In today’s briefing:
- Another Reason To Like China Mobile (941 HK)
- Overlooked Trading Angle in K-New Deal Rebalancing Event: Two LONG SHORT Pairs to Watch
- Nvidia, TSMC, ASML Trading Monitor – TSMC & ASML Results Indicate Cycle Bottom 2Q23E for Leaders
- Taiwan Dual-Listings: TSMC ADR Premium Hit by Large 1-Period Drop, UMC Discount & Earnings This Week
- Weekly Deals Digest (23 Apr) – HKBN, Jiangnan, Lian Beng, Yuexiu Property, ZJLD, Mankind, Adicon
- Taiwan Short Squeeze Potential: Faraday, UMC, Transcend Media Latest Stocks to Watch
Another Reason To Like China Mobile (941 HK)
- In March, the HK Secretary for Financial Services announced a waiver of stamp duty on dual counter trading market making. In November, the Govt of HK gazetted a bill.
- HKEX launched plans in December. 9 large HK names announced in March they’d apply (Tencent, Kuaishou, Geely, BOC, Anta, AIA, China Resources Beer, Bidu, HKEX). Six more in April.
- All the announcements are similar. But one on 21 April caught my eye because it is a big H/A with strong southbound support. That’s China Mobile (941 HK).
Overlooked Trading Angle in K-New Deal Rebalancing Event: Two LONG SHORT Pairs to Watch
- Two pairs of constituent changes marked in squares in INTERNET and GAME may offer meaningful trading opportunities: Seojin System IN / Ahnlab OUT and Com2us IN / Doubleugames OUT.
- Along with TIGER ETF, stealth index funds follow these indices. So, constituent changes in INTERNET and GAME create a flow impact of 0.3~0.6x DTV, even not in the Top 3.
- Also, INTERNET and GAME have less passive flow impact degradation risk due to momentum trading flows compared to BATTERY and BIO.
Nvidia, TSMC, ASML Trading Monitor – TSMC & ASML Results Indicate Cycle Bottom 2Q23E for Leaders
- TSMC and ASML reported results last week, with both companies beating consensus earnings expectations.
- TSMC and ASML both expect their historically high margins to persist and have both shown a major decline in inventory levels.
- TSMC expects utilization to bottom in 2Q23E and improve thereafter; which we believe is strong indication of the cycle bottoming for leaders. TSMC however sees the overall industry taking longer.
Taiwan Dual-Listings: TSMC ADR Premium Hit by Large 1-Period Drop, UMC Discount & Earnings This Week
- TSMC’s ADR spread just experienced one of its largest one-period drops in recent history. The ADRs are now trading at a 2.3% premium after a 4.2% drop.
- UMC ADR’s are trading at a -1.1% discount to their Taiwan shares. The spread has mostly been trading in negative territory over the last month. UMC earnings coming this week.
- ASE ADR’s are trading at a 4.7% premium. ASE’s Taiwan shares are down 10% since end-March, compared to a 5% drop for the TAIEX Semiconductor Index.
Weekly Deals Digest (23 Apr) – HKBN, Jiangnan, Lian Beng, Yuexiu Property, ZJLD, Mankind, Adicon
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Yuexiu Property (123 HK) rights issue and ADICON Holdings Limited (ADI HK), ZJLD Group (ZJLD HK), Mankind Pharma (6596876Z IN) IPOs.
- Event-Driven developments – HKBN Ltd (1310 HK), Jiangnan (1366 HK), Essential Metals (ESS AU), Healius (HLS AU), Lian Beng (LBG SP), Oishi Group PCL (OISHI TB).
Taiwan Short Squeeze Potential: Faraday, UMC, Transcend Media Latest Stocks to Watch
- The divergence between the Philly Semiconductor Index and the Taiwan Market has continued despite both falling moderately.
- Latest short interest data to note — Faraday Technology experienced a surge in short interest ahead of its earnings this week. UMC has high short interest and results this week.
- Institutionally underheld stock Transcend Media has experienced rising institutional ownership recently and has a very high short ratio.
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