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 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.</li>
<li>We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.</li>
<li>Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.</li>
</ul>


There are 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.
We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.


HSCI Index Rebalance: 25 Adds, 29 Deletes & Changes to Southbound Stock Connect

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

ImmuneOnco Biopharmaceuticals (Shanghai) / Equity Bottom-Up

<ul>
<li>The entire R&amp;D cycle involves multi-party cooperation, leveraging one's strengths. So, it is not difficult to understand some of the choices made by domestic pharmaceutical companies (e.g. Innovent, BeiGene).</li>
<li>Due to outdated technology, investment value of Sirnaomics is low, which means the likelihood of the company being acquired is also not high. We remain conservative about the outlook. </li>
<li>ImmuneOnco's stock price has performed much better-than-expected after IPO on HKEX. However, the endgame of ImmuneOnco’s market value could be only about RMB1.5 billion, which means large potential downside ahead.</li>
</ul>


The entire R&amp;D cycle involves multi-party cooperation, leveraging one's strengths. So, it is not difficult to understand some of the choices made by domestic pharmaceutical companies (e.g. Innovent, BeiGene).
Due to outdated technology, investment value of Sirnaomics is low, which means the likelihood of the company being acquired is also not high. We remain conservative about the outlook. 
ImmuneOnco's stock price has performed much better-than-expected after IPO on HKEX. However, the endgame of ImmuneOnco’s market value could be only about RMB1.5 billion, which means large potential downside ahead.


China Healthcare Weekly (Jan.12) - Mainstream R&D Trend, Innovent, BeiGene, Sirnaomics, ImmuneOnco

<ul>
<li>
<a href="https://www.smartkarma.com/entities/posco-dx-co-ltd" target="_blank" data-smartkarma-citation="entities:5198:1" rel="noopener">Posco DX (022100 KS)</a> continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.</li>
<li>There were big net inflows to China ETFs with creations in <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a> ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.</li>
<li>Creations continued in the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex China (EMXC US)</a> ETF with units outstanding reaching a new high.</li>
</ul>



Posco DX (022100 KS) continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.
There were big net inflows to China ETFs with creations in CSI 300 Index ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.
Creations continued in the iShares Emerging Markets ex China (EMXC US) ETF with units outstanding reaching a new high.


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

<ul>
<li>We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.</li>
<li>We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.</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 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
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: Potential Changes in March

Equity Capital Markets

ImmuneOnco Biopharmaceuticals (Shanghai) / Equity Capital Markets

<ul>
<li>ImmuneOnco’s execution/R&amp;D efficiency is far from satisfactory. After about seven years since the establishment in 2015, there are no candidates entering phase III trials or close to market launch.</li>
<li>The biggest concerns are druggability and safety profile of CD47-targeted candidates. There could be potential R&amp;D failure risks. The pipeline layout around CD47 also makes it hard to diversify risks.</li>
<li>It’s challenging for <a href="https://www.smartkarma.com/entities/immuneonco-biopharmaceuticals-shanghai-inc" target="_blank" data-smartkarma-citation="entities:36080:1" rel="noopener">ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK)</a> to hit high-quality license-out deals with reputable big pharma, leading to uncertainties on internationalization. We're conservative about the outlook. </li>
</ul>


ImmuneOnco’s execution/R&amp;D efficiency is far from satisfactory. After about seven years since the establishment in 2015, there are no candidates entering phase III trials or close to market launch.
The biggest concerns are druggability and safety profile of CD47-targeted candidates. There could be potential R&amp;D failure risks. The pipeline layout around CD47 also makes it hard to diversify risks.
It’s challenging for ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK) to hit high-quality license-out deals with reputable big pharma, leading to uncertainties on internationalization. We're conservative about the outlook. 


Pre-IPO ImmuneOnco Biopharmaceuticals (PHIP Updates) - Slow Development Progress and Gloomy Outlook

China

ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK)

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ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK)

HSCI Index Rebalance: 25 Adds, 29 Deletes & Changes to Southbound Stock Connect

There are 25 adds and 29 deletes for the HSCI in March. 21 stocks will be added to Stock Connect while 27 will be deleted. Positions via the...

Brian Freitas

China Healthcare Weekly (Jan.12) - Mainstream R&D Trend, Innovent, BeiGene, Sirnaomics, ImmuneOnco

If we look at mainstream R&D trend, the choices made by companies like Innovent/BeiGene are reasonable. Investment value of Sirnaomics is low....

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

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

Brian Freitas

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

There could be nearly 58 adds/deletes for the HSCI in September. That will trigger changes to the Southbound Stock Connect list and increase flows...

Brian Freitas

Pre-IPO ImmuneOnco Biopharmaceuticals (PHIP Updates) - Slow Development Progress and Gloomy Outlook

ImmuneOnco's business model is self-development, leading to slow progress. Druggability/safety profile of CD47-targeted molecules are the biggest...

Xinyao (Criss) Wang

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52-week Range

Market Cap (USDm)

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