Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>At long last, Hang Seng Indexes (HSIL) has released the consultation paper on the "Proposal to enhance the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market". Market participants have until 24 January to submit their views to the HSIL.</p><p>There are 5 main proposals in the consultation paper:</p><ol>
<li>Select constituents by industry group based on a target coverage for each industry group</li>
<li>Increase the number of constituents to between 65 to 80</li>
<li>Removal of the Minimum Listing History requirement for eligible candidates</li>
<li>Maintain a certain number of constituents classified as Hong Kong companies to sustain the level of representation of Hong Kong portion in the index</li>
<li>Lower the weighting cap of individual constituents from 10% to 8%, and increase the weighting cap of WVRs and Secondary Listings from 5% to 8%.</li>
</ol><p>The simulated one-way turnover of increasing the number of constituents to between 65-80 is estimated at 15-20% and HSIL proposes to implement the transition to the enhanced methodology within one year.</p><p>In this Insight, we look at the impact on the index from the proposed changes.</p>

At long last, Hang Seng Indexes (HSIL) has released the consultation paper on the "Proposal to enhance the Hong Kong Hang Seng Index (HSI INDEX) as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market". Market participants have until 24 January to submit their views to the HSIL.There are 5 main proposals in the consultation paper:
Select constituents by industry group based on a target coverage for each industry group
Increase the number of constituents to between 65 to 80
Removal of the Minimum Listing History requirement for eligible candidates
Maintain a certain number of constituents classified as Hong Kong companies to sustain the level of representation of Hong Kong portion in the index
Lower the weighting cap of individual constituents from 10% to 8%, and increase the weighting cap of WVRs and Secondary Listings from 5% to 8%.
The simulated one-way turnover of increasing the number of constituents to between 65-80 is estimated at 15-20% and HSIL proposes to implement the transition to the enhanced methodology within one year.In this Insight, we look at the impact on the index from the proposed changes.

HSI Market Consultation - Wide Ranging Changes Proposed

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

Equity Bottom-Up

<p>In this analysis, we screen for stocks in the Global universe that are showing signs of a turnaround.  We first look for depressed stocks, those that have fallen from high ownership levels to low ownership levels over the past decade.  We then look for stocks seeing positive momentum over the last 6-months.  A total of just 6 stocks satisfy our screening criteria, led by <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> and <a href="https://www.smartkarma.com/entities/ubs-group-ag-e82c0d58-83f2-4e12-bcb6-976202a4e200" target="_blank" data-smartkarma-citation="entities:27909:1" rel="noopener">UBS Group AG (UBSG SW)</a> <br><br><em>Analysis taken from our Global research, covering 386 active global equity funds with AUM of $850bn.</em></p>

In this analysis, we screen for stocks in the Global universe that are showing signs of a turnaround.  We first look for depressed stocks, those that have fallen from high ownership levels to low ownership levels over the past decade.  We then look for stocks seeing positive momentum over the last 6-months.  A total of just 6 stocks satisfy our screening criteria, led by Freeport Mcmoran (FCX US) and UBS Group AG (UBSG SW)   Analysis taken from our Global research, covering 386 active global equity funds with AUM of $850bn.

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

Alibaba Group Holding  / Equity Capital Markets

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<p>In the first section of this note we review key themes of the last year within our regular coverage, which includes regional Logistics, Transportation, and Travel. We also measure year to date performance of some of the individual stocks we've closely tracked in 2020. </p>
<p>The second section of this note is a list of themes and ideas we expect to drive share price performance in Asian Logistics, Transportation, and Travel over the next 12 months. It concludes with some suggested 2021 Long / Short pair trade ideas in each of these three segments. </p>
<p>The third and final section of this note highlights several potential high-profile IPOs in the broader Asian Logistics space. Most of these potential deals are linked to large, well-known Chinese eCommerce fulfillment and "mobility" companies. </p>




In the first section of this note we review key themes of the last year within our regular coverage, which includes regional Logistics, Transportation, and Travel. We also measure year to date performance of some of the individual stocks we've closely tracked in 2020. 
The second section of this note is a list of themes and ideas we expect to drive share price performance in Asian Logistics, Transportation, and Travel over the next 12 months. It concludes with some suggested 2021 Long / Short pair trade ideas in each of these three segments. 
The third and final section of this note highlights several potential high-profile IPOs in the broader Asian Logistics space. Most of these potential deals are linked to large, well-known Chinese eCommerce fulfillment and "mobility" companies. 

