Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>
 A major bull market in Global Liquidity has started. Be prepared the cycle is rising and looks set to expand towards a new top sometime around 2026.</li>
<li>A sharp uptick in the pace of liquidity injections into World financial markets occurred around October of last year in the wake of the British gilt crisis</li>
<li>
 China’s PBoC also began a major easing policy coinciding with the end of COVID-lockdowns. China matters hugely to the World economy because of her whopping size.</li>
</ul>



 A major bull market in Global Liquidity has started. Be prepared the cycle is rising and looks set to expand towards a new top sometime around 2026.
A sharp uptick in the pace of liquidity injections into World financial markets occurred around October of last year in the wake of the British gilt crisis

 China’s PBoC also began a major easing policy coinciding with the end of COVID-lockdowns. China matters hugely to the World economy because of her whopping size.


Major Global Liquidity Warning – Don’t Fight the Feds

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.

Event-Driven

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn</li>
<li>We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn
We have covered the background of the event in our previous notes. In this note, we talk about the recent updates.


Tencent Meituan Dividend - The US$17bn Overhang Is Here - Not All Shares in CCASS, Here We Go Again!

<ul>
<li>Global Liquidity is the key driver of asset markets. Global Liquidity bottomed in October. Expect a small rise in 2023</li>
<li>Central Banks, led by the US Fed seem to be restarting a QE program and injecting more liquidity</li>
<li>Watch the MOVE Index and the daily size of Reverse Repos (RRP) for clues about the direction of Global Liquidity</li>
</ul>


Global Liquidity is the key driver of asset markets. Global Liquidity bottomed in October. Expect a small rise in 2023
Central Banks, led by the US Fed seem to be restarting a QE program and injecting more liquidity
Watch the MOVE Index and the daily size of Reverse Repos (RRP) for clues about the direction of Global Liquidity


Crisis, What Crisis! – The Drivers of Global Liquidity and What to Watch Out For?

<ul>
<li>How to Invest in 2023 and 2024 based on the evolving cycle of Global Liquidity, which likely bottomed in October 2022 and is now rising again</li>
<li>
QT is effectively dead. Major stock and bond markets may range in 2023, but certain areas, like cyclical, commodities and EM, will show strong gains</li>
<li>Three major changes are driving Global Liquidity higher: Fed stops QT, PBoC eases liquidity aggressively and collateral supply improves as bond volatility drops. MOVE index important</li>
</ul>


How to Invest in 2023 and 2024 based on the evolving cycle of Global Liquidity, which likely bottomed in October 2022 and is now rising again

QT is effectively dead. Major stock and bond markets may range in 2023, but certain areas, like cyclical, commodities and EM, will show strong gains
Three major changes are driving Global Liquidity higher: Fed stops QT, PBoC eases liquidity aggressively and collateral supply improves as bond volatility drops. MOVE index important


Global Liquidity & Asset Allocation in 2023: Is QT Dead?

<ul>
<li>
 Global Liquidity cycle bottomed around October 2022 based on our calculations, immediately following the UK gilt crisis. That is no coincidence!</li>
<li>Central Banks are increasingly using their balance sheets to focus on financial stability. Expect more subtle forms of YCC in the future</li>
<li>QT (quantitative tightening) is effectively dead. Central Banks are becoming active collateral managers. Investors must closely watch the MOVE not the VIX</li>
</ul>



 Global Liquidity cycle bottomed around October 2022 based on our calculations, immediately following the UK gilt crisis. That is no coincidence!
Central Banks are increasingly using their balance sheets to focus on financial stability. Expect more subtle forms of YCC in the future
QT (quantitative tightening) is effectively dead. Central Banks are becoming active collateral managers. Investors must closely watch the MOVE not the VIX


A Sea Change in Global Liquidity: Why QT Is Dead?

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

Major Global Liquidity Warning – Don’t Fight the Feds

A bull market in Global Liquidity already underway. Don’t fight the US Fed, the People’s Bank, the Bank of Japan, the ECB and even the Bank of...

Michael J. Howell

Tencent Meituan Dividend - The US$17bn Overhang Is Here - Not All Shares in CCASS, Here We Go Again!

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. The settlement was...

Sumeet Singh

Crisis, What Crisis! – The Drivers of Global Liquidity and What to Watch Out For?

Global Liquidity is key for the asset market outlook. It is facing challenges, but we expect Liquidity to rise in 2023. Yet, many are worried by...

Michael J. Howell

Global Liquidity & Asset Allocation in 2023: Is QT Dead?

Summary of recent CrossBorderCapital Webinar on Global Liquidity evidencing major inflection of liquidity cycle, spurred by PBoC ease, end of Fed...

Michael J. Howell

A Sea Change in Global Liquidity: Why QT Is Dead?

September 2022 UK gilts crisis has proved a major wake up call for Central Bankers. It marked a major turning point in the Global Liquidity cycle....

Michael J. Howell