China and US Equity Analyst

Roger Xie

Cross Asset Strategy

<ul>
<li>Crypto trading volume has rebounded shocking 70% in October from the level in 3Q21, fueled by the first-ever regulatory approval of bitcoin future ETF and the rise of bitcoin price. Download data software Apptopia also suggested renewed interest for broad range of cryptocurrency trade app, such as <a href="https://www.smartkarma.com/entities/coinbase-global-inc" target="_blank" data-smartkarma-citation="entities:32227:1" rel="noopener">Coinbase (COIN US)</a> and <a href="https://www.smartkarma.com/entities/robinhood-markets-inc" target="_blank" data-smartkarma-citation="entities:33532:1" rel="noopener">Robinhood Markets (HOOD US)</a>. Those engagement metrics DAU and MAU have also reflected the greater interest.</li>
<li>Bitcoin price has been volatile this year. It briefly peaked at $64000 in April. Then China started to clamp down on crypto mining and transaction activities, bitcoin price was down by half from the peak in May. However, blockchain technology, by its nature, has been proven to be flexible to expand the network and relocate the computing nodes as supply/demand changes. We have observed the mining and computing power has been shifted from China to other places in the world. </li>
<li>The much-awaited bitcoin-linked ETF has received green light from US market watchdog Securities and Exchange Commission (SEC) recently. The listed funds from Proshares and Valkyrie offer investor exposure not to crypto itself but to bitcoin future. SEC has signaled that it would prefer ETFs that track bitcoin future due to easy regulation. But investors believe the ETF holding bitcoin directly will received SEC approval in next step. </li>
</ul>


Crypto trading volume has rebounded shocking 70% in October from the level in 3Q21, fueled by the first-ever regulatory approval of bitcoin future ETF and the rise of bitcoin price. Download data software Apptopia also suggested renewed interest for broad range of cryptocurrency trade app, such as Coinbase (COIN US) and Robinhood Markets (HOOD US). Those engagement metrics DAU and MAU have also reflected the greater interest.
Bitcoin price has been volatile this year. It briefly peaked at $64000 in April. Then China started to clamp down on crypto mining and transaction activities, bitcoin price was down by half from the peak in May. However, blockchain technology, by its nature, has been proven to be flexible to expand the network and relocate the computing nodes as supply/demand changes. We have observed the mining and computing power has been shifted from China to other places in the world. 
The much-awaited bitcoin-linked ETF has received green light from US market watchdog Securities and Exchange Commission (SEC) recently. The listed funds from Proshares and Valkyrie offer investor exposure not to crypto itself but to bitcoin future. SEC has signaled that it would prefer ETFs that track bitcoin future due to easy regulation. But investors believe the ETF holding bitcoin directly will received SEC approval in next step. 


Crypto: Trading Activities Rebound as Investors Rush for Inflation Hedging

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*November Market Stats Generally Positive: The Singapore Exchange (SGX.SP) [SGX] released its market statistics for November 2020. Unsurprisingly, the progress of the COVID-19 vaccine fuelled volume gains across the entire spectrum of SGX products; and*Taiwan Pressures: SGX ceased trading of MSCI Taiwan futures contracts on October 30, 2020 as these contracts moved to Hong Kong Exchanges &amp; Clearing (388.HK) [HKEx]. Notional value traded market share of SGX - while usually volatile - has begun gradually declining to 90.4% in November from 92.4% in October. This will have significant implications over how much market share and fee pressure will be placed on SGX's lucrative A50 contract.

*November Market Stats Generally Positive: The Singapore Exchange (SGX.SP) [SGX] released its market statistics for November 2020. Unsurprisingly, the progress of the COVID-19 vaccine fuelled volume gains across the entire spectrum of SGX products; and*Taiwan Pressures: SGX ceased trading of MSCI Taiwan futures contracts on October 30, 2020 as these contracts moved to Hong Kong Exchanges &amp; Clearing (388.HK) [HKEx]. Notional value traded market share of SGX - while usually volatile - has begun gradually declining to 90.4% in November from 92.4% in October. This will have significant implications over how much market share and fee pressure will be placed on SGX's lucrative A50 contract.  

