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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

Equity Bottom-Up

Greatview Aseptic Packaging / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a> Greatview Aseptic is the second-largest roll-fed aseptic packaging supplier in China and the third-largest globally. It has become an established second-source supplier to Tetra Pak in China. It has expanded internationally with the same value proposition. International markets are growing at a faster pace than the Chinese market, but, the gross margin in international markets (18%) is much lower than the Chinese market (30%) with similar operating expenses and investment requirements meaning operating margin should fall with the growing importance of international markets.The company is growing and optically cheap at 11 times operating profit with a 6.7% dividend yield. With the growing importance of international markets and the lower gross margin in international markets, profitability will suffer. Under the base case, Greatview is fairly valued at HKD4.00.

Greatview Aseptic Packaging (468 HK) Greatview Aseptic is the second-largest roll-fed aseptic packaging supplier in China and the third-largest globally. It has become an established second-source supplier to Tetra Pak in China. It has expanded internationally with the same value proposition. International markets are growing at a faster pace than the Chinese market, but, the gross margin in international markets (18%) is much lower than the Chinese market (30%) with similar operating expenses and investment requirements meaning operating margin should fall with the growing importance of international markets.The company is growing and optically cheap at 11 times operating profit with a 6.7% dividend yield. With the growing importance of international markets and the lower gross margin in international markets, profitability will suffer. Under the base case, Greatview is fairly valued at HKD4.00.

Greatview Aspetic- Good Growth Outlook but Falling Margins = Fairly Valued.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Greatview Aseptic Packaging / Technical Analysis

<a href="https://www.smartkarma.com/entities/greatview-aseptic-packaging" target="_blank" data-smartkarma-citation="entities:10802:1" rel="noopener">Greatview Aseptic Packaging (468 HK)</a> does offer a micro long trade on a dip but formidable overhead resistance at 4.10 will act as a cap. Better entry levels are expected on weakness near the 3.0-20 area.An uptrend is beginning to take shape to challenge intermediate resistance at 4.10. Chart denotes clear risk support and breakout resistance points. This gels with signs of increasing activity in packaging.Buy volumes have improved in October.RSI shows top risk tactically while a pullback would provide better energy for the MACD to clear longer term trend resistance.Greatview holding 3.0 pivot support does favor a more bullish stance to try to clear intermediate hurdles.

Greatview Aseptic Packaging (468 HK) does offer a micro long trade on a dip but formidable overhead resistance at 4.10 will act as a cap. Better entry levels are expected on weakness near the 3.0-20 area.An uptrend is beginning to take shape to challenge intermediate resistance at 4.10. Chart denotes clear risk support and breakout resistance points. This gels with signs of increasing activity in packaging.Buy volumes have improved in October.RSI shows top risk tactically while a pullback would provide better energy for the MACD to clear longer term trend resistance.Greatview holding 3.0 pivot support does favor a more bullish stance to try to clear intermediate hurdles.

Greatview Aseptic Buy Dip Bet to Challenge Overhead Barrier

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

This week in StubWorld ...
<ul>
<li>
<a href="https://www.smartkarma.com/entities/19718" target="_blank" data-smartkarma-citation="entities:19718:1">Jardine Matheson Hldgs (JM SP)</a>'s recent buying of <a href="https://www.smartkarma.com/entities/15081" target="_blank" data-smartkarma-citation="entities:15081:1">Jardine Strategic Hldgs (JS SP)</a> is nothing new and follows a long-term plan to fortify the cross-holding structure.</li>
</ul>
Preceding my comments on Jardine and other stubs are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.

This week in StubWorld ...


Jardine Matheson Hldgs (JM SP)'s recent buying of Jardine Strategic Hldgs (JS SP) is nothing new and follows a long-term plan to fortify the cross-holding structure.

Preceding my comments on Jardine and other stubs are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.

StubWorld: Matheson's Strategic Buying of Strategic

China

Greatview Aseptic Packaging Company Limited is an integrated provider of aseptic packaging and related services. The Company also provides customers with a range of support services with respect to standard roll-fed filling machines, which include training and on-site technical assistance, as well as spare parts.

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Greatview Aseptic Packaging (468 HK)

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

Greatview Aspetic- Good Growth Outlook but Falling Margins = Fairly Valued.

Greatview Aspetic has a strong value proposition and a good growth outlook, but growth will come from international markets, which means margins...

Reperio Capital

Greatview Aseptic Buy Dip Bet to Challenge Overhead Barrier

Greatview sets up a long on a better pullback to the lower 3 zone to challenge and clear intermediate hurdles (4.10) that would open the way to...

Thomas Schroeder

StubWorld: Matheson's Strategic Buying of Strategic

This week in StubWorld ... Jardine Matheson Hldgs (JM SP)'s recent buying of Jardine Strategic Hldgs (JS SP) is nothing new and follows a...

David Blennerhassett

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