Yangzijiang Financial Holding

I believe it is the former. The 'chef' is starting to be full (reaching 10% mandate) and do not want to renew its share buyback mandate or utilise its entire 200 million set aside. Their preference is to wait till next AGM, so they are trying to stagger the purchases until end April 2023.

(20-10-2022, 11:38 AM)CY09 Wrote: I believe it is the former. The 'chef' is starting to be full (reaching 10% mandate) and do not want to renew its share buyback mandate or utilise its entire 200 million set aside. Their preference is to wait till next AGM, so they are trying to stagger the purchases until end April 2023.

then it turns into a trading opportunity as the market continues to sell it down, and YZJFH is unable to buy-back (indirectly providing price support), until the next AGM mandate opens...

means prices will go further down from now until next AGM SBB mandate renewal!

become shorts-sellers fave counter!

"Timing the market", not "time in the market" for this counter at the moment... 
Don't catch the falling knife just yet! got to time it carefully!

(20-10-2022, 11:38 AM)CY09 Wrote: I believe it is the former. The 'chef' is starting to be full (reaching 10% mandate) and do not want to renew its share buyback mandate or utilise its entire 200 million set aside. Their preference is to wait till next AGM, so they are trying to stagger the purchases until end April 2023.

I, on the other hand, have a very simple explanation for the reduction you are seeing. Total share volume traded has reduced over the pass week. Historically the volume has been pretty consistently been below 20% of trades volume. Their aim is to be earnings accretive, not to support prices. If you had a $200m budget to buy shares in the specific firm, would you try to support prices as much as possible? Or try to get as low prices as possible? 

As an asset manager, I would choose the latter. Especially when there is an overall selling momentum due to 1) the macro market and 2) T. Rowe prior.

Out of curiosity, I went to look up short sell volumes and they were quite significant! Day traders? Anybody can advise how to look at outstanding short interest?

The usage of trading volume may or may not act as explanation. There is no clear parameters on how they are conducting their share buybacks.

I am not sure how to check the outstanding short interest. The only indirect way I can think of is the amount of shares avaliable in the CDP lending pool. Secondly, short sell volumes are unique in which they have to be covered within T+2 and T+4 range. So pherhaps the past 2-4 market days of short sell volume may serve an indication on the number of short sell in shares.

(20-10-2022, 12:51 PM)CY09 Wrote: The usage of trading volume may or may not act as explanation. There is no clear parameters on how they are conducting their share buybacks.

I am not sure how to check the outstanding short interest. The only indirect way I can think of is the amount of shares avaliable in the CDP lending pool. Secondly, short sell volumes are unique in which they have to be covered within T+2 and T+4 range. So pherhaps the past 2-4 market days of short sell volume may serve an indication on the number of short sell in shares.

I believe your unique short sell refers to naked selling whereby SGX have to buy in for them. There are other forms of short sell such as Contract for Differences and stock borrowing to sell them that won’t have a deadline towards covering them back. The borrower would incur stock borrow fees during the period they hold the short position. That’s my understanding of how the short selling works. Anyone who understands differently please let me know.

I still can’t figure out how to arrive at the short interest. Would be very helpful if SGX provides it (not just for material short positions).

(20-10-2022, 01:39 PM)Squirrel Wrote:

(20-10-2022, 12:51 PM)CY09 Wrote: The usage of trading volume may or may not act as explanation. There is no clear parameters on how they are conducting their share buybacks.

I am not sure how to check the outstanding short interest. The only indirect way I can think of is the amount of shares avaliable in the CDP lending pool. Secondly, short sell volumes are unique in which they have to be covered within T+2 and T+4 range. So pherhaps the past 2-4 market days of short sell volume may serve an indication on the number of short sell in shares.

I believe your unique short sell refers to naked selling whereby SGX have to buy in for them. There are other forms of short sell such as Contract for Differences and stock borrowing to sell them that won’t have a deadline towards covering them back. The borrower would incur stock borrow fees during the period they hold the short position. That’s my understanding of how the short selling works. Anyone who understands differently please let me know.

I still can’t figure out how to arrive at the short interest. Would be very helpful if SGX provides it (not just for material short positions).

Hi Squirrel,

I had managed gather some data regarding the pool size for Securities Borrowing and Lending (SBL) facility in SGX.

For YZJ Fin is 19,032,301 shares for lending. Hope that help.

Besides, in my personal opinion, company share buyback will not be able to prevent from falling. The company need to prove itself in term of financial performance and reward the minority shareholders in the term of attractive and sustainable dividend yield over time. Let's look forward to the full year financial result next year and dividend amount it give.

setan

(20-10-2022, 03:40 PM)setan Wrote:

(20-10-2022, 01:39 PM)Squirrel Wrote:

(20-10-2022, 12:51 PM)CY09 Wrote: The usage of trading volume may or may not act as explanation. There is no clear parameters on how they are conducting their share buybacks.

I am not sure how to check the outstanding short interest. The only indirect way I can think of is the amount of shares avaliable in the CDP lending pool. Secondly, short sell volumes are unique in which they have to be covered within T+2 and T+4 range. So pherhaps the past 2-4 market days of short sell volume may serve an indication on the number of short sell in shares.

