From How to Position for the Coming Growth Slowdown, to Tencent/Netease, to Alibaba (9988 HK)and more, here's what you need to know this week.

The Smartkarma Weekly Starter is a newsletter published every Sunday and pulls together the ten top research notes published over the last 7-days from across our platform.

In this week's edition of the Smartkarma Weekly Starter, we get a quick rundown on the top engaged insights for the week.

Start your week off on the right foot with:

How to Position for the Coming Growth Slowdown

The risk of a substantial economic slowdown is rising based on our review of macro, fundamental, and real-time market factors.

• The IMF warned about a growing risk of recession in the advanced economies: “A hard landing — particularly for advanced economies — has become a much larger risk.”
• The risk of a substantial economic slowdown is rising based on our review of macro, fundamental, and real-time market factors.
• Investors should position themselves by holding a diversified portfolio of stocks and bonds to protect themselves from possible future asset price volatility.

By Cam Hui in Cross Asset Strategy

Tencent/Netease: Zeroed in April

We analyzed the game approval announced last night for Chinese players. Both Tencent and Netease received approval for none.

• China just announced game approval for April batch. The number of games approved is in-line with the pace of approval in recent month.
• Pace of China game approval stays flattish, at a much slower pace than pre-tightening.
• Both Tencent and Netease received approval for none. Tencent is behind its peers since the approval resumed.

By Ke Yan, CFA, FRM in Equity Bottom-Up

Alibaba (9988 HK): “Department One” in Reorganization

Alibaba broke down Taobao Tmall Center into three departments. Department One is actually “other businesses”. Following Department One will help investors to understand Alibaba’s financials.

• Alibaba broke down Taobao Tmall Center, the most important department, into three departments.
• Industry Development Department One is actually “other businesses” after the reorganization.
• Following Department One will help investors to understand Alibaba’s financials.

By Ming Lu in Equity Bottom-Up

Is Singapore Setting Itself Up for a Fall?

Concerns over the cost of living and doing business, and difficulties in recruiting talent put Singapore's position at risk if not remedied.

• The city-state has had a good few years due to sound pandemic management, adept investment promotion, and setbacks experienced by rival hubs such as Hong Kong.?
• However, concerns over the costs of doing business, particularly in labour and rental costs, are early warning signs that firms may look elsewhere if these issues are not fixed.?
• Structural shifts in policy are required, including enhancing regional integration with neighbours, rethinking the education system, and pro-competition policy reforms.??

By Manu Bhaskaran in Macroeconomics

Deep Dive on Hong Kong Macroeconomics: The Hong Kong Dollar Peg and Its Significance on Hong Kong

A deep dive on HK macro on the HK dollar peg.? The peg has maintained HK's financial stability.? In this insight we explored its significance on HK, the HKMA mechanism and the future of the peg

• HKD peg has been a financial cornerstone for HKSAR since 1983. The peg helps maintain financial stability, but it also ties Hong Kong's monetary policy to the U.S. Federal Reserve.
• HKMA maintains a narrow band of 7.75 - 7.85 HKD per USD.? HKMA's undertaking is to step in if the FX hits either strong or weak side of the band
• While there are (continued) discussions if HK should change or break the peg, HKMA ex-chief Norman Chan mentioned there are "4 essential conditions" for such consideration to take place

By Jacob Cheng in Thematic (Sector/Industry)

Last Week in Event SPACE: Tencent, Ecopro, Japan’s Governance, Jardines, Citizen

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the week, you might have missed.

• Prosus (PRX NA) moved 96mn shares of Tencent (700 HK) into CCASS. Tencent shares fell hard. If the share price fell because of a block offering, that would be unwarranted.?
• Ecopro (086520 KS) is up an eye-watering 590% in the past three months, primarily on Ecopro BM (247540 KS) 's outperformance, together with sentiment towards soon-to-be-listed 52.8% held Ecopro Materials.?
• Japan's Finance Minister said that companies need to improve their PBRs, and that "increasing corporate value of listed companies would allow for Japan to realise sustainable growth."

By David Blennerhassett in Event-Driven

The Market Leaders Hiding in Plain Sight

The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.

• The long-term structure of global markets is seeing a loss of leadership by U.S. equities and emerging new leadership in Europe.
• The short-run outlook will depend on the results of earnings season.
• Our base case calls for a choppy and range-bound market.Wait for the breakout, or breakdown.

By Cam Hui in Cross Asset Strategy

Index Rebalance & ETF Flow Recap: HSI, S&P/ASX, KOSDAQ150, TAMSCI, Kotak Mahindra Bank

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight large flows into and out of Asia focused ETFs.

• The review period for the MSCI May QCIR starts on Monday. The most changes inclusions by far are expected to be in China.
• There will be an ad hoc change for the S&P/ASX 100 Index, S&P/ASX 200 (AS51 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 18 April.
• After a period of sustained outflows, there were some inflows to the IShares Core MSCI Asia Ex Japan ETF (3010 HK) during the week.

By Brian Freitas in Event-Driven

Semiconductor Manufacturing International Corp (981 HK) - Target 26.90/27.10 In April/May 2023

30+ years as a technical analyst and a razor sharp focus on momentum confirmation delivered TMA a 75% unleveraged return on our 7 Smartkarma recommendations in October 2022/Jan 2023. Please FOLLOW us!

• At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
• When MT momentum indicators break above multi-year trend lines and ranges they confirm the most impulsive positive MT momentum shift in that multi-year period. This confirms a sustainable MT uptrend.
• With aggressive price action and comprehensive MT momentum confirmation in play, the recent impulsive 5 week uptrend is confirmed to have further immediate capacity and targets 26.90/27.10 (+12-14%) in April/May.

By David Coloretti, CMT in Technical Analysis

Spx, Yield, USD and Gold Alignment

Tactical synergies are aligning between topping equities, yield and DXY wedge formations and the USD reaching a range low (more so in Asia/ZAR). We are approaching the end of the April buoyant cycle.

• Tactical synergies are aligning between topping equities, yield and DXY wedge formations and the USD reaching a range low (more so in Asia/ZAR).
• We are approaching the end of the April buoyant cycle for risk with momentum due to start tapering off next week with late April a timeline for a turn.
• Pay close attention to the bullish wedge in the dollar and the bull wedge in yield - some clear synergy and then we have gold topping. Late April/May clarity.

By Thomas Schroeder in Technical Analysis

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