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

Rikki Malik

Cross Asset Strategy

<ul>
<li>Risk-Reward now skewed towards reward in the Hong Kong market.</li>
<li>Barbell strategy with both high-beta and lower volatility dividend stocks.</li>
<li>Some initial ideas included to add or start a portfolio  incorporating HK stocks.</li>
</ul>


Risk-Reward now skewed towards reward in the Hong Kong market.
Barbell strategy with both high-beta and lower volatility dividend stocks.
Some initial ideas included to add or start a portfolio  incorporating HK stocks.


2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 3

HK/China Equity Long-Short

Osbert Tang, CFA

Quantitative Analysis

<ul>
<li>It remains possible for 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 (HSI INDEX)</a> to generate a positive return in January 2024, given that historically there is a high 73% probability of doing so.</li>
<li>Over the last eleven years, January was also the best-performing one in five of them. Average return for these five was at 7.7%.</li>
<li>The macroenvironment is also conducive for this pattern to sustain - lower USD rates, rebound in Rmb/USD exchange rate, and more supportive measures from the Chinese government.</li>
</ul>


It remains possible for the Hang Seng Index (HSI INDEX) to generate a positive return in January 2024, given that historically there is a high 73% probability of doing so.
Over the last eleven years, January was also the best-performing one in five of them. Average return for these five was at 7.7%.
The macroenvironment is also conducive for this pattern to sustain - lower USD rates, rebound in Rmb/USD exchange rate, and more supportive measures from the Chinese government.


China Strategy: Are We Still Going to Have January Effect in 2024?

Head of Research, Steno Research

Emil Moller

Head of Research

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

<ul><li>Foreign confidence remains a massive issue for investment and equity pricing.</li><li>Efforts for diplomatic damage control seem to be a cheap option when contrasted to the domestic issues related to adding more leverage to the system as an alternative.</li><li>Domestic confidence is arguably even lower with households seeing little light at the end of the tunnel. We can see why they won’t.</li></ul>

Foreign confidence remains a massive issue for investment and equity pricing.Efforts for diplomatic damage control seem to be a cheap option when contrasted to the domestic issues related to adding more leverage to the system as an alternative.Domestic confidence is arguably even lower with households seeing little light at the end of the tunnel. We can see why they won’t.

EM by EM #35:  China 2024: Keeping the Beast Alive

Junior Finance Analyst, Steno Research

Ulrik Simmelholt

Junior Finance Analyst

Macroeconomics

<ul><li>We’ll start today’s 5 things with a look at the central bank outlook for in 2024, then we’ll address the troubles for OPEC.</li><li>We move over to talk about China and afterwards Ukraine for some geopolitics.</li><li>Finally, we’ll end this year’s last 5 things with a crypto outlook.</li></ul>

We’ll start today’s 5 things with a look at the central bank outlook for in 2024, then we’ll address the troubles for OPEC.We move over to talk about China and afterwards Ukraine for some geopolitics.Finally, we’ll end this year’s last 5 things with a crypto outlook.

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

Tongcheng Travel Holdings  / Event-Driven

<ul>
<li>It was a busy week with rebalance implementations at the close of trading on Thursday in Korea and then across the region on Friday.</li>
<li>The <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">SET 50 Index</a> changes should be announced this week and the Yuanta TW Div+ ETF will continue to implement the changes till Thursday.</li>
<li>There were inflows to China ETFs during the week while there were big outflows from <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> ETFs.</li>
</ul>


It was a busy week with rebalance implementations at the close of trading on Thursday in Korea and then across the region on Friday.
The SET 50 Index changes should be announced this week and the Yuanta TW Div+ ETF will continue to implement the changes till Thursday.
There were inflows to China ETFs during the week while there were big outflows from Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) ETFs.


Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 3

The Hong Kong market offers a favorable risk-reward ratio, suggesting a barbell strategy with high-beta and low volatility dividend stocks could...

Rikki Malik

China Strategy: Are We Still Going to Have January Effect in 2024?

China's industrial profit growth accelerated to 29.5% YoY in Nov, from just a 2.7% increase in Oct, suggesting initial impacts from the series of...

Osbert Tang, CFA

EM by EM #35: China 2024: Keeping the Beast Alive

We will be watching the Chinese credit impulse closely for clues on whether to take on positive bets on China and China proxies in 2024.

Steno Research

Five Things We Watch For In 2024

The thing to watch is probably employment numbers and once the labor markets start turning bad, expect CBs to cut in a hurry (especially if it is...

Steno Research

Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 3

​The Hong Kong market offers a favorable risk-reward ratio, suggesting a barbell strategy with high-beta and low volatility dividend stocks could...

Rikki Malik

China Strategy: Are We Still Going to Have January Effect in 2024?

China's industrial profit growth accelerated to 29.5% YoY in Nov, from just a 2.7% increase in Oct, suggesting initial impacts from the series of...

Osbert Tang, CFA

EM by EM #35: China 2024: Keeping the Beast Alive

We will be watching the Chinese credit impulse closely for clues on whether to take on positive bets on China and China proxies in 2024.

Steno Research

Five Things We Watch For In 2024

The thing to watch is probably employment numbers and once the labor markets start turning bad, expect CBs to cut in a hurry (especially if it is...

Steno Research

Index Rebalance & ETF Flow Recap: HSTECH, SIG/CWG, KQ150, REPT BATTERO

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

The Hong Kong market offers a favorable risk-reward ratio, suggesting a barbell strategy with high-beta and low volatility dividend stocks could...