Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

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.

Cross Asset Strategy

Bull markets are born when the prevailing sentiment is one of disgust and die amidst hubris. The post-GFC run-up in equity prices has been rightly labelled as the most hated bull market in history, but sentiment and flows are finally catching up with the 425% appreciation in the S&amp;P 500 index, which has taken place since the markets' post-GFC nadir at the start of February 2009. Conventional wisdom is that long-term investors should not attempt to time markets but there are times such as 1999-2000 and 2007-08, when it is worth taking the risk of being early and shifting assets into cash and cash proxies given the prevailing levels of valuations and sentiment.I believe this is one of those occasions, as current market levels do not discount the potential impact of three key secular drivers on the anticipated returns to capital over the medium term.

Bull markets are born when the prevailing sentiment is one of disgust and die amidst hubris. The post-GFC run-up in equity prices has been rightly labelled as the most hated bull market in history, but sentiment and flows are finally catching up with the 425% appreciation in the S&amp;P 500 index, which has taken place since the markets' post-GFC nadir at the start of February 2009. Conventional wisdom is that long-term investors should not attempt to time markets but there are times such as 1999-2000 and 2007-08, when it is worth taking the risk of being early and shifting assets into cash and cash proxies given the prevailing levels of valuations and sentiment.I believe this is one of those occasions, as current market levels do not discount the potential impact of three key secular drivers on the anticipated returns to capital over the medium term.

Global Equities: China, Technology and Politics to Dominate 2018

Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Event-Driven

<ul>
<li>Yesterday morning, Prosus announced the acquisition of Just Eat Takeaway for $4.3bn.</li>
<li>Naspers and Prosus sold off sharply on the news, ending the day down 7.7% and 7.8%, respectively.</li>
<li>Naspers’ discount widened by 2.8 percentage points to 44.2% and Prosus’ discount widened by 3.1 percentage points to 39.8%.</li>
</ul>


Yesterday morning, Prosus announced the acquisition of Just Eat Takeaway for $4.3bn.
Naspers and Prosus sold off sharply on the news, ending the day down 7.7% and 7.8%, respectively.
Naspers’ discount widened by 2.8 percentage points to 44.2% and Prosus’ discount widened by 3.1 percentage points to 39.8%.


Naspers & Prosus Sell off on JET Acquisition, Discounts Oversold Lifting Buyback Accretion

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Ping An Insurance (H) / Technical Analysis

After a hard SOX decline in the US, Asia tech is now back at more attractive levels on a medium term basis and we are even seeing initial positive signs unfolding for this sector on a relative charts as long as relative supports are maintained. We will run through levels in Ping An, Tencent, SEC, SK Hynix and Tokyo Electron.<div style="text-align: left;">Asia rotation webcast</div>To view click on this link: <a href="https://www.screencast.com/t/6eNTQVLU1" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://www.screencast.com/t/6eNTQVLU1&amp;source=gmail&amp;ust=1512720445486000&amp;usg=AFQjCNEjFPEuDlYEZiyjYIj26GrH-SeZhw">https://www.screencast.com/t/6eNTQVLU1</a>6:45 min.<figure class="editor-figure mceNonEditable"><img class="editor-image img-responsive" src="https://static-prod.smartkarma.com/images/media/000/039/970/original/CPG%20INSERT.png?1512634990" data-smartkarma-image-id="39970"></figure>S&amp;P base case - Current slide is corrective. Secondary support noted at 2,622…

After a hard SOX decline in the US, Asia tech is now back at more attractive levels on a medium term basis and we are even seeing initial positive signs unfolding for this sector on a relative charts as long as relative supports are maintained. We will run through levels in Ping An, Tencent, SEC, SK Hynix and Tokyo Electron.Asia rotation webcastTo view click on this link: https://www.screencast.com/t/6eNTQVLU16:45 min.S&amp;P base case - Current slide is corrective. Secondary support noted at 2,622…

