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

<ul>
<li>Close to the 85% inclusion threshold, <a href="https://www.smartkarma.com/entities/core-lithium-ltd" target="_blank" data-smartkarma-citation="entities:14712:1" rel="noopener">Core Lithium Ltd</a> could be added to the MVIS Global Rare Earth/Strategic Metals Index in June. <a href="https://www.smartkarma.com/entities/lake-resources-nl" target="_blank" data-smartkarma-citation="entities:14597:1" rel="noopener">Lake Resources Nl (LKE AU)</a> is also close.</li>
<li>
<a href="https://www.smartkarma.com/entities/australian-strategic-materials" target="_blank" data-smartkarma-citation="entities:30815:1" rel="noopener">Australian Strategic Materials (ASM AU)</a> is very close to the 98% deletion threshold. Even if it is not deleted, there will be passive selling due to capping changes.</li>
<li>Yesterday was the cutoff date for the June review, so today's steep fall in prices will not affect the ranking of the potential changes.</li>
</ul>


Close to the 85% inclusion threshold, Core Lithium Ltd could be added to the MVIS Global Rare Earth/Strategic Metals Index in June. Lake Resources Nl (LKE AU) is also close.

Australian Strategic Materials (ASM AU) is very close to the 98% deletion threshold. Even if it is not deleted, there will be passive selling due to capping changes.
Yesterday was the cutoff date for the June review, so today's steep fall in prices will not affect the ranking of the potential changes.


MVIS Global Rare Earth/​​​Strategic Metals Index Rebalance Preview: Stocks Plunge as Cutoff Passes

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/telus-international-cda-inc" target="_blank" data-smartkarma-citation="entities:35398:1" rel="noopener">Telus International (TIXT US)</a> has made an unsolicited, conditional and non-binding indicative proposal to acquire 100% of <a href="https://www.smartkarma.com/entities/appen-ltd" target="_blank" data-smartkarma-citation="entities:15825:1" rel="noopener">Appen Ltd (APX AU)</a> at A$9.5/share, valuing the company at A$1.17bn.</li>
<li>The offer is a 48% premium to the last close but a discount to longer-term VWAPs. It should require a bump for the Appen Board to unanimously recommend to shareholders.</li>
<li>
<a href="https://www.smartkarma.com/entities/appen-ltd" target="_blank" data-smartkarma-citation="entities:15825:1" rel="noopener">Appen Ltd (APX AU)</a> is a potential deletion from 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> at the June rebalance. Short interest is 10% of shares out. There will be covering.</li>
</ul>



Telus International (TIXT US) has made an unsolicited, conditional and non-binding indicative proposal to acquire 100% of Appen Ltd (APX AU) at A$9.5/share, valuing the company at A$1.17bn.
The offer is a 48% premium to the last close but a discount to longer-term VWAPs. It should require a bump for the Appen Board to unanimously recommend to shareholders.

Appen Ltd (APX AU) is a potential deletion from the S&amp;P/ASX 200 (AS51 INDEX) at the June rebalance. Short interest is 10% of shares out. There will be covering.


Appen (APX AU): Telus' 48% Premium; 10% Short Interest; Potential ASX200 Deletion

<ul>
<li>The <a href="https://www.smartkarma.com/entities/crown-resorts-ltd" target="_blank" data-smartkarma-citation="entities:808:1" rel="noopener">Crown Resorts</a> Scheme Meeting is scheduled for 20 May and the last trading day could be 24 May, while <a href="https://www.smartkarma.com/entities/the-lottery-corporation-limited" target="_blank" data-smartkarma-citation="entities:35970:1" rel="noopener">The Lottery Corp</a> is expected to start trading 24 May.</li>
<li>The changes for the S&amp;P/ASX 50 Index and S&amp;P/ASX 100 Index will depend on the market cap of <a href="https://www.smartkarma.com/entities/the-lottery-corporation-limited" target="_blank" data-smartkarma-citation="entities:35970:1" rel="noopener">The Lottery Corp (TLC AU)</a> and new <a href="https://www.smartkarma.com/entities/tabcorp-holdings-ltd" target="_blank" data-smartkarma-citation="entities:6837:1" rel="noopener">Tabcorp Ltd (TAH AU)</a>.</li>
<li>The potential adds have outperformed the potential deletes over the last week and couple of months so there will be some pre-positions in there already.</li>
</ul>


The Crown Resorts Scheme Meeting is scheduled for 20 May and the last trading day could be 24 May, while The Lottery Corp is expected to start trading 24 May.
The changes for the S&amp;P/ASX 50 Index and S&amp;P/ASX 100 Index will depend on the market cap of The Lottery Corp (TLC AU) and new Tabcorp Ltd (TAH AU).
The potential adds have outperformed the potential deletes over the last week and couple of months so there will be some pre-positions in there already.


S&P/​ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June

<ul>
<li>
<a href="https://www.smartkarma.com/entities/brambles-ltd" target="_blank" data-smartkarma-citation="entities:693:1" rel="noopener">Brambles Ltd (BXB AU)</a> is in preliminary discussions for CVC to acquire all shares in the company. Media speculation indicates the bid would be at an Enterprise Value &gt; A$20bn.</li>
<li>
<a href="https://www.smartkarma.com/entities/brambles-ltd" target="_blank" data-smartkarma-citation="entities:693:1" rel="noopener">Brambles Ltd (BXB AU)</a> trades cheaper than its peers and a bid at an EV/EBITDA of 9x would imply a buyout price of A$12.84/share, a 23.1% premium to last close.</li>
<li>At the last traded price of A$11.58/share, there is upside. Especially if other private equity investors enter the fray. Buy on weakness; hedge market risk with ASX200 futures.</li>
</ul>



Brambles Ltd (BXB AU) is in preliminary discussions for CVC to acquire all shares in the company. Media speculation indicates the bid would be at an Enterprise Value &gt; A$20bn.

