Emerging markets PM, economist, CFA charterholder

Mark A. DeWeaver, PhD, CFA

Thematic (Sector/Industry)

<a href="https://www.smartkarma.com/entities/204" target="_blank" data-smartkarma-citation="entities:204:1">Maanshan Iron &amp; Steel H (323 HK)</a> and <a href="https://www.smartkarma.com/entities/203" target="_blank" data-smartkarma-citation="entities:203:1">Angang Steel Co Ltd (H) (347 HK)</a> were down 4.8% and 2.4%, respectively, last Friday (March 2), following the announcement of a 25% US tariff on imported steel. Both under-performed the <a href="https://www.smartkarma.com/entities/22900" target="_blank" data-smartkarma-citation="entities:22900:1">Hang Seng China Enterprises Index (HSCEI INDEX)</a>, which fell only 1.8%. (See Figure 1.) Investors were clearly rattled by the possibility that American protectionism might pose a threat to the two steel makers.Figure 1. Angang (347.HK), Magang (323.HK), and the HSCEI. (Daily…

Maanshan Iron &amp; Steel H (323 HK) and Angang Steel Co Ltd (H) (347 HK) were down 4.8% and 2.4%, respectively, last Friday (March 2), following the announcement of a 25% US tariff on imported steel. Both under-performed the Hang Seng China Enterprises Index (HSCEI INDEX), which fell only 1.8%. (See Figure 1.) Investors were clearly rattled by the possibility that American protectionism might pose a threat to the two steel makers.Figure 1. Angang (347.HK), Magang (323.HK), and the HSCEI. (Daily…

Chinese Steel Maker Sell-Off an Overreaction

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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After meeting with steel and aluminum executives at the White House on March 1, President Donald Trump announced that he'll be enacting a 25% steel tariff next week. It is unclear, however, if this approach will be applied in a blanket fashion to all countries or only to a targeted list of countries. In its Feb. 16 Section 232 report, the blanket tariffs proposed by the U.S. Department of Commerce were 24% for all steel imports, which is less severe than the figures indicated by Trump on March…

After meeting with steel and aluminum executives at the White House on March 1, President Donald Trump announced that he'll be enacting a 25% steel tariff next week. It is unclear, however, if this approach will be applied in a blanket fashion to all countries or only to a targeted list of countries. In its Feb. 16 Section 232 report, the blanket tariffs proposed by the U.S. Department of Commerce were 24% for all steel imports, which is less severe than the figures indicated by Trump on March…

Minimal Impact on Our Asian Steel Coverage Following U.S.Steel Import Tariffs; FVEs Unchanged

CHINA - Healthcare, Steel, Autos, Education, Research From Beijing

Scott Laprise/ 乐天虎

CHINA - Healthcare, Steel, Autos, Education

Equity Bottom-Up

Maanshan Iron & Steel H / Equity Bottom-Up

<ul><li>The last steel mill in Baoding was shut down on August 2017.</li><li>Bad news is they were able to sell their production capacity we will explain how.</li><li>The government has a policy to stop or rotate steel production.</li><li>Steel mills can return to full production and we will explain the issue.</li><li>Delong Holdings a Singapore listed stock has had a great run in 2017 despite forced to close its mill in Baoding.</li><li>We will explain our long term and short term views for steel stocks.</li></ul>

The last steel mill in Baoding was shut down on August 2017.Bad news is they were able to sell their production capacity we will explain how.The government has a policy to stop or rotate steel production.Steel mills can return to full production and we will explain the issue.Delong Holdings a Singapore listed stock has had a great run in 2017 despite forced to close its mill in Baoding.We will explain our long term and short term views for steel stocks.

Another Steel Mill Closed in China? – YES and NO

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Highlighted themes and actionable charts: Reiterating BRIC overweight. This country grouping continues to outperform broad EM, and we believe BRIC will be a primary source of outperformance relative to the MSCI EM Index moving forward.  Today’s report includes a wide variety of bottom-up recommendations, spanning most sectors and all market capitalizations within EM.

Highlighted themes and actionable charts: Reiterating BRIC overweight. This country grouping continues to outperform broad EM, and we believe BRIC will be a primary source of outperformance relative to the MSCI EM Index moving forward.  Today’s report includes a wide variety of bottom-up recommendations, spanning most sectors and all market capitalizations within EM.

EM Equity Strategy: Indonesia Perking Up; Overweight BRIC, Tech, and Health Care

Angang Steel Co Ltd (H) / Equity Bottom-Up

<ul><li>Wire rode inventory up and rebar inventory lower than last visit last August 2017.</li><li>Only one truck we found at the traders showing little activity.</li><li>At the traders,  wire rod was around RMB 3900-4000 which was lower than last month.</li><li>HRC’s price is around RMB 4400.</li><li>Most of the small traders said they had no inventory going into Chinese New Year.</li></ul><ul><li>Bigger traders are still busy.</li><li>We will visit again after Chinese New Year in March when we expect to see the construction sector pick up again in the north of China.</li><li>Angang has shot up in January eliminating the long product premium of Magang.</li></ul>

Wire rode inventory up and rebar inventory lower than last visit last August 2017.Only one truck we found at the traders showing little activity.At the traders,  wire rod was around RMB 3900-4000 which was lower than last month.HRC’s price is around RMB 4400.Most of the small traders said they had no inventory going into Chinese New Year.Bigger traders are still busy.We will visit again after Chinese New Year in March when we expect to see the construction sector pick up again in the north of China.Angang has shot up in January eliminating the long product premium of Magang.

China

Angang Steel Company Limited produces steel products which include cold rolled sheets, steel rail, pipe billets, wire rods, thick plates, and other steel products.

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Angang Steel Co Ltd (H) (347 HK)

Chinese Steel Maker Sell-Off an Overreaction

Maanshan Iron & Steel H (323 HK) and Angang Steel Co Ltd (H) (347 HK) were down 4.8% and 2.4%, respectively, last Friday (March 2), following...

Mark A. DeWeaver, PhD, CFA

Minimal Impact on Our Asian Steel Coverage Following U.S.Steel Import Tariffs; FVEs Unchanged

After meeting with steel and aluminum executives at the White House on March 1, President Donald Trump announced that he'll be enacting a 25% steel...

Morningstar, Inc.

Another Steel Mill Closed in China? – YES and NO

The last steel mill in Baoding was shut down on August 2017. Bad news is they were able to sell their production capacity we will...

Scott Laprise/ 乐天虎

EM Equity Strategy: Indonesia Perking Up; Overweight BRIC, Tech, and Health Care

Highlighted themes and actionable charts: Reiterating BRIC overweight. This country grouping continues to outperform broad EM, and we believe BRIC...

Vermilion Research

Beijing Steel Trader Visit in Jan 2018

Wire rode inventory up and rebar inventory lower than last visit last August 2017. Only one truck we found at the traders showing little...

Scott Laprise/ 乐天虎

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