Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.</li>
<li>Overall, net outflow over the past week was ~US$2.4bn, split between Shanghai (-US$1.15bn) and Shenzhen (-US$1.25bn).</li>
<li>The largest inflows were into <a href="https://www.smartkarma.com/entities/contemporary-amperex-techn-a" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">CATL (300750 CH)</a> and <a href="https://www.smartkarma.com/entities/pylon-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33153:1" rel="noopener">Pylon Technologies (688063 CH)</a>. The largest outflows were in <a href="https://www.smartkarma.com/entities/kweichow-moutai-co-ltd-a" target="_blank" data-smartkarma-citation="entities:1553:1" rel="noopener">Kweichow Moutai (600519 CH)</a> and <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group (600887 CH)</a>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
Overall, net outflow over the past week was ~US$2.4bn, split between Shanghai (-US$1.15bn) and Shenzhen (-US$1.25bn).
The largest inflows were into CATL (300750 CH) and Pylon Technologies (688063 CH). The largest outflows were in Kweichow Moutai (600519 CH) and Inner Mongolia Yili Industrial Group (600887 CH).


Shanghai/​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (3 November 2022)

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Consumer Staples ($4,362m of outflows) and financials ($1,929m of outflows) led the outflows in October.</li>
<li>We highlight inflows into Tianqi Lithium, BOE Technology, and outflows from Moutai, Ping An Bank/Insurance, Wulianye, Yili.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Consumer Staples ($4,362m of outflows) and financials ($1,929m of outflows) led the outflows in October.
We highlight inflows into Tianqi Lithium, BOE Technology, and outflows from Moutai, Ping An Bank/Insurance, Wulianye, Yili.


Northbound Flows Monthly (September): One Year High Outflows of $8.3bn

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 28th.</li>
<li>We estimate the weekly outflows to be US$1,807.3 million, led by consumer staples, financials, and offset by information technology, energy, real estate.</li>
<li>We highlight flows for Tianqi Lithium, Longi Green, Shenzhen Mindray, Moutai, Ping An Bank, Wuxi Apptec, Ping An Insurance, CATL. </li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of October 28th.
We estimate the weekly outflows to be US$1,807.3 million, led by consumer staples, financials, and offset by information technology, energy, real estate.
We highlight flows for Tianqi Lithium, Longi Green, Shenzhen Mindray, Moutai, Ping An Bank, Wuxi Apptec, Ping An Insurance, CATL. 


Northbound Flows (Oct 28th): Moutai, Ping An Bank, Wuxi Apptec, Ping An Insurance, CATL

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>Nearing the end of the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 December.</li>
<li>There is a big sector skew in the potential changes. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade of CNY 7.53bn.</li>
<li>The potential adds have outperformed over the last 6 months but have given up some of the gains recently as market turned volatile. Expect outperformance as the review period ends.</li>
</ul>


Nearing the end of the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 December.
There is a big sector skew in the potential changes. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade of CNY 7.53bn.
The potential adds have outperformed over the last 6 months but have given up some of the gains recently as market turned volatile. Expect outperformance as the review period ends.


CSI500 Index Rebalance Preview: Positioned for Outperformance

Post market close on 27 August, the Shanghai Stock Exchange and China Securities Index Company announced the changes to the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR 50 (STAR50 INDEX)</a>. The changes will be effective after the close of trading on 10 September.There are 5 inclusions and 5 exclusions in the review. The inclusions are <a href="https://www.smartkarma.com/entities/pylon-technologies-co-ltd" target="_blank" data-smartkarma-citation="entities:33153:1" rel="noopener">Pylon Technologies Co Ltd (688063 CH)</a>, <a href="https://www.smartkarma.com/entities/3peak-inc" target="_blank" data-smartkarma-citation="entities:33460:1" rel="noopener">3peak (688536 CH)</a>, <a href="https://www.smartkarma.com/entities/bestechnic-shanghai-co-ltd" target="_blank" data-smartkarma-citation="entities:33459:1" rel="noopener">Bestechnic Shanghai (688608 CH)</a>, <a href="https://www.smartkarma.com/entities/zhejiang-supcon-technology-co" target="_blank" data-smartkarma-citation="entities:33457:1" rel="noopener">Zhejiang Supcon Technology (688777 CH)</a> and <a href="https://www.smartkarma.com/entities/tianneng-battery-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33458:1" rel="noopener">Tianneng Battery Group (688819 CH)</a>, while the deletions are <a href="https://www.smartkarma.com/entities/guangzhou-fangbang-electronics-a" target="_blank" data-smartkarma-citation="entities:30313:1" rel="noopener">Guangzhou Fangbang Electronics-A (688020 CH)</a>, <a href="https://www.smartkarma.com/entities/piesat-information-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:30328:1" rel="noopener">Piesat Information Technology (688066 CH)</a>, <a href="https://www.smartkarma.com/entities/shanghai-shen-lian-biomedical" target="_blank" data-smartkarma-citation="entities:30339:1" rel="noopener">Shanghai Shen Lian Biomedical (688098 CH)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-lifotronic-technology-a" target="_blank" data-smartkarma-citation="entities:30395:1" rel="noopener">Shenzhen Lifotronic Technology-A (688389 CH)</a> and <a href="https://www.smartkarma.com/entities/farasis-energy-gan-zhou-co-a" target="_blank" data-smartkarma-citation="entities:28385:1" rel="noopener">Farasis Energy Gan Zhou Co-A (688567 CH)</a>. The changes imply that a 6 month minimum listing was used. This is surprising (but not totally unexpected) since there were 141 stocks that were listed for longer than 1 year and that number was at the upper end of the 100-150 range where the methodology would change to use a minimum 12 month listing history.Even more surprising is the deletion of <a href="https://www.smartkarma.com/entities/farasis-energy-gan-zhou-co-a" target="_blank" data-smartkarma-citation="entities:28385:1" rel="noopener">Farasis Energy Gan Zhou Co-A (688567 CH)</a>. The stock ranks much higher than other index constituents and we cannot see any reason for its deletion from the index.The inclusions, exclusions and capping changes will result in a one-way turnover of 10.46% and result in a one-way trade of CNY4.05bn.