TRACKING TRAFFIC/ 2020 Review | 2021 Preview | Potential IPOs in Logistics, Transportation & Travel

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p><a href="https://www.smartkarma.com/entities/starhub-ltd" target="_blank" data-smartkarma-citation="entities:119:1" rel="noopener">Starhub Ltd (STH SP)</a> pay-TV has been the problem child alongside the Mobile segment due to overcrowded space, led to a higher churn in the number of subscribers coupled with a lower ARPU, followed by a decline in the share price. <a href="https://www.smartkarma.com/entities/the-walt-disney-co" target="_blank" data-smartkarma-citation="entities:15439:1" rel="noopener">The Walt Disney Co (DIS US)</a> + coming to Singapore will cause a further decline in the Pay-TV ARPU. </p><p>Starhub's Enterprise Business which recently has gained momentum and for the first time in almost 3 years, its revenue contribution almost equaled Mobile's. As a result, the revenue in Q3 2020 went up 2% compared to the average of 1H 2020. </p><div class="content-highlight"><p>After underperforming Singtel by 20% for the past 3 years, it is now maybe the time for Starhub to play catch up with the Enterprise Business finally is taking off. With a 3.6% higher yield than Singtel, Starhub sounds like a bargain. </p></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/625/original/image_25922309421608537778217.png?1608537778" class="editor-image img-responsive" data-smartkarma-image-id="179625"></figure><div class="content-remarks"><p>source: Capital IQ</p></div>

Starhub Ltd (STH SP) pay-TV has been the problem child alongside the Mobile segment due to overcrowded space, led to a higher churn in the number of subscribers coupled with a lower ARPU, followed by a decline in the share price. The Walt Disney Co (DIS US) + coming to Singapore will cause a further decline in the Pay-TV ARPU. Starhub's Enterprise Business which recently has gained momentum and for the first time in almost 3 years, its revenue contribution almost equaled Mobile's. As a result, the revenue in Q3 2020 went up 2% compared to the average of 1H 2020. After underperforming Singtel by 20% for the past 3 years, it is now maybe the time for Starhub to play catch up with the Enterprise Business finally is taking off. With a 3.6% higher yield than Singtel, Starhub sounds like a bargain. source: Capital IQ

Starhub (STH): Disney Is Coming but Enterprise Is Gaining Momentum

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Meta Platforms (Facebook) / Equity Bottom-Up

<p>Sheesh! The media pays attention to the faux antitrust lawsuits that have been sprouting the past month against the tech platforms…none of which will actually alter the respective competitive positions for Amazon, Google, Facebook, and Apple.</p><p>However, Apple’s once delayed but now imminent rollout of “opt-in” for ad-tracking seems to be an actual near term threat for Facebook given Facebook’s vociferous responses over the past week or two. Or is it?</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

Sheesh! The media pays attention to the faux antitrust lawsuits that have been sprouting the past month against the tech platforms…none of which will actually alter the respective competitive positions for Amazon, Google, Facebook, and Apple.However, Apple’s once delayed but now imminent rollout of “opt-in” for ad-tracking seems to be an actual near term threat for Facebook given Facebook’s vociferous responses over the past week or two. Or is it?Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

HSI Market Consultation - Wide Ranging Changes Proposed

HSIL has announced the market consultation for the Hang Seng Index. The conclusions should be announced in February. If the market agrees to most...

Brian Freitas

Global Turnaround Stocks

Both UBS and Freeport-McMoran top our list as stocks with depressed fund ownership levels and rising momentum among active Global managers.

Steven Holden

TRACKING TRAFFIC/ 2020 Review | 2021 Preview | Potential IPOs in Logistics, Transportation & Travel

In this year-end piece we review key themes of 2020, look forward to emerging trends of 2021, and highlight some exciting companies that could...

Tracking Traffic

Starhub (STH): Disney Is Coming but Enterprise Is Gaining Momentum

Starhub's Enterprise Business finally is taking off, almost equal to the Mobile. With a 3.6% higher yield than Singtel, Starhub sounds like a bargain.

Henry Soediarko

Facebook: Apple Threat Fact or Fiction?

Facebook has been complaining publicly the past two weeks about how Apple's impending privacy restrictions will hurt small businesses. We doubt it...

Aaron Gabin

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