Singapore Exchange – Strains Seen For TW Futures

*Not Good, But Not Bad: Singapore Exchange (SGX.SP) [SGX] reported FY 4Q20 results of SGD 121.1 mn, falling sunstantially short of FY 3Q20 results by SGD 16.4 mn or 11.9% - although exceeding consensus forecasts. Excluding the one-time loss of SGD 6.2 mn attributed to an associate, we find that operating results would have amounted to SGD 127.3 mn  - down just SGD 10.0 mn or 7.3% linked quarter;* Improving Fee Rates: Despite the general absolute SGD value decline in securities fees and derivatives fees of 1.9% and 19.2%, respectively, we find that securities fee rates increased 28 bp to 7.23% while derivative clearing fees increased 13 bp to 1.26% due to the mix in FTSE China A50 futures volume mix.  Also, the collateral management income per open interest contract remained elevated linked quarter at 34.8% versus 34.3% in FY 3Q20 despite the decline in interest rates;  and* Deals Wave of Future: SGX is hopeful to achieve synergies from newly acquired subsidiaries, such as its additional 80% stake in BidFX,a cloud-based on-line F/X trading platform. SGX is going to have to be a bit more creative to generate revenue with the Hong Kong Exchanges &amp; Clearing (388.HK) likely to be directly competing with the A50 – on of SGX’s bread and butter products.

*Not Good, But Not Bad: Singapore Exchange (SGX.SP) [SGX] reported FY 4Q20 results of SGD 121.1 mn, falling sunstantially short of FY 3Q20 results by SGD 16.4 mn or 11.9% - although exceeding consensus forecasts. Excluding the one-time loss of SGD 6.2 mn attributed to an associate, we find that operating results would have amounted to SGD 127.3 mn  - down just SGD 10.0 mn or 7.3% linked quarter;* Improving Fee Rates: Despite the general absolute SGD value decline in securities fees and derivatives fees of 1.9% and 19.2%, respectively, we find that securities fee rates increased 28 bp to 7.23% while derivative clearing fees increased 13 bp to 1.26% due to the mix in FTSE China A50 futures volume mix.  Also, the collateral management income per open interest contract remained elevated linked quarter at 34.8% versus 34.3% in FY 3Q20 despite the decline in interest rates;  and* Deals Wave of Future: SGX is hopeful to achieve synergies from newly acquired subsidiaries, such as its additional 80% stake in BidFX,a cloud-based on-line F/X trading platform. SGX is going to have to be a bit more creative to generate revenue with the Hong Kong Exchanges &amp; Clearing (388.HK) likely to be directly competing with the A50 – on of SGX’s bread and butter products.

Singapore Exchange – Better Than Expected

Malaysia

CME Group Berhad is an investment holding company. Through its subsidiaries, the Company sells, services, and manufactures fire fighting equipment, fire engines and related spare parts.

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CME Group Bhd (CME MK)

Crypto: Trading Activities Rebound as Investors Rush for Inflation Hedging

The much-awaited bitcoin-linked ETF BITO and BTF have received green light from SEC recently. But investors believe the ETF holding bitcoin...

Roger Xie

Singapore Exchange – Strains Seen For TW Futures

SINGAPORE EXCHANGE: November Stats Look Good Generally Across The Board; However, Taiwan Futures Slippage Could Impact A50.

Thomas J. Monaco

Singapore Exchange – Better Than Expected

*Not Good, But Not Bad: Singapore Exchange (SGX.SP) [SGX] reported FY 4Q20 results of SGD 121.1 mn, falling sunstantially short of FY 3Q20 results...

Thomas J. Monaco

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52-week Range

Market Cap (USDm)

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