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

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

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.

Equity Capital Markets

EDDA Healthcare and Technology / Equity Capital Markets

EDDA Healthcare and Technology Holding Limited (EDDA), offers innovative intelligent solutions to enable precision surgery. It aims to raise up to US$300m in its Hong Kong IPO.EDDA provides a precision surgery solution portfolio, consisting of surgical robots series IQQA-Guide, and a portfolio of precision surgery planning software, including IQQA-3D. It has also established a 3D precision surgery digital solution cloud platform in China (IQQA Cloud Platform) which integrates functions of IQQA-3D and enables physicians to collaborate remotely in real time.Through IQQA-3D and IQQA Cloud Platform, it has assisted in over 70,000 precision surgeries in China across 60 of the top 100 hospitals. Its precision surgery planning software is also registered in the United states. It is the largest player in China’s precision surgical planning market for thoracic and abdominal applications, with over a one-third market share, in terms of surgical cases completed in 2020, according to Frost &amp; Sullivan.

EDDA Healthcare and Technology Holding Limited (EDDA), offers innovative intelligent solutions to enable precision surgery. It aims to raise up to US$300m in its Hong Kong IPO.EDDA provides a precision surgery solution portfolio, consisting of surgical robots series IQQA-Guide, and a portfolio of precision surgery planning software, including IQQA-3D. It has also established a 3D precision surgery digital solution cloud platform in China (IQQA Cloud Platform) which integrates functions of IQQA-3D and enables physicians to collaborate remotely in real time.Through IQQA-3D and IQQA Cloud Platform, it has assisted in over 70,000 precision surgeries in China across 60 of the top 100 hospitals. Its precision surgery planning software is also registered in the United states. It is the largest player in China’s precision surgical planning market for thoracic and abdominal applications, with over a one-third market share, in terms of surgical cases completed in 2020, according to Frost &amp; Sullivan.

EDDA Healthcare Pre-IPO - RoboDoc - Has Been Around for a While but Is Just Getting the Robo Going

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>I seldom touched those unpredicatble biotech stocks, but Bioventix is an exception;</li>
<li>The company provides a bond-like cash streams for its owners, through a well-moated, highly predictable business model;</li>
<li>Although it is not clear whether the share can offer a 20% total return at this price level, I see a high chance for it to outperform the market benchmark with a limited downside from here in the long run.</li>
</ul>


I seldom touched those unpredicatble biotech stocks, but Bioventix is an exception;
The company provides a bond-like cash streams for its owners, through a well-moated, highly predictable business model;
Although it is not clear whether the share can offer a 20% total return at this price level, I see a high chance for it to outperform the market benchmark with a limited downside from here in the long run.


Bioventix: A Rare Biotech Play with a Low-Risk, High-Return Model

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Siemens Gamesa Renewable Energy, S.A. / Event-Driven

<div>
On 18 May, economic daily Expansion said that <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> was planning to launch a delisting bid for <a href="https://www.smartkarma.com/entities/siemens-gamesa-renewable-energy-s-a" target="_blank" data-smartkarma-citation="entities:21270:1" rel="noopener">Siemens Gamesa Renewable Energy, S.A. (SGRE SM)</a>.
The CNMV (National Securities Market Commission, the Spanish market watchdog) suspended Siemens Gamesa trading shortly after 9 a.m. and until 2:30 p.m. and asked Siemens to clarify whether it will launch an exclusion takeover bid for Gamesa.
<ul>
<li>Siemens Energy (ENR GR) explained in a note to the CNMV that it was conducting a "strategic review" of its entire portfolio of assets, and that Siemens Energy was not "currently" working on a delisting bid, although it acknowledged that it had hired external advisers for the strategic review.</li>
<li>Siemens Gamesa's shares resumed trading and closed at €26.52, far from the €38.48 reached on 7 January (historical high).</li>
</ul>
Siemens Gamesa needs to step up changes to adapt to a rapidly evolving wind energy sector. Although Siemens Energy has control of the group's management, by holding the majority of Siemens Gamesa's capital, having 100% would give it total freedom to accelerate change.
There have already been some rumours of a possible takeover bid, the last one in December 2020, when it was discussed the interest of large Asian groups such as Shanghai Electric, and the Japanese conglomerate Mitsubishi, according to Expansion. These two companies reportedly approached Siemens in recent months to discuss the purchase of some Siemens Gamesa assets.
</div>
<div>
Siemens is already undergoing a deep business transformation and cost adjustment. Current prices (estimated multiples of 25.0x and 15.6x EV/EBITDA 2021e and 2022e respectively) already discount a scenario of strong growth and leave little room for pressure from higher supply costs or increased competition.
Siemens paid €20 per share (24% less than the current price) for the 8% it bought from Iberdrola in February 2020, and would not presumably be wiling to pay a high bid premium in case it decided to launch a bid for Siemens Gamesa. At current market prices (without assuming any premium), the amount of the possible takeover bid would amount to c. €5,900 mn euros (32.8% of the capitalization of Siemens Energy and 5.3% that of Siemens).
The stake in Siemens Gamesa represents c. 67.6% of the market cap of Siemens Energy. Siemens Gamesa provides about half of Siemens Energy's EBIT, which suggests that the other businesses of Siemens Energy are undervalued. Siemens Energy is 46.07% owned by Siemens.
I value Siemens Gamesa using a DCF model. My TP is €30.3/share, a 14.3% premium to the closing price on 18 May. Although I am positive on Siemens Gamesa, I do not believe that Siemens will launch a bid anytime soon.
</div>


