Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Cambricon Technologies  Lt / Index Rebalance

<ul>
<li>With the review cutoff done, there could be three changes for the <a href="https://www.smartkarma.com/entities/ishares-ftse-a50-china-index-etf" target="_blank" data-smartkarma-citation="entities:249:1" rel="noopener">iShares A50 China (2823 HK)</a>/ <a href="https://www.smartkarma.com/entities/csop-ftse-china-a50-etf-26e3b671-fa47-4165-a12e-bf841640c5a3" target="_blank" data-smartkarma-citation="entities:23664:1" rel="noopener">CSOP China A50 (HKD) (2822 HK)</a> ETFs in March.</li>
<li>
<a href="https://www.smartkarma.com/entities/cambricon-technologies-corp-lt" target="_blank" data-smartkarma-citation="entities:31068:1" rel="noopener">Cambricon Technologies</a>, <a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:22740:1" rel="noopener">Guotai Junan Securities</a> and <a href="https://www.smartkarma.com/entities/china-united-network-a" target="_blank" data-smartkarma-citation="entities:12620:1" rel="noopener">China United Network</a> could replace <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group</a>, <a href="https://www.smartkarma.com/entities/cgn-power-co-ltd" target="_blank" data-smartkarma-citation="entities:29504:1" rel="noopener">CGN Power</a> and <a href="https://www.smartkarma.com/entities/luzhou-laojiao-co-ltd-a" target="_blank" data-smartkarma-citation="entities:4536:1" rel="noopener">Luzhou Laojiao</a> in the ETFs.</li>
<li>
<a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> is expected to be added to the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a> in March, so there should be inflows for the A-shares and H-shares.</li>
</ul>


With the review cutoff done, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in March.

Cambricon Technologies, Guotai Junan Securities and China United Network could replace Inner Mongolia Yili Industrial Group, CGN Power and Luzhou Laojiao in the ETFs.

Guotai Junan Securities (2611 HK) is expected to be added to the iShares China Large-Cap (FXI) (FXI US) in March, so there should be inflows for the A-shares and H-shares.


China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Forensic Accounting

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> was a logical suitor for <a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>. A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.</li>
<li>China Mobile has a made a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1202/2024120203351.pdf" target="_blank" rel="noopener">pre-conditional voluntary Offer</a> at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. </li>
<li>Pre-Cons are the usual suspects (NDRC, Mofcom &amp; SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN's listing. </li>
</ul>



China Mobile (941 HK) was a logical suitor for HKBN Ltd (1310 HK). A non-PRC (or government-affiliated) corporation taking over a media/broadband/telco in Hong Kong is probably a non-starter.
China Mobile has a made a pre-conditional voluntary Offer at HK$5.23/share, a 40.97% premium to undisturbed. The price is final. 
Pre-Cons are the usual suspects (NDRC, Mofcom &amp; SASAC). The Offer itself conditional on a 50% acceptance hurdle, with 24.96% in the bag. The intention is to maintain HKBN's listing. 


HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hkbn-ltd" target="_blank" data-smartkarma-citation="entities:289:1" rel="noopener">HKBN Ltd (1310 HK)</a>, a Hong Kong broadband play, is never short on privatisation rumours. <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> is reportedly (again) holding talks with HKBN's major shareholders. </li>
<li>China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.</li>
<li>Previous takeover rumours over the years came to nought. It may be different this time. HKBN was <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1119/2024111900127.pdf" target="_blank" rel="noopener">suspended this morning</a> pursuant to the Takeovers Code.
</li>
</ul>



HKBN Ltd (1310 HK), a Hong Kong broadband play, is never short on privatisation rumours. China Mobile (941 HK) is reportedly (again) holding talks with HKBN's major shareholders. 
China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.
Previous takeover rumours over the years came to nought. It may be different this time. HKBN was suspended this morning pursuant to the Takeovers Code.



HKBN (1310 HK): China Mobile Comes Knocking. Again.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I (3382 JP)</a> selling <a href="https://www.smartkarma.com/entities/seven-bank-ltd" target="_blank" data-smartkarma-citation="entities:16063:1" rel="noopener">Seven Bank (8410 JP)</a> is obvious. It has been obvious. It is non-core. It's always been non-core. It was made  clear in previous Strategy announcements,</li>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>'s premium to NAV is unjustified. However reversing the stub has not been going to plan of late, as the NAV premium continues to widen.</li>
<li>Mavcom HAS approved the <a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings (MAHB MK)</a> deal. But still welcomes public consultation. So, approved or not?</li>
</ul>



Seven &amp; I (3382 JP) selling Seven Bank (8410 JP) is obvious. It has been obvious. It is non-core. It's always been non-core. It was made  clear in previous Strategy announcements,

PCCW Ltd (8 HK)'s premium to NAV is unjustified. However reversing the stub has not been going to plan of late, as the NAV premium continues to widen.
Mavcom HAS approved the Malaysia Airports Holdings (MAHB MK) deal. But still welcomes public consultation. So, approved or not?


Last Week in Event SPACE: Seven & I/Seven Bank, PCCW, Malaysia Airports, I'rom Group

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> was trading at an unjustifiable premium to NAV at the time of my last report back in August. Now it's even more unjustifiable. </li>
<li>Preceding my comments on PCCW/<a href="https://www.smartkarma.com/entities/hkt-ltd" target="_blank" data-smartkarma-citation="entities:874:1" rel="noopener">HKT Ltd (6823 HK)</a>, and <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>/<a href="https://www.smartkarma.com/entities/arm-holdings-inc" target="_blank" data-smartkarma-citation="entities:21816:1" rel="noopener">ARM Holdings (ARM US)</a>, are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



PCCW Ltd (8 HK) was trading at an unjustifiable premium to NAV at the time of my last report back in August. Now it's even more unjustifiable. 
Preceding my comments on PCCW/HKT Ltd (6823 HK), and Softbank Group (9984 JP)/ARM Holdings (ARM US), are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: PCCW's Questionable NAV Premium. Plus Softbank Vs. Arm

China

China United Network Communications Limited provides a variety of telecommunication services, including GSM and CDMA wireless telecommunication services, international and domestic long distance communication services, data communication and Internet services, as well as paging services.

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China United Network A (600050 CH)

China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away

There could be 3 changes in March. The forecast adds have outperformed the forecast deletes with 2 adds breaking to new highs. Passive impact is...

Brian Freitas

HKBN (1310 HK): China Mobile's "Fair" Tendering Offer

Say a conservative six months to secure reg approvals, and an additional two months to complete the Offer - I'd pay ~HK$4.95/share - perhaps up to...

David Blennerhassett

HKBN (1310 HK): China Mobile Comes Knocking. Again.

Shares are suspended - so there's nothing to be done right now. A rumoured HK$5/share is probably ok. A 16% premium to last close. But perhaps ~33%...

David Blennerhassett

Last Week in Event SPACE: Seven & I/Seven Bank, PCCW, Malaysia Airports, I'rom Group

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

StubWorld: PCCW's Questionable NAV Premium. Plus Softbank Vs. Arm

Valuation-wise, PCCW is trading full. I'd reverse the stub here, however this unjustifiable NAV premium has become even more unjustiifiable. Avoid....

David Blennerhassett

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