Alpha-Centric ESG Research

Kyle Rudden

Deceitful Chinese companies exploiting Americans. Cheaters, cheating at every turn. Flouting laws and swindling the elderly. Communists! Billions of dollars flowing into China, America bankrolling China's glidepath to global domination. Surveillance technology. Huawei. ZTE. Zoom.Believe it or not, every word above (save for conjunctions and minor poetic license in arrangement) is from politicians talking about Senate Bill 945. The Holding Foreign Companies Accountable Act. You know it; that thing all over the news talking about kicking Chinese stocks off U.S. exchanges.<blockquote>It's asinine that we're giving deceitful Chinese companies an opportunity to exploit Americans.                                                — Senator John Kennedy (R-LA), Sponsor of S945, in a <a href="https://www.kennedy.senate.gov/public/2020/5/senate-passes-kennedy-and-van-hollen-s-bill-to-kick-deceitful-chinese-companies-off-u-s-exchanges" target="_blank" rel="noopener">press release</a></blockquote>Normally, I wouldn't bother repeating such rhetoric. But the sentiment it conveys is emblematic of something highly relevant to this Insight – that while S945 is ostensibly about investor protection, it also embodies a tacit but poorly-hidden political agenda with national security underpinnings.Here is why that matters for investors. Politics – and especially election-year politics – drives every variable in an equation that determines: 1) if the House votes on S945, 2) how it votes, if it does, 3) whether Trump signs S945 in into law or vetoes it, and 4) the impacts on various Chinese stocks.Therein lies the essence of this Insight. It is a deep dive into the bowels of politics. An analysis of the probabilities and outcomes for S945. Political science. Data science. And a risk arbitrage'esque mentality. This is discussed ad nauseam, always on the party line, so better to be different. Right?You're probably wondering about that bullish imperative. I would be too.If I'm honest, it does feel a bit strange putting "bullish" on a report about a largely negative (for the stocks if affects) piece of legislation. I haven't gone mad. But this is a "special situation" needing a little explanation. Details are inside. The following bullet points are the cover-page basics:<ul>
<li>My thesis and imperative are event-based, driven by probabilities and catalysts around S945.</li>
<li>Bullish is relative, not absolute. I'm not positive per se just far "less negative" than consensus.</li>
<li>Most ask, "How will the House vote?" when the real question is, "Will the House even vote at all?"</li>
<li>Odds that the House will not vote this legislative session are about 50/50 but increasing daily.</li>
<li>This no-vote risk is real, not widely understood, and the catalyst to turn this issue on its head.</li>
<li>If the House votes this session, it is more likely to pass S945 than not but that too is changing.</li>
<li>My opinion is that the bill, even if passed, has more bark than bite for certain Chinese stocks.</li>
</ul>

Deceitful Chinese companies exploiting Americans. Cheaters, cheating at every turn. Flouting laws and swindling the elderly. Communists! Billions of dollars flowing into China, America bankrolling China's glidepath to global domination. Surveillance technology. Huawei. ZTE. Zoom.Believe it or not, every word above (save for conjunctions and minor poetic license in arrangement) is from politicians talking about Senate Bill 945. The Holding Foreign Companies Accountable Act. You know it; that thing all over the news talking about kicking Chinese stocks off U.S. exchanges.It's asinine that we're giving deceitful Chinese companies an opportunity to exploit Americans.                                                — Senator John Kennedy (R-LA), Sponsor of S945, in a press releaseNormally, I wouldn't bother repeating such rhetoric. But the sentiment it conveys is emblematic of something highly relevant to this Insight – that while S945 is ostensibly about investor protection, it also embodies a tacit but poorly-hidden political agenda with national security underpinnings.Here is why that matters for investors. Politics – and especially election-year politics – drives every variable in an equation that determines: 1) if the House votes on S945, 2) how it votes, if it does, 3) whether Trump signs S945 in into law or vetoes it, and 4) the impacts on various Chinese stocks.Therein lies the essence of this Insight. It is a deep dive into the bowels of politics. An analysis of the probabilities and outcomes for S945. Political science. Data science. And a risk arbitrage'esque mentality. This is discussed ad nauseam, always on the party line, so better to be different. Right?You're probably wondering about that bullish imperative. I would be too.If I'm honest, it does feel a bit strange putting "bullish" on a report about a largely negative (for the stocks if affects) piece of legislation. I haven't gone mad. But this is a "special situation" needing a little explanation. Details are inside. The following bullet points are the cover-page basics:
My thesis and imperative are event-based, driven by probabilities and catalysts around S945.
Bullish is relative, not absolute. I'm not positive per se just far "less negative" than consensus.
Most ask, "How will the House vote?" when the real question is, "Will the House even vote at all?"
Odds that the House will not vote this legislative session are about 50/50 but increasing daily.
This no-vote risk is real, not widely understood, and the catalyst to turn this issue on its head.
If the House votes this session, it is more likely to pass S945 than not but that too is changing.
My opinion is that the bill, even if passed, has more bark than bite for certain Chinese stocks.


"Delisting Deceitful Chinese Companies Act" Not a Slam Dunk and Has More Bark Than Bite if It Passes

Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

Equity Bottom-Up

<ul>
<li>After initial  9/11shocks, the consumer discretionary sector recovery ramped faster than most predicted.</li>
<li>As uncertainties begin to abate in Asia, currently battered stocks should rise higher and faster than many algorithms may show.</li>
<li>Right now Las Vegas Sands, Sands China and Nagacorp seem especially cheap for a buy on the dip strategy.</li>
</ul>


After initial  9/11shocks, the consumer discretionary sector recovery ramped faster than most predicted.
As uncertainties begin to abate in Asia, currently battered stocks should rise higher and faster than many algorithms may show.
Right now Las Vegas Sands, Sands China and Nagacorp seem especially cheap for a buy on the dip strategy.


Asia Gaming Stocks: Modeling Durations of the 9/11 Attack Reveal Similar Recovery Patterns

United States

Sands China Ltd. develops, owns, and operates integrated resorts, retail malls, and casinos. The Company also manages convention and exhibition halls in Macau.

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Sands China (SCHYY US)

"Delisting Deceitful Chinese Companies Act" Not a Slam Dunk and Has More Bark Than Bite if It Passes

Deceitful Chinese companies exploiting Americans. Cheaters, cheating at every turn. Flouting laws and swindling the elderly. Communists! Billions...

Kyle Rudden

Asia Gaming Stocks: Modeling Durations of the 9/11 Attack Reveal Similar Recovery Patterns

After initial 9/11shocks, the consumer discretionary sector recovery ramped faster than most predicted. As uncertainties begin to abate in Asia,...

Howard J Klein

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