On 18 May, economic daily Expansion said that Siemens AG (SIE GR) was planning to launch a delisting bid for Siemens Gamesa Renewable Energy, S.A. (SGRE SM).
The CNMV (National Securities Market Commission, the Spanish market watchdog) suspended Siemens Gamesa trading shortly after 9 a.m. and until 2:30 p.m. and asked Siemens to clarify whether it will launch an exclusion takeover bid for Gamesa.

Siemens Energy (ENR GR) explained in a note to the CNMV that it was conducting a "strategic review" of its entire portfolio of assets, and that Siemens Energy was not "currently" working on a delisting bid, although it acknowledged that it had hired external advisers for the strategic review.
Siemens Gamesa's shares resumed trading and closed at €26.52, far from the €38.48 reached on 7 January (historical high).

Siemens Gamesa needs to step up changes to adapt to a rapidly evolving wind energy sector. Although Siemens Energy has control of the group's management, by holding the majority of Siemens Gamesa's capital, having 100% would give it total freedom to accelerate change.
There have already been some rumours of a possible takeover bid, the last one in December 2020, when it was discussed the interest of large Asian groups such as Shanghai Electric, and the Japanese conglomerate Mitsubishi, according to Expansion. These two companies reportedly approached Siemens in recent months to discuss the purchase of some Siemens Gamesa assets.


Siemens is already undergoing a deep business transformation and cost adjustment. Current prices (estimated multiples of 25.0x and 15.6x EV/EBITDA 2021e and 2022e respectively) already discount a scenario of strong growth and leave little room for pressure from higher supply costs or increased competition.
Siemens paid €20 per share (24% less than the current price) for the 8% it bought from Iberdrola in February 2020, and would not presumably be wiling to pay a high bid premium in case it decided to launch a bid for Siemens Gamesa. At current market prices (without assuming any premium), the amount of the possible takeover bid would amount to c. €5,900 mn euros (32.8% of the capitalization of Siemens Energy and 5.3% that of Siemens).
The stake in Siemens Gamesa represents c. 67.6% of the market cap of Siemens Energy. Siemens Gamesa provides about half of Siemens Energy's EBIT, which suggests that the other businesses of Siemens Energy are undervalued. Siemens Energy is 46.07% owned by Siemens.
I value Siemens Gamesa using a DCF model. My TP is €30.3/share, a 14.3% premium to the closing price on 18 May. Although I am positive on Siemens Gamesa, I do not believe that Siemens will launch a bid anytime soon.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) were able to shrug off recent news of a more contagious Covid variant that popped-up in the UK. Additionally, Covid fears have done nothing to derail ongoing positive market dynamics. As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying opportunity. Actionable Themes in today's report: Services, Technology, Manufacturing, and Materials.

Broad global indexes (MSCI ACWI, ACWI ex-US, EAFE, and EM) were able to shrug off recent news of a more contagious Covid variant that popped-up in the UK. Additionally, Covid fears have done nothing to derail ongoing positive market dynamics. As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying opportunity. Actionable Themes in today's report: Services, Technology, Manufacturing, and Materials.

Global Equity Strategy: Support Levels Holding; Bullish Outlook Intact

Germany

Siemens AG is an engineering and manufacturing company. The Company focuses on areas of electrification, automation, and digitalization. Siemens also provides engineering solutions in automation and control, power, transportation, and medical diagnosis.

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Siemens (SIE GR)

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

Steven Holden

EDDA Healthcare Pre-IPO - RoboDoc - Has Been Around for a While but Is Just Getting the Robo Going

EDDA Healthcare and Technology Holding Limited (EDDA), offers innovative intelligent solutions to enable precision surgery. It aims to raise up to...

Sumeet Singh

Bioventix: A Rare Biotech Play with a Low-Risk, High-Return Model

Although it is not clear whether this bond proxy can offer a 20% total return at this level, I see a high chance for it to outperform the benchmark...

Steven Chen

Siemens/Siemens Gamesa: Bid Rumours

I value Siemens Gamesa using a DCF model. My TP is €30.3/share, 14.3% premium to closing price on 18 May. Although I am positive on SGRE, I do not...

Jesus Rodriguez Aguilar

Global Equity Strategy: Support Levels Holding; Bullish Outlook Intact

As long as support levels hold and market dynamics remain positive, our outlook remains bullish and we continue to view any weakness as a buying...

Vermilion Research

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