The narrowing divide between China and India’s weight in the MSCI Indices
The spread between India and China weights in active Asia Ex-Japan funds has narrowed to the lowest levels in Copley’s 13-year history and now stands at 16.17% vs. a peak of 45.3% in Aug 20. China’s decline over this period has been dominated by Consumer Discretionary, Communication Services and Financials. 3 companies standout as key drivers of the move lower: Alibaba, Tencent and Ping An Insurance. Increases in fund weight have been minimal with PDD, BYD and Trip.com seeing moderate upticks. India’s rise has been driven by the Financials sector. Specifically, 3 banks: ICICI Bank, HDFC Bank and Axis Bank.
Edition: 180
- 23 February, 2024
Consumer Discretionary
Blue Lotus reinitiates coverage of the stock with a Sell rating as they expect domestic travel growth to slow down in 2024 and assumptions on Chinese outbound travel demand need to be reassessed. They see rising competition in the domestic travel market from Meituan and Tongcheng Travel in the short haul segment as well as share gains made by economy hotels encroaching TCOM’s commission base. While TCOM was quick in launching Large Language Model (LLM) for travel planning, Blue Lotus believes it lacks sufficient data and the advent of AIGC will simplify travel booking which works to TCOM’s disfavour.
Edition: 176
- 22 December, 2023
Samsung Electronics (005930 KS)
Technology
Return of the king - after a brief flirt with underweight in late 2022, active Asia Ex-Japan managers have rotated back into Samsung, pushing allocations towards record highs. It captured the largest increase in average holding weight and the largest increase in net overweight over the last 6 months. It also saw the joint 4th largest increase in the percentage of funds with outright ownership (was eclipsed by Meituan, Trip.com and BYD). Samsung has cemented itself as one of the highest conviction holdings in the Asia Ex-Japan region right now.
Edition: 164
- 07 July, 2023