Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<ul>
<li>
Move Along, No Problems Here: DBS Group Holdings (DBS.SG) [DBS] participated in a competitor conference on January 10, 2022, suggesting that not an ounce of risk is on balance sheet; </li>
<li>
Digital Franchise: Management also focused on digital initiatives, including: DBS Digital Exchange; Digital Custody; and the Partior platform; and</li>
<li>
Deal Risk Remains High: There was no discussion by management of its headlong buying spree of some fairly spicy transactions. And they are not done.</li>
</ul>



Move Along, No Problems Here: DBS Group Holdings (DBS.SG) [DBS] participated in a competitor conference on January 10, 2022, suggesting that not an ounce of risk is on balance sheet; 

Digital Franchise: Management also focused on digital initiatives, including: DBS Digital Exchange; Digital Custody; and the Partior platform; and

Deal Risk Remains High: There was no discussion by management of its headlong buying spree of some fairly spicy transactions. And they are not done.


<ul>
<li>
Bad To Worse:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation;</li>
<li>
Demolition Man: Danzhou City is now in on the act, forcing China Evergrande Group (3333.HK) [Evergrande] to demolish 39 buildings for various violations; and</li>
<li>
Banks To Eat This As Well: Without any compensation to Evergrande, mainland Chinese banks no doubt will finally be writing down their exposure on Evergrande's now non-existent buildings.</li>
</ul>



Bad To Worse:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation;

Demolition Man: Danzhou City is now in on the act, forcing China Evergrande Group (3333.HK) [Evergrande] to demolish 39 buildings for various violations; and

Banks To Eat This As Well: Without any compensation to Evergrande, mainland Chinese banks no doubt will finally be writing down their exposure on Evergrande's now non-existent buildings.


<ul>
<li>
 Sea Sale: Tencent sold 14.5 mn shares in Sea, raising approximately USD 3 bn in cash – reducing Tencent’s position in Sea from 21.3% to 18.7%;   </li>
<li>
 Not A Surprise: Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of Sea shares is not a surprise; and  </li>
<li>
 Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.    </li>
</ul>



 Sea Sale: Tencent sold 14.5 mn shares in Sea, raising approximately USD 3 bn in cash – reducing Tencent’s position in Sea from 21.3% to 18.7%;   

 Not A Surprise: Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of Sea shares is not a surprise; and  

 Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.    


Tencent Holdings – From Sea To Shining Sea

<ul>
<li>
Special Dividend: On December 23, 2021, Tencent Holdings (700.HK) [Tencent] announced that it is planning to distribute USD 16.3 bn in JD.com (JD.US) [JD] Class A shares; </li>
<li>
Not A Surprise:Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of JD shares is not a surprise; and</li>
<li>
Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.  </li>
</ul>



Special Dividend: On December 23, 2021, Tencent Holdings (700.HK) [Tencent] announced that it is planning to distribute USD 16.3 bn in JD.com (JD.US) [JD] Class A shares; 

Not A Surprise:Given mainland China’s crackdown on the country’s largest internet companies, Tencent’s disposal of JD shares is not a surprise; and

Other Stake Sales To Follow: Further divestitures of major stakes are likely if Tencent wishes to remain on the right side of mainland China’s Communist Party.  


<ul>
<li>
This Is Bad:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation; </li>
<li>
Chengdu and Haikou Start Deluge: At 1H21, Evergrande had land plots with an original value of CNY 456.8 bn (USD 71.7 bn); and</li>
<li>
Banks Eating This One:Without any compensation to Evergrande, mainland Chinese banks no doubt will finally have their hands forced in writing down their exposure to Evergrande and other developers.</li>
</ul>



This Is Bad:Under mainland China’s real estate development law, the government has the right to repossess idle land sold to any developer without compensation; 

Chengdu and Haikou Start Deluge: At 1H21, Evergrande had land plots with an original value of CNY 456.8 bn (USD 71.7 bn); and

Banks Eating This One:Without any compensation to Evergrande, mainland Chinese banks no doubt will finally have their hands forced in writing down their exposure to Evergrande and other developers.


Hong Kong

CSOP FTSE China A50 ETF is an exchange-traded fund incorporated in Hong Kong. The Fund seeks to track the performance of the FTSE China A50 Index. The Fund invests most of its total assets in the equities of member companies of the FTSE China A50 Index. This is a RQFII fund.

CSOP FTSE China A50 (HKD) (2822 HK)

DBS Group Holdings – Lots of Lipstick

DBS: DBS participated in a competitor conference, suggesting not an ounce of risk sits on balance sheet. There was no discussion of its headlong...

Thomas J. Monaco

China Evergrande Group – Razing Cain

EVERGRANDE: Danzhou City is forcing Evergrande to demolish 39 buildings for various violations. Mainland Chinese banks no doubt will write down...

Thomas J. Monaco

Tencent Holdings – From Sea To Shining Sea

TENCENT: Tencent sold 14.5 mn shares in Sea, raising USD 3 bn and reducing its position from 21.3% to 18.7%, Other stake sales will follow.

Thomas J. Monaco

Tencent Holdings – Bottom Ticking

TENCENT: Tencent announced that it is planning to distribute USD 16.3 bn in JD shares. Given mainland China’s crackdown on Tencent, the disposal is...

Thomas J. Monaco

China Evergrande – Repo’d

EVERGRANDE: Under mainland China law, the government can repossess idle land sold to developers without compensation. Mainland Chinese banks no...

Thomas J. Monaco