Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

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Macroeconomics

<ul><li>Amid the gloom of China’s <a href="https://www.caixinglobal.com/2023-08-15/china-cuts-key-rate-by-most-since-2020-as-economic-woes-deepen-102093323.html" target="_blank" rel="noopener">economic slowdown</a>, there are some bright spots. A new data series released by the National Bureau of Statistics (NBS) on Tuesday showed that in the first seven months of the year, consumer spending on services like education and leisure rose at almost triple the pace of overall retail sales.</li><li>Retail sales of services jumped 20.3% year-on-year in the January to July period compared with 7.3% growth for overall retail sales, NBS data show.</li><li>The bureau did not provide a monetary amount for retail sales of services and did not provide a breakdown of growth by month, but cumulative growth data will be published from now on, NBS spokesperson Fu Linghui said at a press briefing on Tuesday.</li></ul>

Amid the gloom of China’s economic slowdown, there are some bright spots. A new data series released by the National Bureau of Statistics (NBS) on Tuesday showed that in the first seven months of the year, consumer spending on services like education and leisure rose at almost triple the pace of overall retail sales.Retail sales of services jumped 20.3% year-on-year in the January to July period compared with 7.3% growth for overall retail sales, NBS data show.The bureau did not provide a monetary amount for retail sales of services and did not provide a breakdown of growth by month, but cumulative growth data will be published from now on, NBS spokesperson Fu Linghui said at a press briefing on Tuesday.

New Indicator Shows China’s Consumers Are Spending — on Services

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

Event-Driven

Taiwan Semiconductor (TSMC) / Event-Driven

<ul>
<li>We first wrote about the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex-China (EMXC US)</a> ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.</li>
<li>
<a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">IShares Emerging Markets ex-China (EMXC US)</a> has outperformed <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets" target="_blank" data-smartkarma-citation="entities:438:1" rel="noopener">iShares Emerging Markets (EEM US)</a> and <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-217fc48e-4faa-4bc3-b730-443d6e06728b" target="_blank" data-smartkarma-citation="entities:32500:1" rel="noopener">iShares Emerging Markets Asia (EEMA US)</a> with lower volatility and a lower drawdown.</li>
<li>With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.</li>
</ul>


We first wrote about the iShares Emerging Markets ex-China (EMXC US) ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.

IShares Emerging Markets ex-China (EMXC US) has outperformed iShares Emerging Markets (EEM US) and iShares Emerging Markets Asia (EEMA US) with lower volatility and a lower drawdown.
With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.


Emerging Markets Ex-China: Looking Back... And Forward

Product Marketing Manager, Criat

Raghav Chandra Mathur

Product Marketing Manager

Next-Generation Credit Analytics Provider

Criat

Criat specializes in new-generation data-driven credit analytics. Leveraging our industry-leading DeepCredit analytical technologies, we produce daily-updated forward-looking credit assessment and valuation to help financial institutions stay ahead of risks. Coupled with use-case-driven applications, we extract insights, answer questions and enable smarter credit decisions.

Cross Asset Strategy

<ul>
<li>China’s Local Government Financing Vehicles (LGFVs) across the country have shown a diverse credit profiles with majority of the LGFV’s exhibiting moderate credit risk at the start of this year when broken down by province.</li>
<li>These financing vehicles, that have been used to fund infrastructure and other development-related projects for local governments in China, have been susceptible to varying macroeconomic conditions.</li>
<li>However, at the start of 2024, Criat’s Credit Cycle Index (CCCI) shows that the sector’s credit risk outlook is likely to improve with respect to that of the aggregate credit profile of all Chinese firms.</li>
</ul>


China’s Local Government Financing Vehicles (LGFVs) across the country have shown a diverse credit profiles with majority of the LGFV’s exhibiting moderate credit risk at the start of this year when broken down by province.
These financing vehicles, that have been used to fund infrastructure and other development-related projects for local governments in China, have been susceptible to varying macroeconomic conditions.
However, at the start of 2024, Criat’s Credit Cycle Index (CCCI) shows that the sector’s credit risk outlook is likely to improve with respect to that of the aggregate credit profile of all Chinese firms.


Central Government Policy Aid Set to Catalyze LGFVs' Fortunes in 2024

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

<ul><li>We hope you have enjoyed our China Week coverage with extensive analysis on the ongoing malaise in Chinese Real Estate.</li><li>Positioning in CNY markets is an underreported angle in the discussion on China as it may help guide asset performance from here, now that everyone and their mother agrees that China is stuck in a mess.</li><li>Are international investors even involved in China anymore?</li></ul>

We hope you have enjoyed our China Week coverage with extensive analysis on the ongoing malaise in Chinese Real Estate.Positioning in CNY markets is an underreported angle in the discussion on China as it may help guide asset performance from here, now that everyone and their mother agrees that China is stuck in a mess.Are international investors even involved in China anymore?

Positioning Watch: Is Anyone Even Invested in China at This Stage?

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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>With the MSCI ACWI (ACWI-US) approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here, and we believe caution is warranted.</li>
<li>We want to remain overweight Europe and the UK, but we prefer to buy only on pullbacks.</li>
<li>The Hang Seng and MSCI China (MCHI-US) are both getting rejected at their important resistances discussed last week, and we would expect to see a basing process develop below resistance.</li>
</ul>


With the MSCI ACWI (ACWI-US) approaching the top-end of our expected 2023 trading range at $93, we see limited upside from here, and we believe caution is warranted.
We want to remain overweight Europe and the UK, but we prefer to buy only on pullbacks.
The Hang Seng and MSCI China (MCHI-US) are both getting rejected at their important resistances discussed last week, and we would expect to see a basing process develop below resistance.


Caution Warranted; ACWI-US At $93 Resistance; Buys in Communications, Staples, Materials, Financials

China

iShares MSCI China ETF is an exchange-traded fund incorporated in the USA. The ETF seeks to track the performance of the MSCI China Index. The Index is a free float adjusted market cap weighted index designed to measure the performance of equity securities in the top 85% in market cap of Chinese equity markets, as represented by the A-Shares, H-Shares, B-Shares, Red Chips, & P-Chips.

iShares MSCI China ETF (MCHI US)

New Indicator Shows China’s Consumers Are Spending — on Services

Amid the gloom of China’s economic slowdown, there are some bright spots. A new data series released by the National Bureau of Statistics (NBS) on...

Caixin Global

Emerging Markets Ex-China: Looking Back... And Forward

EMXC's AUM has increased from US$420m in March2021 to US$11bn now. That has led to selling of China stocks and buying of other EM stocks. The U.S....