Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>The HSCEI Review for Sep 2023 was announced on Friday 18 August. There is one ADD <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> and one DELETE <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a>. </li>
<li>Neither of these two are a surprise. Neither are hugely impactful. </li>
<li>There is about 2.5% one-way to trade. Alibaba (ADR) (BABA US) is a sell across all three major indices.</li>
</ul>


The HSCEI Review for Sep 2023 was announced on Friday 18 August. There is one ADD Trip.com Group (9961 HK) and one DELETE Country Garden Services (6098 HK). 
Neither of these two are a surprise. Neither are hugely impactful. 
There is about 2.5% one-way to trade. Alibaba (ADR) (BABA US) is a sell across all three major indices.


HSCEI Sep23 Index Review/​Flows - Trip.Com (9961) Added, CG Svcs (6098) Deleted; ~2.5% One Way

Sinopharm Group Co Ltd H / Index Rebalance

<ul>
<li>On Friday, Hang Seng Indices announced the changes to the benchmark Hang Seng Index, the index in the family with the largest AUM.</li>
<li>
<a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a> is ADDED, <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a> - in no surprise, is deleted. </li>
<li>I see HK$4bn a side to trade, and the only "compelling" trade by ADV here is Sinopharm, but correlations with a Peer Basket are low.</li>
</ul>


On Friday, Hang Seng Indices announced the changes to the benchmark Hang Seng Index, the index in the family with the largest AUM.

Sinopharm Group Co Ltd H (1099 HK) is ADDED, Country Garden Holdings Co (2007 HK) - in no surprise, is deleted. 
I see HK$4bn a side to trade, and the only "compelling" trade by ADV here is Sinopharm, but correlations with a Peer Basket are low.


HSI Sep23 Index Review/​Flows - Sinopharm (1099) IN, CoGard (2007) OUT; 100 Names a Loooong Way Off

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>As expected, <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> replaces <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 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 close on 1 September.</li>
<li>Estimated one-way turnover is 3.5% leading to a one-way trade of HK$3.4bn (US$435m). There are 4 stocks with over 1 day of ADV to trade.</li>
<li>Short interest is 15% of float on both stocks. Short covering could take <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> higher while providing support for <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies (2018 HK)</a> closer to deletion.</li>
</ul>


As expected, East Buy Holding (1797 HK) replaces AAC Technologies Holdings (2018 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 1 September.
Estimated one-way turnover is 3.5% leading to a one-way trade of HK$3.4bn (US$435m). There are 4 stocks with over 1 day of ADV to trade.
Short interest is 15% of float on both stocks. Short covering could take East Buy Holding (1797 HK) higher while providing support for AAC Technologies (2018 HK) closer to deletion.


HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a> will be added 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 (HSI INDEX)</a> on 1 September while <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a> will be deleted.</li>
<li>Both changes are a surprise, but the impact on <a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a> will be much larger. Given the recent increase in shorts, there could be covering.</li>
<li>Estimated one-way turnover is 1.9% leading to a one-way trade of HK$3.65bn. Capping will result in selling on <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>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC (5 HK)</a>. </li>
</ul>



Sinopharm Group Co Ltd H (1099 HK) will be added to the Hang Seng Index (HSI INDEX) on 1 September while Country Garden Holdings Co (2007 HK) will be deleted.
Both changes are a surprise, but the impact on Sinopharm Group Co Ltd H (1099 HK) will be much larger. Given the recent increase in shorts, there could be covering.
Estimated one-way turnover is 1.9% leading to a one-way trade of HK$3.65bn. Capping will result in selling on Alibaba Group Holding (9988 HK), Tencent (700 HK) and HSBC (5 HK). 


Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> replaces <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a> in the <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 (HSCEI INDEX)</a> at the close on 1 September.</li>
<li>
<a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene (6160 HK)</a> fails the Velocity Test and misses inclusion, while an increase in <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a>'s float keeps it in the index.</li>
<li>Using prices from the close on 18 August, estimated one-way turnover is 2.78% leading to a one-way trade of HK$1.73bn (US$221m).</li>
</ul>


As expected, Trip.com Group (9961 HK) replaces Country Garden Services (6098 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 1 September.

BeiGene (6160 HK) fails the Velocity Test and misses inclusion, while an increase in Zhongsheng Group (881 HK)'s float keeps it in the index.
Using prices from the close on 18 August, estimated one-way turnover is 2.78% leading to a one-way trade of HK$1.73bn (US$221m).


HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba (9988 HK)

HSCEI Sep23 Index Review/Flows - Trip.Com (9961) Added, CG Svcs (6098) Deleted; ~2.5% One Way

The Sep 2023 HSCEI rebal is something of a damp squib. Nothing that big. Capping contributes to the BABA sell. And watch for big moves the next few...

Travis Lundy

HSI Sep23 Index Review/Flows - Sinopharm (1099) IN, CoGard (2007) OUT; 100 Names a Loooong Way Off

The Hang Seng Index Sep 2023 review is a little disappointing. The DELETE is obvious. The ADD wasn't so much. And Hang Seng is highly...

Travis Lundy

HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks

East Buy (1797) replaces AAC Tech (2018) in the HSTECH in Sep. Two-way turnover is 7% and the round-trip trade is US$870m. There are big shorts on...

Brian Freitas

Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted

Sinopharm will replace CountryGarden in the HSI at the close on 1 Sep. There will be selling in Alibaba, Tencent and HSBC due to capping. Shorts...

Brian Freitas

HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)

As expected, Trip.com replaces CG Services in the HSCEI. Beigene fails liquidity and Zhongsheng's float increases. Float and capping changes result...

Brian Freitas

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52-week Range

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HSCEI Sep23 Index Review/​Flows - Trip.Com (9961) Added, CG Svcs (6098) Deleted; ~2.5% One Way

The Sep 2023 HSCEI rebal is something of a damp squib. Nothing that big. Capping contributes to the BABA sell. And watch for big moves the next few...

Travis Lundy

HSI Sep23 Index Review/​Flows - Sinopharm (1099) IN, CoGard (2007) OUT; 100 Names a Loooong Way Off

The Hang Seng Index Sep 2023 review is a little disappointing. The DELETE is obvious. The ADD wasn't so much. And Hang Seng is highly...

Travis Lundy

HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks

East Buy (1797) replaces AAC Tech (2018) in the HSTECH in Sep. Two-way turnover is 7% and the round-trip trade is US$870m. There are big shorts on...

Brian Freitas

Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted

Sinopharm will replace CountryGarden in the HSI at the close on 1 Sep. There will be selling in Alibaba, Tencent and HSBC due to capping. Shorts...

Brian Freitas

HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)

As expected, Trip.com replaces CG Services in the HSCEI. Beigene fails liquidity and Zhongsheng's float increases. Float and capping changes result...

Brian Freitas

HSCEI Sep23 Index Review/Flows - Trip.Com (9961) Added, CG Svcs (6098) Deleted; ~2.5% One Way

HSI Sep23 Index Review/Flows - Sinopharm (1099) IN, CoGard (2007) OUT; 100 Names a Loooong Way Off