Differentiated global TMT & Internet Research

New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/21085" target="_blank" data-smartkarma-citation="entities:21085:1">Naspers (NPN SJ)</a> recent 1H18 results show continued traction on the top-line with revenues (adjusted for M&amp;A and FX) continuing to accelerate. Trading profit margins increased by 2ppt driven by improved profitability in e-commerce.  While the results are difficult to analyse given movements in FX across the group and M&amp;A, <a href="https://www.smartkarma.com/profiles/1918" target="_blank" data-smartkarma-citation="accounts:1918">Alastair Jones</a> focuses on growth rates adjusted for these issues to better understand underlying trends. Naspers Group structure is complex making quarterly analysis difficult<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/039/716/original/naspers%20group%20structure.jpg?1512371432" class="editor-image img-responsive" data-smartkarma-image-id="39716"></figure><div class="content-caption">…</div>

Naspers (NPN SJ) recent 1H18 results show continued traction on the top-line with revenues (adjusted for M&amp;A and FX) continuing to accelerate. Trading profit margins increased by 2ppt driven by improved profitability in e-commerce.  While the results are difficult to analyse given movements in FX across the group and M&amp;A, Alastair Jones focuses on growth rates adjusted for these issues to better understand underlying trends. Naspers Group structure is complex making quarterly analysis difficult…

Naspers Continues to Execute Well on Its Non-Tencent Investments.

CHINA - Healthcare, Steel, Autos, Education, Research From Beijing

Scott Laprise/ 乐天虎

CHINA - Healthcare, Steel, Autos, Education

Thematic (Sector/Industry)

<ul><li>CONVICTION BUY Tencent - had a very good year, now profit taking but catalysts too many to ignore.</li><li>Toyota China sales benefitting from the pushback on the Korean automakers.</li><li>CNHE possible good entry point on this education stock, we like the education space.</li><li><div>Tuniu Corp Spon Adr more issues ahead with Chinese travellers being more independent.</div></li><li>SMIC placement went well.</li><li>Nissin Foods IPO - maybe a tough going for instant noodles in China.</li><li>MGM China has some good catalysts investors should take a look at.</li><li>Shandong International Trust looks like a deal to stay away from.</li><li>Chinese real estate market suffers from transactional volume - is there a problem ahead?</li><li>HSBC France showing the 2nd worst ROA.</li></ul>

CONVICTION BUY Tencent - had a very good year, now profit taking but catalysts too many to ignore.Toyota China sales benefitting from the pushback on the Korean automakers.CNHE possible good entry point on this education stock, we like the education space.Tuniu Corp Spon Adr more issues ahead with Chinese travellers being more independent.SMIC placement went well.Nissin Foods IPO - maybe a tough going for instant noodles in China.MGM China has some good catalysts investors should take a look at.Shandong International Trust looks like a deal to stay away from.Chinese real estate market suffers from transactional volume - is there a problem ahead?HSBC France showing the 2nd worst ROA.

The Week That Was in Greater China@ Smartkarma: Tencent, Toyota, CNHE, Tuniu,Nissin, MGM China

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Global Equities: China, Technology and Politics to Dominate 2018

Bull markets are born when the prevailing sentiment is one of disgust and die amidst hubris. The post-GFC run-up in equity prices has been rightly...

John-Paul Smith

Naspers & Prosus Sell off on JET Acquisition, Discounts Oversold Lifting Buyback Accretion

Naspers and Prosus sold off sharply on the news of the JET acquisition yesterday morning. Both discounts widened, following a notable recovery...

DMA

Levels to Buy Asian Tech Giants

After a hard SOX decline in the US, Asia tech is now back at more attractive levels on a medium term basis and we are even seeing initial positive...

Thomas Schroeder

Naspers Continues to Execute Well on Its Non-Tencent Investments.

Naspers (NPN SJ) recent 1H18 results show continued traction on the top-line with revenues (adjusted for M&A and FX) continuing to accelerate....

New Street Research

The Week That Was in Greater China@ Smartkarma: Tencent, Toyota, CNHE, Tuniu,Nissin, MGM China

CONVICTION BUY Tencent - had a very good year, now profit taking but catalysts too many to ignore. Toyota China sales benefitting from the...

Scott Laprise/ 乐天虎

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