Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry. </li>
<li>Overall, the total value increased US$12.5bn in the past week, with Shanghai accounting for US$5.7bn and Shenzhen US$6.8bn. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> is the dominant holding across both programs</li>
<li>
<a href="https://www.smartkarma.com/entities/glory-sun-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:17758:1" rel="noopener">Glory Sun Financial Group Limited (1282 HK)</a> saw the biggest upward movement as the chairman sold to pay off debt. <a href="https://www.smartkarma.com/entities/china-south-city-holdings" target="_blank" data-smartkarma-citation="entities:8205:1" rel="noopener">China South City (1668 HK)</a> was reduced by both programs. </li>
</ul>


Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry. 
Overall, the total value increased US$12.5bn in the past week, with Shanghai accounting for US$5.7bn and Shenzhen US$6.8bn. Tencent (700 HK) is the dominant holding across both programs

Glory Sun Financial Group Limited (1282 HK) saw the biggest upward movement as the chairman sold to pay off debt. China South City (1668 HK) was reduced by both programs. 


Shanghai/Shenzhen Southbound Connect: Weekly Moves (20 May 2022)

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>In Depth: 'Zero Covid' slams the brakes on China’s electric car industry</li><li>Shanghai’s Covid hospitals struggle to handle patients with other serious illnesses</li><li>Exclusive: China’s ‘Big Four’ banks to start pilot program for retirement savings products</li></ul>

In Depth: 'Zero Covid' slams the brakes on China’s electric car industryShanghai’s Covid hospitals struggle to handle patients with other serious illnessesExclusive: China’s ‘Big Four’ banks to start pilot program for retirement savings products

CX Daily: 'Zero Covid' Slams the Brakes on China’s Electric Car Industry

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

Hang Seng China Enterprises Index / Event-Driven

<ul>
<li>Last evening <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a> announced a special div of HK$1.18/share - that is higher than market expectations. <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> could announce a special div next week.</li>
<li>Fair value for the HSCEI 2022 dividend futures moves higher to 250 DIPS off the back of <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd</a>'s special div and the estimated <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> special div.</li>
<li>The HSCEI 2022/23 steepener had dropped to -29 yesterday and should drop even lower today where we could see some covering.</li>
</ul>


Last evening CNOOC Ltd (883 HK) announced a special div of HK$1.18/share - that is higher than market expectations. JD.com Inc. (9618 HK) could announce a special div next week.
Fair value for the HSCEI 2022 dividend futures moves higher to 250 DIPS off the back of CNOOC Ltd's special div and the estimated JD.com Inc. (9618 HK) special div.
The HSCEI 2022/23 steepener had dropped to -29 yesterday and should drop even lower today where we could see some covering.


HSCEI Dividend Futures: CNOOC Special Drives 2022 Fair Value Higher, 22/23 Steepener Lower

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

China Construction Bank H / Equity Bottom-Up

<ul>
<li>CCB is our preferred pick, given its attractive valuations, strong capital adequacy, healthy ROE and sound credit quality; CCB’s real estate exposure is limited and it sector delinquency is low</li>
<li>We also pick PSBC for its good value, its attractive PEG ratio and healthy credit quality and coverage; its real estate exposure, and its related delinquency, are both very low</li>
<li>We are negative on China Minsheng due to its low ROE, poor delinquency and NPL coverage, its high exposures to real estate relative to its peers and fast rising delinquency</li>
</ul>


CCB is our preferred pick, given its attractive valuations, strong capital adequacy, healthy ROE and sound credit quality; CCB’s real estate exposure is limited and it sector delinquency is low
We also pick PSBC for its good value, its attractive PEG ratio and healthy credit quality and coverage; its real estate exposure, and its related delinquency, are both very low
We are negative on China Minsheng due to its low ROE, poor delinquency and NPL coverage, its high exposures to real estate relative to its peers and fast rising delinquency


China Banks – 4Q21 KPIs Support Our Stock Picks

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

Thematic (Sector/Industry)

<ul>
<li>Financials sector allocations continue to move higher.  Average holding weights stand at 18.78%, the highest level since early 2020 and well up from the lows of 15.06% in Sep 2020</li>
<li>Indonesia, Singapore, India and Thailand were responsible for the moves higher, with China &amp; HK not participating in the upturn. </li>
<li>AIA Group Ltd is the most widely held stock.  China Merchants Bank and Bank Central Asia the key overweights. China Construction Bank and ICBC are largely avoided by Asian investors.</li>
</ul>


Financials sector allocations continue to move higher.  Average holding weights stand at 18.78%, the highest level since early 2020 and well up from the lows of 15.06% in Sep 2020
Indonesia, Singapore, India and Thailand were responsible for the moves higher, with China &amp; HK not participating in the upturn. 
AIA Group Ltd is the most widely held stock.  China Merchants Bank and Bank Central Asia the key overweights. China Construction Bank and ICBC are largely avoided by Asian investors.


Asia Ex-Japan:  Financials Recovery Leaves China Behind

China

China Construction Bank Corporation provides a comprehensive range of commercial banking products and services to individuals and corporate customers. The Bank's business consists of three principal business segments: corporate banking, personal banking, and treasury operations. China Construction Bank also services infrastructure loans, residential mortgage, and bank cards.

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China Construction Bank H (939 HK)

Shanghai/Shenzhen Southbound Connect: Weekly Moves (20 May 2022)

Overall, the total value increased US$12.5bn, with Shanghai accounting for US$5.7bn and Shenzhen US$6.8bn. Glory Sun saw the biggest upward...

David Blennerhassett

CX Daily: 'Zero Covid' Slams the Brakes on China’s Electric Car Industry

In Depth: 'Zero Covid' slams the brakes on China’s electric car industry. Shanghai’s Covid hospitals struggle to handle patients with other serious...

Caixin Global

HSCEI Dividend Futures: CNOOC Special Drives 2022 Fair Value Higher, 22/23 Steepener Lower

The CNOOC special div and the potential JD.com special div pushes the fair value for the 2022 div futures higher. With no change to the fair value...

Brian Freitas

China Banks – 4Q21 KPIs Support Our Stock Picks

CCB is our preferred pick with the best " all rounder" attributes; we also like PSBC for its good value and solid credit quality; China Minsheng...

Victor Galliano

Asia Ex-Japan: Financials Recovery Leaves China Behind

Financials exposure moves higher. Active weights hit their highest level since early 2020. Indonesia, Singapore and India Financials were the...

Steven Holden

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