Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

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.

Cross Asset Strategy

<ul>
<li>We have spent this Sunday evening trying to prepare ourselves for the opening given the turmoil expected in China after Country Gardens (the former largest developer) is to suspend trading of at least 10 onshore bonds after a week where they failed to pay coupons of a couple of international payments.</li>
<li>The Hang Seng Property Index (HSP) is down 20% y-t-d but only lost 0.2% on Friday despite another landslide in the Country Garden stock.</li>
<li>If the HSP Index drops over the coming days, it ought to be taken as a signal that Chinese RE credit will decline further due to a lack of confidence in the financial system.</li>
</ul>


We have spent this Sunday evening trying to prepare ourselves for the opening given the turmoil expected in China after Country Gardens (the former largest developer) is to suspend trading of at least 10 onshore bonds after a week where they failed to pay coupons of a couple of international payments.
The Hang Seng Property Index (HSP) is down 20% y-t-d but only lost 0.2% on Friday despite another landslide in the Country Garden stock.
If the HSP Index drops over the coming days, it ought to be taken as a signal that Chinese RE credit will decline further due to a lack of confidence in the financial system.


Asset Allocation Watch: Country Garden Melt-Down? 5 Charts on Cross-Asset Spill-Overs!

<ul>
<li>Welcome to our weekly flagship editorial.</li>
<li>The markets over the past week or two have made little sense as commodities (especially energy) have continued to outperform risk assets despite China apparently suffering from long-covid symptoms economically.</li>
<li>Chinese money and credit trends look worse than US trends post Lehman, which means that either China rebounds or else it is the end of the Chinese economy as we know it! We have timed our rotation from high-beta tech/AI to Energy/Commodity proxies amazingly well, but we need to remain vigilant at this juncture.</li>
</ul>


Welcome to our weekly flagship editorial.
The markets over the past week or two have made little sense as commodities (especially energy) have continued to outperform risk assets despite China apparently suffering from long-covid symptoms economically.
Chinese money and credit trends look worse than US trends post Lehman, which means that either China rebounds or else it is the end of the Chinese economy as we know it! We have timed our rotation from high-beta tech/AI to Energy/Commodity proxies amazingly well, but we need to remain vigilant at this juncture.


Steno Signals #60: Worse than Lehman in China!? The 3 Most Important Questions Right Now!

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

<ul>
<li>The review period for the September rebalance of the S&amp;P/ASX family of indices ends on Friday. There will be a lot of changes across the family.</li>
<li>Hang Seng Indices will announce the 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> and the HSCI after market close on Friday.</li>
<li>There were HUGE inflows to onshore China focused ETFs during the week with <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500 Index</a> and <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index</a> ETFs taking in the largest amounts.</li>
</ul>


The review period for the September rebalance of the S&amp;P/ASX family of indices ends on Friday. There will be a lot of changes across the family.
Hang Seng Indices will announce the changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI after market close on Friday.
There were HUGE inflows to onshore China focused ETFs during the week with CSI 300 Index, CSI 500 Index and SSE50 Index ETFs taking in the largest amounts.


Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning - India, Japan, Korea

<ul>
<li>We finally got to 80 <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> constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.</li>
<li>The conclusions of the market consultation on the inclusion of foreign stocks in 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> should be announced soon though implementation could start only in December.</li>
<li>We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.</li>
</ul>


We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.


Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

<ul>
<li>What a week in global fixed income! We thankfully rotated out of bonds and into cyclical exposures in steepeners, commodities, energy and materials ahead of the worst storm and the big question is now whether this is just a “hump” or the start of a broad steepening trend.</li>
<li>In last week’s Portfolio Watch we declared that we anticipated a steepening curve:”Many are urgently discussing the ramifications of the BoJ move to push the band on the YCC.</li>
<li>With equities already looking frothy and volatility being low we may see some reversal near term – or perhaps stonks just carry on their insufferable streak and shorts keep getting wiped out as shares are sold to buy cheap calls.</li>
</ul>


What a week in global fixed income! We thankfully rotated out of bonds and into cyclical exposures in steepeners, commodities, energy and materials ahead of the worst storm and the big question is now whether this is just a “hump” or the start of a broad steepening trend.
In last week’s Portfolio Watch we declared that we anticipated a steepening curve:”Many are urgently discussing the ramifications of the BoJ move to push the band on the YCC.
With equities already looking frothy and volatility being low we may see some reversal near term – or perhaps stonks just carry on their insufferable streak and shorts keep getting wiped out as shares are sold to buy cheap calls.


Portfolio Watch: Steep, Steeper, Steepest!

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)

Asset Allocation Watch: Country Garden Melt-Down? 5 Charts on Cross-Asset Spill-Overs!

We have spent this Sunday evening trying to prepare ourselves for the opening given the turmoil expected in China after Country Gardens (the former...

Steno Research

Steno Signals #60: Worse than Lehman in China!? The 3 Most Important Questions Right Now!

The markets over the past week or two have made little sense as commodities (especially energy) have continued to outperform risk assets despite...

Steno Research

Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning - India, Japan, Korea

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

Brian Freitas

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

There is just over a week to the announcement of the September changes for the HSI. A lot of the potential inclusions have outperformed the HSI...

Brian Freitas

Portfolio Watch: Steep, Steeper, Steepest!

What a week in global fixed income! We thankfully rotated out of bonds and into cyclical exposures in steepeners, commodities, energy and...

Steno Research