I believe your unique short sell refers to naked selling whereby SGX have to buy in for them. There are other forms of short sell such as Contract for Differences and stock borrowing to sell them that won’t have a deadline towards covering them back. The borrower would incur stock borrow fees during the period they hold the short position. That’s my understanding of how the short selling works. Anyone who understands differently please let me know.

I still can’t figure out how to arrive at the short interest. Would be very helpful if SGX provides it (not just for material short positions).

Hi Squirrel,

I had managed gather some data regarding the pool size for Securities Borrowing and Lending (SBL) facility in SGX.

For YZJ Fin is 19,032,301 shares for lending. Hope that help.

Besides, in my personal opinion, company share buyback will not be able to prevent from falling. The company need to prove itself in term of financial performance and reward the minority shareholders in the term of attractive and sustainable dividend yield over time. Let's look forward to the full year financial result next year and dividend amount it give.

setan

Thanks for the info, does that include stock that is already lent out?

For me this is just an intellectual exercise to find out more. It’s intrigues me how big the short selling volume is. I am guessing a lot is intraday trading. But can’t be sure. And of course there is always the big question of, will there be a short squeeze?

According to the MAS short position report*, as of 14 Oct 2022, there are some 46m shares in short positions. If I am not wrong, the MAS report also comprises of private market makers, e.g. brokerages that facilitate lending/borrowing via their own custodian accounts. 

At the end of the day, I suppose the share price is a reflection on how much "haircut" the mkt is assuming on YZJ FH in light of China's (and the world's) economic (and geopolitical) situation. For that matter, even Alibaba / China Big banks are also quite beaten down. If situations continue to be difficult, challenging issues may surface e.g. collaterals secured against debts may fall in value, ending up with "unsellable" surrendered properties in lieu of debt.

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*https://eservices.mas.gov.sg/sprs/Public/Publication/ViewAggregatedReports.aspx

(20-10-2022, 07:12 PM)dreamybear Wrote: According to the MAS short position report*, as of 14 Oct 2022, there are some 46m shares in short positions. If I am not wrong, the MAS report also comprises of private market makers, e.g. brokerages that facilitate lending/borrowing via their own custodian accounts. 

At the end of the day, I suppose the share price is a reflection on how much "haircut" the mkt is assuming on YZJ FH in light of China's (and the world's) economic (and geopolitical) situation. For that matter, even Alibaba / China Big banks are also quite beaten down. If situations continue to be difficult, challenging issues may surface e.g. collaterals secured against debts may fall in value, ending up with "unsellable" surrendered properties in lieu of debt.

-------------------

*https://eservices.mas.gov.sg/sprs/Public/Publication/ViewAggregatedReports.aspx

Hi Dreamybear,

Thanks for sharing the link to short aggregate report publish by MAS. I had learned something new which I'm not aware it previously.

I had downloaded all the report files and compile the weekly short aggregate for YZJ Fin in the table and chart in the attached file.

My observation is that the aggregate short position is increasing over time. 

Do the shortlists know something more?

On the other hand, the company is buying back the shares and also insider also buying but not continuously. 

Do the shortlists know more than the company/insider?

setan

(20-10-2022, 11:22 PM)setan Wrote:

(20-10-2022, 07:12 PM)dreamybear Wrote: According to the MAS short position report*, as of 14 Oct 2022, there are some 46m shares in short positions. If I am not wrong, the MAS report also comprises of private market makers, e.g. brokerages that facilitate lending/borrowing via their own custodian accounts. 

At the end of the day, I suppose the share price is a reflection on how much "haircut" the mkt is assuming on YZJ FH in light of China's (and the world's) economic (and geopolitical) situation. For that matter, even Alibaba / China Big banks are also quite beaten down. If situations continue to be difficult, challenging issues may surface e.g. collaterals secured against debts may fall in value, ending up with "unsellable" surrendered properties in lieu of debt.

-------------------

*https://eservices.mas.gov.sg/sprs/Public/Publication/ViewAggregatedReports.aspx

Hi Dreamybear,

Thanks for sharing the link to short aggregate report publish by MAS. I had learned something new which I'm not aware it previously.

I had downloaded all the report files and compile the weekly short aggregate for YZJ Fin in the table and chart in the attached file.

My observation is that the aggregate short position is increasing over time. 

Do the shortlists know something more?

On the other hand, the company is buying back the shares and also insider also buying but not continuously. 

Do the shortlists know more than the company/insider?

setan

Hi setan,

That's a nice little excel - thanks for compiling. Just so you know, I am currently not vested, and my knowledge of this stock is rather limited. Was only sharing about the MAS short report after reading about the short position discussion.

Perhaps the short sellers are building their stakes in expectation of a poorer upcoming quarter's financial result?

Generally, a company can buy back shares for a couple of various reasons. 

I think regardless of shortists / buybacks, the key is the entry price after taking into account, factors like : the book value of the counter (and possible credit risks/impairments*) and sufficient margin of safety built-in, the company's ability to execute its plans, the mkt's perception of the counter (e.g. will it trade above book value even after the global/China's economy has normalized). If the share price continues to be "depressed", given the no. of privatisations in recent years, not sure whether this is another point to consider.

Just my 2 cents.

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*risk factors in the introductory document: 
https://links.sgx.com/FileOpen/Yangzijia...ileID=6378