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>
<a href="https://www.smartkarma.com/entities/waypoint-reit" target="_blank" data-smartkarma-citation="entities:22851:1" rel="noopener">Waypoint REIT (WPR AU)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/vaneck-vectors-australian-property-etf" target="_blank" data-smartkarma-citation="entities:30998:1" rel="noopener">Vaneck Vectors Australian Property ETF (MVA AU)</a> next week. There are float changes and capping changes too.</li>
<li>Estimated one-way turnover is 4.3% and will result in a round-trip trade of A$49m. There are 3 stocks with over 0.5x ADV to trade from passive trackers.</li>
<li>We had <a href="https://www.smartkarma.com/entities/waypoint-reit" target="_blank" data-smartkarma-citation="entities:22851:1" rel="noopener">Waypoint REIT (WPR AU)</a> as a delete in December, but the stock was not deleted from the index. We had it as a close delete this time.</li>
</ul>



Waypoint REIT (WPR AU) will be deleted from the Vaneck Vectors Australian Property ETF (MVA AU) next week. There are float changes and capping changes too.
Estimated one-way turnover is 4.3% and will result in a round-trip trade of A$49m. There are 3 stocks with over 0.5x ADV to trade from passive trackers.
We had Waypoint REIT (WPR AU) as a delete in December, but the stock was not deleted from the index. We had it as a close delete this time.


MV Australia A-REITs Index Rebalance: Waypoint REIT (WPR AU) Deleted

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a>’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.</li>
<li>On 7 March, the consortium disclosed two additional irrevocable (3.47% of outstanding shares) and satisfied two regulatory preconditions (UK FCA and Singapore MAS).</li>
<li>Since announcing the offer, peers have materially derated, lowering the vote risk. At the last close and for an end August payment, the gross/annualised spread is 4.5%/10.1%</li>
</ul>



ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
On 7 March, the consortium disclosed two additional irrevocable (3.47% of outstanding shares) and satisfied two regulatory preconditions (UK FCA and Singapore MAS).
Since announcing the offer, peers have materially derated, lowering the vote risk. At the last close and for an end August payment, the gross/annualised spread is 4.5%/10.1%


<ul>
<li>The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 20 December. There are no constituent changes, but there are float and capping changes.</li>
<li>Estimated one-way turnover at the rebalance is 2.9% resulting in a one-way trade of A$17m. There is limited impact on the index constituents.</li>
<li>The largest inflows are in <a href="https://www.smartkarma.com/entities/charter-hall-group" target="_blank" data-smartkarma-citation="entities:5593:1" rel="noopener">Charter Hall</a>, <a href="https://www.smartkarma.com/entities/gpt-group" target="_blank" data-smartkarma-citation="entities:168:1" rel="noopener">Gpt Group</a>, <a href="https://www.smartkarma.com/entities/dexus" target="_blank" data-smartkarma-citation="entities:403:1" rel="noopener">Dexus Property</a> and <a href="https://www.smartkarma.com/entities/region-re-ltd" target="_blank" data-smartkarma-citation="entities:20100:1" rel="noopener">Region RE</a> while the largest outflows will be from <a href="https://www.smartkarma.com/entities/goodman-group" target="_blank" data-smartkarma-citation="entities:959:1" rel="noopener">Goodman Group</a>, <a href="https://www.smartkarma.com/entities/scentre-group" target="_blank" data-smartkarma-citation="entities:9538:1" rel="noopener">Scentre Group</a> and <a href="https://www.smartkarma.com/entities/federation-centres" target="_blank" data-smartkarma-citation="entities:335:1" rel="noopener">Vicinity Centres</a>.</li>
</ul>


The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 20 December. There are no constituent changes, but there are float and capping changes.
Estimated one-way turnover at the rebalance is 2.9% resulting in a one-way trade of A$17m. There is limited impact on the index constituents.
The largest inflows are in Charter Hall, Gpt Group, Dexus Property and Region RE while the largest outflows will be from Goodman Group, Scentre Group and Vicinity Centres.


MV Australia A-REITs Index Rebalance: Only Float & Capping Changes

<ul>
<li>
<a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a>’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.</li>
<li>The precondition relates to several regulatory approvals. The precondition satisfaction does not carry the same risk as the <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> deal break.   </li>
<li>The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done deal, with timing the key risk. </li>
</ul>



ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
The precondition relates to several regulatory approvals. The precondition satisfaction does not carry the same risk as the China Traditional Chinese Medicine (570 HK) deal break.   
The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done deal, with timing the key risk. 


ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a> provided a positive update on the indicative proposal. The update notes that the consortium has expanded from three to six, representing 39.91% of outstanding shares.</li>
<li>The addition of new consortium members is a positive. While the recent market rally is not a dealbreaker, it should give the consortium renewed impetus to launch an acceptable offer.   </li>
<li>The downside to a deal break is low as ESR’s valuation is undemanding, which is supported by the potential earnings recovery in a more benign interest rate environment.</li>
</ul>



ESR Group (1821 HK) provided a positive update on the indicative proposal. The update notes that the consortium has expanded from three to six, representing 39.91% of outstanding shares.
The addition of new consortium members is a positive. While the recent market rally is not a dealbreaker, it should give the consortium renewed impetus to launch an acceptable offer.   
The downside to a deal break is low as ESR’s valuation is undemanding, which is supported by the potential earnings recovery in a more benign interest rate environment.


ESR Group (1821 HK): Inching Closer to a Binding Proposal

Australia

Charter Hall Group invests in and develops real estate.  The Company manages real estate investment funds and develops commercial, residential, and industrial properties.

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Charter Hall (CHC AU)

MV Australia A-REITs Index Rebalance: Waypoint REIT (WPR AU) Deleted

Waypoint REIT will be deleted from the MVA ETF next Friday and passives need to sell over 3.5x ADV in the stock. Estimated one-way turnover is 4.3%...

Brian Freitas

ESR Group (1821 HK): Steady Progress

The additional irrevocable and material derating of peers lowers the vote risk. The consortium is making steady progress in satisfying the...

Arun George

MV Australia A-REITs Index Rebalance: Only Float & Capping Changes

No constituent changes, but a few float and capping changes. Estimated one-way turnover at the rebalance is 2.9% resulting in a one-way trade of...

Brian Freitas

ESR Group (1821 HK): Consortium’s Scheme Cash/Scrip Privatisation Offer

The irrevocable (31.03% of outstanding shares) ensure that shareholders with blocking or close to blocking stakes are supportive. This is a done...

Arun George

ESR Group (1821 HK): Inching Closer to a Binding Proposal

The addition of new consortium members is a key positive. While the recent market rally is not a dealbreaker, it should give the consortium renewed...

Arun George

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