Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Taking a cue from <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a> using Hong Kong's Central Clearing and Automated Settlement System (<a href="http://www.hkexnews.hk/sdw/search/searchsdw.aspx" target="_blank">CCASS</a>) data to back out his weekly <a href="https://www.smartkarma.com/insights/h-a-discounts-southbound-flows-20180126" target="_blank">southbound analysis</a>, and David Webb's own <a href="https://webb-site.com/articles/WCASupgrade.asp" target="_blank">CCASS analysis</a>, I've analysed thousands of large CCASS moves (&gt;10% of outstanding shares) over the past couple of years.All trades on the Stock Exchange of Hong Kong are cleared through CCASS. Yet some CCASS moves occur outside normal market transactions, which may be indicative of share pledges. Unfortunately, such pledges are not required to be disclosed - except for controlling shareholders in the first 12 months after listing (<a href="http://en-rules.hkex.com.hk/en/display/display_main.html?rbid=4476&amp;element_id=2398" target="_blank">Rule 10.07</a>). My analysis strips out those companies subject to M&amp;A IF there was no noticeable change in CCASS prior to the offer/deal announcement. Shares tendered in a Hong Kong offer are settled outside of CCASS via Hong Kong Securities Clearing Company Limited, a subsidiary of HKEx, which operates CCASS. Assuming the target subject to the offer continues to trade, often those same shares taken outside of CCASS, or a large portion thereon, move back into a CCASS participant of the Offeror's choice, or indeed the advisor to the Offeror. I have also ignored new IPOs which often result in the major shareholder(s) moving shares into CCASS.The results are interesting, and not in a positive way.

Taking a cue from Travis Lundy using Hong Kong's Central Clearing and Automated Settlement System (CCASS) data to back out his weekly southbound analysis, and David Webb's own CCASS analysis, I've analysed thousands of large CCASS moves (&gt;10% of outstanding shares) over the past couple of years.All trades on the Stock Exchange of Hong Kong are cleared through CCASS. Yet some CCASS moves occur outside normal market transactions, which may be indicative of share pledges. Unfortunately, such pledges are not required to be disclosed - except for controlling shareholders in the first 12 months after listing (Rule 10.07). My analysis strips out those companies subject to M&amp;A IF there was no noticeable change in CCASS prior to the offer/deal announcement. Shares tendered in a Hong Kong offer are settled outside of CCASS via Hong Kong Securities Clearing Company Limited, a subsidiary of HKEx, which operates CCASS. Assuming the target subject to the offer continues to trade, often those same shares taken outside of CCASS, or a large portion thereon, move back into a CCASS participant of the Offeror's choice, or indeed the advisor to the Offeror. I have also ignored new IPOs which often result in the major shareholder(s) moving shares into CCASS.The results are interesting, and not in a positive way.

Hong Kong

SFund International Holdings Limited operates apparel supply chains. The Company provides men's apparels, women's apparels, apparel accessories, buttons, zippers, threads, and other products. SFund International Holdings also operates financing, money lending, securities investment, and other services.

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SFund International Holdings L (1367 HK)

CCASS: Why Large Moves Matter

Taking a cue from Travis Lundy using Hong Kong's Central Clearing and Automated Settlement System (CCASS) data to back out his weekly southbound...

David Blennerhassett

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52-week Range

Market Cap (USDm)

P/E

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