Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it. </li>
<li>We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations. </li>
<li>We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here. </li>
</ul>


This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it. 
We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations. 
We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here. 


The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)

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>With the review cutoff done, there could be two changes for the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a> in March.</li>
<li>
<a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a> are expected to replace <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">China Tourism Group Duty Free (1880 HK)</a> and <a href="https://www.smartkarma.com/entities/china-coal-energy-co-h" target="_blank" data-smartkarma-citation="entities:383:1" rel="noopener">China Coal Energy Co H (1898 HK)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a> has broken out to new highs (possibly on short covering) while <a href="https://www.smartkarma.com/entities/china-coal-energy-co-h" target="_blank" data-smartkarma-citation="entities:383:1" rel="noopener">China Coal Energy Co H (1898 HK)</a> continues to sell off.</li>
</ul>


With the review cutoff done, there could be two changes for the iShares China Large-Cap (FXI) (FXI US) in March.

Guotai Junan Securities (2611 HK) and ZTE Corp H (763 HK) are expected to replace China Tourism Group Duty Free (1880 HK) and China Coal Energy Co H (1898 HK). 

ZTE Corp H (763 HK) has broken out to new highs (possibly on short covering) while China Coal Energy Co H (1898 HK) continues to sell off.


FXI Rebalance Preview: Two Sets of Changes as ZTE Breaks Out, China Coal Dumps

<ul>
<li>SOUTHBOUND gross trading activity was not stronger per day than the previous two weeks. But SB Net Buying was HUGE. The biggest week since global index deletions in January 2021.</li>
<li>The story was similar. On Tuesday in the US, Tencent was put on a DoD list leading to a possible CMC list appearance (which would lead to index deletions).</li>
<li>Tencent saw US$4bn of SOUTHBOUND net buying. SMIC, Xiaomi, and China Mobile were another $1bn.</li>
</ul>


SOUTHBOUND gross trading activity was not stronger per day than the previous two weeks. But SB Net Buying was HUGE. The biggest week since global index deletions in January 2021.
The story was similar. On Tuesday in the US, Tencent was put on a DoD list leading to a possible CMC list appearance (which would lead to index deletions).
Tencent saw US$4bn of SOUTHBOUND net buying. SMIC, Xiaomi, and China Mobile were another $1bn.


HK Connect SOUTHBOUND Flows (To 10 Jan 2025); YUUUUGE Net Buying by SB, $4bn on Tencent

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sichuan-kelun-biotech-biopharm" target="_blank" data-smartkarma-citation="entities:40071:1" rel="noopener">Sichuan Kelun-Biotech Bio (6990 HK)</a>, <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Ind. (669 HK)</a>, <a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>, <a href="https://www.smartkarma.com/entities/chervon-holdings-limited" target="_blank" data-smartkarma-citation="entities:35309:1" rel="noopener">Chervon Hldgs (2285 HK)</a>, and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> have a very high reliance on the US market.</li>
<li>
<a href="https://www.smartkarma.com/entities/vtech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18812:1" rel="noopener">Vtech Hldgs (303 HK)</a>, <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a>, and <a href="https://www.smartkarma.com/entities/tcl-multimedia-technology" target="_blank" data-smartkarma-citation="entities:15654:1" rel="noopener">Tcl Multimedia (1070 HK)</a> ranked lower on the list, but consumer cutbacks will have a bigger impact. </li>
<li>The spillover effect of a US recession to other countries will pressurise companies that have low direct exposure, like <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a> and <a href="https://www.smartkarma.com/entities/prada-s-p-a" target="_blank" data-smartkarma-citation="entities:889:1" rel="noopener">Prada S.P.A. (1913 HK)</a>.</li>
</ul>



Sichuan Kelun-Biotech Bio (6990 HK), Techtronic Ind. (669 HK), Vesync (2148 HK), Chervon Hldgs (2285 HK), and WuXi AppTec (2359 HK) have a very high reliance on the US market.

Vtech Hldgs (303 HK), Samsonite (1910 HK), Haier Smart Home (6690 HK), and Tcl Multimedia (1070 HK) ranked lower on the list, but consumer cutbacks will have a bigger impact. 
The spillover effect of a US recession to other countries will pressurise companies that have low direct exposure, like Orient Overseas International (316 HK) and Prada S.P.A. (1913 HK).


