research reports

  • [UBS UBS] 2024 Global Family Office Report Asia-Pacific will become the preferred investment destination for global family offices

    Portfolios shifted to a more balanced allocation, with fixed income allocations to developed markets at their highest in five years. As a diversified investment strategy, investors have increased their confidence in active management, and artificial intelligence (AI) is the primary investment theme of concern. Alternative investments continue to form an important part of investment portfolios, providing an additional source of diversification and return.

  • [Fasheng Investment Consulting] Global Market Outlook and Investment Viewpoints

    Mabrouk Chetouane, head of global market strategy department at Fasheng Investment Management; Bo Zhuang, global general economic strategist at Loomis Sellers

  • [UBS UBS] UBS research points out that the handover period of family businesses creates low-buying opportunities to help investors increase long-term returns.

    UBS shows Asian family businesses outperforming in share price returns and profitability Asian family businesses with market capitalization of more than US$1 trillion over the next five years will enter a transition period, providing investors with buying opportunities UBS Global Research & Evidence Labs today Released titled \”Asian Heritage: How Will the Transition of a $1 Trillion Family Business Impact the Market?\” ” research report, which provides an in-depth analysis of the impact of corporate inheritance on the stock price performance of Asian family businesses through an original index. The research results show that although the level of revenue and profit growth of family companies is generally similar to that of non-family companies, their profitability performance is better, and the long-term average return on invested capital (ROIC) is 212 basis points higher than that of non-family companies, reflecting that family companies Focus more on long-term value creation. Additionally, annual share price returns for the Asia Family 500 Index over the past 20 years have also been 96 basis points higher than those of non-family companies. Karen Hizon, Asia Pacific equity strategist at UBS Investment Bank, said: “We estimate that 48% of Asian family businesses will experience intergenerational transitions in the next five years, and these families account for more than $1 trillion in the MSCI Asia ex-Japan Index. The free-float market capitalization in US dollars and an index weight of 18% make the family-owned company\’s superior return performance quite attractive, but they are also concerned that leadership changes during the transition period will have a negative impact on the stock price. Through the comprehensive analysis of this research report, investors can understand the performance of stocks before and after the handover period and grasp the investment opportunities brought by this trend in Asia. \”Overview of \”Asian Family 500\” India and China dominate family businesses, respectively. Accounting for 41% and 19% of the total market value. This is followed by South Korea (13%) and Hong Kong (9%). Most businesses are 40 to 50 years old, with South Korea, India and the Philippines having the oldest family businesses, while China has the youngest family businesses on average. Each generation is typically defined as 20-25 years, meaning that family businesses in Asia are mostly in their second generation, with China being the only market where the first or founding generation still runs the business. A total of 72% of enterprises are in the founding or second-generation stage, and succession handover will be one of the most important plans. There was a \”transition bottom\” in the early stage, but the stock price has recovered three years later. The study also selected 170 of the most outstanding and large family business groups from seven Asian markets, and conducted a study on the transition period in the past 20 years to understand their impact. Impact on corporate stock prices and profitability. The results show that family-owned businesses typically perform poorly in the first two years after handover, but share prices rebound after the third year, suggesting investors\’ concerns have been alleviated. Buying during this \”transition bottom\” period is expected to enhance investors\’ long-term returns. The report also compared the situation of inheritance to family members or the addition of non-family management personnel. The results determined that the stock price fluctuations were relatively greater when the company was handed over to family members, while the stock price was less affected when non-family management was involved. The report also found that the transition period between the founding generation generates the greatest share price volatility, as founders leaving the company may cause investor concerns. Still, these businesses are typically still in a relatively early stage of their life cycle, a period when business growth is stronger. Companies in the fourth or subsequent generation typically perform poorly in terms of share price performance and recover later than previous generations, as companies generally face transition-related issues that make investors worry about the future direction of the company. In terms of profitability, the reported results show that ROIC is, on average, relatively stable before and after handover. Although some of the more difficult transition situations may result in a loss of leadership and lower profitability, broadly speaking, there is no clear link between transitions and ROIC trends in Asian family businesses.

    US stock market trends May 22, 2024