Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Are the recent announcements blocking Chinese investment a sea change in US/China relations?</li>
<li>Are we wrong about Trump’s willingness to do a deal with China?</li>
<li>Is it wrong to maintain a bullish stance on HK-listed China stocks?</li>
</ul>


Are the recent announcements blocking Chinese investment a sea change in US/China relations?
Are we wrong about Trump’s willingness to do a deal with China?
Is it wrong to maintain a bullish stance on HK-listed China stocks?


Will Recent US Announcements Derail the HK/China Bull Market?

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

Index Rebalance

<ul>
<li>Hang Seng Indexes announces changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a>, HSIII Index and HSCI Index (among others) post market close today. </li>
<li>The net round-trip trade across the stocks is estimated to be HK$35bn (US$4.5bn) with big impact in a lot of stocks.</li>
<li>Capping will lead to most inflows to <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> while the largest outflows will be from <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> and <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>. </li>
</ul>


Hang Seng Indexes announces changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index, HSIII Index and HSCI Index (among others) post market close today. 
The net round-trip trade across the stocks is estimated to be HK$35bn (US$4.5bn) with big impact in a lot of stocks.
Capping will lead to most inflows to Meituan (3690 HK) while the largest outflows will be from Alibaba Group Holding (9988 HK) and Xiaomi Corp (1810 HK). 


Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares</li>
<li>India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption </li>
</ul>


A review of recent events/data impacting our investment themes or outlook
The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares
India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption 


Overview #14 - The Emperor Has No Clothes Moment

Event-Driven

<ul>
<li>The U.S. Department of Defense has designated <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> as a Chinese Military Company. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd-69366efb-cf6b-404d-a0e4-c6b9b2e128dc" target="_blank" data-smartkarma-citation="entities:17:1" rel="noopener">Tencent Holdings (ADR) (TCEHY US)</a> shares were down nearly 8% overnight.</li>
<li>There is no change to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC) yet. But the overlap between the DoD list and the NS-CMIC list is high.</li>
<li>If added to the NS-CMIC list, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> will be deleted from global indexes and there will be HUGE passive selling from these trackers.</li>
</ul>


The U.S. Department of Defense has designated Tencent (700 HK) as a Chinese Military Company. Tencent Holdings (ADR) (TCEHY US) shares were down nearly 8% overnight.
There is no change to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC) yet. But the overlap between the DoD list and the NS-CMIC list is high.
If added to the NS-CMIC list, Tencent (700 HK) will be deleted from global indexes and there will be HUGE passive selling from these trackers.


Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

<ul>
<li>In its last update, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group</a> announced that the company was preparing for its primary listing in Hong Kong and the process was expected to complete by the end August.</li>
<li>The Board meets on 14 August to approve results for the three months ending June. Could there be an announcement on the dual primary listing too?</li>
<li>Mainland Chinese own between 3.5%-15.5% of companies that converted from Secondary to Dual-Primary in the last few years. Similar buying in <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba</a> could take the stock higher from here. </li>
</ul>


In its last update, Alibaba Group announced that the company was preparing for its primary listing in Hong Kong and the process was expected to complete by the end August.
The Board meets on 14 August to approve results for the three months ending June. Could there be an announcement on the dual primary listing too?
Mainland Chinese own between 3.5%-15.5% of companies that converted from Secondary to Dual-Primary in the last few years. Similar buying in Alibaba could take the stock higher from here. 


Alibaba (9988 HK/BABA) Dual Primary Listing: Are We There Yet?

Hong Kong

The Hang Seng TECH Index aims to represent the 30 largest technology companies listed in Hong Kong which have high business exposure to the Innovative Tech Themes.

Hang Seng TECH Index (HSTECH INDEX EQUITY)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hang Seng TECH Index (HSTECH INDEX EQUITY)

Will Recent US Announcements Derail the HK/China Bull Market?

Reevaluating the bullish stance on HK-listed China stocks amid potential shifts in US/China relations and uncertainty about Trump's willingness to...

Rikki Malik

Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)

Hang Seng Indexes announces post market close today. There will be changes for the HSI, HSCEI, HSTECH, HSIII and HSCI indices. The net round-trip...

Brian Freitas

Overview #14 - The Emperor Has No Clothes Moment

A review of recent events/data impacting our investment themes and outlook. We look at the potential implications of Deepseek on Chinese tech...

Rikki Malik

Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

The U.S. DoD has designated Tencent as a Chinese Military Company. The stock is not on the NS-CMIC list yet and could be added later. Addition to...

Brian Freitas

Alibaba (9988 HK/BABA) Dual Primary Listing: Are We There Yet?

Alibaba will be in included in Southbound Stock Connect from the open of trading today. Volumes should be higher than usual as mainland investors...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Will Recent US Announcements Derail the HK/China Bull Market?

​Reevaluating the bullish stance on HK-listed China stocks amid potential shifts in US/China relations and uncertainty about Trump's willingness to...

Rikki Malik

Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)

Hang Seng Indexes announces post market close today. There will be changes for the HSI, HSCEI, HSTECH, HSIII and HSCI indices. The net round-trip...

Brian Freitas

Overview #14 - The Emperor Has No Clothes Moment

A review of recent events/data impacting our investment themes and outlook. We look at the potential implications of Deepseek on Chinese tech...

Rikki Malik

Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

The U.S. DoD has designated Tencent as a Chinese Military Company. The stock is not on the NS-CMIC list yet and could be added later. Addition to...

Brian Freitas

Alibaba (9988 HK/BABA) Dual Primary Listing: Are We There Yet?

Alibaba will be in included in Southbound Stock Connect from the open of trading today. Volumes should be higher than usual as mainland investors...

Brian Freitas

Reevaluating the bullish stance on HK-listed China stocks amid potential shifts in US/China relations and uncertainty about Trump's willingness to...