In today’s briefing:
- Index Rebalance & ETF Flow Recap: HSCI, S&P/ASX, HSI, HSCEI, KOSPI2, KOSDAQ150, Wharf, Meituan
- Intel Vs. TSMC Monitor: TSMC Soars on Buffett Investment, Why INTC Could Now Revert
- Last Week in Event SPACE: Tencent/Meituan, Halcyon Agri, Swire Pac, Perpetual/Pendal, OZ Minerals
- ECM Weekly (20th Nov 2022) – I-Tail, Growatt, Lygend, SinoHytech, Meituan/Tencent, Olympus, Paytm
- Travelsky (696): Beneficiary from Potential Reopening in China
- NVIDIA Corp: New Product Launches & Other Drivers
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Cisco Systems Inc: Major Drivers
Index Rebalance & ETF Flow Recap: HSCI, S&P/ASX, HSI, HSCEI, KOSPI2, KOSDAQ150, Wharf, Meituan
- Plenty of index change announcements in the last week – Kospi 200 Index, KOSDAQ 150 Index, Hang Seng Index, HSCEI, HSTECH, S&P BSE SENSEX Index and FTSE AW/AC Index.
- There are a bunch of indices that have the end of their review periods in the coming week while announcements for China indices are expected post market close on Friday.
- There were outflows from ETFs for most Asian markets over the week with China and Hong Kong ETFs taking the biggest hits.
Intel Vs. TSMC Monitor: TSMC Soars on Buffett Investment, Why INTC Could Now Revert
- TSMC has outperformed INTC by 23% in just two weeks, which is an extreme divergence in a short period of time by historical standards.
- Foreseeable company-specific events or news flow over the next 30 days appears limited.
- Valuation remains supportive for INTC and we believe it could recover part of its recent underperformance in the next month.
Last Week in Event SPACE: Tencent/Meituan, Halcyon Agri, Swire Pac, Perpetual/Pendal, OZ Minerals
- The in-specie distribution is basically a forward block sale of Meituan (3690 HK). You know it’s coming. You don’t know how large it is. It is not unlike a lockup situation.
- China Hainan Rubber Industry (601118 CH) will start with 36% in Halcyon Agri (HACL SP). Founders and friends have ~10%. Getting to 50%+ will be easy.
- The Swire Pacific (B) / Swire Pacific (A) ratio is near a 19-year low. The last time it dipped to 6% under its 3mo average, it bounced back in 4 weeks.
ECM Weekly (20th Nov 2022) – I-Tail, Growatt, Lygend, SinoHytech, Meituan/Tencent, Olympus, Paytm
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, Indian IPOs delivered some decent performance while HK IPOs are likely to pick up as well.
- There were a number of placement and blocks this week, after the expiry of lockups in a few Indian names.
Travelsky (696): Beneficiary from Potential Reopening in China
- Travelsky Technology Ltd H (696 HK) is a system provider for airports in China that benefit from the reopening plan.
- The company is not sensitive to the oil price and it has low debt which makes it attractive compared to the airlines.
- The stock is trading at a 40% PBR discount to Shanghai International Airport. Historically, the company is trading at a 50% discount to its 5-year high on PBR.
NVIDIA Corp: New Product Launches & Other Drivers
- NVIDIA Corp delivered a mixed performance as the company’s revenues exceeded the analyst consensus estimate.
- However, its earnings were below par given the persistent supply chain interruptions, increased export bans, and macroeconomic challenges.
- Leading U.S. cloud providers and a growing number of consumer Internet companies were the main drivers of year-over-year increases for workloads like big language models, recommendation systems, and generative AI.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
Cisco Systems Inc: Major Drivers
- Cisco had a good start to fiscal 2023 and managed to deliver an all-around beat.
- The management continued their shift to greater software and subscription-based recurring revenue, even as they proactively manage through a developing and complicated market environment.
- Web-scale orders increased by double digits or more on a trailing 12-month basis for the ninth consecutive quarter.
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