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 weekly Hong Kong Connect flows with our data engine for holding position as of March 17th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 17th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi.


Hong Kong Connect Flows (Mar 17th): Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On 24 February 2023, the Hang Seng Indices released their changes for the March rebalance. No changes in HSI, which was unexpected, and small changes elsewhere.</li>
<li>Capping flows and the rule changes on treatment of Dual Primary Listed stocks are responsible for the interesting flows. Yesterday's closing prices are used for final capping.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> and <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> are the interesting trades. Still. </li>
</ul>


On 24 February 2023, the Hang Seng Indices released their changes for the March rebalance. No changes in HSI, which was unexpected, and small changes elsewhere.
Capping flows and the rule changes on treatment of Dual Primary Listed stocks are responsible for the interesting flows. Yesterday's closing prices are used for final capping.

Li Auto (2015 HK) and XPeng (9868 HK) are the interesting trades. Still. 


Major Hang Seng Indices Capping Flows Decided (HSCEI, HSI, HSTECH)

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

<ul>
<li>The March rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.</li>
<li>The largest inflows will be on <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> and <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>. </li>
<li>The largest outflows will be on <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC (883 HK)</a> and <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">SMIC (981 HK)</a>.</li>
</ul>


The March rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.
The largest inflows will be on Li Auto (2015 HK), Meituan (3690 HK), XPeng (9868 HK), JD.com (9618 HK), Alibaba (9988 HK), BYD (1211 HK) and Kuaishou Technology (1024 HK). 
The largest outflows will be on Tencent (700 HK), HSBC Holdings (5 HK), Baidu (9888 HK), Xiaomi Corp (1810 HK), NetEase (9999 HK), CNOOC (883 HK) and SMIC (981 HK).


HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (March 2023)

Index Rebalance

<ul>
<li>On Friday 24 February 2023, the Hang Seng Index Committee announced changes for the HSTECH Index - <a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo Corp (9898 HK)</a> IN, <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a> OUT.</li>
<li>Notably, the changes in FAF due to the new treatment for Dual Primary Companies means decent boosts in weight for <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> and <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>. </li>
<li>Of the three "major" indices, this one produces the most fun - US$900mm+ and 8.7% flow one-way. And the big flows are additive to the other indices.</li>
</ul>


On Friday 24 February 2023, the Hang Seng Index Committee announced changes for the HSTECH Index - Weibo Corp (9898 HK) IN, Ming Yuan Cloud Group (909 HK) OUT.
Notably, the changes in FAF due to the new treatment for Dual Primary Companies means decent boosts in weight for XPeng (9868 HK) and Li Auto (2015 HK). 
Of the three "major" indices, this one produces the most fun - US$900mm+ and 8.7% flow one-way. And the big flows are additive to the other indices.


HSTECH Mar23 Index Review/​Flows - Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng

<ul>
<li>
<a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo Corp (9898 HK)</a> replaces <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> at the close on 10 March.</li>
<li>Using prices from the close on 24 February, estimated one-way turnover is 8.92% and will result in a one-way trade of HK$7,078m at the close on 10 March.</li>
<li>There will be big buying on <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> and <a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> due to a change in the index handling methodology for Dual Primary listings.</li>
</ul>



Weibo Corp (9898 HK) replaces Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the close on 10 March.
Using prices from the close on 24 February, estimated one-way turnover is 8.92% and will result in a one-way trade of HK$7,078m at the close on 10 March.
There will be big buying on Li Auto (2015 HK) and XPeng (9868 HK) due to a change in the index handling methodology for Dual Primary listings.


HSTECH Index Rebalance: Weibo Replaces Ming Yuan Cloud; Big Inflows on Li Auto & XPeng

China

Ming Yuan Cloud is an investment holding company that provides cloud services and on-premises software and services in China, primarily for property developers and other real estate industry participants. The company offers a comprehensive suite of enterprise-grade SaaS products, including CRM Cloud, Construction Cloud, Procurement Cloud, and Asset Management Cloud, alongside ERP solutions to optimize various business operations. Ming Yuan Cloud was founded in 1997 and is headquartered in Shenzhen, China.

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Ming Yuan Cloud (909 HK)

Hong Kong Connect Flows (Mar 17th): Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi.

Ke Yan, CFA, FRM

Major Hang Seng Indices Capping Flows Decided (HSCEI, HSI, HSTECH)

Hang Seng Indices final capping for March 2023 resulted from the 7 March close. Li Auto and Xpeng are the major beneficiaries still. HSBC and...

Travis Lundy

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (March 2023)

The Hang Seng indices rebalance Friday. Capping uses today's closing prices. The one-way trade across all stocks across the indices is estimated at...

Brian Freitas

HSTECH Mar23 Index Review/Flows - Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng

HSTECH is the most interesting of the 3 major Hang Seng indices. There is one inclusion worth 0.04% but the index sees 8.7% one-way turnover on...

Travis Lundy

HSTECH Index Rebalance: Weibo Replaces Ming Yuan Cloud; Big Inflows on Li Auto & XPeng

Weibo replaces Ming Yuan Cloud in March. There will be big inflows on Li Auto & XPeng due to index handling changes for dual primary listings....

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Connect Flows (Mar 17th): Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for Tencent, China Mobile, ICBC, Bilibili, Meituan, Xiaomi.

Ke Yan, CFA, FRM

Major Hang Seng Indices Capping Flows Decided (HSCEI, HSI, HSTECH)

Hang Seng Indices final capping for March 2023 resulted from the 7 March close. Li Auto and Xpeng are the major beneficiaries still. HSBC and...

Travis Lundy

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (March 2023)

The Hang Seng indices rebalance Friday. Capping uses today's closing prices. The one-way trade across all stocks across the indices is estimated at...

Brian Freitas

HSTECH Mar23 Index Review/​Flows - Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng

HSTECH is the most interesting of the 3 major Hang Seng indices. There is one inclusion worth 0.04% but the index sees 8.7% one-way turnover on...

Travis Lundy

HSTECH Index Rebalance: Weibo Replaces Ming Yuan Cloud; Big Inflows on Li Auto & XPeng

Weibo replaces Ming Yuan Cloud in March. There will be big inflows on Li Auto & XPeng due to index handling changes for dual primary listings....

Brian Freitas

HSTECH Mar23 Index Review/Flows - Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng