Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

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Macroeconomics

<ul><li>Amid the gloom of China’s <a href="https://www.caixinglobal.com/2023-08-15/china-cuts-key-rate-by-most-since-2020-as-economic-woes-deepen-102093323.html" target="_blank" rel="noopener">economic slowdown</a>, there are some bright spots. A new data series released by the National Bureau of Statistics (NBS) on Tuesday showed that in the first seven months of the year, consumer spending on services like education and leisure rose at almost triple the pace of overall retail sales.</li><li>Retail sales of services jumped 20.3% year-on-year in the January to July period compared with 7.3% growth for overall retail sales, NBS data show.</li><li>The bureau did not provide a monetary amount for retail sales of services and did not provide a breakdown of growth by month, but cumulative growth data will be published from now on, NBS spokesperson Fu Linghui said at a press briefing on Tuesday.</li></ul>

Amid the gloom of China’s economic slowdown, there are some bright spots. A new data series released by the National Bureau of Statistics (NBS) on Tuesday showed that in the first seven months of the year, consumer spending on services like education and leisure rose at almost triple the pace of overall retail sales.Retail sales of services jumped 20.3% year-on-year in the January to July period compared with 7.3% growth for overall retail sales, NBS data show.The bureau did not provide a monetary amount for retail sales of services and did not provide a breakdown of growth by month, but cumulative growth data will be published from now on, NBS spokesperson Fu Linghui said at a press briefing on Tuesday.

New Indicator Shows China’s Consumers Are Spending — on Services

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>China &amp; HK allocations among Global funds have hit new lows, with 25.5% of funds avoiding the region entirely and a record 79.6% underweight versus the benchmark.</li>
<li>In the six months leading up to recent stimulus measures, another 5.4% of funds fully exited their China &amp; HK exposure.</li>
<li>Tencent and Alibaba are well below their 2020 highs, while AIA Group ownership moved lower and China Construction Bank continues its long-term decline</li>
</ul>


China &amp; HK allocations among Global funds have hit new lows, with 25.5% of funds avoiding the region entirely and a record 79.6% underweight versus the benchmark.
In the six months leading up to recent stimulus measures, another 5.4% of funds fully exited their China &amp; HK exposure.
Tencent and Alibaba are well below their 2020 highs, while AIA Group ownership moved lower and China Construction Bank continues its long-term decline


China:  Record Bearish Positioning Ahead of Stimulus

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

Taiwan Semiconductor (TSMC) / Event-Driven

<ul>
<li>We first wrote about the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex-China (EMXC US)</a> ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.</li>
<li>
<a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">IShares Emerging Markets ex-China (EMXC US)</a> has outperformed <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets" target="_blank" data-smartkarma-citation="entities:438:1" rel="noopener">iShares Emerging Markets (EEM US)</a> and <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-217fc48e-4faa-4bc3-b730-443d6e06728b" target="_blank" data-smartkarma-citation="entities:32500:1" rel="noopener">iShares Emerging Markets Asia (EEMA US)</a> with lower volatility and a lower drawdown.</li>
<li>With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.</li>
</ul>


We first wrote about the iShares Emerging Markets ex-China (EMXC US) ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.

IShares Emerging Markets ex-China (EMXC US) has outperformed iShares Emerging Markets (EEM US) and iShares Emerging Markets Asia (EEMA US) with lower volatility and a lower drawdown.
With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.


Emerging Markets Ex-China: Looking Back... And Forward

Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

<ul>
<li>China’s Local Government Financing Vehicles (LGFVs) across the country have shown a diverse credit profiles with majority of the LGFV’s exhibiting moderate credit risk at the start of this year when broken down by province.</li>
<li>These financing vehicles, that have been used to fund infrastructure and other development-related projects for local governments in China, have been susceptible to varying macroeconomic conditions.</li>
<li>However, at the start of 2024, Criat’s Credit Cycle Index (CCCI) shows that the sector’s credit risk outlook is likely to improve with respect to that of the aggregate credit profile of all Chinese firms.</li>
</ul>


China’s Local Government Financing Vehicles (LGFVs) across the country have shown a diverse credit profiles with majority of the LGFV’s exhibiting moderate credit risk at the start of this year when broken down by province.
These financing vehicles, that have been used to fund infrastructure and other development-related projects for local governments in China, have been susceptible to varying macroeconomic conditions.
However, at the start of 2024, Criat’s Credit Cycle Index (CCCI) shows that the sector’s credit risk outlook is likely to improve with respect to that of the aggregate credit profile of all Chinese firms.


Central Government Policy Aid Set to Catalyze LGFVs' Fortunes in 2024

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.

<ul><li>We hope you have enjoyed our China Week coverage with extensive analysis on the ongoing malaise in Chinese Real Estate.</li><li>Positioning in CNY markets is an underreported angle in the discussion on China as it may help guide asset performance from here, now that everyone and their mother agrees that China is stuck in a mess.</li><li>Are international investors even involved in China anymore?</li></ul>

We hope you have enjoyed our China Week coverage with extensive analysis on the ongoing malaise in Chinese Real Estate.Positioning in CNY markets is an underreported angle in the discussion on China as it may help guide asset performance from here, now that everyone and their mother agrees that China is stuck in a mess.Are international investors even involved in China anymore?

Positioning Watch: Is Anyone Even Invested in China at This Stage?

China

iShares MSCI China ETF is an exchange-traded fund incorporated in the USA. The ETF seeks to track the performance of the MSCI China Index. The Index is a free float adjusted market cap weighted index designed to measure the performance of equity securities in the top 85% in market cap of Chinese equity markets, as represented by the A-Shares, H-Shares, B-Shares, Red Chips, & P-Chips.

iShares MSCI China ETF (MCHI US)

New Indicator Shows China’s Consumers Are Spending — on Services

Amid the gloom of China’s economic slowdown, there are some bright spots. A new data series released by the National Bureau of Statistics (NBS) on...

Caixin Global

China: Record Bearish Positioning Ahead of Stimulus

China & HK allocations among Global funds have hit new lows, with 25.5% of funds avoiding the region entirely and a record 79.6% underweight versus...