Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>There could be one index change during the September 2024 index rebal event. The official results will be announced after market close on 16th August 2024.</li>
<li>In this insight, we take a look at our latest flow expectations based on closing prices on Monday 12th August 2024.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
There could be one index change during the September 2024 index rebal event. The official results will be announced after market close on 16th August 2024.
In this insight, we take a look at our latest flow expectations based on closing prices on Monday 12th August 2024.


Quiddity Leaderboard HSTECH Sep 24: Expected ADD and DEL Have 10+ Days to Trade

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> is expected to replace <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> at the September rebalance.</li>
<li>Constituent changes and capping changes will result in a one-way turnover of 3.7% and that will result in a round-trip trade of HK$7.8bn (US$1bn).</li>
<li>Short interest is near the lows on both stocks but there has been a recent tick higher for <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a>.</li>
</ul>



ASM Pacific Technology (522 HK) is expected to replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the September rebalance.
Constituent changes and capping changes will result in a one-way turnover of 3.7% and that will result in a round-trip trade of HK$7.8bn (US$1bn).
Short interest is near the lows on both stocks but there has been a recent tick higher for ASM Pacific Technology (522 HK).


HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade

<ul>
<li>Hang Seng Indexes announces changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a>, HSIII Index and HSCI Index (among others) post market close today. </li>
<li>The net round-trip trade across the stocks is estimated to be HK$35bn (US$4.5bn) with big impact in a lot of stocks.</li>
<li>Capping will lead to most inflows to <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> while the largest outflows will be from <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> and <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>. </li>
</ul>


Hang Seng Indexes announces changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index, HSIII Index and HSCI Index (among others) post market close today. 
The net round-trip trade across the stocks is estimated to be HK$35bn (US$4.5bn) with big impact in a lot of stocks.
Capping will lead to most inflows to Meituan (3690 HK) while the largest outflows will be from Alibaba Group Holding (9988 HK) and Xiaomi Corp (1810 HK). 


Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)

<ul>
<li>The review period for the September rebalance of the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a> ended on 30 June, the changes will be announced on 22 August and implemented on 5 September.</li>
<li>No constituent changes will result in a one-way turnover of 4.1% and that will mean a round-trip trade of HK$15.2bn (US$1.94bn).</li>
<li>An expansion of the index universe could lead to one constituent change and that increases the one-way turnover to 6.2% and the round-trip trade to HK$23.1bn (US$2.94bn).</li>
</ul>


The review period for the September rebalance of the Hang Seng TECH Index ended on 30 June, the changes will be announced on 22 August and implemented on 5 September.
No constituent changes will result in a one-way turnover of 4.1% and that will mean a round-trip trade of HK$15.2bn (US$1.94bn).
An expansion of the index universe could lead to one constituent change and that increases the one-way turnover to 6.2% and the round-trip trade to HK$23.1bn (US$2.94bn).


HSTECH Index Rebalance Preview: Universe Expansion Could Lead to One Change

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of HS TECH in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on BYD, Ntes, Kuaishou, Lenovo, Li Auto, Horizonrobot, China Lit, Asmpt.</li>
</ul>


We analysed the earning revision of component stocks of HS TECH in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on BYD, Ntes, Kuaishou, Lenovo, Li Auto, Horizonrobot, China Lit, Asmpt.


HS TECH Index Earning Revision (Jun): BYD, Ntes, Kuaishou, Lenovo, Li Auto, Horizonrobot, China Lit

Hong Kong

ASM Pacific Technology Limited manufactures semiconductor back end equipment. The Company produces assembly equipment, packaging equipment, surface mount technology equipment, and other equipment. ASM Pacific Technology supplies its products in microelectronics, semiconductor, optoelectronics, and other fields.

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ASM Pacific Technology (522 HK)

Quiddity Leaderboard HSTECH Sep 24: Expected ADD and DEL Have 10+ Days to Trade

We see ASMPT (522 HK) as an expected ADD and Ping An Healthcare (1833 HK) as an expected DEL. Our latest one-way flow estimate is ~US$733mn which...

Janaghan Jeyakumar, CFA

HSTECH Index Rebalance Preview: ASM Pacific (522) Could Replace Ping An Health (1833); US$1bn Trade

ASMPT is down a LOT today following results that were weaker than expected and guidance that was lower than projected earlier. With potential...

Brian Freitas

Hang Seng Indexes: Announcement Today; Updated Flows (Some Big Ones)

Hang Seng Indexes announces post market close today. There will be changes for the HSI, HSCEI, HSTECH, HSIII and HSCI indices. The net round-trip...

Brian Freitas

HSTECH Index Rebalance Preview: Universe Expansion Could Lead to One Change

Horizon Robotics' FAF increase will result in big passive buying. An expansion of the index universe could lead to one constituent change with...

Brian Freitas

HS TECH Index Earning Revision (Jun): BYD, Ntes, Kuaishou, Lenovo, Li Auto, Horizonrobot, China Lit

We analyzed HS TECH's consensus for Jun 2025 and highlighted changes of EPS in BYD, Ntes, Kuaishou, Lenovo, Li Auto, Horizonrobot, China Lit, Asmpt.

Ke Yan, CFA, FRM

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