Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>SOUTHBOUND was a net seller the prior week for HK$1.5bn, the first week in 29 where SB was a net seller. It was all ETFs. Stocks were a net buy.</li>
<li>This week, they reverted to net buying. Financials and Utilities were strong net buys. ETFs again a net sell. Total SOUTHBOUND volumes also picked up. </li>
<li>SOEs, SOE Banks, Energy, Utilities, and finally <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> saw net buying after salutary earnings.</li>
</ul>


SOUTHBOUND was a net seller the prior week for HK$1.5bn, the first week in 29 where SB was a net seller. It was all ETFs. Stocks were a net buy.
This week, they reverted to net buying. Financials and Utilities were strong net buys. ETFs again a net sell. Total SOUTHBOUND volumes also picked up. 
SOEs, SOE Banks, Energy, Utilities, and finally Anta Sports Products (2020 HK) saw net buying after salutary earnings.


HK Connect SOUTHBOUND Flows (To 30 Aug 2024); Weak Econ Data, But a Rebound in SB Net Buys

Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Thematic (Sector/Industry)

<ul>
<li>Today news reported that China has announced policy where mortgage holders can negotiate with banks on their rates.  We think this is a strong boost to the sentiment</li>
<li>Despite today sector is up 3-11%, valuation is at all time low and we think the risk reward profile is attractive, especially macro environment is turning more favorable</li>
<li>We think there can be potential upside of 40-200% depending on stock selection.  We also identify 5 factor that can drive a sector rerating</li>
</ul>


Today news reported that China has announced policy where mortgage holders can negotiate with banks on their rates.  We think this is a strong boost to the sentiment
Despite today sector is up 3-11%, valuation is at all time low and we think the risk reward profile is attractive, especially macro environment is turning more favorable
We think there can be potential upside of 40-200% depending on stock selection.  We also identify 5 factor that can drive a sector rerating


What Is the Upside if Buy China RE Stocks? Valuation Is All-Time Low, 5 Factors to Drive Re-Rating

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Uptick in Real Estate positioning driven by a shift towards Indian Real Estate stocks, which has outweighed reductions in exposure to China &amp; HK Real Estate</li>
<li>Three names stand out: Phoenix Mills, Macrotech Developers, and DLF Limited, all of which have seen ownership rise to record levels.</li>
<li>New positions in Indian Real Estate by Allianz and JKC have been offset by closures in Chinese Real Estate by LO Funds and SEB, among others.</li>
</ul>


Uptick in Real Estate positioning driven by a shift towards Indian Real Estate stocks, which has outweighed reductions in exposure to China &amp; HK Real Estate
Three names stand out: Phoenix Mills, Macrotech Developers, and DLF Limited, all of which have seen ownership rise to record levels.
New positions in Indian Real Estate by Allianz and JKC have been offset by closures in Chinese Real Estate by LO Funds and SEB, among others.


Real Estate:  India/China Rotation Sparks Sector Growth

<ul>
<li>News report today that RMB may appreciate 10% due to potential USD weakness and capital inflow of USD1trn back into China, causing upward pressure of the currency</li>
<li>The capital inflow comes from potential unwinding of carry trade, as Chinese companies borrow CNY at low interest rate and place capital in USD deposit, at higher interest rate</li>
<li>We think this scenario is unlikely unless China economy is showing strong recovery.  But, if this happens, it will hurt export but positive for HK-listed Chinese property stocks</li>
</ul>


News report today that RMB may appreciate 10% due to potential USD weakness and capital inflow of USD1trn back into China, causing upward pressure of the currency
The capital inflow comes from potential unwinding of carry trade, as Chinese companies borrow CNY at low interest rate and place capital in USD deposit, at higher interest rate
We think this scenario is unlikely unless China economy is showing strong recovery.  But, if this happens, it will hurt export but positive for HK-listed Chinese property stocks


What Is the Implication if RMB Appreciates 10%?

<ul>
<li>Jackson Hole is annual event among central bankers and economists, where Fed Chair Powell will also be speaking on Friday</li>
<li>In the scenario of a new Fed rate cut cycle, we expect Hong Kong RE, China RE and Singapore RE to benefit, while investors can reduce exposure in Japan RE</li>
<li>We also recommend some trade ideas based on our analysis and suggest specific stocks</li>
</ul>


Jackson Hole is annual event among central bankers and economists, where Fed Chair Powell will also be speaking on Friday
In the scenario of a new Fed rate cut cycle, we expect Hong Kong RE, China RE and Singapore RE to benefit, while investors can reduce exposure in Japan RE
We also recommend some trade ideas based on our analysis and suggest specific stocks


A Scenario Analysis: If Fed Initiates a Rate Cut Cycle, How Should Investors Position Themselves?

Hong Kong

China Overseas Land & Investment Limited provides real estate services. The Company develops, manages, and invests in commercial properties. China Overseas Land & Investment serves customers globally.

China Overseas Land & Investment (688 HK)

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China Overseas Land & Investment (688 HK)

HK Connect SOUTHBOUND Flows (To 30 Aug 2024); Weak Econ Data, But a Rebound in SB Net Buys

SOUTHBOUND Connect flows picked up to the positive side again after the buy streak was broken the week before. Gross flows picked up. Econ data was...

Travis Lundy

What Is the Upside if Buy China RE Stocks? Valuation Is All-Time Low, 5 Factors to Drive Re-Rating

We think there can be 40-200% potential upside if we buy China RE stocks now. Valuation is at all time low, there is government policy support,...

Jacob Cheng

Real Estate: India/China Rotation Sparks Sector Growth

Real Estate exposure grows among active Asia Ex-Japan funds, sparked by a rotation in to Indian Real Estate, as China & HK positioning falls.

Steven Holden

What Is the Implication if RMB Appreciates 10%?

News report that CNY may appreciate 10% due to weaker USD and unwinding of carry trade causing USD1trn capital inflow to China. It's unlikely, but...

Jacob Cheng

A Scenario Analysis: If Fed Initiates a Rate Cut Cycle, How Should Investors Position Themselves?

We conducted a scenario analysis on Asia real estate if Fed is to initiate a new rate cut cycle. Within Asia, we expect Hong Kong, China and...

Jacob Cheng

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52-week Range

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