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

<ul>
<li>Last evening, Hang Seng announced a methodology change for the Hang Seng Internet &amp; Information Technology Index (HSIII Index) with implementation in two phases.</li>
<li>The capping methodology will be updated at the September rebalance and the turnover and sector requirements will be updated at the December rebalance.</li>
<li>The updated capping scheme increases turnover and flow in September, while there could be one constituent change for the index at the December rebalance.</li>
</ul>


Last evening, Hang Seng announced a methodology change for the Hang Seng Internet &amp; Information Technology Index (HSIII Index) with implementation in two phases.
The capping methodology will be updated at the September rebalance and the turnover and sector requirements will be updated at the December rebalance.
The updated capping scheme increases turnover and flow in September, while there could be one constituent change for the index at the December rebalance.


Hang Seng Internet & IT Index (HSIII): Methodology Change & Impact

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>
Context: Volatility cones chart implied volatility against historical percentiles across the term structure, providing a clear framework to evaluate whether options are trading cheap or rich.</li>
<li>
Highlight: Several high-profile HK stocks currently show historically cheap implied volatility. With some of them trading near 52-week highs, now may be an opportune time to hedge.</li>
<li>
Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.</li>
</ul>



Context: Volatility cones chart implied volatility against historical percentiles across the term structure, providing a clear framework to evaluate whether options are trading cheap or rich.

Highlight: Several high-profile HK stocks currently show historically cheap implied volatility. With some of them trading near 52-week highs, now may be an opportune time to hedge.

Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.


Volatility Cones: Opportunities Across 8 Hong Kong Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On Friday 22 August, the Hang Seng Index team announced the changes to the Hang Seng Technology Index for the September 2025 rebalance.</li>
<li>Team Quiddity had one low conviction ADD/DEL pair "predicted" but there were no name changes announced. </li>
<li>
<a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> is a big FAF upweight, as expected. There are other small changes and big capping/re-capping moves. We see US$3.9bn to trade.</li>
</ul>


On Friday 22 August, the Hang Seng Index team announced the changes to the Hang Seng Technology Index for the September 2025 rebalance.
Team Quiddity had one low conviction ADD/DEL pair "predicted" but there were no name changes announced. 

Horizon Robotics (9660 HK) is a big FAF upweight, as expected. There are other small changes and big capping/re-capping moves. We see US$3.9bn to trade.


[Quiddity Index] Sep25 HSTECH Review Announced; No Name Changes, Big Flows

Event-Driven

<ul>
<li>Gross SOUTHBOUND volumes US$20+bn a day this past 5-day week. Net buying much more limited. Big ETF buying turned into ETF selling and tech buying, as suggested. </li>
<li>Last week's reco <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> was the top net buy in SOUTHBOUND this past week, up 2.2%, outperforming major HK benchmarks.</li>
<li>The data tables below update on a daily basis in the <a href="https://www.smartkarma.com/tools" target="_blank" rel="noopener">Tools</a> section of Smartkarma. The <a href="https://www.smartkarma.com/tools/quiddity/south-flow-monitor" target="_blank" rel="noopener">SOUTHBOUND Flow Monitor</a> and <a href="https://www.smartkarma.com/tools/quiddity/ah-shares-monitor" target="_blank" rel="noopener">AH Pairs Monitor</a> are both there free for SK readers.</li>
</ul>


Gross SOUTHBOUND volumes US$20+bn a day this past 5-day week. Net buying much more limited. Big ETF buying turned into ETF selling and tech buying, as suggested. 
Last week's reco Tencent (700 HK) was the top net buy in SOUTHBOUND this past week, up 2.2%, outperforming major HK benchmarks.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there free for SK readers.


HK Connect SOUTHBOUND Flows (To 22 Aug 2025); Big Swing Out of ETFs Into Tech Realised

<ul>
<li>There are no constituent changes for 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> in September. However, there are float and capping changes.</li>
<li>Estimated one-way turnover is 6.3% leading to a round-trip trade of HK$31.1bn (US$4bn). There is plenty to buy in <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> and <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>. </li>
<li>Short interest is elevated in some of the stocks with large flows and shorts could be active in the stocks over the next couple of weeks.</li>
</ul>


There are no constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in September. However, there are float and capping changes.
Estimated one-way turnover is 6.3% leading to a round-trip trade of HK$31.1bn (US$4bn). There is plenty to buy in Horizon Robotics (9660 HK), BYD (1211 HK) and Meituan (3690 HK). 
Short interest is elevated in some of the stocks with large flows and shorts could be active in the stocks over the next couple of weeks.


HSTECH Index Rebalance: No Constituent Changes; Float/Capping Changes Lead to US$4bn Trade

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

Hang Seng Internet & IT Index (HSIII): Methodology Change & Impact

Changes to the capping scheme increase turnover and flow in September. Introduction of minimum turnover and expansion of the universe could lead to...

Brian Freitas

Volatility Cones: Opportunities Across 8 Hong Kong Stocks

Spot opportunities and manage risk in HK stocks reporting soon: Meituan (27 Aug), Ping An Ins. (27 Aug), Alibaba (29 Aug), BYD (29 Aug). Several...

Gaudenz Schneider

[Quiddity Index] Sep25 HSTECH Review Announced; No Name Changes, Big Flows

The Hang Seng Technology Index review was announced on 22 August after the close. No name changes but nearly $3.9bn to trade with capping, re...

Travis Lundy

HK Connect SOUTHBOUND Flows (To 22 Aug 2025); Big Swing Out of ETFs Into Tech Realised

SOUTHBOUND volumes very big at US$20bn a day. NET buying limited at US$400mm a day average. Hang Seng Rebals announced, as expected. Horizon...

Travis Lundy

HSTECH Index Rebalance: No Constituent Changes; Float/Capping Changes Lead to US$4bn Trade

No constituent changes, but some large FAF/capping changes. Estimated one-way turnover is 6.3% and round-trip trade is US$4bn. Large inflows for...

Brian Freitas

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