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

Equity Bottom-Up

<ul>
<li>Under a rate cut cycle, REITs historically outperform as risk free rates going down and share price would go up to maintain the same interest rate spread</li>
<li>Besides, the rate cut cycle would provide ample room for Link REIT to carry out more M&amp;As and expand its portfolio, to drive earnings and DPU growth</li>
<li>Link REIT currently offers 6.6% yield, and we think there is at least 15-20% upside from current valuation</li>
</ul>


Under a rate cut cycle, REITs historically outperform as risk free rates going down and share price would go up to maintain the same interest rate spread
Besides, the rate cut cycle would provide ample room for Link REIT to carry out more M&amp;As and expand its portfolio, to drive earnings and DPU growth
Link REIT currently offers 6.6% yield, and we think there is at least 15-20% upside from current valuation


Link REIT: Building a Diversified Asia Pac Portfolio and a Solid REIT Play in the Rate Cut Cycle

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

Langham Hospitality Inv Ss / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/langham-hospitality-inv-ss" target="_blank" data-smartkarma-citation="entities:760:1" rel="noopener">Langham Hospitality Inv Ss (1270 HK)</a> received a notice from <a href="https://www.smartkarma.com/entities/great-eagle-holdings-ltd" target="_blank" data-smartkarma-citation="entities:758:1" rel="noopener">Great Eagle Holdings (41 HK)</a>, the largest unitholder, that it intends to present a detailed proposal for scheme privatisation.</li>
<li>The privatisation interest is unsurprising, as the unit price has declined by 43% over the last twelve months. A tough 2023 did not help the declining sentiment.</li>
<li>Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47% premium to the last close.</li>
</ul>



Langham Hospitality Inv Ss (1270 HK) received a notice from Great Eagle Holdings (41 HK), the largest unitholder, that it intends to present a detailed proposal for scheme privatisation.
The privatisation interest is unsurprising, as the unit price has declined by 43% over the last twelve months. A tough 2023 did not help the declining sentiment.
Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47% premium to the last close.


Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation

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

Cross Asset Strategy

<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.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.</li>
<li>The changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a>, <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50</a> and a bunch of other mainland China indices will be announced after market close on Friday.</li>
<li>Relatively quiet week for ETF flows with no major creations or redemptions during the week.</li>
</ul>


The FRTIB benchmark switch from the EAFE Index to the ACWI IMI ex-USA ex-China ex-Hong Kong Index will result in a round trip trade of around US$56bn.
The changes for the CSI 300, CSI 500, STAR50, SSE50 and a bunch of other mainland China indices will be announced after market close on Friday.
Relatively quiet week for ETF flows with no major creations or redemptions during the week.


Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>400+ days ago, the TCC Group bid for <a href="https://www.smartkarma.com/entities/frasers-hospitality-trust" target="_blank" data-smartkarma-citation="entities:913:1" rel="noopener">Frasers Hospitality Trust (FHT SP)</a> at just over 1.05x NAV failed on a combination of vocal minority opposition and minority apathy.</li>
<li>FHT has dramatically outperformed plummeting peers over the last few months on hope TCC might re-up that bid, but weaker peers and CRE markets suggest financing could be tougher.</li>
<li>Nothing is impossible, but it might make more sense for TCC to up its stake by stealth here rather than brute force. Earnings are 7 November.</li>
</ul>


400+ days ago, the TCC Group bid for Frasers Hospitality Trust (FHT SP) at just over 1.05x NAV failed on a combination of vocal minority opposition and minority apathy.
FHT has dramatically outperformed plummeting peers over the last few months on hope TCC might re-up that bid, but weaker peers and CRE markets suggest financing could be tougher.
Nothing is impossible, but it might make more sense for TCC to up its stake by stealth here rather than brute force. Earnings are 7 November.


Frasers Hospitality - Will TCC Renew Its Takeover Offer? Market Prices Bet Yes Ahead of Earnings

Hong Kong

Link REIT is a real estate investment trust in Hong Kong. The Trust owns and operates shopping centers, parking space facilities and real estate retail space.

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Link REIT (823 HK)

Link REIT: Building a Diversified Asia Pac Portfolio and a Solid REIT Play in the Rate Cut Cycle

Under a rate cut cycle, REITs would outperform as risk free goes down and price has to adjust to maintain the same spread. Link REIT, the Asia's...

Jacob Cheng

Langham Hospitality Investments (1270 HK): Great Eagle (41 HK)’s Possible Scheme Privatisation

Our methodology for triangulating the potential offer price results in a range of HK$0.63-1.76. Our best guess is an offer of around HK$0.85, a 47%...

Arun George

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

Index Rebalance & ETF Flow Recap: FRTIB, Japan, CSI300, CSI500, STAR50, WuXi XDC, Asahi

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Frasers Hospitality - Will TCC Renew Its Takeover Offer? Market Prices Bet Yes Ahead of Earnings

Frasers Hospitality Trust is trading as if TCC might make another offer. But peers in Singapore/Asia are getting crushed, and globally CRE is in...

Travis Lundy

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