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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education (9901 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</a> in December while <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a> will be deleted.</li>
<li>Estimated one-way turnover is 2.7% and the estimated round-trip trade is HK$10.89bn (US$1.4bn) with over 1 day of ADV to trade in the adds and the delete.</li>
<li>The index committee has net added 1 stock 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> this year to go from 82 to 83 constituents. Reaching the 100-member target will drag into 2026.</li>
</ul>



Kuaishou Technology (1024 HK) and New Oriental Education (9901 HK) will be added to the Hang Seng Index in December while New World Development (17 HK) will be deleted.
Estimated one-way turnover is 2.7% and the estimated round-trip trade is HK$10.89bn (US$1.4bn) with over 1 day of ADV to trade in the adds and the delete.
The index committee has net added 1 stock to the Hang Seng Index this year to go from 82 to 83 constituents. Reaching the 100-member target will drag into 2026.


Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.</li>
<li>In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.


Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

<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>The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.</li>
<li>In this insight, we take a look at our updated flow expectations.</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.
The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
In this insight, we take a look at our updated flow expectations.


Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Tencent Music Entertainment / Equity Bottom-Up

<ul>
<li>Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.</li>
<li>
<a href="https://www.smartkarma.com/entities/crrc-corp-ltd-461535b2-37ac-4589-b4d9-8b71c06c43b8" target="_blank" data-smartkarma-citation="entities:124:1" rel="noopener">CRRC Corp Ltd H (1766 HK)</a> gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> reported solid results as it shifts to a pay-to-stream subscription model. <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> had a blowout quarter with EV sales surging.
</li>
</ul>


Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.

CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.


Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.



BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

<ul>
<li>China announced game approval for the October batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to have accelerated to the same level as pre-tightening.</li>
<li>None of the companies that we are tracking got any approval for October batch.</li>
</ul>


China announced game approval for the October batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening.
None of the companies that we are tracking got any approval for October batch.


Tencent/Netease: Zeroed Again After Three Months

China

Bilibili Inc. is a leading online entertainment and video-sharing platform in China, primarily offering professional user-generated videos (PUGV), mobile games, live broadcasting, and value-added services. The company provides diverse digital content including anime, comics, and gaming (ACG), as well as pan-entertainment and pan-knowledge content. Bilibili is headquartered in Shanghai, China, and was founded in 2009.

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Bilibili (9626 HK)

Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

Kuaishou and New Oriental Ed are adds and NWD is a delete. Positioning is generally low and the stocks could move in the short-term before relative...

Brian Freitas

Quiddity Leaderboard HSIII: ~US$160mn One-Way Flows in Dec 24; 3 ADDs/DELs in Mar 25 Likely

Easou Technology Holdings (2550 HK) has dropped 80%+ in the last few trading days and is on the verge of missing out on HSIII addition in March 2025.

Janaghan Jeyakumar, CFA

Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected

We currently estimate total one-way flow to be US$1.2bn during the December 2024 index rebal event. The final caps will be decided based on 3rd...

Janaghan Jeyakumar, CFA

BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

Hong Kong has seen its Consumer Discretionary and Healthcare sectors perform well since the stimulus in September. CRCC has had several buy...

David Mudd

Tencent/Netease: Zeroed Again After Three Months

We analyzed the game approval issued by NPPA for Chinese online game players for the month of October. None of the stocks we are tracking got any...

Ke Yan, CFA, FRM

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