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

GigaDevice Semiconductor  / Index Rebalance

<ul>
<li>With the review period complete, there are 5 non-constituents in direct inclusion zone and 5 current constituents in direct deletion zone. However, as usual, there will be discretion used.</li>
<li>5 changes result in a one-way turnover of 6.4%, leading to a round-trip trade of CNY 13bn (US$1.9bn). Index arb balances will increase the impact on the stocks.</li>
<li>Impact on the forecast adds varies between 0.2-0.3x ADV while the impact on the forecast deletes is a lot higher at 0.5-1.9x ADV. Index arb balance will further increase flow/impact.</li>
</ul>


With the review period complete, there are 5 non-constituents in direct inclusion zone and 5 current constituents in direct deletion zone. However, as usual, there will be discretion used.
5 changes result in a one-way turnover of 6.4%, leading to a round-trip trade of CNY 13bn (US$1.9bn). Index arb balances will increase the impact on the stocks.
Impact on the forecast adds varies between 0.2-0.3x ADV while the impact on the forecast deletes is a lot higher at 0.5-1.9x ADV. Index arb balance will further increase flow/impact.


SSE50 Index Rebalance Preview: Forecast Changes & Borderline Names for June

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

China National Nuclear Power C / Equity Bottom-Up

China National Nuclear Power C (601985 CH)

<ul>
 <li>
Dominant Market Position with Strong Government Backing: As a subsidiary of the state-owned China National Nuclear Corporation (CNNC), CNNP is a leader in China's nuclear power sector, which is a strategic priority for the nation's energy security and decarbonization goals. This backing provides significant competitive advantages, including favorable policies, access to funding, and a clear growth pipeline.</li>
 <li>
Clear Growth Trajectory Driven by National Energy Policy: China has the world's most ambitious nuclear power expansion plan, aiming to reach 70 GWe of installed capacity by 2025 and 110 GWe by 2030. CNNP is a primary vehicle for this growth, with a substantial number of reactors under construction and in the approval pipeline, ensuring a long-term revenue and earnings growth runway.</li>
 <li>
High Capital Expenditure and Negative Free Cash Flow: The company's aggressive expansion strategy requires massive capital investment, leading to consistently negative free cash flow. While this is necessary for future growth, it represents a significant cash burn and reliance on financing until new reactors become operational and start generating returns.</li>
</ul>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.


  
Dominant Market Position with Strong Government Backing: As a subsidiary of the state-owned China National Nuclear Corporation (CNNC), CNNP is a leader in China's nuclear power sector, which is a strategic priority for the nation's energy security and decarbonization goals. This backing provides significant competitive advantages, including favorable policies, access to funding, and a clear growth pipeline.
  
Clear Growth Trajectory Driven by National Energy Policy: China has the world's most ambitious nuclear power expansion plan, aiming to reach 70 GWe of installed capacity by 2025 and 110 GWe by 2030. CNNP is a primary vehicle for this growth, with a substantial number of reactors under construction and in the approval pipeline, ensuring a long-term revenue and earnings growth runway.
  
High Capital Expenditure and Negative Free Cash Flow: The company's aggressive expansion strategy requires massive capital investment, leading to consistently negative free cash flow. While this is necessary for future growth, it represents a significant cash burn and reliance on financing until new reactors become operational and start generating returns.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: China National Nuclear Power C (601985 CH) - Sep 2025

<ul>
<li>Nearing the end of the review period for the September rebalance, there could be three changes for the <a href="https://www.smartkarma.com/entities/ishares-ftse-a50-china-index-etf" target="_blank" data-smartkarma-citation="entities:249:1" rel="noopener">iShares A50 China (2823 HK)</a>/ <a href="https://www.smartkarma.com/entities/csop-ftse-china-a50-etf-26e3b671-fa47-4165-a12e-bf841640c5a3" target="_blank" data-smartkarma-citation="entities:23664:1" rel="noopener">CSOP China A50 (HKD) (2822 HK)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd" target="_blank" data-smartkarma-citation="entities:27092:1" rel="noopener">WuXi AppTec</a>, <a href="https://www.smartkarma.com/entities/zhongji-innolight-co-ltd" target="_blank" data-smartkarma-citation="entities:6986:1" rel="noopener">Zhongji Innolight</a> and <a href="https://www.smartkarma.com/entities/beigene-ltd-1c8ba4ff-edc5-43c3-b3fe-c3e4230f1c53" target="_blank" data-smartkarma-citation="entities:40395:1" rel="noopener">BeiGene</a> could replace <a href="https://www.smartkarma.com/entities/china-united-network-a" target="_blank" data-smartkarma-citation="entities:12620:1" rel="noopener">China United Network</a>, <a href="https://www.smartkarma.com/entities/nari-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:4364:1" rel="noopener">NARI Technology</a> and <a href="https://www.smartkarma.com/entities/china-national-nuclear-power-c" target="_blank" data-smartkarma-citation="entities:25348:1" rel="noopener">China National Nuclear Power</a> in the ETF at the close on 19 September.</li>
<li>Passives will need to trade 0.1-0.7x ADV in the forecast changes. The forecast adds have massively outperformed the forecast deletes over the last 4 months.</li>
</ul>


Nearing the end of the review period for the September rebalance, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK).

