Good day.. First test run

I've often opined that to be good at something you have to put yourself over and over again at a similar task to develop that autonomous reflex ( muscle memory ) to execute it perfectly.

In the world of merger arbitrages.. the more you see, the more you gain.. by developing the niche skill of knowing potentially how a deal might play out..given the multiple factors that might effect the outcome...the acquirers, the target, the potential regulatory rulings.. the spread level, the market perception.. and etc etc.

The risk arbitrage world in Asia, is definitely more lucrative that the developed countries where spreads just trade within a tight range. Many ppl often perceived that earning just 3% a deal is not enough when if a deal goes wrong, the spread might blow out to 20. One wrong deal will cancel out 10 of you normal trades. Which is why we need to be extremely vigilant about each spread we invest in.

In doing risk arb trades, the current economic needs to be taken into consideration. In a good year, there would be as many bumps as there are duds.

I would put the proportions around 20% bumps, 70% normal and 10% duds.
Normally the returns would be around 15-20% on a twice leverage portfolio which have a 10-15% vol either way.

Well lets start with the markets that i'm interested in..

Japan - Spreads are always tight. Not an interesting market.
Korea - Another market where M&A players need to be more vigilant due to the minority protection where dissenters get to put the shares back to the company at fair value.

Beside the two markets above, basically i'm interested in the rest of the M&A in Asia.

Australia - Typically one of the best markets to trade M&A given the resource boom. The resource sector has typically provided one of the most exciting M&A market in Asia.

Hong Kong - Good market, but lack of deals lately.. mostly small companies.

Taiwan - Consolidation of the semiconductor industry to compete with other major players in the world ie US, has definitely been a plus. Spread in Taiwan has always been lucrative.. downside is regulatory filings might be scarce.

Malaysia - Cash deals normally trade between the spread of 2-3% spread.. pretty tight for a developing country. If spread are much wider, one would have to question if the locals know anything that will go wrong on the deal. However have seen pretty decent deals out from Malaysia.

Singapore - A good market to trade in as well, but deals coming out of Sg has been of relatively small companies.

India - Good market to trade but you can short in India. Also they do proportionate takeovers instead.

Indonesia and Thailand - Relatively infrequent and currency hedging is required.

Will update more on the current deals available