Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Hang Seng Tech Index is more widely-followed than many think, and it is reasonably concentrated, so outperformance and underperformance by big names means capping and re-capping.</li>
<li>This time, those flows are worth about 8% of the index in terms of one-way flows. Meituan, Xiaomi, JD.com, Tencent and Kuaishou Tech DOWN. Li Auto back up. </li>
<li>Those who have pre-positioned on the big buy have recently gotten hurt. There are some FAF changes which are less predictable and may be interesting.</li>
</ul>


The Hang Seng Tech Index is more widely-followed than many think, and it is reasonably concentrated, so outperformance and underperformance by big names means capping and re-capping.
This time, those flows are worth about 8% of the index in terms of one-way flows. Meituan, Xiaomi, JD.com, Tencent and Kuaishou Tech DOWN. Li Auto back up. 
Those who have pre-positioned on the big buy have recently gotten hurt. There are some FAF changes which are less predictable and may be interesting.


HSTECH June 2024 Rebal - No Changes But Big Capping Flows, As Expected; 8% US$1.6bn One-Way

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>PDD US: Temu merchants report a new round of forced price reductions (+)</li>
<li>3690 HK: Meituan Restructures Delivery Business to Boost Efficiency, Refine Operations Amid Slowing Order Growth(+)</li>
<li>Douyin/1797 HK/2618 HK/3690 HK: JD Logistics Partners with EastBuy to Launch "Delivery in hours" Service, Directly Competing with Meituan(+/-)</li>
</ul>


PDD US: Temu merchants report a new round of forced price reductions (+)
3690 HK: Meituan Restructures Delivery Business to Boost Efficiency, Refine Operations Amid Slowing Order Growth(+)
Douyin/1797 HK/2618 HK/3690 HK: JD Logistics Partners with EastBuy to Launch "Delivery in hours" Service, Directly Competing with Meituan(+/-)


[Blue Lotus Daily - TMT Update]:PDD US/3690 HK/Douyin/1797 HK/2618 HK/NTES US/TCOM US/ATAT US

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

<ul>
<li>The March rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a> are the biggest buys 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>, <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>,  <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC (5 HK)</a> are the biggest sells.</li>
<li>The round-trip trade across all stocks across the four indices is estimated at HK$16.16bn (US$2.06bn).</li>
</ul>


The March rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.

Tencent (700 HK), Meituan (3690 HK) and Tongcheng Travel (780 HK) are the biggest buys while Alibaba (9988 HK), Li Auto (2015 HK),  HSBC (5 HK) are the biggest sells.
The round-trip trade across all stocks across the four indices is estimated at HK$16.16bn (US$2.06bn).


HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

Index Rebalance

Hygon Information Technology C / Index Rebalance

<ul>
<li>The changes for the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index were announced post market close on Friday.</li>
<li>The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.</li>
<li>With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300</a>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500</a>, <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext</a> and <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50</a> indices.</li>
</ul>


The changes for the SSE STAR50 (STAR50 INDEX) and STAR100 Index were announced post market close on Friday.
The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.
With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the CSI 300, CSI 500, ChiNext and STAR50 indices.


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

<ul>
<li>There will be 3 changes for the Hang Seng Internet &amp; Information Technology Index (HSIII) at the March rebalance. There are some surprises.</li>
<li>Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn (US$416m). 6 stocks will have over 1x ADV to trade.</li>
<li>There is huge short interest on <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> and there could be some short covering ahead of the inclusion of the stock in the index.</li>
</ul>


There will be 3 changes for the Hang Seng Internet &amp; Information Technology Index (HSIII) at the March rebalance. There are some surprises.
Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn (US$416m). 6 stocks will have over 1x ADV to trade.
There is huge short interest on East Buy Holding (1797 HK) and there could be some short covering ahead of the inclusion of the stock in the index.


Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise

China

East Buy Holding Limited operates livestreaming platform businesses. The Company provides private label products including agricultural products, food, books, and household goods. East Buy Holding also conducts college education businesses.

Price Gauge
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East Buy Holding (1797 HK)

HSTECH June 2024 Rebal - No Changes But Big Capping Flows, As Expected; 8% US$1.6bn One-Way

Quiddity did not expect any name changes to the HSTECH index in June 2024 but we expected big flows because of significant capping impact, mostly...

Travis Lundy

[Blue Lotus Daily - TMT Update]:PDD US/3690 HK/Douyin/1797 HK/2618 HK/NTES US/TCOM US/ATAT US

Merchants in Temu report forced price reductions, Meituan restructures delivery business for efficiency, JD Logistics partners with EastBuy for...

Blue Lotus Research Institute

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

Tencent (700 HK), Meituan (3690 HK) and Tongcheng Travel (780 HK) are the biggest buys while Alibaba (9988 HK), Li Auto (2015 HK), HSBC (5 HK) are...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise

There are 3 changes for the HSIII in March. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSTECH June 2024 Rebal - No Changes But Big Capping Flows, As Expected; 8% US$1.6bn One-Way

Quiddity did not expect any name changes to the HSTECH index in June 2024 but we expected big flows because of significant capping impact, mostly...

Travis Lundy

[Blue Lotus Daily - TMT Update]:PDD US/3690 HK/Douyin/1797 HK/2618 HK/NTES US/TCOM US/ATAT US

​Merchants in Temu report forced price reductions, Meituan restructures delivery business for efficiency, JD Logistics partners with EastBuy for...

Blue Lotus Research Institute

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

Tencent (700 HK), Meituan (3690 HK) and Tongcheng Travel (780 HK) are the biggest buys while Alibaba (9988 HK), Li Auto (2015 HK), HSBC (5 HK) are...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise

There are 3 changes for the HSIII in March. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn...

Brian Freitas

Merchants in Temu report forced price reductions, Meituan restructures delivery business for efficiency, JD Logistics partners with EastBuy for...