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

<ul>
<li>HKEX reported a weak set of 4Q21 earnings results of HKD 2.7 bn, declining HKD 577 mn (17.7%) linked quarter, driven by the decline in cash ADT and higher costs; </li>
<li>Derivative activity remained flattish linked quarter with contract volume at 507 thousand – despite the successful launch of the MSCI China A50 Connect (HK A50); and </li>
<li>With HIBOR set to increase, HKEx is likely to become more reliant on lower quality investment income. </li>
</ul>


HKEX reported a weak set of 4Q21 earnings results of HKD 2.7 bn, declining HKD 577 mn (17.7%) linked quarter, driven by the decline in cash ADT and higher costs; 
Derivative activity remained flattish linked quarter with contract volume at 507 thousand – despite the successful launch of the MSCI China A50 Connect (HK A50); and 
With HIBOR set to increase, HKEx is likely to become more reliant on lower quality investment income. 


Hong Kong Exchanges & Clearing – Negative Jaws

<ul>
<li>OCBC reported 4Q21 net profit of SGD 973 mn, declining 20.5% linked quarter, as a result of an increase in loss provisions and higher costs; </li>
<li>Were it not for the 51.8% decline in Singapore NPLs, credit quality would have been disastrous for OCBC with credit falling off of a cliff regionally; and </li>
<li>Given the increase in net new NPLs, reserves would appear to now be wanting by SGD 2.8 bn plus or nearly three quarters of bottom-line results. </li>
</ul>


OCBC reported 4Q21 net profit of SGD 973 mn, declining 20.5% linked quarter, as a result of an increase in loss provisions and higher costs; 
Were it not for the 51.8% decline in Singapore NPLs, credit quality would have been disastrous for OCBC with credit falling off of a cliff regionally; and 
Given the increase in net new NPLs, reserves would appear to now be wanting by SGD 2.8 bn plus or nearly three quarters of bottom-line results. 


Oversea Chinese Banking Corp.- Another Weak Print

<ul>
<li>The US Trade Representative (“USTR”) office added Tencent and Alibaba Group to the US government's latest "notorious markets" list; </li>
<li>Similar to being implicated in running afoul of regulators in mainland China, Tencent “strongly disagrees” with the USTR label; and</li>
<li>*We look forward to Tencent’s 4Q21 results announcement on March 23, 2021 where management will continue to refuse to discuss anything meaningful.</li>
</ul>


The US Trade Representative (“USTR”) office added Tencent and Alibaba Group to the US government's latest "notorious markets" list; 
Similar to being implicated in running afoul of regulators in mainland China, Tencent “strongly disagrees” with the USTR label; and
*We look forward to Tencent’s 4Q21 results announcement on March 23, 2021 where management will continue to refuse to discuss anything meaningful.


Tencent Holdings – Bad News On The Doorstep

<ul>
<li>The shares of Evergrande aren’t worth the paper their printed on;  </li>
<li>Shanghai Construction receives a positive court outcome at expense of Evergrande; and</li>
<li>The likelihood that Evergrande has enough liquidity and will not have a fire sale of assets is nil – we can add Evergrande to the list of the walking dead. </li>
</ul>


The shares of Evergrande aren’t worth the paper their printed on;  
Shanghai Construction receives a positive court outcome at expense of Evergrande; and
The likelihood that Evergrande has enough liquidity and will not have a fire sale of assets is nil – we can add Evergrande to the list of the walking dead. 


China Evergrande Group – Be A Hero, Take It To Zero

<ul>
<li>Be a hero, just take Evergrande to zero. The scrip isn't worth the paper their written on; </li>
<li>Without an Act of God, the likelihood that Evergrande has enough liquidity and will not have a fire sale of assets is nil; and </li>
<li>Major creditor, China Cinda, be placed in charge creates a massive conflict of interest that no investor or creditor should get comfortable with.   </li>
</ul>


Be a hero, just take Evergrande to zero. The scrip isn't worth the paper their written on; 
Without an Act of God, the likelihood that Evergrande has enough liquidity and will not have a fire sale of assets is nil; and 
Major creditor, China Cinda, be placed in charge creates a massive conflict of interest that no investor or creditor should get comfortable with.   


China Evergrande Group – Just Stop the Nonsense

China

iShares FTSE A50 China Index ETF is an exchanged-traded fund established in Hong Kong. The investment objective of the iShares FTSE A50 China Index ETF is to provide investment results that, before fees and expenses, closely correspond to the performance of A50 Index.

iShares FTSE/Xinhua A50 China (2823 HK)

Hong Kong Exchanges & Clearing – Negative Jaws

HKEX: HKEX reported a fairly weak set of 4Q21 results, declining 17.7% QOQ, and driven by the overall decline in cash ADT and higher overall costs.

Thomas J. Monaco

Oversea Chinese Banking Corp.- Another Weak Print

OCBC: OCBC reported 4Q21 net profit decline of 20.5% QOQ due to increases in loss provisions and costs. Were it not for the improvement in...

Thomas J. Monaco

Tencent Holdings – Bad News On The Doorstep

TENCENT: The USTR office added Tencent and Alibaba Group to the US government's latest "notorious markets" list. Similar to running afoul of...

Thomas J. Monaco

China Evergrande Group – Be A Hero, Take It To Zero

EVERGRANDE: The shares of Evergrande aren’t worth the paper printed on. Shanghai Construction receives a positive court outcome against Evergrande....

Thomas J. Monaco

China Evergrande Group – Just Stop the Nonsense

EVERGRANDE: The likelihood that Evergrande has enough liquidity and will not have a fire sale of assets is nil. Major creditor, China Cinda, be...

Thomas J. Monaco