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

Thoughts on Amazon –What Does Its Valuation Tells Us?

Netflix & Amazon Expand in Korea – Not a Coincidence

Okja: The Fight Between Netflix Vs. CJ CGV

Quiddity Advisors

Thematic (Sector/Industry)

Japan Consumer discretionary / Thematic (Sector/Industry)

Late in October 2018, various Chinese media sources reported that the Shanghai Stock Exchange and the Tokyo Stock Exchange operated by <a href="https://www.smartkarma.com/entities/11266" target="_blank" data-smartkarma-citation="entities:11266:1">Japan Exchange Group (8697 JP)</a> were planning on cross-listing ETFs, with the deal cemented when Japan Prime Minister Abe met with Chinese President Xi Jinping in what was the first official visit by a Japanese PM to China in seven years.That was the MOU. Early last week there were news articles previewing the news, and a couple of days ago we got an <a href="https://www.jpx.co.jp/english/corporate/news/news-releases/0060/b5b4pj000002sy9v-att/outline01.pdf" target="_blank">announcement</a> from the TSE with a small description of the agreement signed (with no small ceremony in Shanghai). <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/085/751/original/Screenshot%202019-04-24%20at%204.55.56%20PM.png?1556096179" class="editor-image img-responsive" data-smartkarma-image-id="85751"></figure><div style="text-align: left;" class="content-caption">data source: JPX announcement</div>The basic construct of how a China-based investor would see it is that an ETF would be listed in Shanghai - let's call it the Shanghai Nomura TOPIX ETF - and that ETF would put at least 90% of its AUM in an ETF already listed on the Tokyo Stock Exchange - say <a href="https://www.smartkarma.com/entities/22657" target="_blank" data-smartkarma-citation="entities:22657:1">Nomura ETF Topix (1306 JP)</a>.The China-based investor trading on the Shanghai Stock Exchange would simply buy shares in this "Shanghai Nomura TOPIX ETF" (which is used as hypothetical example) using RMB in their account. The Shanghai Nomura TOPIX ETF would trade in RMB prices all day long, tracking the RMB-denominated performance of the TOPIX Index, more or less. When the Shanghai investor wanted to buy more, they'd spend RMB to buy a Chinese ETF holding a Japanese ETF. When they sell, they will get RMB back. For a potential Japanese investor, they could buy a TSE-traded Japanese jurisdiction ETF which held a Chinese ETF, and they'd get yen pricing in a domestic brokerage account, Japanese-language documentation and support, but underlying Shanghai index exposure.The actual dynamics of how this will work is interesting, and tells you a bit about how this might work compared to how the Hong Kong-Shanghai Connect worked in its early stages.It is not clear when this link will open, but Japanese articles out prior to the official announcement suggested that because all the MOUs between the relevant oversight bodies have been signed, the link will be operational "this year" and possibly as early as May 2019.

Late in October 2018, various Chinese media sources reported that the Shanghai Stock Exchange and the Tokyo Stock Exchange operated by Japan Exchange Group (8697 JP) were planning on cross-listing ETFs, with the deal cemented when Japan Prime Minister Abe met with Chinese President Xi Jinping in what was the first official visit by a Japanese PM to China in seven years.That was the MOU. Early last week there were news articles previewing the news, and a couple of days ago we got an announcement from the TSE with a small description of the agreement signed (with no small ceremony in Shanghai). data source: JPX announcementThe basic construct of how a China-based investor would see it is that an ETF would be listed in Shanghai - let's call it the Shanghai Nomura TOPIX ETF - and that ETF would put at least 90% of its AUM in an ETF already listed on the Tokyo Stock Exchange - say Nomura ETF Topix (1306 JP).The China-based investor trading on the Shanghai Stock Exchange would simply buy shares in this "Shanghai Nomura TOPIX ETF" (which is used as hypothetical example) using RMB in their account. The Shanghai Nomura TOPIX ETF would trade in RMB prices all day long, tracking the RMB-denominated performance of the TOPIX Index, more or less. When the Shanghai investor wanted to buy more, they'd spend RMB to buy a Chinese ETF holding a Japanese ETF. When they sell, they will get RMB back. For a potential Japanese investor, they could buy a TSE-traded Japanese jurisdiction ETF which held a Chinese ETF, and they'd get yen pricing in a domestic brokerage account, Japanese-language documentation and support, but underlying Shanghai index exposure.The actual dynamics of how this will work is interesting, and tells you a bit about how this might work compared to how the Hong Kong-Shanghai Connect worked in its early stages.It is not clear when this link will open, but Japanese articles out prior to the official announcement suggested that because all the MOUs between the relevant oversight bodies have been signed, the link will be operational "this year" and possibly as early as May 2019.

Japan & China Cross-Listing of ETFs Could Be Interesting