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

QUICK NOTE: China Brokers Share Issuance: CITIC Secs gets CSRC OK to issue US$6bn

Thematic (Sector/Industry)

Hong kong Financials / Thematic (Sector/Industry)

CITIC Securities last night announced that it had formed a 'Strategic Cooperation Framework Agreement' with China's National Social Security Fund, "pursuant to which the Company and NSSF will establish comprehensive strategic business cooperations in various financial services areas." To cement the three year 'cooperation' deal, CITIC Securities is offering NSSF &gt;5% of the company at a 45% discount to the last month's average H-share price (or a 57% discount to the current A-share level). CITIC will, in turn, use the capital for the same thing they will use the prospective H-share issuance (announced and approved earlier in the year).The prospective H-Share issuance (discussed <a href="http://www.smartkarma.com/insights/quick-note-china-brokers-share-issuance-citic-secs-gets-csrc-ok-to-issue-us-6bn" target="_blank">here</a>) has been reduced in size to accommodate this placement to the NSSF.There are governance and fiduciary issues here which bear a closer look. It is not clear, from a governance perspective, that sovereign wealth funds should be making large locked-up investments in private company shares - at significantly better terms than are offered to other investors - in return for the promise of doing business with that company. Investors should look closely at the implications of the NSSF deal. They get to vote on it sometime soonish.

CITIC Securities last night announced that it had formed a 'Strategic Cooperation Framework Agreement' with China's National Social Security Fund, "pursuant to which the Company and NSSF will establish comprehensive strategic business cooperations in various financial services areas." To cement the three year 'cooperation' deal, CITIC Securities is offering NSSF &gt;5% of the company at a 45% discount to the last month's average H-share price (or a 57% discount to the current A-share level). CITIC will, in turn, use the capital for the same thing they will use the prospective H-share issuance (announced and approved earlier in the year).The prospective H-Share issuance (discussed here) has been reduced in size to accommodate this placement to the NSSF.There are governance and fiduciary issues here which bear a closer look. It is not clear, from a governance perspective, that sovereign wealth funds should be making large locked-up investments in private company shares - at significantly better terms than are offered to other investors - in return for the promise of doing business with that company. Investors should look closely at the implications of the NSSF deal. They get to vote on it sometime soonish. 

Greaterchina Professional Services (8193 HK)

Southwest Securities Intl Securities (812 HK)

Orient Securities Intl Holdings (8001 HK)

China Financial International Investment (721 HK)

China Ding Yi Feng Holdings Limited (612 HK)

Freeman FinTech Corporation Limited (279 HK)

China Merchants China Direct Investments (133 HK)

China Medical & HealthCare Group Limited (383 HK)

China Smarter Energy Group Holdings (1004 HK)

China Development Bank Intrntnl Invstmnt (1062 HK)

Cosmopolitan International Holdings Limited (120 HK)

Cosmopolitan International Holdings Limited

Oi Wah Pawnshop Credit Holdings (1319 HK)

Haitong International Securities Group (665 HK)

China Development Bank Financial Leasing (1606 HK)

QuickNote: CITIC Secs to sell NSSF H-shares at HUGE discount - Strategic? Hmmm....