Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<p>Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.</p><ul><li><a href='#lucror-entity-28953'>Central China New Life</a></li><li><a href='#lucror-entity-713'>Evergrande Auto</a></li><li><a href='#lucror-entity-433'>Fosun International</a></li><li><a href='#lucror-entity-1776'>Indika Energy</a></li><li><a href='#lucror-entity-18561'>JSW Steel Ltd</a></li><li><a href='#lucror-entity-21047'>Ronshine China Holdings</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Central China New LifeEvergrande AutoFosun InternationalIndika EnergyJSW Steel LtdRonshine China Holdings

Morning Views Asia: Central China New Life, Evergrande Auto, Fosun International, Indika Energy

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Cross Asset Strategy

<ul>
<li>After 3 months of consistent decline, our China Property Sentiment Indicator is showing notable signs of recovery</li>
<li>News attribution suggests this is primarily driven by decreasing negative coverage as the Evergrande liquidity crisis was averted limiting broader contagion; continued momentum on developer spin-offs of property management subsidiaries; and strong Golden Week consumption metrics related to home furnishings &amp; building products (a secondary parameter in our indicator)</li>
<li>Our text mining already incorporates recent negative news on shrinking land premiums, as well as coverage on (expectedly) heavy discounting during Golden Week sales; but the overall tone of coverage remains "less negative" in the month-to-date</li>
<li>The TMI China Property Sentiment Indicator has been 58% correlated with Chinese real estate equities (via CHIR ETF), 40%-54% with Chinese HY (via KCCB ETF), and 65% with copper prices (on a T24M basis)</li>
</ul><div class="content-highlight"><p>TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. </p></div>


After 3 months of consistent decline, our China Property Sentiment Indicator is showing notable signs of recovery
News attribution suggests this is primarily driven by decreasing negative coverage as the Evergrande liquidity crisis was averted limiting broader contagion; continued momentum on developer spin-offs of property management subsidiaries; and strong Golden Week consumption metrics related to home furnishings &amp; building products (a secondary parameter in our indicator)
Our text mining already incorporates recent negative news on shrinking land premiums, as well as coverage on (expectedly) heavy discounting during Golden Week sales; but the overall tone of coverage remains "less negative" in the month-to-date
The TMI China Property Sentiment Indicator has been 58% correlated with Chinese real estate equities (via CHIR ETF), 40%-54% with Chinese HY (via KCCB ETF), and 65% with copper prices (on a T24M basis)
TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade &amp; traditional media. Our proprietary software text-mines the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income &amp; individual equities. 

TMI Snapshots: China Property Sentiment Indicators Recover Post "Three Red Lines" & Evergrande Drama

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<p>With <a href="https://www.smartkarma.com/entities/evergrande-real-estate-group-limited" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> averting a cash crunch for now and kicking the can further down the road, the stock quickly soared over the last week and the media has started to highlight how shorts in the stock have been burned repeatedly over the last few years.</p><p>Using data starting from March 2017, we estimate that shorts have lost in excess of HK$10.1bn till date. Most of the losses were sustained in 2017, starting with the buyback and then continuing as the stock soared nearly 400% from the lows. Losses to the shorts since then have not been very high with periods of sustained gains offset by sharp rallies in the stock leading to losses.</p><p>In this Insight, we look at some of the recent news flow on the stock, the evolution of shorts, the company buybacks, and the losses sustained by the shorts.</p>

With Evergrande Real Estate Group (3333 HK) averting a cash crunch for now and kicking the can further down the road, the stock quickly soared over the last week and the media has started to highlight how shorts in the stock have been burned repeatedly over the last few years.Using data starting from March 2017, we estimate that shorts have lost in excess of HK$10.1bn till date. Most of the losses were sustained in 2017, starting with the buyback and then continuing as the stock soared nearly 400% from the lows. Losses to the shorts since then have not been very high with periods of sustained gains offset by sharp rallies in the stock leading to losses.In this Insight, we look at some of the recent news flow on the stock, the evolution of shorts, the company buybacks, and the losses sustained by the shorts.

Evergrande - How Much Have the Shorts Lost?

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Thematic (Sector/Industry)

<div>With only 40+ days left before the Presidential Election in the U.S, China is wisely taking a laissez faire approach to the bilateral issues and conflicts, waiting Trump out until after November. However, Beijing understands the White House’s targeting at China enjoys bipartisan support at this moment, one of the few exceptions of today’s politics in the U.S.</div>

With only 40+ days left before the Presidential Election in the U.S, China is wisely taking a laissez faire approach to the bilateral issues and conflicts, waiting Trump out until after November. However, Beijing understands the White House’s targeting at China enjoys bipartisan support at this moment, one of the few exceptions of today’s politics in the U.S.

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. 

Technical Analysis

<p><a href="https://www.smartkarma.com/entities/evergrande-real-estate-group-limited" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> support lies at the 17 gap zone and the current push higher looks vulnerable to a pullback. The higher conviction short zone may require a secondary rally sequence toward tough resistance near 22. </p><p>Buy volumes on the reaction rise are drying up and warn of a top and pullback under 21 resistance.</p><p>We outline three trade setups. 1. A near term top for a fade to gap support. 2. Bounce long from gap support. 3. higher conviction short zone near 22. Macro bias is to short strength which may come in two phases.</p><p>Given a dip and rally we then see a migration toward lower pattern support at 14.</p>

Evergrande Real Estate Group (3333 HK) support lies at the 17 gap zone and the current push higher looks vulnerable to a pullback. The higher conviction short zone may require a secondary rally sequence toward tough resistance near 22. Buy volumes on the reaction rise are drying up and warn of a top and pullback under 21 resistance.We outline three trade setups. 1. A near term top for a fade to gap support. 2. Bounce long from gap support. 3. higher conviction short zone near 22. Macro bias is to short strength which may come in two phases.Given a dip and rally we then see a migration toward lower pattern support at 14.

China

China Evergrande Group is an integrated residential property developer. The Company, through its subsidiaries, operates in property development, investment, management, finance, internet, health, culture, and tourism markets.

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Evergrande (3333 HK)

Morning Views Asia: Central China New Life, Evergrande Auto, Fosun International, Indika Energy

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

TMI Snapshots: China Property Sentiment Indicators Recover Post "Three Red Lines" & Evergrande Drama

After 3 months of consistent slowdown and a dip into outright negative territory, our China Property Indicator is showing signs of recovery News...

Elan Gore

Evergrande - How Much Have the Shorts Lost?

With Evergrande Real Estate Group (3333 HK) averting a cash crunch for now and kicking the can down the road, the stoc

Brian Freitas

China Macro and Geopolitical Briefing

With only 40+ days left before the Presidential Election in the U.S, China is wisely taking a laissez faire approach to the bilateral issues and...

JL Warren Capital

Evergrande Short to Test Gap Zone

Evergrande Real Estate Group (3333 HK) support lies at the 17 gap zone and the current push higher looks vulnerable to a pullback. The higher...

Thomas Schroeder

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