Markets with Bertie: The woes of a CIO and the changed reality of China ‘maal’

Bertie made a quick dash to the city of the Merlion last week. It’s an unwritten pact between him and his Singaporean friend Nat that whenever he is in town, they have breakfast at Saravana Bhavana. Nat and Bertie started their buy-side careers together and when your first boss is Miranda Priestly incarnate, the underlings end up forging a lifelong bond. Bertie is proud of his friend who has ascended to the post of Asia CIO at a large global firm but, more importantly, has remained a genuine nice guy.

Over cups of steaming filter coffee, the two men were reminiscing some of their early stock picks when Nat sighed. “I miss those days. To be an analyst—and think only about investing and stocks all day.” That remark surprised Bertie. “But isn’t that your entire job now. After all the middle name of your designation is ‘Investment.’” Nat stared out of the window and let out a Hindi expletive that Bertie had taught him. “It’s a treadmill, Bert—our industry. You have to run hard to stay where you are.” Bertie waited for more.

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“You know of the pressure on fees. Passives, hedge funds, platforms—all breathing down our neck. And costs keep going up, especially compliance. Proper pincer it is. And unlike you guys we don’t have SIPs coming in like clockwork. Bottom line, I have to get a billion dollars of new money every year just to maintain our profit.” Bertie knew of the pressures but did not realize it had gotten this dire.

“All I do is marketing!” said Nat. “Client dinners. Industry events. Endless meetings with asset allocators, private banks and family offices. It’s a merry-go-round.” He pulled out his phone and showed Bertie his calendar. “Just two investment meetings in last four weeks. Just two. Chief Investment Officer it seems!”

Bertie was feeling bad for his friend, but he knew that Nat would be alright. He taught him a new Hindi cussword and asked him to hurl it at the universe when he was alone next. Nat had a “what nonsense!” expression on his face, but by the end of the day he sent Bertie a cussing emoji followed by a wide grin.

China ‘maal’

It was around the turn of the century that cheap Chinese goods started becoming ubiquitous in Indian cities. A Sony Walkman was out of reach for a just-graduated Bertie, but a pocket-sized portable FM radio was just the thing he needed for the long commutes. Bertie focused on the affordable pricing and not on the country of manufacture, till one day when the batteries leaked inside his pocket. That day Bertie understood the meaning of the term ‘China maal’ and swore to stay away from it.

But that reality of twenty-five years ago might be changing. While in Singapore, Bertie test drove the popular Atto-3 model by the Chinese electric car maker BYD. He had to grudgingly admit that in terms of finish and quality it is anything but ‘China maal.’ Bertie alluded to this quality amelioration to a young Chinese consumer analyst who looked at him with surprise. She would have been in kindergarten when a pair of batteries had leaked in Bertie’s shirt pocket.

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In order to completely redeem her country’s image, she reeled off a list of premium, high-quality products that China produces. “Li Ning sports gear,” she said, “is as good as anything out there, if not better.” Bertie nodded as he remembered that his badminton racquet was no longer Yonex. “Wear a Bosideng jacket. You will forget Moncler!” she went on.

Coincidentally, the Chinese cosmetics maker Mao Geping had a fabulous listing on the Hong Kong stock exchange that very day and the analyst did not forget to bring it up. “Remember how Japanese cosmetics company Shiseido went global in the early sixties? Then it was the Koreans—LG H&H and Amorepacific. Now it’s going to be us.” Bertie was still sceptical of the investment merit of all these Chinese stocks but quite impressed by the patriotic fervour of the girl. At the airport duty-free, Bertie bought a Mao Geping concealer, which apparently is one of their best-selling products, and gifted it to his surprised missus. If it turns out to be ‘China maal,’ you, dear reader, should know why this column abruptly stopped.

Bertie is a Mumbai-based fund manager whose compliance department wishes him to cough twice before speaking and then decide not to say it after all.

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