Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Thematic (Sector/Industry)

<ul>
<li>PBoC just announced a RRR cut of 25bps, which is a surprise to market</li>
<li>The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts</li>
<li>Government’s press release addresses key market concerns.  We need to monitor recovery in property market.  LONG China on easing cycle.  China property names are trading at distressed valuation</li>
</ul>


PBoC just announced a RRR cut of 25bps, which is a surprise to market
The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts
Government’s press release addresses key market concerns.  We need to monitor recovery in property market.  LONG China on easing cycle.  China property names are trading at distressed valuation


Short Note: LONG China on Monetary Easing Cycle

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>News reports indicate that <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke (H) (2202 HK)</a> is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.</li>
<li>The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke (H) (2202 HK)</a> trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.</li>
</ul>


News reports indicate that China Vanke (H) (2202 HK) is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.
The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.

China Vanke (H) (2202 HK) trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.


China Vanke (2202 HK): Placement & Index Flows

Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Technical Analysis

Alibaba Group Holding  / Technical Analysis

<ul><li>The consensus of bottom in China Tech and China A shares continue to gain favour.</li><li>Bank of America is the latest to recommend selling US tech to buy China Tech.  </li><li>The Bullish China stocks call is predicated on reopening Pivot, yet the daily increase in cases and sporadic lockdown put the Pivot callers to double down.</li></ul>

The consensus of bottom in China Tech and China A shares continue to gain favour.Bank of America is the latest to recommend selling US tech to buy China Tech.  The Bullish China stocks call is predicated on reopening Pivot, yet the daily increase in cases and sporadic lockdown put the Pivot callers to double down.

US Vs China Technology, Alibaba, China Unicom, and New World Development

<ul><li>A better way to think of the Hong Kong Market in the current cycle is that it has both US &amp; China's economic headwinds and requires sharply lower rates and currency to correct macro imbalances.</li><li>HKMA should be cutting interest rates, but it cannot do so due to the currency peg.</li><li>Over the last 12-18 months, Hong Kong developers have enjoyed stability in expectations of reopening borders, investment demand, strong balance sheet compared to mainland developers, and low funding costs (HIBOR). These tailwinds are now headwinds.</li></ul>

A better way to think of the Hong Kong Market in the current cycle is that it has both US &amp; China's economic headwinds and requires sharply lower rates and currency to correct macro imbalances.HKMA should be cutting interest rates, but it cannot do so due to the currency peg.Over the last 12-18 months, Hong Kong developers have enjoyed stability in expectations of reopening borders, investment demand, strong balance sheet compared to mainland developers, and low funding costs (HIBOR). These tailwinds are now headwinds.

Hang Seng Index Constituents 16th June 2022

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener"><strong>Giordano International (709 HK)</strong></a> was suspended this morning pursuant to Hong Kong's Takeovers Code. </li>
<li>The Cheng Yu Tung family is the largest shareholder with 24.37%, as it has been since December 2015. A possible Offer ahead of a (potentially) improving retail outlook? </li>
<li>And just for some (possible) added excitement, David Webb holds 5.1%. </li>
</ul>



Giordano International (709 HK) was suspended this morning pursuant to Hong Kong's Takeovers Code. 
The Cheng Yu Tung family is the largest shareholder with 24.37%, as it has been since December 2015. A possible Offer ahead of a (potentially) improving retail outlook? 
And just for some (possible) added excitement, David Webb holds 5.1%. 


Giordano (709 HK): Cheng Family Offer Or Cashing Out?

Hong Kong

New World Development Company Limited, through its subsidiaries, develops and invests in properties, provides contracting services, property management, and transportation services.  The Company also operates infrastructure business, telecommunication services, department stores, hotels and restaurants, and media and technology business.

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New World Development (17 HK)

Short Note: LONG China on Monetary Easing Cycle

China just announced a 25bps RRR cut, which is a surprise. China's low inflation allows more room to RRR cuts. Jan-Feb macro data shows...

Jacob Cheng

China Vanke (2202 HK): Placement & Index Flows

China Vanke is looking to sell 300m shares in a placement to raise US$500m. Passive index trackers will buy between 11-12% of the new shares early...

Brian Freitas

US Vs China Technology, Alibaba, China Unicom, and New World Development

The consensus of bottom in China Tech and China A shares continue to gain favour. Bank of America is the latest to recommend selling US tech to buy...

Untying The Gordian Knot

Hang Seng Index Constituents 16th June 2022

A better way to think of the Hong Kong Market in the current cycle is that it has both US & China's economic headwinds and requires sharply...

Untying The Gordian Knot

Giordano (709 HK): Cheng Family Offer Or Cashing Out?

Shares are currently suspended, so there is nothing to be done yet. IF a firm Offer unfolds from Cheng Yu Tung family, I expect a punchy premium.

David Blennerhassett

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