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

Emerging Market Health Care allocations sit towards the lower end of their 7-year range. Current levels are off their 2015 highs by a margin, with the percentage of EM funds with exposure dropping by 11% and average holding weights down by 1.4%. However, in recent months there has been evidence the downward trend is meeting resistance. Ownership statistics are above the lows seen at the start of the year and in certain countries are on an upward trend. We take a look at the sector in detail to determine current positioning and what is driving the reversal.

Emerging Market Health Care allocations sit towards the lower end of their 7-year range. Current levels are off their 2015 highs by a margin, with the percentage of EM funds with exposure dropping by 11% and average holding weights down by 1.4%. However, in recent months there has been evidence the downward trend is meeting resistance. Ownership statistics are above the lows seen at the start of the year and in certain countries are on an upward trend. We take a look at the sector in detail to determine current positioning and what is driving the reversal.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

Sinopharm Group Co Ltd H / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/32" target="_blank" data-smartkarma-citation="entities:32:1">Sinopharm Group Co H (1099 HK)</a> 's pending acquisition of a majority interest in China National Scientific Instruments and Materials Co. Ltd. ("CNSIM") from CNPGC marks a major expansion of its medical device distribution business and signals that the rollout of the "two-invoice" policy for medical devices should pick up in earnest.  The new policy poses some transition risks for medical device manufacturers. The magnitude of the impact is difficult to quantify because data from pilot programs is limited and anecdotal.
We view Sinopharm's acquisition of CNSIM favorably, but tag this Insight as bearish because of the heightened risk for medical device companies.

Sinopharm Group Co H (1099 HK) 's pending acquisition of a majority interest in China National Scientific Instruments and Materials Co. Ltd. ("CNSIM") from CNPGC marks a major expansion of its medical device distribution business and signals that the rollout of the "two-invoice" policy for medical devices should pick up in earnest.  The new policy poses some transition risks for medical device manufacturers. The magnitude of the impact is difficult to quantify because data from pilot programs is limited and anecdotal.
We view Sinopharm's acquisition of CNSIM favorably, but tag this Insight as bearish because of the heightened risk for medical device companies.

China Medical Devices: "Two-Invoice" Is Coming

Equity Capital Markets

AK Medical Holdings Limited / Equity Capital Markets

AK Medical Holdings (1789 HK) is a new listing with a proposed price range of HKD1.66 -2.00. The company is China's leading (in volume) orthopedic joint and spine replacement device manufacturer. AK Medical has taken share over the last few years by carving out a position as a high-quality domestic player that can undercut high-priced imported products. In addition, AK Medical has established a cutting-edge position in using 3D printing technology to manufacture products. The position is noteworthy, but we would not assign much value to this distinction at this point.The expected pricing date is Tuesday, December 12, 2017 (EST) / Wednesday, December 13, 2017 (HKT) with an expected settlement and listing date of Wednesday, December 20, 2017. This Insight will be relatively brief given the timetable and offering size (less than US$100 million) with heavy use of content from the offering document. If a picture is worth 1,000 words (百闻不如一见), then you should be well informed by the end.We have several outstanding questions regarding reimbursement risk and working capital policies, but are inclined to take the deal assuming that management's responses are thoughtful and sensible.

AK Medical Holdings (1789 HK) is a new listing with a proposed price range of HKD1.66 -2.00. The company is China's leading (in volume) orthopedic joint and spine replacement device manufacturer. AK Medical has taken share over the last few years by carving out a position as a high-quality domestic player that can undercut high-priced imported products. In addition, AK Medical has established a cutting-edge position in using 3D printing technology to manufacture products. The position is noteworthy, but we would not assign much value to this distinction at this point.The expected pricing date is Tuesday, December 12, 2017 (EST) / Wednesday, December 13, 2017 (HKT) with an expected settlement and listing date of Wednesday, December 20, 2017. This Insight will be relatively brief given the timetable and offering size (less than US$100 million) with heavy use of content from the offering document. If a picture is worth 1,000 words (百闻不如一见), then you should be well informed by the end.We have several outstanding questions regarding reimbursement risk and working capital policies, but are inclined to take the deal assuming that management's responses are thoughtful and sensible.

AK Medical: Take It If The Answers Are Good

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

<ul><li>From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. </li><li>For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.</li><li>Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. </li></ul>

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. 

Bespoke Research on China and neighbouring regions, Bixmoor

Bixmoor

Bespoke Research on China and neighbouring regions

Bixmoor specialises in providing bespoke research to business, governments and the financial community on China and neighbouring regions. We seek to build long-term relationships with our clients, based on our expertise, our reliability and our determination to find the right solution.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

Falling Fertility Adds to China's Population Woes

China

Shandong Weigao Group Medical Polymer Company Limited, through its subsidiaries, researches and develops, produces, and sells single-use aseptic polymer medical products.

Shandong Weigao Group Medical Polymer Co (1066 HK)

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Shandong Weigao Group Medical Polymer Co (1066 HK)

EM Health Care: Late Cycle Rotation

Emerging Market Health Care allocations sit towards the lower end of their 7-year range. Current levels are off their 2015 highs by a margin, with...

Steven Holden

China Medical Devices: "Two-Invoice" Is Coming

Sinopharm Group Co H (1099 HK) 's pending acquisition of a majority interest in China National Scientific Instruments and Materials Co. Ltd....

Kemp Dolliver, CFA

AK Medical: Take It If The Answers Are Good

AK Medical Holdings (1789 HK) is a new listing with a proposed price range of HKD1.66 -2.00. The company is China's leading (in volume) orthopedic...

Kemp Dolliver, CFA

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

Falling Fertility Adds to China's Population Woes

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of...

Bixmoor

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52-week Range

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