<p><strong>Exchange </strong><br><strong>Partner </strong></p><p><strong>Singapore’s Selected Single Stocks </strong></p><p><strong>SSF Strategies On Lion City’s Blue Chips </strong></p><p><strong>by Tariq Dennison, +852 9476 2868 </strong></p><p>© 2020 GFM Group Limited, https:://gfmasset.com </p><p>Image source: <a href="/goto?url=https://www.pinterest.com/pin/162129655305421931/?autologin=true" target="_blank">https://www.pinterest.com/pin/162129655305421931/?autologin=true </a></p><p><strong>Disclaimer </strong></p><p>This presentation is for educational and discussion purposes only.&nbsp;<strong>Nothing </strong></p><p><strong>in this presentation is to be taken as investment advice</strong>, nor as any </p><p>recommendation to buy or sell any security or investment property or product. Please consult with GFM or your own investment advisors 1-on-1 before making any investment decisions. </p><p><strong>GFM does NOT provide any tax or legal advice</strong>. Tax&nbsp;strategies in this </p><p>presentation are based on our experience and believed to be current, but please consult with your own tax advisor for tax advice specific to your situation. GFM&nbsp;Group Limited is an SFC Type 9 Licensed Asset Management firm and is not affiliated with any exchange, brokerage firm, or custodian, including the co-presenters of this seminar.&nbsp;GFM Asset Management LLC, an affiliated company, is a US SEC Registered Investment Advisor. </p><p>Investing involves risks, including the risk that you may lose some or all the money you invest. </p><p><strong>GFM is not affiliated with Interactive Brokers LLC, or any other FINRA broker-dealer </strong></p><p>© 2020 GFM Group </p><p>2</p><p><strong>Disclaimer by SGX </strong></p><p>This document/presentation has not been prepared by Singapore Exchange Limited </p><p><em>(“SGX”) </em>or any of its affiliates <em>(SGX and its affiliates collectively, the “SGX Group </em></p><p><em>Companies”) </em>and the information in this document/presentation has not been verified by any SGX Group Company. No SGX Group Company endorses or shall be liable for the contents of this document/presentation. </p><p>Accordingly, no representation or warranty whatsoever, expressed or implied, including without limitation any statement, figures, opinion or view provided herein is given by any SGX Group Company and it should not be relied upon as such. No SGX Group Company shall be responsible or liable (whether under contract, tort (including negligence) or otherwise) for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered or incurred by any person due to any omission, error, inaccuracy, incompleteness, or otherwise, or use of or any reliance on any information, in, arising from or in connection with this document/presentation and/or the seminar. </p><p>Statements or information disseminated by presenters at the seminar represent the views of the particular presenter and not of any SGX Group Company. No SGX Group Company endorses or shall be liable for the content of information provided by third parties, including any content of information at the seminar. Use of and/or reliance on such information is entirely at the reader’s and/or audience’s own risk. </p><p><strong>SGX is not affiliated with Interactive Brokers LLC, or any other FINRA broker-dealer </strong></p><p>© 2020 GFM Group </p><p>3</p><p>About Tariq Dennison TEP CFP<sup style="top: -0.5em;">CM </sup><br>. Hong Kong &amp; US Adviser on the <br>IBKR platform </p><p>. US Advisor: GFM Asset Management LLC . HK Advisor: GFM Group Limited </p><p>. In the market since 1998 </p><p>. Commerzbank (NY, London, Frankfurt) . Bear Stearns (NY) . J.P. Morgan (NY) . Canadian Imperial Bank