13 August Asia

Asia Ex-Japan Funds: Stock Sentiment Analysis

93 Active Asia Ex-Japan Funds, AUM $63bn.

Asia Ex-Japan Stock Sentiment

Investment levels among the thousands of stocks in the investible Asia universe differ greatly. Some stocks are widely owned, others largely avoided with ownership levels changing every month. We combine current and historical positioning against shorter-term manager activity to get a handle on where sentiment lies for every stock in the Asia universe. We highlight 7 stocks at the extreme ends of their own positioning ranges whilst also seeing large changes in fund ownership.

The Sentiment Grid

The Sentiment Grid below is designed to visualize the interplay between current fund positioning, long-term fund positioning and shorter-term fund manager activity for all stocks in the Asia Ex-Japan universe. The Y-axis shows the ‘Position Score’, a measure of current positioning in each stock compared to its own history going back to 2011 on a scale of 0-100%. It takes in to account the percentage of funds invested in each stock versus history, the average fund weight versus history and the percentage of funds overweight the benchmark versus history. The higher the number, the more heavily a stock is owned by active China managers compared to its own history.
The X-Axis shows the ‘Momentum Score’, a measure of fund manager activity for each stock between 01/31/2022 and 07/31/2022 on a scale of 0% (maximum negative activity) to 100% (maximum positive activity). The Momentum Score takes in to account the change in the percentage of funds invested in each stock over the period, the change in average weight and the change in the percentage of funds overweight. The chart also highlights the companies at the extreme ends of each quadrant by colour, which will shall explore in more detail below.

Extreme Stocks

The tables below list the stocks in the extreme corners of each quadrant. The screening methodology is as follows:

  • High Positioning & Negative Momentum: Position Score > 80%. Momentum Score < 5%
  • Low Positioning & Negative Momentum: Position Score < 5%. Momentum Score < 5%
  • Low Positioning & Positive Momentum: Position Score < 20%. Momentum Score > 95%
  • High Positioning & Positive Momentum: Position Score > 90%. Momentum Score > 95%

Extreme Stocks

The charts below track the percentage of active funds invested in each of the top 2 stocks across the 4 categories. It’s another way to visualize how the Sentiment Grid works. For example, in the bottom left-hand chart below, both Ayala Corp and China Mobile are towards the bottom end of their historical ownership ranges as managers continue to reduce holdings in both stocks.
In the opposite case (bottom right), both Bank of China Ltd and Brilliance China Automotive are at the bottom of their historical ownership ranges, but both have started to climb from the lows. In the charts that follow we provide more detailed profiles of each of the 8 stocks at the extreme corners of our Sentiment Grid.

High Positioning, Positive Momentum: ICICI Bank Limited

High Positioning, Positive Momentum: Unimicron Technology Corp

Low Positioning, Positive Momentum: Shinhan Financial Group Co

Low Positioning, Positive Momentum: Industrial and Commercial Bank of China Limited Class H

High Positioning, Negative Momentum: China Mengniu Dairy Co.

Low Positioning, Negative Momentum: Ayala Corp

Low Positioning, Negative Momentum: China Mobile Limited

For more analysis, data or information on active investor positioning in your market, please get in touch with me on steven.holden@copleyfundresearch.com