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>The December rebalance of the Hang Seng family of indices will use today's closing prices to cap the index constituent weights.</li>
<li>The net round-trip trade across all stocks across the five indices is estimated at HK$50bn (US$6.4bn). There is size to trade in a lot of stocks.</li>
<li>
<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi (1810 HK)</a> is the biggest buy due to HSIII Index inclusion and capping, while <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 (9988 HK)</a> is the biggest capping sell.</li>
</ul>


The December rebalance of the Hang Seng family of indices will use today's closing prices to cap the index constituent weights.
The net round-trip trade across all stocks across the five indices is estimated at HK$50bn (US$6.4bn). There is size to trade in a lot of stocks.

Xiaomi (1810 HK) is the biggest buy due to HSIII Index inclusion and capping, while Alibaba (9988 HK) is the biggest capping sell.


HSI, HSCEI, HSTECH, HSIII, HSBIO Index Rebalance: US$6.4bn of Flows Post Capping (Dec 2025)

<ul>
<li>Following two periods of profitability, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 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> at the close on 5 December.</li>
<li>
<a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> is also an add to 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> in December, so this inclusion increases the flow and impact.</li>
<li>Estimated one-way turnover is 2.3% and the estimated round-trip trade is HK$9.2bn (US$1.2bn). Big capping outflows for <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 (9988 HK)</a> at the December rebalance.</li>
</ul>


Following two periods of profitability, Innovent Biologics Inc (1801 HK) will be added to the Hang Seng Index (HSI INDEX) at the close on 5 December.

Innovent Biologics Inc (1801 HK) is also an add to the Hang Seng China Enterprises Index (HSCEI INDEX) in December, so this inclusion increases the flow and impact.
Estimated one-way turnover is 2.3% and the estimated round-trip trade is HK$9.2bn (US$1.2bn). Big capping outflows for Alibaba (9988 HK) at the December rebalance.


Hang Seng Index (HSI) Rebalance: Innovent Biologics Turns a Profit, Gets Added

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Adani Green Energy, Fosun International</li>
<li>In the US, the final services PMI for December 2024 edged up to 56.8 (56.1 p), while the composite PMI rose to 55.4 (54.9 p). Separately in November, factory orders declined 0.4% (-0.3% e / 0.5% revised p), and the final durable goods orders fell 1.2% (-0.5% e / -1.1% p).</li>
<li>Long-end treasury yields climbed, with the UST curve bear-steepening after a weak auction of 3Y notes and amid a large supply of US corporate bond issuances.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Adani Green Energy, Fosun International
In the US, the final services PMI for December 2024 edged up to 56.8 (56.1 p), while the composite PMI rose to 55.4 (54.9 p). Separately in November, factory orders declined 0.4% (-0.3% e / 0.5% revised p), and the final durable goods orders fell 1.2% (-0.5% e / -1.1% p).
Long-end treasury yields climbed, with the UST curve bear-steepening after a weak auction of 3Y notes and amid a large supply of US corporate bond issuances.


<ul>
<li>This morning, China Hongqiao held a roadshow to market USD benchmark-sized three-year RegS bonds.</li>
<li>The expected issuance size is USD 300-400 mn (capped at USD 400 mn).</li>
<li>The order book is reported at USD 2 bn (including USD 395 mn interest from the 15 joint global coordinators).</li>
</ul>


This morning, China Hongqiao held a roadshow to market USD benchmark-sized three-year RegS bonds.
The expected issuance size is USD 300-400 mn (capped at USD 400 mn).
The order book is reported at USD 2 bn (including USD 395 mn interest from the 15 joint global coordinators).


China Hongqiao - Event Flash - Roadshowing USD 3Y Regs Notes - Lucror Analytics

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Equity Bottom-Up

<ul>
<li>Since the last rebalancing of our portfolio on 5th September, it has returned 13.5% vs 9.5% from MSCI-Asia-ex-Japan. Since inception (15th May), our portfolio has appreciated 20.1% vs MXASJ's 18.6%.</li>
<li>Six stocks, SK Hynix, TSMC, Samsung Electronics, Alibaba, China Hongqiao, Tencent, contributed almost the entire return of our portfolio. Overweight on Korea drove more than half the portfolio's return.</li>
<li>We turn more selective on Chinese discretionary consumption and step into the Korean defense sector. We exclude Anta Sports and Mediatek and include Hyundai Rotem and Hon Hai Precision.</li>
</ul>


Since the last rebalancing of our portfolio on 5th September, it has returned 13.5% vs 9.5% from MSCI-Asia-ex-Japan. Since inception (15th May), our portfolio has appreciated 20.1% vs MXASJ's 18.6%.
Six stocks, SK Hynix, TSMC, Samsung Electronics, Alibaba, China Hongqiao, Tencent, contributed almost the entire return of our portfolio. Overweight on Korea drove more than half the portfolio's return.
We turn more selective on Chinese discretionary consumption and step into the Korean defense sector. We exclude Anta Sports and Mediatek and include Hyundai Rotem and Hon Hai Precision.


Asian Equities: Model Portfolio Outperformed Sharply; Less China Consumption, More Korea Defence

China

China Hongqiao Group Ltd. manufactures aluminum products. The Company's aluminum products consist of molten aluminum alloy, aluminum alloy ingots and aluminum busbars.

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China Hongqiao (1378 HK)

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Hang Seng Index (HSI) Rebalance: Innovent Biologics Turns a Profit, Gets Added

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Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Adani Green Energy, Fosun...

Lucror Analytics

China Hongqiao - Event Flash - Roadshowing USD 3Y Regs Notes - Lucror Analytics

This morning, China Hongqiao held a roadshow to market USD benchmark-sized three-year RegS bonds. The expected issuance size is USD 300-400 mn...

Lucror Analytics

Asian Equities: Model Portfolio Outperformed Sharply; Less China Consumption, More Korea Defence

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