Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Brilliance China Automotive / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a> was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.</li>
<li>Following the resumption of trading, <a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China Automotive (1114 HK)</a> was added to the HSCI in March and subsequently to Southbound Stock Connect.</li>
<li>The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.</li>
</ul>



Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.


Brilliance China (1114 HK): Driving Back Into Passive Portfolios

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn</li>
<li>We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn
We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.


Tencent Meituan Dividend - The US$17bn Overhang Is Here - Not All Shares in CCASS, Here We Go Again!

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>Markets are often driven by liquidity. 2022 has seen a collapse in Global Liquidity, but there are signs that the cycle could turn higher in 2023?</li>
<li>We evidence 5 reasons for optimism, including positive signs from the US Fed and China's PBoC; a US$ peak and rising market depth in the US Treasury market</li>
<li>We expect interest rates to stay higher for longer, but predict liquidity will be reinjected. It is not ‘Risk On’ yet, but it may be the end of ‘Risk Off’ 
</li>
</ul>


Markets are often driven by liquidity. 2022 has seen a collapse in Global Liquidity, but there are signs that the cycle could turn higher in 2023?
We evidence 5 reasons for optimism, including positive signs from the US Fed and China's PBoC; a US$ peak and rising market depth in the US Treasury market
We expect interest rates to stay higher for longer, but predict liquidity will be reinjected. It is not ‘Risk On’ yet, but it may be the end of ‘Risk Off’ 



Podcast by J.P. Morgan analysts on global markets, At Any Rate

At Any Rate

Podcast by J.P. Morgan analysts on global markets

Analysts from J.P. Morgan’s Research team take a closer look at the stories behind some of the biggest trends, themes and developments in markets today.

Macroeconomics

<ul>
<li>Financial crisis causing extreme volatility in EM fixed income assets</li>
<li>Three factors driving market moves: concerns of US and global recession, unwind of carry positions, concerns of escalation in Middle East</li>
<li>Not currently positioning for a US recession as labor market softens but job growth remains positive.</li>
</ul>
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


Financial crisis causing extreme volatility in EM fixed income assets
Three factors driving market moves: concerns of US and global recession, unwind of carry positions, concerns of escalation in Middle East
Not currently positioning for a US recession as labor market softens but job growth remains positive.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

EM Fixed Income: Olympic-level Volatility

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>We continue to believe a 1-4-month pullback/consolidation is ongoing. Important supports have been violated, including $110 on MSCI ACWI (ACWI-US) and $41 on MSCI EM (EEM-US).</li>
<li>We're shifting our outlook to neutral on $ACWI after being bullish since early-November 2023. Major price breakdowns combined with deteriorating market dynamics have increased the odds of a topping pattern.</li>
<li>Also downgrading Japan to market weight. 7/25/24 we said "Japan's TOPIX breaking below 2800-2815 is near-term bearish, suggests it could pull back to its long-term uptrend, or worse."</li>
</ul>


We continue to believe a 1-4-month pullback/consolidation is ongoing. Important supports have been violated, including $110 on MSCI ACWI (ACWI-US) and $41 on MSCI EM (EEM-US).
We're shifting our outlook to neutral on $ACWI after being bullish since early-November 2023. Major price breakdowns combined with deteriorating market dynamics have increased the odds of a topping pattern.
Also downgrading Japan to market weight. 7/25/24 we said "Japan's TOPIX breaking below 2800-2815 is near-term bearish, suggests it could pull back to its long-term uptrend, or worse."


Downgrading Japan; Stay Defensive; Downgrading Outlook on Global Equities $ACWI to Neutral

United States

iShares MSCI Emerging Markets ETF is an exchange-traded fund incorporated in the USA. The ETF tracks the performance of the MSCI TR Emerging Markets Index. The ETF holds emerging market stocks that can predominantly be classified as large and mid-cap. It weights the holdings using a market capitalization methodology and rebalances quarterly.

iShares MSCI Emerging Markets (EEM US)

Brilliance China (1114 HK): Driving Back Into Passive Portfolios

The stock is up 27% over the last 3 months and could be added to passive portfolios at the end of the month. There will be positioning on the stock...

Brian Freitas

Tencent Meituan Dividend - The US$17bn Overhang Is Here - Not All Shares in CCASS, Here We Go Again!

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. The settlement was...

Sumeet Singh

Five Reasons For Optimism In 2023?

We evidence 5 reasons for optimism in 2023. Interest rates could stay higher for longer, but we predict liquidity will be reinjected. It is not...

Michael J. Howell

EM Fixed Income: Olympic-level Volatility

EM assets are experiencing extreme volatility due to concerns about a US recession, central bank actions, and geopolitical tensions in the Middle...

At Any Rate

Downgrading Japan; Stay Defensive; Downgrading Outlook on Global Equities $ACWI to Neutral

Downgrading Japan TOPIX, Nikkei; Stay Defensive; Downgrading Outlook on Global Equities $ACWI $EEM to Neutral; Many Risk-Off Signals increase odds...

Vermilion Research