Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Over the past five trading days, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> multi-leg option strategies showcased a variety of approaches. Strategy highlights and volatility context are provided.</li>
<li>With short-term implied volatility below its median, long volatility strategies dominate, with a balanced mix of bullish and bearish positions. </li>
<li>Open interest spread across monthly and quarterly expiries, with some notable strategies taking advantage of longer expiration dates, and a steep negatively sloped skew $475.</li>
</ul>


Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights and volatility context are provided.
With short-term implied volatility below its median, long volatility strategies dominate, with a balanced mix of bullish and bearish positions. 
Open interest spread across monthly and quarterly expiries, with some notable strategies taking advantage of longer expiration dates, and a steep negatively sloped skew $475.


Tencent (700 HK): Volatility Plays and Skew Top Trades

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.</li>
<li>That's decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).</li>
<li>Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more. </li>
</ul>


Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.
That's decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).
Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more. 


HK Connect SOUTHBOUND Flows (To 28 Mar 2025); Banks and Divs Bought Again

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, <a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a>'s range looks a little pricey, while <a href="https://www.smartkarma.com/entities/eco-shop-marketing" target="_blank" data-smartkarma-citation="entities:44169:1" rel="noopener">Eco-Shop Marketing (ECO MY)</a> could trade ahead of its listed peers, in our view.</li>
<li>On the placements front, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> matched <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> in size, but couldn't do so in returns.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, DN Solutions (298440 KS)'s range looks a little pricey, while Eco-Shop Marketing (ECO MY) could trade ahead of its listed peers, in our view.
On the placements front, Xiaomi Corp (1810 HK) matched BYD (1211 HK) in size, but couldn't do so in returns.


ECM Weekly (31st Mar 2025) - Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda

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

Index Rebalance

<ul>
<li>Hang Seng Indexes has announced a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the next rebalance in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/netease-inc" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a>, <a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO (9866 HK)</a>, <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Techn (9901 HK)</a> and <a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo (9898 HK)</a> benefit; <a href="https://www.smartkarma.com/entities/gds-holdings-ltd" target="_blank" data-smartkarma-citation="entities:32157:1" rel="noopener">GDS Holdings (9698 HK)</a> loses out.</li>
<li>The FAF changes along with capping changes will result in a round-trip trade of HK$34.2bn (US$4.4bn) at the June rebalance with the largest turnover for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a>. </li>
</ul>


Hang Seng Indexes has announced a change in the FreeFloat-Adjusted Factor (FAF) methodology for Secondary Listings that will be implemented from the next rebalance in June.

NetEase (9999 HK), Baidu (9888 HK), Trip.com (9961 HK), NIO (9866 HK), New Oriental Education &amp; Techn (9901 HK) and Weibo (9898 HK) benefit; GDS Holdings (9698 HK) loses out.
The FAF changes along with capping changes will result in a round-trip trade of HK$34.2bn (US$4.4bn) at the June rebalance with the largest turnover for the Hang Seng TECH Index. 


Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Mar 21st.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Mar 21st.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea.


HK Short Interest Weekly: Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

Tencent (700 HK): Volatility Plays and Skew Top Trades

Strategies show dominance of long volatility approaches with a mix of bullish and bearish positions, taking advantage of longer expiration dates...

Gaudenz Schneider

HK Connect SOUTHBOUND Flows (To 28 Mar 2025); Banks and Divs Bought Again

Chinese banks get their expected capital injection and the world awaits tariffs but SOUTHBOUND investors continue to buy, making for a record...

Travis Lundy

ECM Weekly (31st Mar 2025) - Xiaomi, NIO, FCT, Gigabyte, DN Sol, Nanshan Al, Zenergy, LXJ, Veeda

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

Hang Seng Indexes: FAF Methodology Change for Secondary Listings; Over US$1bn to Buy in NetEase

The big buys are up in the last week: NetEase (+3.75%), Baidu (+2.1%), Trip.com (+1.8%) while the headline indices are down: HSI (-1.1%), HSCEI (...

Brian Freitas

HK Short Interest Weekly: Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea

We analyzed the latest HK SFC report for aggregate short position as of Mar 21st and highlight short interest changes in Trip.Com, Zto Express,...

Ke Yan, CFA, FRM

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