Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Macroeconomics

<div class="content-highlight"><ul>
<li>Every time the Chinese authorities try to wean the economy off monetary stimulus they are forced back into an ever diminishing cycle.  2015 is no exception.</li>
<li>The latest data releases support the view of a stimulus led recovery in China.  Kicking the 'reform' can down the road for a little while.</li>
<li>Unfortunately the impulse value of each stimulus is diminishing.</li>
<li>Due to the precipitous declines in commodities markets prior to this round of stimulus the commodities markets will behave differently from…</li>
</ul></div>


Every time the Chinese authorities try to wean the economy off monetary stimulus they are forced back into an ever diminishing cycle.  2015 is no exception.
The latest data releases support the view of a stimulus led recovery in China.  Kicking the 'reform' can down the road for a little while.
Unfortunately the impulse value of each stimulus is diminishing.
Due to the precipitous declines in commodities markets prior to this round of stimulus the commodities markets will behave differently from…


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

Guotai Haitong Securities / Index Rebalance

<ul>
<li>There could be 23 changes for the CSI A500 Index at the December rebalance. Turnover is estimated at 2.9% and the round-trip trade is around US$1.6bn.</li>
<li>There is a fair amount of balance between sectors with Consumer Discretionary and Health Care expected to lose index spots to Industrials, Information Technology and Materials.</li>
<li>The forecast adds outperformed the forecast deletes from June-September but have given up gains since then. Position in stocks that will have same-way flows from passive trackers of other indices.</li>
</ul>


There could be 23 changes for the CSI A500 Index at the December rebalance. Turnover is estimated at 2.9% and the round-trip trade is around US$1.6bn.
There is a fair amount of balance between sectors with Consumer Discretionary and Health Care expected to lose index spots to Industrials, Information Technology and Materials.
The forecast adds outperformed the forecast deletes from June-September but have given up gains since then. Position in stocks that will have same-way flows from passive trackers of other indices.


CSI A500 Index Rebalance Preview: Bunch of Changes to Lead to US$1.6bn Trade

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> has secured all PRC regulatory approvals for its <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a> offer. The remaining precondition is approval from the HK Communications Authority. </li>
<li>I Squared, while technically still in the race, is rapidly running out of time. It needs to announce an offer before China Mobile opens its offer for acceptance.</li>
<li>Despite the HKBN CEO’s comments that the China Mobile offer is not good enough, China Mobile has no pressing need to bump if a competing offer fails to materialise.</li>
</ul>



China Mobile (941 HK) has secured all PRC regulatory approvals for its HKBN Ltd (1310 HK) offer. The remaining precondition is approval from the HK Communications Authority. 
I Squared, while technically still in the race, is rapidly running out of time. It needs to announce an offer before China Mobile opens its offer for acceptance.
Despite the HKBN CEO’s comments that the China Mobile offer is not good enough, China Mobile has no pressing need to bump if a competing offer fails to materialise.


HKBN (1310 HK): China Mobile Inches Closer Toward Precondition Satisfaction

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Greatview Aseptic Packaging / Event-Driven

<ul>
<li>Quite a lot of new news to digest - <a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">GAPack (468 HK)</a>'s IFA, not altogether surprisingly, <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0107/2025010700041.pdf" target="_blank" rel="noopener">concluded</a> that shareholders should not accept the Offer - in bold, red caps. </li>
<li>But more surprisingly, is the <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0106/2025010601137.pdf" target="_blank" rel="noopener">disclosure announcement</a> that <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a> has reduced its stake below 5%.  </li>
<li>Evidently Mengniu is keeping its options open to tender - or not - and not have to make public disclosures. Keep an eye out on CCASS movements.</li>
</ul>


Quite a lot of new news to digest - GAPack (468 HK)'s IFA, not altogether surprisingly, concluded that shareholders should not accept the Offer - in bold, red caps. 
But more surprisingly, is the disclosure announcement that China Mengniu Dairy Co (2319 HK) has reduced its stake below 5%.  
Evidently Mengniu is keeping its options open to tender - or not - and not have to make public disclosures. Keep an eye out on CCASS movements.


GAPack (468 HK): IFA Says "Reject". But Mengniu Selling Down

Canvest Environmental Protection Group / Event-Driven

Canvest Environmental Protection Group (0XC SW)

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/smart-share-global-limited" target="_blank" data-smartkarma-citation="entities:32217:1" rel="noopener">Smart Share Global (EM US)</a>, <a href="https://www.smartkarma.com/entities/lifestyle-china-group-ltd" target="_blank" data-smartkarma-citation="entities:26090:1" rel="noopener">Lifestyle China (2136 HK)</a>, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/get-nice-financial-group-ltd" target="_blank" data-smartkarma-citation="entities:29667:1" rel="noopener">Get Nice Financial Group Ltd (1469 HK)</a>. </li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>, <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">Avjennings Ltd (AVJ AU)</a>, <a href="https://www.smartkarma.com/entities/latin-resources-ltd" target="_blank" data-smartkarma-citation="entities:8770:1" rel="noopener">Latin Resources (LRS AU)</a>, <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a>. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Shanghai Henlius Biotech (2696 HK), Smart Share Global (EM US), Lifestyle China (2136 HK), Seven &amp; I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK). 
Lowest spreads: Makino Milling Machine Co (6135 JP), Fuji Soft Inc (9749 JP), Avjennings Ltd (AVJ AU), Latin Resources (LRS AU), Pressance Corp (3254 JP). 


Merger Arb Mondays (20 Jan) - Canvest, Henlius, Lifestyle China, Vesync, JAMCO, Insignia, AVJennings

China

ORG Technology Co., Ltd. develops, designs, manufactures and sells food and beverages metal packaging products. The Company's main products include food and beverage cans.

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ORG Technology Co., Ltd. A (002701 CH)

China - Late 2012-Early 2013 Repeat

Every time the Chinese authorities try to wean the economy off monetary stimulus they are forced back into an ever diminishing cycle. 2015 is no...

Mark Artherton

CSI A500 Index Rebalance Preview: Bunch of Changes to Lead to US$1.6bn Trade

There could be 23 changes for the CSI A500 Index at the Dec rebal. Estimated turnover is 2.9% and round-trip trade is US$1.6bn. Adds outperformed...

Brian Freitas

HKBN (1310 HK): China Mobile Inches Closer Toward Precondition Satisfaction

I Squared, while technically still in the race, is rapidly running out of time. Despite the HKBN CEO’s comments that the China Mobile offer is not...

Arun George

GAPack (468 HK): IFA Says "Reject". But Mengniu Selling Down

The first close of XJF's Offer for Greatview Aseptic Packaging (468 HK) is the 21st January, and for a number of investors, the deadline to tender...

David Blennerhassett

Merger Arb Mondays (20 Jan) - Canvest, Henlius, Lifestyle China, Vesync, JAMCO, Insignia, AVJennings

This week, the highest gross spreads are Henlius (29.3%), Smart Share (16.8%), Lifestyle China (16.7%), Seven & I (15.4%), Get Nice (13.3%), ESR...

Arun George

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