In today’s briefing:
- CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
- Turning Bearish: Hang Lung Properties Going Through a Perfect Storm
- S&P/ASX 200: All-Time Highs, Complacent Vols and a Tactical Hedge with a Relative Value Edge
- Ategrity Specialty Holdings LLC (ASIC): Insurance Sector Stays Hot, Pops 6 Points at Open
- Lucror Analytics – Morning Views Asia
- Seazen Group – ESG Report – Lucror Analytics
CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
- There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
- A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
- There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.
Turning Bearish: Hang Lung Properties Going Through a Perfect Storm
- We are turning bearish on Hang Lung Properties. Given China’s economic slowdown, we think luxury spending in China will take longer than expected
- In addition, the property slowdown and housing prices decline will lead to a negative wealth effect, which will further impact luxury consumption
- If RMB is to strengthen, more Chinese will travel to spend overseas. HLP P/B valuation is almost historical low, but can stay cheap as a “value trap”
S&P/ASX 200: All-Time Highs, Complacent Vols and a Tactical Hedge with a Relative Value Edge
- S&P/ASX 200 posts a rare rally, joining an elite list of historical moves.
- Implied volatility has collapsed to multi-year lows despite the surge in price.
- We discuss a defined, cost-efficient structure that allows positioning with asymmetry and edge.
Ategrity Specialty Holdings LLC (ASIC): Insurance Sector Stays Hot, Pops 6 Points at Open
- Ategrity Specialty Holdings LLC (ASIC) priced a full-size deal of 6.67mm shares at $17.00 ($1 above the range) and opened at $23.65 for a gain of 39.1% at first trade.
- The underwriters felt good about this IPO enough that they elected to accelerate the timing of this deal by a single day.
- This insurance company was a pure-play E&S with higher regards given to this niche area by sector-dedicated investors.
Lucror Analytics – Morning Views Asia
- US treasury movements were muted yesterday, with the curve flattening marginally ahead of today’s CPI data release.
- The yield on the 2Y UST rose 2 bps to 4.02%, while the yield on the 10Y UST was unchanged at 4.47%.
- Equities climbed for the third straight day, supported by optimism over US-China trade talks.
Seazen Group – ESG Report – Lucror Analytics
- Seazen Group (formerly known as Future Land) is among the most established property developers in China’s Yangtze River Delta region, targeting first-time home buyers and upgraders.
- The company has broad exposure in many Chinese cities, particularly lower-tier ones.
- In addition, it has a portfolio of more than 150 investment properties, including the Wuyue-branded shopping malls.
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