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

Thematic (Sector/Industry)

<ul>
<li>Concerns over Chinese Real Estate sector pushes ownership in Construction Materials stocks to their lowest levels on record.</li>
<li>Fund activity heavily skewed to the sell-side and driven by mass closures in Anhui Conch Cement, Huaxin Cement and Beijing New Building Materials.</li>
<li>Investor sentiment, as measured by A-Share fund activity and positioning, is as low as it gets for the Construction Materials sector.</li>
</ul>


Concerns over Chinese Real Estate sector pushes ownership in Construction Materials stocks to their lowest levels on record.
Fund activity heavily skewed to the sell-side and driven by mass closures in Anhui Conch Cement, Huaxin Cement and Beijing New Building Materials.
Investor sentiment, as measured by A-Share fund activity and positioning, is as low as it gets for the Construction Materials sector.


China A-Shares: Construction Materials Slump

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. </li>
<li>A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.</li>
<li>Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.</li>
</ul>


Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. 
A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.


China NPC: Implications of Government Working Report 2023

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>According to 100NJZ’s channel check among 12220 projects, the work resumption rate was only 11% on the 10th day of CNY vs. 17% in 2022.</li><li>It is mainly dragged by property constructions (infra relatively better), in line with weak sales in Jan by major developers (-22% YoY).</li><li>By regions, South China saw most drop in constructions, due to tight cash flow by developers and governments while Southwest is better off on active fund inflow. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

According to 100NJZ’s channel check among 12220 projects, the work resumption rate was only 11% on the 10th day of CNY vs. 17% in 2022.It is mainly dragged by property constructions (infra relatively better), in line with weak sales in Jan by major developers (-22% YoY).By regions, South China saw most drop in constructions, due to tight cash flow by developers and governments while Southwest is better off on active fund inflow. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Property+ Weekly: Weak Construction Resumption Rate Dragged by Property

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.

Macroeconomics

<ul><li>Well, we won't know until later Q1, 2023. I don't share the complete confidence that the Sell Side consensus, we are in for the "China is Roaring Back" narrative.</li><li>With no transparency of Omicron spread, severe cases, fatalities, and genome sequencing, the current wave predictions are nothing short of "I believe it will boom" because it will.</li><li>The reopening was going to be hamstrung by the initial spread surge, given the sudden U-turn in policy and unpreparedness.</li></ul>

Well, we won't know until later Q1, 2023. I don't share the complete confidence that the Sell Side consensus, we are in for the "China is Roaring Back" narrative.With no transparency of Omicron spread, severe cases, fatalities, and genome sequencing, the current wave predictions are nothing short of "I believe it will boom" because it will.The reopening was going to be hamstrung by the initial spread surge, given the sudden U-turn in policy and unpreparedness.

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For our next Webinar, we are excited to welcome Analysts <a href="https://www.smartkarma.com/profiles/said-desaque" target="_blank" data-smartkarma-citation="accounts:1107" rel="noopener">Said Desaque</a> and <a href="https://www.smartkarma.com/profiles/osbert-tang-cfa" target="_blank" data-smartkarma-citation="accounts:3879" rel="noopener">Osbert Tang, CFA</a> , who will go over China's latest potential $220 billion stimulus through a massive sale of special bonds. The Analysts will each present their views on the situation and a Q&amp;A will follow.</p>
<h3>The webinar was hosted on Wednesday, 13 July 2022, 17:00 SGT/HKT.</h3>
<p>Subscribe to our podcast feed and listen to the session on the go:</p>
<p><iframe src="https://open.spotify.com/embed/episode/5vGxVSGzl0Izwsa0swFIBi?utm_source=generator" width="100%" height="232" style="border-radius: 12px;" frameborder="0" allowfullscreen="allowfullscreen" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture"></iframe>Said DeSaque is a professional economist with over 33 years of experience covering the global economy, with significant expertise in the US, China, Japan, and emerging markets. He worked with US investment banks for 25 years covering institutional investors in Europe, Middle East, Far East and Australia. He covers financial markets on a multi-asset basis, and has been an independent economist covering the global economy and financial markets for the past 8 years since founding DeSaque Macro Research in London.</p>
<p>Osbert Tang is an equity analyst with over 20 years of experience, focusing on China transport, infrastructure, industrials, and utilities. He has been based in Shanghai since 2003, where he accumulated more than 15 years of on-ground knowledge on the Chinese economy and financial markets, and has a wealth of contacts with China corporates and government entities.</p>

For our next Webinar, we are excited to welcome Analysts Said Desaque and Osbert Tang, CFA , who will go over China's latest potential $220 billion stimulus through a massive sale of special bonds. The Analysts will each present their views on the situation and a Q&amp;A will follow.
The webinar was hosted on Wednesday, 13 July 2022, 17:00 SGT/HKT.
Subscribe to our podcast feed and listen to the session on the go:
Said DeSaque is a professional economist with over 33 years of experience covering the global economy, with significant expertise in the US, China, Japan, and emerging markets. He worked with US investment banks for 25 years covering institutional investors in Europe, Middle East, Far East and Australia. He covers financial markets on a multi-asset basis, and has been an independent economist covering the global economy and financial markets for the past 8 years since founding DeSaque Macro Research in London.
Osbert Tang is an equity analyst with over 20 years of experience, focusing on China transport, infrastructure, industrials, and utilities. He has been based in Shanghai since 2003, where he accumulated more than 15 years of on-ground knowledge on the Chinese economy and financial markets, and has a wealth of contacts with China corporates and government entities.

Smartkarma Webinar | Understanding China's Latest Stimulus

China

Anhui Conch Cement Company Limited primarily manufactures and sells cement, clinker, and aggregates, with products widely used in large-scale infrastructure projects. The company also diversifies into new energy, new materials, environmental protection, digital economy, and international trade. It was founded in 1997 and is headquartered in Wuhu, Anhui Province, China.

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Anhui Conch Cement (914 HK)

China A-Shares: Construction Materials Slump

Concerns over Chinese Real Estate sector pushes ownership in Construction Materials stocks to their lowest levels on record.

Steven Holden

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

Property+ Weekly: Weak Construction Resumption Rate Dragged by Property

According to 100NJZ’s channel check among 12220 projects, the work resumption rate was only 11% on the 10th day of CNY vs. 17% in 2022.

CMB International

What Will Drive China Recovery?

Well, we won't know until later Q1, 2023. I don't share the complete confidence that the Sell Side consensus, we are in for the "China is Roaring...

Untying The Gordian Knot

Smartkarma Webinar | Understanding China's Latest Stimulus

On 13 July, 5pm SGT, join our Webinar on China's latest potential stimulus, featuring Analysts Said Desaque and Osbert Tang.

Smartkarma Research

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