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>The review period for the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY</a> family of indices, <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>, <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">STAR50</a>, the KRX New Deal Index and a global index ends on 31 January.</li>
<li>The January rebalance of the IDX30 and LQ45 indices will be implemented at the close of trading on 31 January.</li>
<li>There have been huge inflows into the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a> ETFs for another week. This will increase the impact on the index changes at the next rebalance.</li>
</ul>


The review period for the NIFTY family of indices, Nikkei 225, STAR50, the KRX New Deal Index and a global index ends on 31 January.
The January rebalance of the IDX30 and LQ45 indices will be implemented at the close of trading on 31 January.
There have been huge inflows into the CSI 300 Index ETFs for another week. This will increase the impact on the index changes at the next rebalance.


Index Rebalance & ETF Flow Recap: CSI300, CSI500, SSE50, ChiNext, KOSPI200, Renesas, IDX30/LQ45

Jiangsu Hoperun Software / Index Rebalance

<ul>
<li>Nearly halfway through the review period, we forecast 7 changes for the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index (SZ399006 INDEX EQUITY)</a> and 5 changes for the ChiNext 50 Index in June.</li>
<li>Some of the potential changes will also have passive flows from the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500 Index</a> trackers at the same time as the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index</a> rebalance.</li>
<li>The potential inclusions and deletions have slipped over the last couple of months along with the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index</a>, but the potential inclusions have outperformed as the deletions have dropped more.</li>
</ul>


Nearly halfway through the review period, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
Some of the potential changes will also have passive flows from the CSI 500 Index trackers at the same time as the ChiNext Index rebalance.
The potential inclusions and deletions have slipped over the last couple of months along with the ChiNext Index, but the potential inclusions have outperformed as the deletions have dropped more.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Porton Pharma Solutions / Index Rebalance

<ul>
<li>The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.</li>
<li>The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.</li>
<li>In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.</li>
</ul>


The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.


Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shanghai Tofflon Science A / Equity Bottom-Up

<ul>
<li>Tofflon needs to go through a considerable period of adjustment after experiencing the high point of performance. Its “periodicity” is obvious, which means the performance high growth is not sustainable.</li>
<li>The decline in growth rate of contract liabilities suggests that the future prospects is highly uncertain. Overall margins could continue to drop due to reduction in high margin overseas orders.</li>
<li>Unless there's a major catalyst, it’s difficult to see significant valuation boost in short term. Given the current downward trend in performance, valuation may continue to decline in the future.</li>
</ul>


Tofflon needs to go through a considerable period of adjustment after experiencing the high point of performance. Its “periodicity” is obvious, which means the performance high growth is not sustainable.
The decline in growth rate of contract liabilities suggests that the future prospects is highly uncertain. Overall margins could continue to drop due to reduction in high margin overseas orders.
Unless there's a major catalyst, it’s difficult to see significant valuation boost in short term. Given the current downward trend in performance, valuation may continue to decline in the future.


Shanghai Tofflon Science (300171.CH) 2022/23Q1 - It's Better Not to Go Against the Trend

Equity Capital Markets

Shanghai Duoning Biotechnology / Equity Capital Markets

<ul>
<li>The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.</li>
<li>Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.</li>
<li>A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. </li>
</ul>


The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.
Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.
A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. 


Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

China

Shanghai Tofflon Science and Technology Company Limited develops, designs, produces and markets pharmaceutical freeze dryer and related systems. The Company's main products include in-place sterilisation, in-place lyophilization cleaners, laboratory freeze dryers, production freeze dryers, liquid nitrogen freeze dryers and freeze drying systems and equipments.

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Shanghai Tofflon Science A (300171 CH)

Index Rebalance & ETF Flow Recap: CSI300, CSI500, SSE50, ChiNext, KOSPI200, Renesas, IDX30/LQ45

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

There could be 7 changes for the ChiNext and 5 changes for the ChiNext50. Round trip trade is estimated at US$636m. There is overlap between the...

Brian Freitas

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names

I see four ADDs/DELs for the ChiNext index and three ADDs/DELs for the ChiNext 50 index. Collectively, I expect these changes to cause US$259mn one...

Janaghan Jeyakumar, CFA

Shanghai Tofflon Science (300171.CH) 2022/23Q1 - It's Better Not to Go Against the Trend

Tofflon is clearly in a downward cycle, with unclear outlook. It may take a long time for the next peak to occur. 2023 is difficult for Tofflon as...

Xinyao (Criss) Wang

Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

Upstream cost control is major driving force for the localization of pharmaceutical supply chain. So, Duoning has big potential. A slow-down...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Index Rebalance & ETF Flow Recap: CSI300, CSI500, SSE50, ChiNext, KOSPI200, Renesas, IDX30/LQ45

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

There could be 7 changes for the ChiNext and 5 changes for the ChiNext50. Round trip trade is estimated at US$636m. There is overlap between the...

Brian Freitas

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names

I see four ADDs/DELs for the ChiNext index and three ADDs/DELs for the ChiNext 50 index. Collectively, I expect these changes to cause US$259mn one...

Janaghan Jeyakumar, CFA

Shanghai Tofflon Science (300171.CH) 2022/23Q1 - It's Better Not to Go Against the Trend

Tofflon is clearly in a downward cycle, with unclear outlook. It may take a long time for the next peak to occur. 2023 is difficult for Tofflon as...

Xinyao (Criss) Wang

Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

Upstream cost control is major driving force for the localization of pharmaceutical supply chain. So, Duoning has big potential. A slow-down...

Xinyao (Criss) Wang

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow