Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>In this insight, we take a look at potential index changes and capping flows for HSIII index rebal event in September 2025.</li>
<li>Based on the latest data, we see three ADDs and three DELs and one significant float percentage revision.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
In this insight, we take a look at potential index changes and capping flows for HSIII index rebal event in September 2025.
Based on the latest data, we see three ADDs and three DELs and one significant float percentage revision.


Quiddity Leaderboard HSIII Sep25: Some Changes to Expectations; Trade Idea Successful

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>For the June 2025 index rebal, we estimate there to be US$423mn one-way flows due to capping.</li>
<li>We also expect three index changes (so far) for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
For the June 2025 index rebal, we estimate there to be US$423mn one-way flows due to capping.
We also expect three index changes (so far) for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).


Quiddity Leaderboard HSIII Jun25: US$423mn One-Way for Jun; Some Sector-Neutral Pair Trades for Sep

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>There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.</li>
<li>A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.</li>
<li>There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.</li>
</ul>


There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.


CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact

External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

Equity Bottom-Up

<ul><li>NetDragon's stock is priced at 11.0 HKD with 531 million shares and a market cap of 5,870 HKD</li><li>Company completed a reverse merger listing for its education business, causing some complications, but gaming business is seen as a hidden gem with growth potential</li><li>NetDragon, operated by the Liu family, has a history of successful business incubation and has returned around 50% of its market capitalization to shareholders in the past three years</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

NetDragon's stock is priced at 11.0 HKD with 531 million shares and a market cap of 5,870 HKDCompany completed a reverse merger listing for its education business, causing some complications, but gaming business is seen as a hidden gem with growth potentialNetDragon, operated by the Liu family, has a history of successful business incubation and has returned around 50% of its market capitalization to shareholders in the past three yearsThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Netdragon (777 HK) - Tuesday, Apr 9, 2024

<ul>
<li>There could be 3 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are some fairly large capping changes for some stocks.</li>
<li>Estimated one-way turnover is 4.9% and the round-trip trade is HK$5.4bn (US$694m). The impact on the deletes will be a lot larger than the impact on the adds.</li>
<li>The forecast adds have outperformed the forecast deletes over the near-term, though the trade has been quite volatile over the medium term.</li>
</ul>


There could be 3 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are some fairly large capping changes for some stocks.
Estimated one-way turnover is 4.9% and the round-trip trade is HK$5.4bn (US$694m). The impact on the deletes will be a lot larger than the impact on the adds.
The forecast adds have outperformed the forecast deletes over the near-term, though the trade has been quite volatile over the medium term.


CSI Hong Kong Connect Internet Index Rebalance Preview: 6 Changes & US$700m Trade

Hong Kong

NetDragon Websoft, Inc. develops online internet games. The Company offers tracks player behaviour and purchasing patterns to design games that cater to their customers' tastes. NetDragon Websoft operates worldwide.

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Netdragon Websoft (777 HK)

Quiddity Leaderboard HSIII Sep25: Some Changes to Expectations; Trade Idea Successful

The SHORT Expected DEL Net Dragon vs Peers trade has generated a strong positive return during the last month. This could continue over the next...

Janaghan Jeyakumar, CFA

Quiddity Leaderboard HSIII Jun25: US$423mn One-Way for Jun; Some Sector-Neutral Pair Trades for Sep

We see NetDragon (777 HK) as an expected DEL for the September 2025 index review and there could be multiple days of volume to sell. NetDragon...

Janaghan Jeyakumar, CFA

CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact

There are 10 constituent changes in June and the flow and impact is pretty large. The adds have outperformed the deletes bigly over the last 2 days...

Brian Freitas

Netdragon (777 HK) - Tuesday, Apr 9, 2024

NetDragon, operated by the Liu family, has a history of successful business incubation and has returned around 50% of its market capitalization to...

Value Investors Club

CSI Hong Kong Connect Internet Index Rebalance Preview: 6 Changes & US$700m Trade

There could be 3 changes for the index in June. Estimated one-way turnover is 4.9% and the round-trip trade is US$694m. The forecast adds have...

Brian Freitas

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