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

Rikki Malik

Thematic (Sector/Industry)

<ul>
<li>The stealth bull market in HK listed Chinese banks continues.</li>
<li>While the negatives are well known, the positives are underappreciated</li>
<li>We tweak the basket of bank stocks after they report Q1 results</li>
</ul>


The stealth bull market in HK listed Chinese banks continues.
While the negatives are well known, the positives are underappreciated
We tweak the basket of bank stocks after they report Q1 results


China’s Banks: The Quiet Bull Market No One’s Watching

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Agricultural Bank Of China / Event-Driven

<ul>
<li>SOUTHBOUND was a net buyer this week. Over five days, it was +HK$12.5bn on high gross volume, but all of that net buying was on <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> became SOUTHBOUND-eligible on Tuesday, and mainland buyers bought US$2.1bn of BABA shares, more than total SOUTHBOUND net buys.</li>
<li>Gross volumes were highest in months. This was a big week. Even bigger than just BABA. After BABA the story was banks buying. </li>
</ul>


SOUTHBOUND was a net buyer this week. Over five days, it was +HK$12.5bn on high gross volume, but all of that net buying was on Alibaba Group Holding (9988 HK). 

Alibaba Group Holding (9988 HK) became SOUTHBOUND-eligible on Tuesday, and mainland buyers bought US$2.1bn of BABA shares, more than total SOUTHBOUND net buys.
Gross volumes were highest in months. This was a big week. Even bigger than just BABA. After BABA the story was banks buying. 


HK Connect SOUTHBOUND Flows (To 13 Sep 2024); Weak Data, Weak Markets, but BABA and Banks!

<ul>
<li>SOUTHBOUND was again a net buyer, for HK$9.3bn this week, on smallish two-way volumes. Banks were a big buy.</li>
<li>It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying...</li>
<li>But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.</li>
</ul>


SOUTHBOUND was again a net buyer, for HK$9.3bn this week, on smallish two-way volumes. Banks were a big buy.
It is not clear how much of this is H/A discounts, expected dividend tax removal, shareholder return KPIs for SOE CEOs, upcoming Third Plenum policy, or national team buying...
But valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows - national team and otherwise.


HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate

Cross Asset Strategy

<ul>
<li>Are the recent announcements blocking Chinese investment a sea change in US/China relations?</li>
<li>Are we wrong about Trump’s willingness to do a deal with China?</li>
<li>Is it wrong to maintain a bullish stance on HK-listed China stocks?</li>
</ul>


Are the recent announcements blocking Chinese investment a sea change in US/China relations?
Are we wrong about Trump’s willingness to do a deal with China?
Is it wrong to maintain a bullish stance on HK-listed China stocks?


Will Recent US Announcements Derail the HK/China Bull Market?

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.</li>
<li>Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.</li>
<li>Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.</li>
</ul>


Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.
Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.
Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.


China

Agricultural Bank of China Limited provides a full range of commercial banking services. The Banks services includes RMB and foreign currency deposit, loan, international and domestic settlement, bill discount, currency trading, bank guarantee, and treasury bill underwriting.

Price Gauge
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Agricultural Bank Of China (1288 HK)

China’s Banks: The Quiet Bull Market No One’s Watching

The article discusses the ongoing stealth bull market in Hong Kong listed Chinese banks, highlighting the underappreciated positives and...

Rikki Malik

HK Connect SOUTHBOUND Flows (To 13 Sep 2024); Weak Data, Weak Markets, but BABA and Banks!

The biggest week for SOUTHBOUND gross volumes in many months. It would have been the biggest week even without the launch of Alibaba Southbound...

Travis Lundy

HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate

SOUTHBOUND saw its 4th net sell day since Chinese New Year last week. But the week ended up again. That is ~20 weeks in a row. But SOUTHBOUND...

Travis Lundy

Will Recent US Announcements Derail the HK/China Bull Market?

Reevaluating the bullish stance on HK-listed China stocks amid potential shifts in US/China relations and uncertainty about Trump's willingness to...

Rikki Malik

China Macro: Sector Positioning Update

Sector positioning among active China Funds. Industrials and Consumer Staples Remain Top Overweights, Energy shows signs of a turnaround, whilst...

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China’s Banks: The Quiet Bull Market No One’s Watching

​The article discusses the ongoing stealth bull market in Hong Kong listed Chinese banks, highlighting the underappreciated positives and...

Rikki Malik

HK Connect SOUTHBOUND Flows (To 13 Sep 2024); Weak Data, Weak Markets, but BABA and Banks!

The biggest week for SOUTHBOUND gross volumes in many months. It would have been the biggest week even without the launch of Alibaba Southbound...

Travis Lundy

HK Connect SOUTHBOUND Flows (To 28 June 2024); Still a Net Buy, but Less Strong. Financials Dominate

SOUTHBOUND saw its 4th net sell day since Chinese New Year last week. But the week ended up again. That is ~20 weeks in a row. But SOUTHBOUND...

Travis Lundy

Will Recent US Announcements Derail the HK/China Bull Market?

​Reevaluating the bullish stance on HK-listed China stocks amid potential shifts in US/China relations and uncertainty about Trump's willingness to...

Rikki Malik

China Macro: Sector Positioning Update

Sector positioning among active China Funds. Industrials and Consumer Staples Remain Top Overweights, Energy shows signs of a turnaround, whilst...

Steven Holden

The article discusses the ongoing stealth bull market in Hong Kong listed Chinese banks, highlighting the underappreciated positives and...

Reevaluating the bullish stance on HK-listed China stocks amid potential shifts in US/China relations and uncertainty about Trump's willingness to...