Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Quiddity Weekly H/​​A: Share Spreads & Southbound Flows [Week to 12 Oct 2018]

Quiddity Weekly H/​A: Spreads & Southbound Flows [Week to 20 Jul 2018]

Quiddity Weekly H/A: Spread Monitor & Southbound Flows [Week to 29 Jun 2018]

Quiddity Advisors

Event-Driven

Cosco Shipping Development / Event-Driven

<p><em>This insight is an H/A Spread Monitor Project offering a brief look at recent changes in H-Share/A-Share spreads, Southbound flow and impact, and where the spreads are trading within their own historical ranges.</em></p>
<p><em>Generically, H/A spreads are still trading just off 6-month wides. Spreads which are closer to the wide end of their 52-week range include <a href="https://www.smartkarma.com/entities/463" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (H) (6030 HK)</a>, <a href="https://www.smartkarma.com/entities/17576" target="_blank" data-smartkarma-citation="entities:17576:1" rel="noopener">Sinopec Shanghai Petrochemical (338 HK)</a>, <a href="https://www.smartkarma.com/entities/8045" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a>, with the most dramatic being <a href="https://www.smartkarma.com/entities/585" target="_blank" data-smartkarma-citation="entities:585:1" rel="noopener">China Shipping Container H (2866 HK)</a>. The two biggest net Southbound flows this past week in HKD terms were both buys - <a href="https://www.smartkarma.com/entities/516" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">Hsbc Holdings (5 HK)</a> again leading the top inflows and <a href="https://www.smartkarma.com/entities/127" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Automobile Holdings (175 HK)</a> seeing even stronger inflows than last week, with 16% of Hong Kong volume covered by southbound net buying. </em></p>
<p><em>Buying in HSBC may have been because the share price continued to fall (-3.3% on the week, but even worse Friday morning) and southbound investors wanted to buy the dip, but it could have had something to do with news out earlier in the week that HSBC wanted to become the first company to issue Shanghai-listed CDRs under the London-Shanghai Stock Connect mechanism mooted to start operations later this year. </em></p>
<div>
<h2>The Nitty-Gritty Details Follow</h2>
</div>
<ol>
<li>There are five sets of data for now:<br>1.   HK-Shanghai/Shenzhen Connect Southbound Turnover and Net Buying vs Indices, HKEx Turnover<br>2.   Top 20 Net Southbound buys and sells over the last 5 days<br>3.   H-Share/A-Share Discounts, Changes in Discount over 1 and 4 wks, Changes in Southbound Flow<br>4.   Southbound Flow as a % of Volume and Float on All Eligible Stocks<br>5.   H-Share/A-Share Sector Discount Ranges and Averages Charted Over the Last 12 months </li>
</ol>
<div>
<h2>Historical Southbound Flows:  Outright &amp; vs HKEx Turnover</h2>
</div>
<p>Net Southbound <em>outflows</em> since April 1st across Shanghai and Shenzhen Southbound total HKD 35.6bn. October is seeing inflows after small inflows in September - now +HKD 7.9bn MTD - <em><strong>up HKD 2.2bn on the week.</strong></em></p>
<div class="content-highlight">
<p><em>Shenzhen saw net selling every day this week, totalling HKD 1.0bn of outflows for the week, and Shanghai Southbound saw net buying 3 out of four trading days this week, with net inflows to HK of HKD 3.2bn.</em></p>
</div>
<div class="content-remarks">
<p>Note: The charts below NOW show <em>both</em> HK-Shanghai and HK-Shenzhen Connect Southbound Flows. </p>
</div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/067/231/original/Screen%20Shot%202018-10-20%20at%204.06.32%20PM.png?1540022834" class="editor-image img-responsive" data-smartkarma-image-id="67231"></figure>
<div style="text-align: left;" class="content-caption">source data: HKEx, Bloomberg, calculations Travis Lundy</div>
<p><em>If you would like to see specific flows over time, or specific H/A spreads against their sector ranges/averages, don't hesitate to enquire (message or discussion post). I will post them in the Discussion section below.</em></p>

This insight is an H/A Spread Monitor Project offering a brief look at recent changes in H-Share/A-Share spreads, Southbound flow and impact, and where the spreads are trading within their own historical ranges.
Generically, H/A spreads are still trading just off 6-month wides. Spreads which are closer to the wide end of their 52-week range include Citic Securities (H) (6030 HK), Sinopec Shanghai Petrochemical (338 HK), Shanghai Fosun Pharmaceutical (Group) (2196 HK), with the most dramatic being China Shipping Container H (2866 HK). The two biggest net Southbound flows this past week in HKD terms were both buys - Hsbc Holdings (5 HK) again leading the top inflows and Geely Automobile Holdings (175 HK) seeing even stronger inflows than last week, with 16% of Hong Kong volume covered by southbound net buying. 
Buying in HSBC may have been because the share price continued to fall (-3.3% on the week, but even worse Friday morning) and southbound investors wanted to buy the dip, but it could have had something to do with news out earlier in the week that HSBC wanted to become the first company to issue Shanghai-listed CDRs under the London-Shanghai Stock Connect mechanism mooted to start operations later this year. 

The Nitty-Gritty Details Follow


There are five sets of data for now: 1.   HK-Shanghai/Shenzhen Connect Southbound Turnover and Net Buying vs Indices, HKEx Turnover 2.   Top 20 Net Southbound buys and sells over the last 5 days 3.   H-Share/A-Share Discounts, Changes in Discount over 1 and 4 wks, Changes in Southbound Flow 4.   Southbound Flow as a % of Volume and Float on All Eligible Stocks 5.   H-Share/A-Share Sector Discount Ranges and Averages Charted Over the Last 12 months 


Historical Southbound Flows:  Outright &amp; vs HKEx Turnover

Net Southbound outflows since April 1st across Shanghai and Shenzhen Southbound total HKD 35.6bn. October is seeing inflows after small inflows in September - now +HKD 7.9bn MTD - up HKD 2.2bn on the week.

Shenzhen saw net selling every day this week, totalling HKD 1.0bn of outflows for the week, and Shanghai Southbound saw net buying 3 out of four trading days this week, with net inflows to HK of HKD 3.2bn.


Note: The charts below NOW show both HK-Shanghai and HK-Shenzhen Connect Southbound Flows. 


source data: HKEx, Bloomberg, calculations Travis Lundy
If you would like to see specific flows over time, or specific H/A spreads against their sector ranges/averages, don't hesitate to enquire (message or discussion post). I will post them in the Discussion section below.

Guangzhou Baiyunshan Pharmaceutical Holdings (874 HK)

Guangzhou Baiyunshan Pharmaceutical Holdings

Quiddity Weekly H/​​​A: Share Spreads & Southbound Flows [Week to 19 Oct 2018]

Cosco Shipping Development

Quiddity Weekly H/​​​A: Share Spreads & Southbound Flows [Week to 19 Oct 2018]

Quiddity Weekly H/A: Share Spreads & Southbound Flows [Week to 19 Oct 2018]