Independent Sell Side Equity Research Analyst, ChartSmarter

Douglas Busch

Independent Sell Side Equity Research Analyst

ChartSmarter

ChartSmarter is a service dedicated to the art of technical analysis.

On a daily basis we write up actionable ideas on a specific, major S&P sector on both the long and short side, in an easy yet thorough way. In the notes we give precise entries and exits, while looking to capture the "meat" of a trend.

Technical Analysis.

Technical Analysis

KraneShares CSI China Internet ETF / Technical Analysis

<ul>
<li>KWEB giving an attractive entry point here, as it begins to outperform the domestic FDN.</li>
<li>Toyota&gt;Honda and look for that relationship to continue going forward.</li>
<li>JD&gt;BABA, a new dynamic divergence between the two, and my opinion is JD will be the leader in 2024 and beyond.</li>
</ul>


KWEB giving an attractive entry point here, as it begins to outperform the domestic FDN.
Toyota&gt;Honda and look for that relationship to continue going forward.
JD&gt;BABA, a new dynamic divergence between the two, and my opinion is JD will be the leader in 2024 and beyond.


KWEB Attractive, Toyota and JD.com Best in Breed

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

Ping An Healthcare and Technology / Index Rebalance

<ul>
<li>The review period for the December rebalance of the CSI Overseas China Internet Index ended 31 October. The changes should be announced 28 November and implemented close on 12 December.</li>
<li>There could be 6 inclusions for the <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KraneShares CSI China Internet ETF (KWEB US)</a> in December with most inclusions being high probability.</li>
<li>Impact on the inclusions varies between 1.3-5 days of ADV. There will be stocks with float increases and some capping changes.</li>
</ul>


The review period for the December rebalance of the CSI Overseas China Internet Index ended 31 October. The changes should be announced 28 November and implemented close on 12 December.
There could be 6 inclusions for the KraneShares CSI China Internet ETF (KWEB US) in December with most inclusions being high probability.
Impact on the inclusions varies between 1.3-5 days of ADV. There will be stocks with float increases and some capping changes.


KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares</li>
<li>India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption </li>
</ul>


A review of recent events/data impacting our investment themes or outlook
The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares
India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption 


Overview #14 - The Emperor Has No Clothes Moment

<ul>
<li>It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.</li>
<li>Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.</li>
<li>As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.</li>
</ul>


It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.
Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.
As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.


How Has the Index Rebalance Strategy Performed in 2024?

<ul>
<li>The December rebalance of the <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KraneShares CSI China Internet ETF (KWEB US)</a> will take place at the close of trading on 12 December.</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-pictures-group-ltd" target="_blank" data-smartkarma-citation="entities:20724:1" rel="noopener">Alibaba Pictures</a>, <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding</a>, <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology</a>, <a href="https://www.smartkarma.com/entities/xd-inc" target="_blank" data-smartkarma-citation="entities:28283:1" rel="noopener">XD Inc.</a> and <a href="https://www.smartkarma.com/entities/caocao-inc" target="_blank" data-smartkarma-citation="entities:42803:1" rel="noopener">CaoCao (2643 HK)</a> will be added, while <a href="https://www.smartkarma.com/entities/iqiyi-inc" target="_blank" data-smartkarma-citation="entities:26755:1" rel="noopener">iQIYI Inc (IQ US)</a> will be deleted.</li>
<li>Short interest has increased in most adds recently and there could be some short covering following the announcement of the index inclusion.</li>
</ul>


The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 12 December.

Alibaba Pictures, East Buy Holding, Ping An Healthcare and Technology, XD Inc. and CaoCao (2643 HK) will be added, while iQIYI Inc (IQ US) will be deleted.
Short interest has increased in most adds recently and there could be some short covering following the announcement of the index inclusion.


United States

KraneShares CSI China Internet Fund is an exchange-traded fund incorporated in the USA. The fund tracks the CSI Overseas China Internet Index. It invests in a universe of publicly traded China-based companies whose primary business is in the Internet and Internet-related sectors. It attempts to offer exposure to companies that benefit from increasing consumption by China's growing middle class.

KraneShares CSI China Internet ETF (KWEB US)

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KraneShares CSI China Internet ETF (KWEB US)

KWEB Attractive, Toyota and JD.com Best in Breed

Chinese softness feels like a rear view mirror story. Leaders in Japan likely to continue to flourish. Invest accordingly.

Douglas Busch

KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December

There could be 6 adds for the KWEB ETF in Dec, plus float increase for Healthyway and capping changes for the large stocks. CaoCao is newly...

Brian Freitas

Overview #14 - The Emperor Has No Clothes Moment

A review of recent events/data impacting our investment themes and outlook. We look at the potential implications of Deepseek on Chinese tech...

Rikki Malik

How Has the Index Rebalance Strategy Performed in 2024?

The index rebalance strategy has performed reasonably well this year. Accurate forecasting of index changes and optimal hedge selection have played...

Brian Freitas

KWEB Index Rebalance: 5 Adds & A Delete

There are 5 adds and 1 delete for the KWEB ETF in Dec. Most of the changes were forecast but short covering and positioning could take the stocks...

Brian Freitas

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