of Commerce . Societe Generale (HK) </p><p>. Masters in Financial Engineering </p><p>. University of California at Berkeley </p><p>. Lecturer at ESSEC Singapore </p><p>. Fixed Income . Alternative Assets </p><p>. Focus on US-Asia corridor . Author “Invest Outside the Box” </p><p>© 2020 GFM Group </p><p>4</p><p>Outline of this presentation </p><p>1. Introduce&nbsp;the 10 Singapore Stocks w/ SSFs 2. Review&nbsp;key data sources 3. Demonstrate&nbsp;an SSF trade 4. Outline&nbsp;some key applications / strategies </p><p>© 2020 GFM Group </p><p>5</p><p>Some Historical Reading: • MNCs • GLCs • PLCs </p><p>6</p><p>Which 10 Stocks? <br>• The&nbsp;big banks: DBS, UOB, OCBC </p><p>• Consumer:&nbsp;ThaiBev, Wilmar, Genting • Infrastructure:&nbsp;SingTel, ComfortDelGro • Shipping:&nbsp;Keppel, Yangzijiang • Notably&nbsp;absent so far: REITs, Health Care, … </p><p>Source: SGX.com </p><p>© 2020 GFM Group </p><p>7</p><p>Fixed Income ETFs </p><p>Source: SGX.com </p><p>© 2020 GFM Group </p><p>8</p><p>© 2020 GFM Group </p><p>9</p><p>© 2020 GFM Group </p><p>10 </p><p>Source: ThaiBev Annual Report &amp; Website </p><p>© 2020 GFM Group </p><p>11 </p><p>Source: ThaiBev Annual Report &amp; Website </p><p>© 2020 GFM Group </p><p>12 </p><p>Source: Genting Singapore Annual Report </p><p>© 2020 GFM Group </p><p>13 </p><p><sup style="top: -0.9722em;">© 2020 GFM Group </sup>Source: SingTel Annual Report </p><p>14 </p><p><sup style="top: -0.9722em;">© 2020 GFM Group </sup>Source: ComfortDelGro Annual Report </p><p>15 </p><p><sup style="top: -0.9722em;">© 2020 GFM Group </sup>Source: Yangzijiang Annual Report </p><p>16 </p><p><sup style="top: -0.9722em;">© 2020 GFM Group </sup>Source: Keppel Corp Annual Report </p><p>17 </p><p>Pulling up the SSF contracts on IB TWS … and comparing vs cash equity prices &amp; volumes </p><p>© 2020 GFM Group </p><p>18 </p><p>© 2020 GFM Group </p><p>19 </p><p>Source: SGX.com </p><p>© 2020 GFM Group </p><p>20 </p><p>Why SSFs? </p><p>1. Arbitrage&nbsp;opportunities for liquidity providers 2. Short&nbsp;without borrowing 3. Leverage&nbsp;with efficient margin / eff borrow rate 4. Avoid&nbsp;physically holding shares (futures are cash settled) </p><p>© 2020 GFM Group </p><p>21 </p><p>Risks </p><p>Trade #1: SSF Arb v Cash <br>• Good&nbsp;project for algo / API&nbsp;• Anything&nbsp;goes wrong with <br>/ automated trader&nbsp;your algo </p><p>• Trigger&nbsp;trade on more liquid&nbsp;• Requires&nbsp;constant asset (e.g. buy D05) on execution of less liquid asset (SSF sold) </p><p>monitoring of spread, and quick execution on more liquid asset </p><p>• Requires&nbsp;capital </p><p>• Trading&nbsp;costs pose an extra hurdle </p><p>• Easier&nbsp;for long cash / short futures than trades that require borrow </p><p>© 2020 GFM Group </p><p>22 </p><p>© 2020 GFM Group </p><p>23 </p><p>Trade #2: SSG (SIMSCI) vs Top 3 Banks’ SSFs </p><p>Risks </p><p>• SSG&nbsp;contract size ~$31k,&nbsp;• Being&nbsp;wrong on the spread so likely 3-5x SSG vs 1 ea Bank SSF </p><p> Margin call <br>• SSF&nbsp;roll cost vs time horizon </p><p>• Simple&nbsp;way to create a <br>“Singapore ex-Banks” tracker </p><p>• Some&nbsp;mismatch may be unhedgeable until SSFs launch &amp; get liquid on all SIMSCI components </p><p>• Check&nbsp;net margin requirement (ask SGX or IB about portfolio/net margining) </p><p>© 2020 GFM Group </p><p>24 </p><p>GFM Group Limited 7<sup style="top: -0.6em;">th </sup>Floor, Grand Millennium Plaza 181 Queen’s Road Central Hong Kong </p><p><a href="/goto?url=https://gfmasset.com" target="_blank">https://gfmasset.com </a></p><p>On Seeking Alpha: TARIQ DENNISON <a href="mailto:[email protected]" target="_blank">[email protected] </a>Twitter: @QuantOfAsia M +852 9476 2868 </p>