WuXi AppTec, Zhongji Innolight and BeiGene could replace China United Network, NARI Technology and China National Nuclear Power in the ETF at the close on 19 September.
Passives will need to trade 0.1-0.7x ADV in the forecast changes. The forecast adds have massively outperformed the forecast deletes over the last 4 months.


China A50 ETFs Rebalance Preview: Three Changes in September

Cambricon Technologies  Lt / Index Rebalance

<ul>
<li>With the review cutoff done, there could be three changes for the <a href="https://www.smartkarma.com/entities/ishares-ftse-a50-china-index-etf" target="_blank" data-smartkarma-citation="entities:249:1" rel="noopener">iShares A50 China (2823 HK)</a>/ <a href="https://www.smartkarma.com/entities/csop-ftse-china-a50-etf-26e3b671-fa47-4165-a12e-bf841640c5a3" target="_blank" data-smartkarma-citation="entities:23664:1" rel="noopener">CSOP China A50 (HKD) (2822 HK)</a> ETFs in March.</li>
<li>
<a href="https://www.smartkarma.com/entities/cambricon-technologies-corp-lt" target="_blank" data-smartkarma-citation="entities:31068:1" rel="noopener">Cambricon Technologies</a>, <a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:22740:1" rel="noopener">Guotai Junan Securities</a> and <a href="https://www.smartkarma.com/entities/china-united-network-a" target="_blank" data-smartkarma-citation="entities:12620:1" rel="noopener">China United Network</a> could replace <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group</a>, <a href="https://www.smartkarma.com/entities/cgn-power-co-ltd" target="_blank" data-smartkarma-citation="entities:29504:1" rel="noopener">CGN Power</a> and <a href="https://www.smartkarma.com/entities/luzhou-laojiao-co-ltd-a" target="_blank" data-smartkarma-citation="entities:4536:1" rel="noopener">Luzhou Laojiao</a> in the ETFs.</li>
<li>
<a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> is expected to be added to the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a> in March, so there should be inflows for the A-shares and H-shares.</li>
</ul>


With the review cutoff done, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in March.

Cambricon Technologies, Guotai Junan Securities and China United Network could replace Inner Mongolia Yili Industrial Group, CGN Power and Luzhou Laojiao in the ETFs.

Guotai Junan Securities (2611 HK) is expected to be added to the iShares China Large-Cap (FXI) (FXI US) in March, so there should be inflows for the A-shares and H-shares.


China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away

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

<ul>
<li>We analyze the 3Q2024 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.</li>
<li>We estimate that the inflows in 3Q were US$7,684 million and holdings were USD340bn.</li>
<li>We highlight flows for Midea, Moutai, Ping An Insurance, Catl, Yangtze Power.</li>
</ul>


We analyze the 3Q2024 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.
We estimate that the inflows in 3Q were US$7,684 million and holdings were USD340bn.
We highlight flows for Midea, Moutai, Ping An Insurance, Catl, Yangtze Power.


Northbound Flows (3Q2024): Wait and See Mode

China

China National Nuclear Power Co., Ltd. is a nuclear energy power producer. The Company invests in, constructs, manages and operates nuclear power plants throughout China.

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China National Nuclear Power C (601985 CH)

SSE50 Index Rebalance Preview: Forecast Changes & Borderline Names for June

There could be 5 changes. Estimated one-way turnover is 6.4% and round-trip trade is CNY 13bn (US$1.9bn). Index arb balance will increase flow and...

Brian Freitas

Primer: China National Nuclear Power C (601985 CH) - Sep 2025

Dominant Market Position with Strong Government Backing: As a subsidiary of the state-owned China National Nuclear Corporation (CNNC), CNNP is...

αSK Primers

China A50 ETFs Rebalance Preview: Three Changes in September

There could be 3 changes for the ETF in Sep. The forecast adds have outperformed the forecast deletes by a huge margin over the last 4 months....

Brian Freitas

China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away

There could be 3 changes in March. The forecast adds have outperformed the forecast deletes with 2 adds breaking to new highs. Passive impact is...

Brian Freitas

Northbound Flows (3Q2024): Wait and See Mode

We analyzed Northbound connect data for 3Q2024 and highlight flows for Moutai, Midea, Wuliangye, Catl, Gree Electric Appliances.

Ke Yan, CFA, FRM

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