Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.</li>
<li>Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land - net buying of SOEs, selling of tech.</li>
<li>Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). </li>
</ul>


A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.
Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land - net buying of SOEs, selling of tech.
Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). 


HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

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

<ul>
<li>On 27 May, the SFC and CSRC announced that they had agreed in principle to the inclusion of Exchange Traded Funds by mainland and Hong Kong exchanges in Stock Connect.</li>
<li>We currently see 6 ETF being eligible for inclusion in Southbound Connect and another couple that could be included at a subsequent review.</li>
<li>Increased mainland participation in the ETF market could lead to sustained premium/discount on the ETFs and this will be transmitted to index futures and affect pricing of short-term/long-term repo.</li>
</ul>


On 27 May, the SFC and CSRC announced that they had agreed in principle to the inclusion of Exchange Traded Funds by mainland and Hong Kong exchanges in Stock Connect.
We currently see 6 ETF being eligible for inclusion in Southbound Connect and another couple that could be included at a subsequent review.
Increased mainland participation in the ETF market could lead to sustained premium/discount on the ETFs and this will be transmitted to index futures and affect pricing of short-term/long-term repo.


ETFs in Stock Connect: Criteria & Potential Southbound Inclusions

Agricultural Bank Of China / Event-Driven

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$9.3bn this week, on smallish two-way volumes. Banks were a big buy.</li>
<li>It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying...</li>
<li>But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.</li>
</ul>


SOUTHBOUND was again a net buyer, for HK$9.3bn this week, on smallish two-way volumes. Banks were a big buy.
It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying...
But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.


HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 28th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for CCB (939 HK), ICBC (1398 HK), Tencent (700 HK).</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 28th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for CCB (939 HK), ICBC (1398 HK), Tencent (700 HK).


Hong Kong Connect Flows (Jun 28th): CCB, ICBC, Tencent

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$24.1bn this week, on smallish two-way volumes. Banks, Tech, Energy, and Materials all saw inflows.</li>
<li>It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying...</li>
<li>But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.</li>
</ul>


SOUTHBOUND was again a net buyer, for HK$24.1bn this week, on smallish two-way volumes. Banks, Tech, Energy, and Materials all saw inflows.
It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying...
But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.


HK Connect SOUTHBOUND Flows (To 21 June 2024); Every Day A Net Buy; Banks, Energy, and Utes

Hong Kong

Tracker Fund of Hong Kong (TraHK) is an ETF registered in Hong Kong. The Fund seeks to provide investment results that closely correspond to the performance of the Hang Seng Index through investing all, or substantially all, of the Fund's assets in Index Shares in substantially the same weightings as they appear in the Hang Seng Index.

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Tracker Fund of Hong Kong (2800 HK)

HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

SOUTHBOUND flows were positive on the week but most of the net buying was in the big two ETFs. The trend of buying low PER high div SOEs continues....

Travis Lundy

ETFs in Stock Connect: Criteria & Potential Southbound Inclusions

SFC & CSRC have agreed in principle to the inclusion of HKEX listed ETFs in Southbound Connect. We see 6 ETFs as eligible for inclusion. There will...

Brian Freitas

HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate

SOUTHBOUND saw its 4th net sell day since Chinese New Year last week. But the week ended up again. That is ~20 weeks in a row. But SOUTHBOUND...

Travis Lundy

Hong Kong Connect Flows (Jun 28th): CCB, ICBC, Tencent

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for CCB (939 HK), ICBC (1398 HK), Tencent (700 HK).

Ke Yan, CFA, FRM

HK Connect SOUTHBOUND Flows (To 21 June 2024); Every Day A Net Buy; Banks, Energy, and Utes

SOUTHBOUND HK Connect saw its 20th straight week of net inflows. Net vs Gross flows continue to be big. Banks, Energy, Materials, and Utilities all...

Travis Lundy

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