Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Thematic (Sector/Industry)

<ul>
<li>PBoC just announced a RRR cut of 25bps, which is a surprise to market</li>
<li>The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts</li>
<li>Government’s press release addresses key market concerns.  We need to monitor recovery in property market.  LONG China on easing cycle.  China property names are trading at distressed valuation</li>
</ul>


PBoC just announced a RRR cut of 25bps, which is a surprise to market
The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts
Government’s press release addresses key market concerns.  We need to monitor recovery in property market.  LONG China on easing cycle.  China property names are trading at distressed valuation


Short Note: LONG China on Monetary Easing Cycle

Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Technical Analysis

<ul><li>The consensus of bottom in China Tech and China A shares continue to gain favour.</li><li>Bank of America is the latest to recommend selling US tech to buy China Tech.  </li><li>The Bullish China stocks call is predicated on reopening Pivot, yet the daily increase in cases and sporadic lockdown put the Pivot callers to double down.</li></ul>

The consensus of bottom in China Tech and China A shares continue to gain favour.Bank of America is the latest to recommend selling US tech to buy China Tech.  The Bullish China stocks call is predicated on reopening Pivot, yet the daily increase in cases and sporadic lockdown put the Pivot callers to double down.

US Vs China Technology, Alibaba, China Unicom, and New World Development

Hong Kong Exchanges and Clearing / Technical Analysis

Hong Kong Exchanges and Clearing (388 HK)

<ul><li>A better way to think of the Hong Kong Market in the current cycle is that it has both US &amp; China's economic headwinds and requires sharply lower rates and currency to correct macro imbalances.</li><li>HKMA should be cutting interest rates, but it cannot do so due to the currency peg.</li><li>Over the last 12-18 months, Hong Kong developers have enjoyed stability in expectations of reopening borders, investment demand, strong balance sheet compared to mainland developers, and low funding costs (HIBOR). These tailwinds are now headwinds.</li></ul>

A better way to think of the Hong Kong Market in the current cycle is that it has both US &amp; China's economic headwinds and requires sharply lower rates and currency to correct macro imbalances.HKMA should be cutting interest rates, but it cannot do so due to the currency peg.Over the last 12-18 months, Hong Kong developers have enjoyed stability in expectations of reopening borders, investment demand, strong balance sheet compared to mainland developers, and low funding costs (HIBOR). These tailwinds are now headwinds.

Hang Seng Index Constituents 16th June 2022

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

On the 6 January 2010, the SGX issued a <a href="https://api2.sgx.com/sites/default/files/2018-09/Consultation%2BPaper%2Bon%2BProposed%2BRevisions%2Bto%2BMainboard%2BAdmission%2BCriteria%2Band%2Bthe%2BIntroduction%2Bof%2BSPAC.pdf" target="_blank" rel="noopener">consultation paper</a> on the "Proposed Revisions to Mainboard Admission Criteria and the Introduction of SPAC".  Following the feedback at that time, SGX determined that it was not an opportune time to introduce SPACs.
In <a href="https://skr.ma/5UGLq" target="_blank" rel="noopener">Virtual IPOs/Direct Listings: Uninhibited Price Discovery</a> on the 29 November last year, I mentioned a white paper on special purpose acquisition company (SPAC) may be issued by the SGX in the first half of the following year.
In January, the Business Times <a href="https://www.businesstimes.com.sg/companies-markets/sgx-looking-into-listing-of-special-purpose-acquisition-companies" target="_blank" rel="noopener">reported</a> that a consultation could be launched by the SGX as early as this quarter - see <a href="https://skr.ma/u7S36" target="_blank" rel="noopener">Singapore Exchange: Asia's Future SPAC Hub</a>. The SGX did sound out the Listings Advisory Committee (“LAC”) for advice on SPACs in January, and after consideration, the LAC advised that it was in favour of SPAC listings, subject to the appropriate safeguards.
The Singapore Exchange <a href="https://api2.sgx.com/sites/default/files/2021-03/Consultation%20Paper%20on%20Proposed%20Listing%20Framework%20for%20Special%20Purpose%20Acquisition%20Companies.pdf" target="_blank" rel="noopener">announced</a> last week a regulatory framework for SPACs to list on the SGX and asked the market for feedback.
Subsequent to the feedback phase ending on the 28 April, the framework may be finalised in the middle of this year. 
The SGX makes it clear SPACs are susceptible to execution risks where the SPAC is unable to identify a suitable target company or successfully consummate the business combination within the pre-determined period. But given the clear demand for such instruments, the SGX evidently sees the benefits outweigh the risks.

