In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 14 Feb 2025); HUGE Jump in Value Traded, Consumer Names Get a Bid
- A/H Premium Tracker (To 14 Feb 2025): AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks
- (Mostly) Asia-Pac M&A: Paragon REIT, Kaonavi, Arcadium Lithium, Sun Art Retail, HKBN, and Seven & I
- Companies Should Consider All Options, Not Just Maintaining Their Listing
HK Connect SOUTHBOUND Flows (To 14 Feb 2025); HUGE Jump in Value Traded, Consumer Names Get a Bid
- There was a HUGE jump in value traded this week – HK$655bn vs ~$300bn for 5-days of trading the last several weeks.
- Alibaba Group Holding (9988 HK) was the big buy with net buying 7 of 8 days post-CNY and a huge end of week. Tencent was sold.
- There appears to be a flight to Chinese equities by foreigners and SB are taking part with risk-on style trading. Watch Hang Seng rebal news this week!
A/H Premium Tracker (To 14 Feb 2025): AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks
- AH Premia are lower again (new 5yr low) in the first full week after the CNY holiday. HK stocks up BIG vs A-shares. H/A discounts slightly narrower on average.
- That tells you that the big winners in HK the past two weeks are those stocks without A-shares. This past week Healthcare sector pairs saw the best relative H-share performance.
- Foreigners returning to HK markets but less to the H in H/A pairs. They are buying HK/China “foreign-investor beta” not China breadth. Feels spivvy, and short-term.
(Mostly) Asia-Pac M&A: Paragon REIT, Kaonavi, Arcadium Lithium, Sun Art Retail, HKBN, and Seven & I
- I tally 59 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Two new deals discussed this week: Paragon REIT (PGNREIT SP) and Kaonavi Inc (4435 JP).
- Key updates/news took place on: Arcadium Lithium (LTM AU), Sun Art Retail (6808 HK), HKBN Ltd (1310 HK), and Seven & I Holdings (3382 JP).
Companies Should Consider All Options, Not Just Maintaining Their Listing
- Besides not showing concrete measures to increase corporate value, the feasibility of the plan and the valuation at that time are often not verified, so disclosures that don’t add up.
- Listed subsidiaries and equity method affiliates account for 31.8% of all listed companies. The company is still in the process of restructuring its business portfolio.
- The growth of each company’s corporate value and stock market capitalization will be determined by how quickly issues that have not been initiated so far are resolved.
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