Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Equity Bottom-Up

<ul>
<li>A review of recent events/data impacting our investment themes and outlook</li>
<li>Change of mindset needed for HK/China as the bull markets broadens out</li>
<li>Signs of excess are rife in many global markets, but no top yet signalled.</li>
</ul>


A review of recent events/data impacting our investment themes and outlook
Change of mindset needed for HK/China as the bull markets broadens out
Signs of excess are rife in many global markets, but no top yet signalled.


Overview #34 – China Rocks On: Bull Market Rules

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong secular bull market continues to broaden and has broken all long term resistance levels. The HSCEI has beaten Asian and global peers over the last 18 months.</li>
<li>Growth and Momentum factors have been the best performers in the HSCI year to date. The Materials and Healthcare sectors continue to show increasing strength in their relative returns.</li>
<li>
<a href="https://www.smartkarma.com/entities/cloud-village-inc" target="_blank" data-smartkarma-citation="entities:33412:1" rel="noopener">Cloud Village (9899 HK)</a> had a breakout pattern from a continuation triangle after reporting a deal to stream Korean drama series to Chinese market. The company's profits grew in 1H25.
</li>
</ul>


The Hong Kong secular bull market continues to broaden and has broken all long term resistance levels. The HSCEI has beaten Asian and global peers over the last 18 months.
Growth and Momentum factors have been the best performers in the HSCI year to date. The Materials and Healthcare sectors continue to show increasing strength in their relative returns.

Cloud Village (9899 HK) had a breakout pattern from a continuation triangle after reporting a deal to stream Korean drama series to Chinese market. The company's profits grew in 1H25.



Technically Speaking Breakouts & Breakdowns - HONG KONG (September 10)

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>Last evening, Hang Seng announced a methodology change for the Hang Seng Internet &amp; Information Technology Index (HSIII Index) with implementation in two phases.</li>
<li>The capping methodology will be updated at the September rebalance and the turnover and sector requirements will be updated at the December rebalance.</li>
<li>The updated capping scheme increases turnover and flow in September, while there could be one constituent change for the index at the December rebalance.</li>
</ul>


Last evening, Hang Seng announced a methodology change for the Hang Seng Internet &amp; Information Technology Index (HSIII Index) with implementation in two phases.
The capping methodology will be updated at the September rebalance and the turnover and sector requirements will be updated at the December rebalance.
The updated capping scheme increases turnover and flow in September, while there could be one constituent change for the index at the December rebalance.


Hang Seng Internet & IT Index (HSIII): Methodology Change & Impact

<ul>
<li>The prospect of jumbo US rate cuts is juicing asset markets</li>
<li>Overseas Capital is starting to move into domestic Chinese equities</li>
<li>The Precious metals ETFs are breaking out -looking at laggards</li>
</ul>


The prospect of jumbo US rate cuts is juicing asset markets
Overseas Capital is starting to move into domestic Chinese equities
The Precious metals ETFs are breaking out -looking at laggards


Overview #32 – International Money Starts to Flow to Chinese Domestic Markets

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>For the June 2025 index rebal, we estimate there to be US$423mn one-way flows due to capping.</li>
<li>We also expect three index changes (so far) for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
For the June 2025 index rebal, we estimate there to be US$423mn one-way flows due to capping.
We also expect three index changes (so far) for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).


Quiddity Leaderboard HSIII Jun25: US$423mn One-Way for Jun; Some Sector-Neutral Pair Trades for Sep

China

Weibo Corp operates as a social media platform for people to create, distribute and discover Chinese language contents. The Company offers users public self expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution. Weibo enables its advertising and marketing customers to promote their brands and services to users.

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Weibo (9898 HK)

Overview #34 – China Rocks On: Bull Market Rules

A review of recent events/data impacting our investment themes and outlook. We look at some new additions in Chinese tech as the bull market broadens

Rikki Malik

Technically Speaking Breakouts & Breakdowns - HONG KONG (September 10)

The Hong Kong secular bull market continues to broaden and has broken all long term resistance levels. The HSCEI has beaten Asian and global peers...

David Mudd

Hang Seng Internet & IT Index (HSIII): Methodology Change & Impact

Changes to the capping scheme increase turnover and flow in September. Introduction of minimum turnover and expansion of the universe could lead to...

Brian Freitas

Overview #32 – International Money Starts to Flow to Chinese Domestic Markets

A review of recent events/data impacting our investment themes and outlook. We look at the Chinese breakout and laggards in the precious metal space

Rikki Malik

Quiddity Leaderboard HSIII Jun25: US$423mn One-Way for Jun; Some Sector-Neutral Pair Trades for Sep

We see NetDragon (777 HK) as an expected DEL for the September 2025 index review and there could be multiple days of volume to sell. NetDragon...

Janaghan Jeyakumar, CFA

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