Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares</li>
<li>India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption </li>
</ul>


A review of recent events/data impacting our investment themes or outlook
The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares
India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption 


Overview #14 - The Emperor Has No Clothes Moment

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Thematic (Sector/Industry)

<ul><li>Hello! I went on a short hike this weekend, which always seems to cause something to change.</li><li>What changed was that we are seeing a very large leveraged unwind in the market, driven by the BOJ's hike in interest rates.</li><li>Let me write out the series of events. First and foremost, last week, we saw some of the first macro jitters. The CPI came to light, which was viewed as positive. But then NFP showed a bit of weakness.</li></ul>

Hello! I went on a short hike this weekend, which always seems to cause something to change.What changed was that we are seeing a very large leveraged unwind in the market, driven by the BOJ's hike in interest rates.Let me write out the series of events. First and foremost, last week, we saw some of the first macro jitters. The CPI came to light, which was viewed as positive. But then NFP showed a bit of weakness.

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

Index Rebalance

<ul>
<li>Constituent changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> and capping changes will result in a round-trip trade of US$15.5bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.</li>
<li>The Select Sector index trackers and S&amp;P500 Equal Weight trackers will need to buy the adds to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P500 INDEX</a> and sell the deletes, further increasing flow for the stocks.</li>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-vectors-semiconductor" target="_blank" data-smartkarma-citation="entities:32807:1" rel="noopener">VanEck Vectors Semiconductor (SMH US)</a> ETF will be selling <a href="https://www.smartkarma.com/entities/broadcom-inc" target="_blank" data-smartkarma-citation="entities:998:1" rel="noopener">Broadcom (AVGO US)</a> at the same time as the Select Sector and S&amp;P500 Equal Weight Index trackers.</li>
</ul>


Constituent changes to the S&amp;P 500 INDEX and capping changes will result in a round-trip trade of US$15.5bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.
The Select Sector index trackers and S&amp;P500 Equal Weight trackers will need to buy the adds to the S&amp;P500 INDEX and sell the deletes, further increasing flow for the stocks.
The VanEck Vectors Semiconductor (SMH US) ETF will be selling Broadcom (AVGO US) at the same time as the Select Sector and S&amp;P500 Equal Weight Index trackers.


Select Sector Indices and S&P Equal Weight Rebalance: US$15.5bn Flow Post Capping

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>More evidence emerging of a regime change in global markets</li>
<li>What is different this time around from previous bear markets</li>
</ul>


A review of recent events/data impacting our investment themes or outlook
More evidence emerging of a regime change in global markets
What is different this time around from previous bear markets


Overview #19 – Don’t Buy the D@nm Dip!

<ul>
<li>There are no constituent changes for the <a href="https://www.smartkarma.com/entities/vaneck-vectors-semiconductor" target="_blank" data-smartkarma-citation="entities:32807:1" rel="noopener">VanEck Vectors Semiconductor (SMH US)</a> ETF in March but there are a lot of float and capping changes.</li>
<li>Estimated one-way turnover is 3% resulting in a round-trip trade of US$1.2bn. Impact on the stocks is small given they are highly liquid.</li>
<li>There is expected to be US$600m to sell in <a href="https://www.smartkarma.com/entities/broadcom-inc" target="_blank" data-smartkarma-citation="entities:998:1" rel="noopener">Broadcom</a> from the <a href="https://www.smartkarma.com/entities/technology-select-sector-spdr" target="_blank" data-smartkarma-citation="entities:27543:1" rel="noopener">Technology Select Sector</a> and <a href="https://www.smartkarma.com/entities/invesco-s-p-500-equal-weight-e" target="_blank" data-smartkarma-citation="entities:32932:1" rel="noopener">Invesco S&amp;P500 Equal Weight</a> ETFs at the same time as the selling from <a href="https://www.smartkarma.com/entities/vaneck-vectors-semiconductor" target="_blank" data-smartkarma-citation="entities:32807:1" rel="noopener">VanEck Vectors Semiconductor</a>.</li>
</ul>


There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in March but there are a lot of float and capping changes.
Estimated one-way turnover is 3% resulting in a round-trip trade of US$1.2bn. Impact on the stocks is small given they are highly liquid.
There is expected to be US$600m to sell in Broadcom from the Technology Select Sector and Invesco S&amp;P500 Equal Weight ETFs at the same time as the selling from VanEck Vectors Semiconductor.


MV US Listed Semiconductor 25 Index Rebalance: Round-Trip Trade Over US$1.2bn

United States

VanEck Vectors Semiconductor is an exchange-traded fund incorporated in the USA. The Fund seeks to track the performance results of the MVIS US Listed Semiconductor 25 Index. The fund invests in the largest and most liquid companies listed in the US, which are active in the semiconductor sector. The E-TF will not hold more than 20% in any one security.

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VanEck Vectors Semiconductor (SMH US)

Overview #14 - The Emperor Has No Clothes Moment

A review of recent events/data impacting our investment themes and outlook. We look at the potential implications of Deepseek on Chinese tech...

Rikki Malik

MARKETS AND SEMICONDUCTORS

Hello! I went on a short hike this weekend, which always seems to cause something to change. What changed was that we are seeing a very large...

Fabricated Knowledge

Select Sector Indices and S&P Equal Weight Rebalance: US$15.5bn Flow Post Capping

Constituent changes to the S&P 500 Index and capping changes will result in a round-trip trade of US$15.45bn across the Select Sector indices and...

Brian Freitas

Overview #19 – Don’t Buy the D@nm Dip!

A review of recent events/data impacting our investment themes and outlook. How will the incoming bear market in the US impact Asia

Rikki Malik

MV US Listed Semiconductor 25 Index Rebalance: Round-Trip Trade Over US$1.2bn

No constituent changes but big capping changes. Estimated one-way turnover is 3% resulting in a round-trip trade of US$1.2bn. Broadcom will have...

Brian Freitas

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