Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>.With Hang Seng Indexes looking to get up to 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.

Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the Hong Kong Hang Seng Index (HSI INDEX).With Hang Seng Indexes looking to get up to 80 Hong Kong Hang Seng Index (HSI INDEX) members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

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.

Quantitative Analysis

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 29.In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Gas Holdings Limited (384 HK) (HKD 91.4 million worth of buybacks), Hopson Development Holdings Limited (754 HK) (HKD 84.2 million worth of buybacks), Sihuan Pharmaceutical Holdings Group Ltd. (460 HK) (HKD 57.2 million worth of buybacks).

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 29.In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Gas Holdings Limited (384 HK) (HKD 91.4 million worth of buybacks), Hopson Development Holdings Limited (754 HK) (HKD 84.2 million worth of buybacks), Sihuan Pharmaceutical Holdings Group Ltd. (460 HK) (HKD 57.2 million worth of buybacks).

Hong Kong Buybacks: China Gas, Hopson, Sihuan

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

The last time I wrote about <a href="https://www.smartkarma.com/entities/kunlun-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:10054:1" rel="noopener">Kunlun Energy (135 HK)</a> was in early June 2021 when I discussed the little extra trick one might use to maximise dividend payout. It worked. But I was bullish.At that time, my conclusion was...<blockquote>I am still VERY bullish on Kunlun Energy vs a basket of the three listed HK peers, and at this point, a dollar-neutral position is probably appropriate. </blockquote>The stock was a little wishy-washy the day the Special Dividend went ex- - for whatever reason I do not know - then rallied sharply but since 4 June, though the stock itself rallied 30% from that post ex-div rally to early September, the sharp rise in gas input costs caused the shares to fall back to their post-div rally point last week. However the stock has continued to outperform peers - outperforming a basket of three liquid HK-listed city gas peers by 37.9% since I last wrote (the dots). <section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/339/original/Screenshot+2021-10-25+at+6.55.32+PM.png?1635159349" class="editor-image img-responsive" data-smartkarma-image-id="237339"></figure></section>But despite that performance... </section>I am still VERY bullish on Kunlun Energy vs a basket of the three listed HK peers, and at this point, EITHER a dollar-neutral position OR an outright long is appropriate. More below the fold.

The last time I wrote about Kunlun Energy (135 HK) was in early June 2021 when I discussed the little extra trick one might use to maximise dividend payout. It worked. But I was bullish.At that time, my conclusion was...I am still VERY bullish on Kunlun Energy vs a basket of the three listed HK peers, and at this point, a dollar-neutral position is probably appropriate. The stock was a little wishy-washy the day the Special Dividend went ex- - for whatever reason I do not know - then rallied sharply but since 4 June, though the stock itself rallied 30% from that post ex-div rally to early September, the sharp rise in gas input costs caused the shares to fall back to their post-div rally point last week. However the stock has continued to outperform peers - outperforming a basket of three liquid HK-listed city gas peers by 37.9% since I last wrote (the dots). But despite that performance... I am still VERY bullish on Kunlun Energy vs a basket of the three listed HK peers, and at this point, EITHER a dollar-neutral position OR an outright long is appropriate. More below the fold. 

Kunlun Energy - People Still Don't Get It So Gas It Up Some More

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 22.In the past 7 days, the top 3 companies that repurchased the most shares from the market were Xiaomi Corporation (1810 HK) (HKD 147.5 million worth of buybacks), China Gas Holdings Limited (384 HK) (HKD 75.9 million worth of buybacks), Sihuan Pharmaceutical Holdings Group Ltd. (460 HK) (HKD 70.2 million worth of buybacks).

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 22.In the past 7 days, the top 3 companies that repurchased the most shares from the market were Xiaomi Corporation (1810 HK) (HKD 147.5 million worth of buybacks), China Gas Holdings Limited (384 HK) (HKD 75.9 million worth of buybacks), Sihuan Pharmaceutical Holdings Group Ltd. (460 HK) (HKD 70.2 million worth of buybacks).

Hong Kong Buybacks: Xiaomi, China Gas, Sihuan

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 8th.In the past 7 days, the top 3 companies that repurchased the most shares from the market were Xiaomi Corporation (1810 HK) (HKD 242.3 million worth of buybacks), China Gas Holdings Limited (384 HK) (HKD 125.0 million worth of buybacks), Tencent Holdings Limited (700 HK) (HKD 105.6 million worth of buybacks).

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Oct 8th.In the past 7 days, the top 3 companies that repurchased the most shares from the market were Xiaomi Corporation (1810 HK) (HKD 242.3 million worth of buybacks), China Gas Holdings Limited (384 HK) (HKD 125.0 million worth of buybacks), Tencent Holdings Limited (700 HK) (HKD 105.6 million worth of buybacks).

Hong Kong Buybacks: Xiaomi, China Gas, Tencent

Hong Kong

China Gas is a leading energy supplier and service provider primarily engaged in the investment, construction, and management of city gas pipeline infrastructure. It distributes natural gas and liquefied petroleum gas (LPG) to residential, industrial, and commercial users, and operates CNG/LNG refilling stations. The company was founded in 1995 and is headquartered in Hong Kong.

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China Gas (384 HK)

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

The HSI has 60 members and the target is to reach 80 constituents over the next 3 rebalances. There could be a lot of stocks added at the Dec rebal...

Brian Freitas

Hong Kong Buybacks: China Gas, Hopson, Sihuan

We highlight in the past week the top 3 companies that repurchased the most shares from the market were China Gas (384 HK), Hopson (754 HK), Sihuan...

Ke Yan, CFA, FRM

Kunlun Energy - People Still Don't Get It So Gas It Up Some More

There are a few ways to look at Kunlun Energy vs Peers. Traditional measures show Kunlun as dreadfully cheap vs peers. The traditional measures are...

Travis Lundy

Hong Kong Buybacks: Xiaomi, China Gas, Sihuan

We highlight the top 3 companies that repurchased the most shares from the market were Xiaomi (1810 HK), China Gas Holdings Limited (384 HK),...

Ke Yan, CFA, FRM

Hong Kong Buybacks: Xiaomi, China Gas, Tencent

We highlight the top 3 companies that repurchased the most shares from the market were Xiaomi (1810 HK), China Gas Holdings (384 HK), Tencent (700...

Ke Yan, CFA, FRM

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