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 monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Consumer Staples ($962 million worth of outflows), Consumer Discretionary ($561 million worth of outflows) led the outflows (first chart below).</li>
<li>We highlight monthly outflows for CATL, Zhongji, Moutai, Wuliangye, Mindray.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Consumer Staples ($962 million worth of outflows), Consumer Discretionary ($561 million worth of outflows) led the outflows (first chart below).
We highlight monthly outflows for CATL, Zhongji, Moutai, Wuliangye, Mindray.


Northbound Flows (July): Two Months of Outflows

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

China National Nuclear Power C / Event-Driven

China National Nuclear Power C (601985 CH)

<ul>
<li>Based on the close of 22 July, there could be two 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 (2822 HK)</a> ETFs in June.</li>
<li>
<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> and <a href="https://www.smartkarma.com/entities/huaneng-lancang-river-hydropow" target="_blank" data-smartkarma-citation="entities:26585:1" rel="noopener">Huaneng Lancang River Hydropowe</a>r could replace <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd</a> and <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings</a> in the ETFs. </li>
<li>
<a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">China Tourism Group Duty Free (1880 HK)</a> could be deleted from a global index in August, so there could be selling in the A-shares and H-shares.</li>
</ul>


Based on the close of 22 July, there could be two changes for the iShares A50 China (2823 HK) / CSOP China A50 (2822 HK) ETFs in June.

China National Nuclear Power and Huaneng Lancang River Hydropower could replace China Tourism Group Duty Free Corp Ltd and Yihai Kerry Arawana Holdings in the ETFs. 

China Tourism Group Duty Free (1880 HK) could be deleted from a global index in August, so there could be selling in the A-shares and H-shares.


China A50 ETFs Rebalance Preview: Two Changes in September

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.</li>
<li>We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.</li>
<li>We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 12th.
We estimate the weekly inflows to be US$2,168.8 million, led by financials, information technology, utilities sectors, and offset by health care, communication services, energy.
We highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP.


Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 5th.</li>
<li>We estimate the weekly outflows to be US$1,769.7 million, led by information technology, materials, industrials, and offset by communication services, real estate, utilities.</li>
<li>We note that outflows have been consecutive for four weeks and highlight outflows for CATL (300750 CH).</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 5th.
We estimate the weekly outflows to be US$1,769.7 million, led by information technology, materials, industrials, and offset by communication services, real estate, utilities.
We note that outflows have been consecutive for four weeks and highlight outflows for CATL (300750 CH).


Northbound Flows (Jul 5th): 4 Weeks of Outflows

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net SELL RMB 21.9bn of A-shares. NORTHBOUND bought tech and sold everything else, especially consumer names. Kweichow Moutai, Midea, appliances and renewables.</li>
<li>Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 21.9bn of A-shares. NORTHBOUND bought tech and sold everything else, especially consumer names. Kweichow Moutai, Midea, appliances and renewables.
Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.


Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

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)

Northbound Flows (July): Two Months of Outflows

We analyzed the Shanghai/Shenzhen Connect Scheme for July and highlight outflows for CATL, Zhongji, Moutai, Wuliangye, Mindray.

Ke Yan, CFA, FRM

China A50 ETFs Rebalance Preview: Two Changes in September

There could be 2 changes for the China A50 ETFs in Sep. CTG could see selling in A- and H-shares within 3 weeks. The IPPs have been trading higher...

Brian Freitas

Northbound Flows (Jul 12th): Moutai, Yangtze Power, Ping An Insurance, Cosco Shipping, CNNP

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Moutai, Yangtze Power, Ping An Insurance, Cosco...

Ke Yan, CFA, FRM

Northbound Flows (Jul 5th): 4 Weeks of Outflows

We analyzed northbound Shanghai/Shenzhen connect flows in the past week. We estimate the outflows to be USD1.8bn and highlight flows for CATL.

Ke Yan, CFA, FRM

Mainland Connect NORTHBOUND Flows (To 14 June 2024): Large Tech Buying, Large Consumer Selling

Mainland Connect NORTHBOUND flows this past 4-day week were heavily to the sell side. Consumer Staples/Discretionary were HUGE net sells. Tech was...

Travis Lundy

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