Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On April 11, <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> made an <a href="https://www.prosus.com/news/update-on-repurchase-programme-110423/" target="_blank" rel="noopener">Update on Repurchase Programme</a> that it had repurchased shares in the market from the 3-7 April. They do so every week.</li>
<li>This one said they would move 96 million shares of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> currently held in non-transferrable shares into CCASS so they could be sold. </li>
<li>The ADRs dropped in New York time. Tencent shares fell hard today. If the share price fell because of a block offering, that would be unwarranted. </li>
</ul>


On April 11, Prosus (PRX NA) made an Update on Repurchase Programme that it had repurchased shares in the market from the 3-7 April. They do so every week.
This one said they would move 96 million shares of Tencent (700 HK) currently held in non-transferrable shares into CCASS so they could be sold. 
The ADRs dropped in New York time. Tencent shares fell hard today. If the share price fell because of a block offering, that would be unwarranted. 


Tencent (700 HK) - This Is Not the Selldown You Are Looking For

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares.</li>
<li>We have spoken about the background of the deal in our earlier notes. In this note, we talk about the overnight updates.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares.
We have spoken about the background of the deal in our earlier notes. In this note, we talk about the overnight updates.


Tencent Meituan Dividend - All Shares in CCASS - More Pressure Now but Will Have a Shorter Overhang

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

<ul>
<li>From the time of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> announcement of the in-specie dividend, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> has underperformed <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> by around 35%.</li>
<li>Surprisingly, short interest on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> has dropped in the last few months as the stock has continued to drop.</li>
<li>As with <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> could sell <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> in the months following settlement. Or they could remove the overhang by placing a block.</li>
</ul>


From the time of Tencent (700 HK) announcement of the in-specie dividend, Meituan (3690 HK) has underperformed Tencent (700 HK) and Alibaba Group (9988 HK) by around 35%.
Surprisingly, short interest on Meituan (3690 HK) has dropped in the last few months as the stock has continued to drop.
As with JD.com Inc. (9618 HK), Prosus (PRX NA) could sell Meituan (3690 HK) in the months following settlement. Or they could remove the overhang by placing a block.


Meituan (3690 HK): Tencent's In-Specie Div Settles in Two Weeks

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for nearly 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for nearly 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


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>We identify stocks in the EMEA region that are filling the void created by Russia's removal from financial markets in 2022.</li>
<li>MENA stocks have benefitted from rotation, led by Saudi Aramco,  Emaar Properties and <a href="https://www.smartkarma.com/entities/saudi-basic-industries-corp" target="_blank" data-smartkarma-citation="entities:27316:1" rel="noopener">Saudi Basic Industries</a>
</li>
<li>Outside of MENA, South Africa remains an important destination, whilst <a href="https://www.smartkarma.com/entities/dino-polska-sa" target="_blank" data-smartkarma-citation="entities:27637:1" rel="noopener">Dino Polska SA (DNP PW)</a> and MOL are favoured in Eastern Europe</li>
</ul>


We identify stocks in the EMEA region that are filling the void created by Russia's removal from financial markets in 2022.
MENA stocks have benefitted from rotation, led by Saudi Aramco,  Emaar Properties and Saudi Basic Industries

Outside of MENA, South Africa remains an important destination, whilst Dino Polska SA (DNP PW) and MOL are favoured in Eastern Europe


South Africa

Naspers Limited operates in the technology industry. The Company invests in global internet companies across the world.

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Naspers (NPN SJ)

Tencent (700 HK) - This Is Not the Selldown You Are Looking For

Prosus put out their weekly repurchase update on 11 April and included a note they'd put 96mm shares of Tencent into CCASS. Tencent then fell...

Travis Lundy

Tencent Meituan Dividend - All Shares in CCASS - More Pressure Now but Will Have a Shorter Overhang

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. In this note, we talk...

Sumeet Singh

Meituan (3690 HK): Tencent's In-Specie Div Settles in Two Weeks

Meituan shares from Tencent's in-specie div settle in just over 2 weeks. Meituan has underperformed Tencent & Alibaba by 35% since announcement....

Brian Freitas

Screening for GEMs: February 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Replacing Russia: EMEA Stock Screening

We identify stocks in the EMEA region that are filling the void created by Russia's removal from financial markets in 2022.

Steven Holden

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