In today’s briefing:
- Global Markets Tactical Outlook: Week of June 30 – July 4
- HK Connect SOUTHBOUND Flows (To 27 June 2025); Volumes Up, Net Buying Up, Banks Bought, SOEs Sold
- FWD Group Holdings (1828 HK): Low Free Float Delays and Limits Global Index Inclusion
- BBVA/Sabadell: Potential BBVA Bump, TSB Dividend Catalyst, and Positioning Via Equity and Options
- Bright Smart (1428 HK): Bright and Smart FY25
- UCO Bank (UCO IN) Vs. Indian Overseas Bank (IOB IN): Trade Closed as Mean Reversion Hits Target
- Samsung F&M (000815 KS) Vs. Woori (316140 KS): No Mean Reversion (Yet), Time to Reassess the Pair
Global Markets Tactical Outlook: Week of June 30 – July 4
- A quick synoptic look at the tactical models for some key indices, stocks, commodities and bonds we cover, for the week June 30 – July 4.
- US Markets will be closed for Independence Day celebrations on July 4th.
- Most stocks and global indices appear to be overbought or nearly overbought. 10-year US Treasuries Futures are also overbought. Commodities like Gold and Crude Oil are down.
HK Connect SOUTHBOUND Flows (To 27 June 2025); Volumes Up, Net Buying Up, Banks Bought, SOEs Sold
- Gross SOUTHBOUND volumes up to US$17+bn a day this past 5-day week. Net buying strong at +US$700mm a day.
- Among the top buys as a percentage of volume, FINANCIALS stood out, dramatically. Again. Neither INFO TECH nor Tencent were the big sells this week.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers. Technical issue delayed this week’s Monitor.
FWD Group Holdings (1828 HK): Low Free Float Delays and Limits Global Index Inclusion
- FWD Group Holdings (1828 HK) fails to meet the minimum free float thresholds of both Global indices prior to the IPO lock-up expiry.
- The security is expected to be added to Global All-World at the September 2026 review following the 6-month lock-up expiry.
- The security is likely to remain excluded from Global Standard even after the lock-up expiry due to insufficient float cap.
BBVA/Sabadell: Potential BBVA Bump, TSB Dividend Catalyst, and Positioning Via Equity and Options
- Abadell trades above BBVA’s offer, implying market expectations for either a bid bump or dividend windfall (€0.12–€0.24/share in one-off distributions) from the upcoming TSB sale.
- Long SAB / short BBVA remains an attractive pair trade to capture deal asymmetry while hedging beta and political risk.
- September options at €2.70 strike offer tactical setups: long calls for convex upside, puts for hedge, or synthetic longs for capital-efficient exposure.
Bright Smart (1428 HK): Bright and Smart FY25
- Bright Smart Securities (1428 HK)‘s earnings rebounded solidly by 20.4% YoY in 2H FY25, fueled by higher client accounts and assets, and better HK market turnover.
- BSS has been an underperformer against peers since May, as other brokerage companies rallied on the back of potential entry into the virtual asset dealing business.
- Ant Financial will be able to transform BSS into a sizeable cross-asset house. The share price’s current implied earnings growth and PER valuations are conservative.
UCO Bank (UCO IN) Vs. Indian Overseas Bank (IOB IN): Trade Closed as Mean Reversion Hits Target
- Context: This article provides an update on a previously identified pair trading opportunity between Uco Bank (UCO IN) and Indian Overseas Bank (IOB IN), based on statistical mean reversion analysis.
- Key Insights: The trade has now reached its exit signal as the price ratio reverted to its one-standard deviation band, yielding a positive return.
- Why Read It: For investors interested in quantitative trading strategies, this article demonstrates how statistical arbitrage can generate short-term alpha and highlights actionable similar opportunities in the current market.
Samsung F&M (000815 KS) Vs. Woori (316140 KS): No Mean Reversion (Yet), Time to Reassess the Pair
- Context: This article provides an update on a previously identified pair trading opportunity between Samsung Fire & Marine Insuranc (000815 KS) and Woori Financial Group (316140 KS).
- Key Insights: The pair has not mean-reverted. This Insight discusses the use of a Stop Loss in a statistical pair trading context and why one might be considered at this point.
- Why Read It: For investors interested in quantitative strategies, this article demonstrates some of the mechanics of statistical arbitrage and which indicators can be used to decide on exiting a position.
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