China & HK Strategy: Who Are the Victims of a US Recession?

<ul>
<li>HK$77bn/Day of gross SOUTHBOUND activity last week vs HK$88bn the week before, HK$100+bn the week before. Gross flows are winding down.</li>
<li>Watch for news on the Dual Counter (RMB) Trading eligibility for SOUTHBOUND near-term. That could re-up the pace .</li>
<li>The data tables below update on a daily basis in the <a href="https://www.smartkarma.com/tools" target="_blank" rel="noopener">Tools</a> section of Smartkarma. The <a href="https://www.smartkarma.com/tools/quiddity/south-flow-monitor" target="_blank" rel="noopener">Southbound Flow Monitor</a> and <a href="https://www.smartkarma.com/tools/quiddity/ah-shares-monitor" target="_blank" rel="noopener">AH Pairs Monitor</a> are both there - free - for all SK readers.</li>
</ul>


HK$77bn/Day of gross SOUTHBOUND activity last week vs HK$88bn the week before, HK$100+bn the week before. Gross flows are winding down.
Watch for news on the Dual Counter (RMB) Trading eligibility for SOUTHBOUND near-term. That could re-up the pace .
The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there - free - for all SK readers.


HK Connect SOUTHBOUND Flows (2Wks To 5 Dec 2025) - Lower Activity, Lower Nets, BABA Still Bought

China

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

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ZTE Corp H (763 HK)

FXI Rebalance Preview: Two Sets of Changes as ZTE Breaks Out, China Coal Dumps

GTJA and ZTE could replace CTG Duty Free and China Coal in the FXI ETF in March. Alibaba and Tencent will be sold on capping, Meituan bought. ZTE...

Brian Freitas

HK Connect SOUTHBOUND Flows (To 10 Jan 2025); YUUUUGE Net Buying by SB, $4bn on Tencent

Gross SOUTHBOUND flows were not larger this week on a daily basis than over the holiday weeks, but SOUTHBOUND bought Tencent with a vengeance as it...

Travis Lundy

China & HK Strategy: Who Are the Victims of a US Recession?

Reliance on the US market varies among HK-listed companies, with some having high direct exposure to a recession. Those with low direct exposure...

Osbert Tang, CFA

HK Connect SOUTHBOUND Flows (2Wks To 5 Dec 2025) - Lower Activity, Lower Nets, BABA Still Bought

SOUTHBOUND volumes and net are winding down - lower consecutively, but nets still positive - into year-end. I await RMB Counters in Southbound. SB...

Travis Lundy

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The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)

Quiddity's New & Improved And Really Quite Spiffy H/A Discount Monitor. All the H/A Pairs, universe & sector metrics, with interactive tables and...

Travis Lundy

FXI Rebalance Preview: Two Sets of Changes as ZTE Breaks Out, China Coal Dumps

GTJA and ZTE could replace CTG Duty Free and China Coal in the FXI ETF in March. Alibaba and Tencent will be sold on capping, Meituan bought. ZTE...

Brian Freitas

HK Connect SOUTHBOUND Flows (To 10 Jan 2025); YUUUUGE Net Buying by SB, $4bn on Tencent

Gross SOUTHBOUND flows were not larger this week on a daily basis than over the holiday weeks, but SOUTHBOUND bought Tencent with a vengeance as it...

Travis Lundy

China & HK Strategy: Who Are the Victims of a US Recession?

​Reliance on the US market varies among HK-listed companies, with some having high direct exposure to a recession. Those with low direct exposure...

Osbert Tang, CFA

HK Connect SOUTHBOUND Flows (2Wks To 5 Dec 2025) - Lower Activity, Lower Nets, BABA Still Bought

SOUTHBOUND volumes and net are winding down - lower consecutively, but nets still positive - into year-end. I await RMB Counters in Southbound. SB...

Travis Lundy

Reliance on the US market varies among HK-listed companies, with some having high direct exposure to a recession. Those with low direct exposure...