Post market close on 27 August, the Shanghai Stock Exchange and China Securities Index Company announced the changes to the SSE STAR 50 (STAR50 INDEX). The changes will be effective after the close of trading on 10 September.There are 5 inclusions and 5 exclusions in the review. The inclusions are Pylon Technologies Co Ltd (688063 CH), 3peak (688536 CH), Bestechnic Shanghai (688608 CH), Zhejiang Supcon Technology (688777 CH) and Tianneng Battery Group (688819 CH), while the deletions are Guangzhou Fangbang Electronics-A (688020 CH), Piesat Information Technology (688066 CH), Shanghai Shen Lian Biomedical (688098 CH), Shenzhen Lifotronic Technology-A (688389 CH) and Farasis Energy Gan Zhou Co-A (688567 CH). The changes imply that a 6 month minimum listing was used. This is surprising (but not totally unexpected) since there were 141 stocks that were listed for longer than 1 year and that number was at the upper end of the 100-150 range where the methodology would change to use a minimum 12 month listing history.Even more surprising is the deletion of Farasis Energy Gan Zhou Co-A (688567 CH). The stock ranks much higher than other index constituents and we cannot see any reason for its deletion from the index.The inclusions, exclusions and capping changes will result in a one-way turnover of 10.46% and result in a one-way trade of CNY4.05bn.

STAR50 Index Rebalance: If You Obey All The Rules, You Miss All The Fun

China

Pylon Technologies Co., Ltd. researches, develops, manufactures, and distributes energy storage systems. The Company provides cathode materials, lithium cells, battery management system and system integration, and more. Pylon Technologies markets its products across worldwide.

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Pylon Technologies (688063 CH)

Shanghai/Shenzhen Northbound Connect: Weekly Moves (3 November 2022)

Overall, net outflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$2.4bn, split between Shanghai (...

David Blennerhassett

Northbound Flows Monthly (September): One Year High Outflows of $8.3bn

We analyzed the Shanghai/Shenzhen Connect Scheme for October and highlight flows for Tianqi Lithium, BOE Technology, Moutai, Ping An Bank...

Ke Yan, CFA, FRM

Northbound Flows (Oct 28th): Moutai, Ping An Bank, Wuxi Apptec, Ping An Insurance, CATL

We analyzed the Shanghai/Shenzhen Connect Scheme for last week and highlight flows for Tianqi Lithium, Longi Green, Shenzhen Mindray, Moutai, Ping...

Ke Yan, CFA, FRM

CSI500 Index Rebalance Preview: Positioned for Outperformance

There could be 50 changes to the index in December. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade...

Brian Freitas

STAR50 Index Rebalance: If You Obey All The Rules, You Miss All The Fun

There are 5 changes to the STAR Index at the Sep rebalance. The index provider has used a 6 month minimum listing history. One-way turnover is in...

Brian Freitas

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Shanghai/​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (3 November 2022)

Overall, net outflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$2.4bn, split between Shanghai (...

David Blennerhassett

Northbound Flows Monthly (September): One Year High Outflows of $8.3bn

We analyzed the Shanghai/Shenzhen Connect Scheme for October and highlight flows for Tianqi Lithium, BOE Technology, Moutai, Ping An Bank...

Ke Yan, CFA, FRM

Northbound Flows (Oct 28th): Moutai, Ping An Bank, Wuxi Apptec, Ping An Insurance, CATL

We analyzed the Shanghai/Shenzhen Connect Scheme for last week and highlight flows for Tianqi Lithium, Longi Green, Shenzhen Mindray, Moutai, Ping...

Ke Yan, CFA, FRM

CSI500 Index Rebalance Preview: Positioned for Outperformance

There could be 50 changes to the index in December. We estimate a one-way turnover of 13.67% at the December rebalance leading to a one-way trade...

Brian Freitas

STAR50 Index Rebalance: If You Obey All The Rules, You Miss All The Fun

There are 5 changes to the STAR Index at the Sep rebalance. The index provider has used a 6 month minimum listing history. One-way turnover is in...

Brian Freitas

Shanghai/Shenzhen Northbound Connect: Weekly Moves (3 November 2022)