstimate suggests the display ads in the terminal run about 75 percent wealth management and 25 percent fine watches. (No surprise that every other storefront in the Ville Centre area of Geneva has watches on offer.)

    There is one plus to all of the bank ads in the airport for the less wealthy though. Tell your cab driver to head toward their addresses and you’re likely to find the city’s best cafes.

China resource deals still hot

Investment bankers have been saying that there are only two things you need to know when it comes to Asia M&As — China and resources.

Is this still the case after Rio Tinto walked away from Chinalco’s $19 billion proposal earlier this year?

A noticeable rise has been seen over the last 12 to 18 months in China-related mergers and acquisitions, particularly Chinese firms moving on overseas targets, Philip Partnow, a senior banker with UBS Securities, said at the Reuters China Investment Summit.

“My personal view is it’s a very interesting and exciting area,” said Partnow, deputy head of UBS’s investment banking department in China. “There’s a lot of activity.”

But areas outside of resources were not as clear.

“It was rather unexpected to see a company that isn’t really involved in automobile manufacture going out to acquire a business like Hummer,” Partnow said, referring to little-known Chinese heavy machinery maker Tengzhong, and its surprising bid for General Motors’ Hummer brand.

Compared to automobiles, the resources sector is relatively straightforward, said the banker.

No recovery seen for former high-flyer India

By Tony Munroe

When markets boomed, India’s star was shining bright and deals were plentiful, but the hard landing means any recovery will be painfully slow.

Indian stock markets are still down more than 50 percent so far this year, making them the third worst Asian performer after China and Vietnam.

But even when markets look to stabilise, India may have a harder time in deal-making, given its heavy exposure to the global services sector, said Rory Tapner, chairman and chief executive for Asia-Pacific at UBS.

“India may be one of the markets that is going to perhaps find some of this tougher,” Tapner told the Reuters Global Finance Summit, adding that overseas companies look set to cut back on outsourcing as unemployment in their home countries grows.

He said Australia will drive deals as demand for resources grows when conditions improve, while asset management and insurance firms will also do deals.

“If the world gets going again, I think that will be one of the first places that start to recover.”