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>There are 29 adds and 41 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 505.</li>
<li>We expect 27 of the 29 HSCI inclusions to be added to Stock Connect from the open on 10 March while <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> should be added in May.</li>
<li>We expect 28 of the 41 HSCI deletions will be removed from Stock Connect and there has been increased Southbound holding in a lot of the stock this calendar year.</li>
</ul>


There are 29 adds and 41 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 505.
We expect 27 of the 29 HSCI inclusions to be added to Stock Connect from the open on 10 March while Horizon Robotics (9660 HK) should be added in May.
We expect 28 of the 41 HSCI deletions will be removed from Stock Connect and there has been increased Southbound holding in a lot of the stock this calendar year.


HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect

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 Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outflows, and holding by mainland investors.</li>
<li>We highlight inflows into Tencent, SMIC, ICBC, China Mobile, Xiaomi and outflows from Meituan.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows into Tencent, SMIC, ICBC, China Mobile, Xiaomi and outflows from Meituan.


Hong Kong Connect Flows (January): $18.1bn Inflows

Equity Bottom-Up

<ul>
<li>China announced game approval for the January batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to have accelerated to the same level as pre-tightening.</li>
<li>Tencent and CMGE received one approval for January, respectively. We also highlight perplexity of Tencent's approved game. </li>
</ul>


China announced game approval for the January batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening.
Tencent and CMGE received one approval for January, respectively. We also highlight perplexity of Tencent's approved game. 


Tencent/Netease: One Game Approval for Tencent in Jan and the Perplexity

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-up-corp" target="_blank" data-smartkarma-citation="entities:36232:1" rel="noopener">Shift Up (462870 KS)</a> raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from their lockup soon.</li>
<li>Shift Up is a South Korean games developer, which as released three games so far for the global markets.</li>
<li>In this note, we will talk about the lockup dynamics and possible placement.</li>
</ul>



Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from their lockup soon.
Shift Up is a South Korean games developer, which as released three games so far for the global markets.
In this note, we will talk about the lockup dynamics and possible placement.


Shift Up IPO Lockup - US$1.2bn Lockup Release of Strategic, Employees and IPO Investors

<ul>
<li>We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.</li>
<li>There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

China

iDreamSky Technology operates a digital entertainment platform, primarily publishing and operating mobile games through apps and websites in China. The company also develops mobile games, offers in-game information and advertising services, and engages in IP derivatives business, including console game experiences and sales of trendy products. It was founded in 2009 and is headquartered in Shenzhen, China.

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iDreamSky Technology (1119 HK)

HSCI Index Rebalance: 29 Adds, 41 Deletes & Changes to Southbound Stock Connect

There are 29 adds/ 41 deletes for the HSCI in March. We expect 27 inclusions and 28 deletions for Southbound Stock Connect. There are big holdings...

Brian Freitas

Hong Kong Connect Flows (January): $18.1bn Inflows

We analyzed the Hong Kong Connect Scheme for January and highlighted flows for Tencent, SMIC, ICBC, China Mobile, Xiaomi and Meituan.

Ke Yan, CFA, FRM

Tencent/Netease: One Game Approval for Tencent in Jan and the Perplexity

We analyzed the game approval issued by NPPA for Chinese online game players for the month of January. Game approvals for large players are slow so...

Ke Yan, CFA, FRM

Shift Up IPO Lockup - US$1.2bn Lockup Release of Strategic, Employees and IPO Investors

Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from...

Sumeet Singh

HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

There could be 89 changes for the HSCI in March. That could result in 73 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

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