Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

HomeCo Daily Needs REIT / Index Rebalance

<ul>
<li>The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. </li>
<li>In March 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20. </li>
<li>In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.</li>
</ul>


The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. 
In March 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20. 
In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.


S&P/​​ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Paradigm Biopharmaceuticals / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/paradigm-biopharmaceuticals" target="_blank" data-smartkarma-citation="entities:26140:1" rel="noopener">Paradigm Biopharmaceuticals (PAR AU)</a> is re-pioneering patent expired, existing drug molecule pentosan polysulfate sodium as a potential treatment of osteoarthritis, under the brand name Zilosul.</li>
<li>With a current addressable patient population of 72 million people, Zilosul has an annual revenue potential of more than $10 billion, if approved.</li>
<li>Inherent safety concern on the existing FDA-approved indication and Paradigm’s financial capability are the near-term overhangs on the commercialization prospect of the drug.</li>
</ul>



Paradigm Biopharmaceuticals (PAR AU) is re-pioneering patent expired, existing drug molecule pentosan polysulfate sodium as a potential treatment of osteoarthritis, under the brand name Zilosul.
With a current addressable patient population of 72 million people, Zilosul has an annual revenue potential of more than $10 billion, if approved.
Inherent safety concern on the existing FDA-approved indication and Paradigm’s financial capability are the near-term overhangs on the commercialization prospect of the drug.


Paradigm Biopharmaceuticals (PAR AU): Concerns on First Potentially Commercialized Product

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> and <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a>. </li>
<li>There will also be the large <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> upweight and funding trade following unification, and possibly the <a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a> acquisition by <a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a>. </li>
<li>Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.</li>
</ul>


There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of Ausnet Services (AST AU) and Sydney Airport (SYD AU). 
There will also be the large BHP Group (BHP AU) upweight and funding trade following unification, and possibly the Afterpay Touch (APT AU) acquisition by Square Inc (SQ US). 
Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.


ASX100/​200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mesoblast-ltd" target="_blank" data-smartkarma-citation="entities:769:1" rel="noopener">Mesoblast Ltd (MSB AU)</a> presented positive results from a phase 3 trial for rexlemestrocel-L, a second-generation cell therapy product candidate derived from its proprietary mesenchymal stromal cell therapy technology platforms.</li>
<li>Rexlemestrocel-L is being studied for advanced chronic heart failure and has the potential to change how currently approve therapies treat heart failure.</li>
<li>Mesoblast expects to receive feedback from the US FDA on potential approval pathways for rexlemestrocel-L by this year. Rexlemestrocel-L has the potential to become a blockbuster drug.</li>
</ul>



Mesoblast Ltd (MSB AU) presented positive results from a phase 3 trial for rexlemestrocel-L, a second-generation cell therapy product candidate derived from its proprietary mesenchymal stromal cell therapy technology platforms.
Rexlemestrocel-L is being studied for advanced chronic heart failure and has the potential to change how currently approve therapies treat heart failure.
Mesoblast expects to receive feedback from the US FDA on potential approval pathways for rexlemestrocel-L by this year. Rexlemestrocel-L has the potential to become a blockbuster drug.


Mesoblast (MSB AU): Gets Closer to FDA Approval Pathways on Positive Phase 3 Clinical Trial Data