Brambles Ltd (BXB AU) trades cheaper than its peers and a bid at an EV/EBITDA of 9x would imply a buyout price of A$12.84/share, a 23.1% premium to last close.
At the last traded price of A$11.58/share, there is upside. Especially if other private equity investors enter the fray. Buy on weakness; hedge market risk with ASX200 futures.


Brambles (BXB AU): Where Could CVC's Bid Come In?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/core-lithium-ltd" target="_blank" data-smartkarma-citation="entities:14712:1" rel="noopener">Core Lithium Ltd (CXO AU)</a> could be added to the MVIS Global Rare Earth/Strategic Metals Index in June. <a href="https://www.smartkarma.com/entities/lake-resources-nl" target="_blank" data-smartkarma-citation="entities:14597:1" rel="noopener">Lake Resources Nl (LKE AU)</a> is the next highest ranked non-index constituent.</li>
<li>Irrespective of whether there are inclusions, there will be passive selling on <a href="https://www.smartkarma.com/entities/ioneer-ltd" target="_blank" data-smartkarma-citation="entities:10264:1" rel="noopener">ioneer Ltd (INR AU)</a> and <a href="https://www.smartkarma.com/entities/australian-strategic-materials" target="_blank" data-smartkarma-citation="entities:30815:1" rel="noopener">Australian Strategic Materials (ASM AU)</a> due to capping changes to the index constituents.</li>
<li>Inclusions to the index jump post announcement. The review cutoff date is 31 May, so weakness in the potential inclusions could be used to pre-position (if they outperform index constituents).</li>
</ul>



Core Lithium Ltd (CXO AU) could be added to the MVIS Global Rare Earth/Strategic Metals Index in June. Lake Resources Nl (LKE AU) is the next highest ranked non-index constituent.
Irrespective of whether there are inclusions, there will be passive selling on ioneer Ltd (INR AU) and Australian Strategic Materials (ASM AU) due to capping changes to the index constituents.
Inclusions to the index jump post announcement. The review cutoff date is 31 May, so weakness in the potential inclusions could be used to pre-position (if they outperform index constituents).


MVIS Global Rare Earth/​​Strategic Metals Index Rebalance Preview: Potential Adds & Capping Flows

Australia

The S&P/ASX 200 measures the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. Representative liquid and tradable, it is widely considered Australia's preeminent benchmark index. The index is float-adjusted. The index was launched in April 2000.

S&P/ASX 200 (AS51 INDEX)

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Stocks Plunge as Cutoff Passes

Core Lithium could be added to the REMX in June. Lake Resources could miss out on index inclusion. ASM will be sold due to funding flows but is...

Brian Freitas

Appen (APX AU): Telus' 48% Premium; 10% Short Interest; Potential ASX200 Deletion

Telus has made an indicative proposal to acquire 100% of Appen at A$9.5/share, valuing the company at A$1.17bn. Short interest is 10% of shares out...

Brian Freitas

S&P/ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June

The Crown Resorts privatisation and Tabcorp spinoff will add to the S&P/ASX changes in June. There is a lot to trade on the potential adds/deletes...

Brian Freitas

Brambles (BXB AU): Where Could CVC's Bid Come In?

Brambles is in preliminary talks with CVC. The stock is up 11% today, but there could be more once an offer is on the table. Buy Brambles on...

Brian Freitas

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Potential Adds & Capping Flows

Core Lithium could be added to the REMX Index in June. Lake Resources is the next potential add. Both stocks are potential ASX200 adds in June....

Brian Freitas

MVIS Global Rare Earth/​​​Strategic Metals Index Rebalance Preview: Stocks Plunge as Cutoff Passes

Core Lithium could be added to the REMX in June. Lake Resources could miss out on index inclusion. ASM will be sold due to funding flows but is...

Brian Freitas

Appen (APX AU): Telus' 48% Premium; 10% Short Interest; Potential ASX200 Deletion

Telus has made an indicative proposal to acquire 100% of Appen at A$9.5/share, valuing the company at A$1.17bn. Short interest is 10% of shares out...

Brian Freitas

S&P/​ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June

The Crown Resorts privatisation and Tabcorp spinoff will add to the S&P/ASX changes in June. There is a lot to trade on the potential adds/deletes...

Brian Freitas

Brambles (BXB AU): Where Could CVC's Bid Come In?

Brambles is in preliminary talks with CVC. The stock is up 11% today, but there could be more once an offer is on the table. Buy Brambles on...

Brian Freitas

MVIS Global Rare Earth/​​Strategic Metals Index Rebalance Preview: Potential Adds & Capping Flows

Core Lithium could be added to the REMX Index in June. Lake Resources is the next potential add. Both stocks are potential ASX200 adds in June....

Brian Freitas

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Stocks Plunge as Cutoff Passes

S&P/ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June

MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Potential Adds & Capping Flows