On the 6 January 2010, the SGX issued a consultation paper on the "Proposed Revisions to Mainboard Admission Criteria and the Introduction of SPAC".  Following the feedback at that time, SGX determined that it was not an opportune time to introduce SPACs.
In Virtual IPOs/Direct Listings: Uninhibited Price Discovery on the 29 November last year, I mentioned a white paper on special purpose acquisition company (SPAC) may be issued by the SGX in the first half of the following year.
In January, the Business Times reported that a consultation could be launched by the SGX as early as this quarter - see Singapore Exchange: Asia's Future SPAC Hub. The SGX did sound out the Listings Advisory Committee (“LAC”) for advice on SPACs in January, and after consideration, the LAC advised that it was in favour of SPAC listings, subject to the appropriate safeguards.
The Singapore Exchange announced last week a regulatory framework for SPACs to list on the SGX and asked the market for feedback.
Subsequent to the feedback phase ending on the 28 April, the framework may be finalised in the middle of this year. 
The SGX makes it clear SPACs are susceptible to execution risks where the SPAC is unable to identify a suitable target company or successfully consummate the business combination within the pre-determined period. But given the clear demand for such instruments, the SGX evidently sees the benefits outweigh the risks.

Singaporean SPACs: Democratizing Access To High Growth

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Sun Hung Kai Properties / Technical Analysis

Hong Kong property has seen a degree of short covering and the current recovery rise at this stage appears corrective in nature. We outline turn points in <a href="https://www.smartkarma.com/entities/sun-hung-kai-properties-ltd" target="_blank" rel="noopener" data-smartkarma-citation="entities:111:1">Sun Hung Kai Properties (16 HK)</a><a href="https://www.smartkarma.com/entities/henderson-land-development" target="_blank" rel="noopener" data-smartkarma-citation="entities:376:1">Henderson Land Development (12 HK)</a> and <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" rel="noopener" data-smartkarma-citation="entities:7037:1">New World Development (17 HK)</a>  that would act as a more bullish catalyst and sell inflection levels.A key driver for HK in general will stem from a more bullish US equity cycle in Q4/Q1 2020.Indicators imply there is tactical upside followed by a fresh draw down and then a secondary rally in store for HK property. Flat ranges are labeled corrective for SHK and Henderson with New World displaying the more bullish undertone.Hong Kong property remains stuck in a range with tactical trade points for a near term rally, fade and secondary rise attempt but the directional trade remains to short strength for new lows which would set the stage for a better intermediate rise.

Hong Kong property has seen a degree of short covering and the current recovery rise at this stage appears corrective in nature. We outline turn points in Sun Hung Kai Properties (16 HK)Henderson Land Development (12 HK) and New World Development (17 HK)  that would act as a more bullish catalyst and sell inflection levels.A key driver for HK in general will stem from a more bullish US equity cycle in Q4/Q1 2020.Indicators imply there is tactical upside followed by a fresh draw down and then a secondary rally in store for HK property. Flat ranges are labeled corrective for SHK and Henderson with New World displaying the more bullish undertone.Hong Kong property remains stuck in a range with tactical trade points for a near term rally, fade and secondary rise attempt but the directional trade remains to short strength for new lows which would set the stage for a better intermediate rise.

HK Property Relief Points and Sell Levels

Hong Kong

New World Development is a Hong Kong-based conglomerate primarily engaged in property development and investment, hotels, infrastructure and services, and department stores in Greater China, particularly the Greater Bay Area. Its portfolio includes residential, retail, office, and industrial properties, as well as hotel operations and various infrastructure projects. The company was founded in 1970 and is headquartered in Central, Hong Kong.

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New World Development (17 HK)

Short Note: LONG China on Monetary Easing Cycle

China just announced a 25bps RRR cut, which is a surprise. China's low inflation allows more room to RRR cuts. Jan-Feb macro data shows...

Jacob Cheng

US Vs China Technology, Alibaba, China Unicom, and New World Development

The consensus of bottom in China Tech and China A shares continue to gain favour. Bank of America is the latest to recommend selling US tech to buy...

Untying The Gordian Knot

Hang Seng Index Constituents 16th June 2022

A better way to think of the Hong Kong Market in the current cycle is that it has both US & China's economic headwinds and requires sharply...

Untying The Gordian Knot

Singaporean SPACs: Democratizing Access To High Growth

This move/initiative from Singapore was simply inevitable given the demand for an alternative to the old method of going public.

David Blennerhassett

HK Property Relief Points and Sell Levels

Hong Kong property has seen a degree of short covering and the current recovery rise at this stage appears corrective in nature. We outline turn...

Thomas Schroeder

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52-week Range

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