<div><p>S&amp;P Dow Jones Indices will announce changes to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.</p></div><div>We are almost three quarters of the way through the review period. There are 3 potential inclusions at the review - <a href="https://www.smartkarma.com/entities/centuria-capital-group" target="_blank" data-smartkarma-citation="entities:15546:1" rel="noopener">Centuria Capital (CNI AU)</a>, <a href="https://www.smartkarma.com/entities/pinnacle-investment-manageme" target="_blank" data-smartkarma-citation="entities:20624:1" rel="noopener">Wilson (PNI AU)</a> and <a href="https://www.smartkarma.com/entities/sealink-travel-group-ltd" target="_blank" data-smartkarma-citation="entities:6400:1" rel="noopener">Sealink Travel (SLK AU)</a> while the potential deletions are <a href="https://www.smartkarma.com/entities/nuix-limited" target="_blank" data-smartkarma-citation="entities:31040:1" rel="noopener">Nuix Limited (NXL AU)</a>, <a href="https://www.smartkarma.com/entities/nrw-holdings-ltd" target="_blank" data-smartkarma-citation="entities:9271:1" rel="noopener">NRW Holdings (NWH AU)</a> and <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a>.</div><div></div><div>
<a href="https://www.smartkarma.com/entities/galaxy-resources-ltd" target="_blank" data-smartkarma-citation="entities:13914:1" rel="noopener">Galaxy Resources (GXY AU)</a> is placed in the inclusion zone but is unlikely to be added to the index given its pending merger with <a href="https://www.smartkarma.com/entities/orocobre-ltd" target="_blank" data-smartkarma-citation="entities:3572:1" rel="noopener">Orocobre Ltd (ORE AU)</a>.</div><div></div><div>
<a href="https://www.smartkarma.com/entities/de-grey-mining-ltd" target="_blank" data-smartkarma-citation="entities:6192:1" rel="noopener">De Grey Mining (DEG AU)</a> is a close add and the corresponding deletion is <a href="https://www.smartkarma.com/entities/westgold-resources-ltd" target="_blank" data-smartkarma-citation="entities:24269:1" rel="noopener">Westgold Resources (WGX AU)</a>.</div><div></div><div>There is a large impact expected on the inclusions while the impact on the deletions is lower.</div><div></div><div>For <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a>, the short interest is close to the estimated passive selling. For the other two deletes, short interest is a lot smaller than the estimated passive selling and there will be more shorts created from now to rebalance implementation day.</div>

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 200 (AS51 INDEX) as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.We are almost three quarters of the way through the review period. There are 3 potential inclusions at the review - Centuria Capital (CNI AU), Wilson (PNI AU) and Sealink Travel (SLK AU) while the potential deletions are Nuix Limited (NXL AU), NRW Holdings (NWH AU) and G8 Education (GEM AU).
Galaxy Resources (GXY AU) is placed in the inclusion zone but is unlikely to be added to the index given its pending merger with Orocobre Ltd (ORE AU).
De Grey Mining (DEG AU) is a close add and the corresponding deletion is Westgold Resources (WGX AU).There is a large impact expected on the inclusions while the impact on the deletions is lower.For G8 Education (GEM AU), the short interest is close to the estimated passive selling. For the other two deletes, short interest is a lot smaller than the estimated passive selling and there will be more shorts created from now to rebalance implementation day.

ASX200 Sep21 Index Rebalance Preview: Large Impact Names

Australia

Mesoblast Limited provides biomedical services. The Company develops drugs for cardiovascular diseases, oncology, hematology, and spine orthopedic disorders treatment. Mesoblast conducts its business worldwide.

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Mesoblast Ltd (MSB AU)

S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

A final look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.

Janaghan Jeyakumar, CFA

Paradigm Biopharmaceuticals (PAR AU): Concerns on First Potentially Commercialized Product

The company's dependence on a single molecule makes it a risky bet. Moreover, the inherent safety concern of the lead candidate may limit its...

Tina Banerjee

ASX100/200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March

There will be many changes to the ASX100/200/300 indices from now to March due to M&A activity & price moves. Plus a large funding trade following...

Brian Freitas

Mesoblast (MSB AU): Gets Closer to FDA Approval Pathways on Positive Phase 3 Clinical Trial Data

Mesoblast presented positive phase 3 results in chronic heart failure patients. The product candidate has the potential to become blockbuster drug,...

Tina Banerjee

ASX200 Sep21 Index Rebalance Preview: Large Impact Names

We see 3 potential changes to the ASX200 at the Sep rebalance with CNI, PNI and SLK being included and NXL, NRW and GEM being deleted. Passive...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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S&P/​​ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

A final look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.

Janaghan Jeyakumar, CFA

Paradigm Biopharmaceuticals (PAR AU): Concerns on First Potentially Commercialized Product

The company's dependence on a single molecule makes it a risky bet. Moreover, the inherent safety concern of the lead candidate may limit its...

Tina Banerjee

ASX100/​200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March

There will be many changes to the ASX100/200/300 indices from now to March due to M&A activity & price moves. Plus a large funding trade following...

Brian Freitas

Mesoblast (MSB AU): Gets Closer to FDA Approval Pathways on Positive Phase 3 Clinical Trial Data

Mesoblast presented positive phase 3 results in chronic heart failure patients. The product candidate has the potential to become blockbuster drug,...

Tina Banerjee

ASX200 Sep21 Index Rebalance Preview: Large Impact Names

We see 3 potential changes to the ASX200 at the Sep rebalance with CNI, PNI and SLK being included and NXL, NRW and GEM being deleted. Passive...

Brian Freitas

S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

ASX100/200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March