Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A monthly review of how the markets and our themes are currently performing</li>
<li>Analysing what went wrong and what went right in stocks and sectors</li>
<li>Highlighting positions added or removed from the thematic investment portfolio</li>
</ul>


A monthly review of how the markets and our themes are currently performing
Analysing what went wrong and what went right in stocks and sectors
Highlighting positions added or removed from the thematic investment portfolio


August Themes and Thematic Portfolio Review

Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Event-Driven

<ul>
<li>Tencent reported a softer set of results for Q2 relative to Q1. Revenue for the quarter was up 1% QoQ and 8% YoY.</li>
<li>Since our last discount update mid-August, the discounts of both Naspers and Prosus have continued to narrow.</li>
<li>Naspers' discount is trading well off the lows reached at the end of July (~45%). </li>
</ul>


Tencent reported a softer set of results for Q2 relative to Q1. Revenue for the quarter was up 1% QoQ and 8% YoY.
Since our last discount update mid-August, the discounts of both Naspers and Prosus have continued to narrow.
Naspers' discount is trading well off the lows reached at the end of July (~45%). 


Naspers X Prosus Discount Update Post Tencent 2Q FY24 Results, Narrowing Gains Momentum

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>The Nasdaq, China and the JPY walk into a bar.</li>
<li>The world's biggest uranium miner cuts its 2025 production guidance</li>
</ul>


A review of recent events/data impacting our investment themes or outlook
The Nasdaq, China and the JPY walk into a bar.
The world's biggest uranium miner cuts its 2025 production guidance


Quantitative Researcher, MRM Research

Nico Rosti

Quantitative Researcher

MRM Research

Quantitative Research

Equity Derivatives

<ul>
<li>We have correctly forecasted a August rally for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> in previous insights, <a href="https://www.smartkarma.com/insights/eqd-the-hsi-is-ripe-for-a-rally-in-august-if-july-s-close-is-negative" target="_blank" rel="noopener">here</a> and then <a href="https://www.smartkarma.com/insights/eqd-the-hsi-rebound-can-reach-higher-prices-in-august" target="_blank" rel="noopener">here</a> - the rally is on, but a pullback is coming.</li>
<li>The pullback may come in this week or the next, but it's probably behind the corner, the index can continue higher after the pullback.</li>
<li>In this insight we want to expose what are the levels to buy LONG to benefit from a <strong>highly probable continuation of the rally in September</strong>.</li>
</ul>


We have correctly forecasted a August rally for the Hang Seng Index in previous insights, here and then here - the rally is on, but a pullback is coming.
The pullback may come in this week or the next, but it's probably behind the corner, the index can continue higher after the pullback.
In this insight we want to expose what are the levels to buy LONG to benefit from a highly probable continuation of the rally in September.


EQD | HSI May Pull Back, Levels to BUY For Rally Continuation In September

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

<ul>
<li>Media reports indicate that <a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> is looking to sell 144.5m shares of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com (JD US)</a> to raise up to US$3.74bn. That would be substantially all of its stake.</li>
<li>There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.</li>
<li>There will be no passive buying from <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.</li>
</ul>


Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.


JD.com (9618 HK): Index Implications of Walmart Placement

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

August Themes and Thematic Portfolio Review

We review overall market performance, our investment themes, highlighting additions and substractions in the thematic portfolio.

Rikki Malik

Naspers X Prosus Discount Update Post Tencent 2Q FY24 Results, Narrowing Gains Momentum

The discounts of Naspers and Prosus have continued to narrow through August. We provide an update on how the discounts have traded since Tencent...

DMA

Overview #8 Plus Ca Change...

A review of recent events/data impacting our investment themes and outlook. Japan the Japanese Yen, China as well as Uranium

Rikki Malik

EQD | HSI May Pull Back, Levels to BUY For Rally Continuation In September

The August rally for the Hang Seng Index unfolded as forecasted, but a pullback is coming in the next 2 weeks. The index will probably rally higher...

Nico Rosti

JD.com (9618 HK): Index Implications of Walmart Placement

Walmart is looking to sell its entire stake in JD.com. The ADR is lower in the aftermarket and the HK-line is down 10.8%. Passive trackers will buy...

Brian Freitas