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

Contemporary Amperex Technology / Index Rebalance

Contemporary Amperex Technology (3750 HK)

<ul>
<li>On 10 August, Hang Seng Index launched a market consultation on potential changes to 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> methodology.</li>
<li>If the proposals are approved, there will be 20 stocks added to the index in December creating a lot of flow and impact for the index constituents.</li>
<li>One way turnover is estimated at 13.4% leading to a round-trip trade of HK$73.3bn (US$9.3bn), so this could be implemented in a phased manner.</li>
</ul>


On 10 August, Hang Seng Index launched a market consultation on potential changes to the Hang Seng TECH Index (HSTECH INDEX) methodology.
If the proposals are approved, there will be 20 stocks added to the index in December creating a lot of flow and impact for the index constituents.
One way turnover is estimated at 13.4% leading to a round-trip trade of HK$73.3bn (US$9.3bn), so this could be implemented in a phased manner.


HSTECH Index: Market Consultation, 20 Adds in December, Trade of US$9.3bn

<ul>
<li>On 7 October, Hang Seng announced the conclusions of the market consultation to increase the number of <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> constituents from 30 to 50.</li>
<li>While most of the proposals will be implemented as proposed, a liquidity requirement has been tightened, and revenue thresholds have been imposed for companies qualifying through the Sales Growth Stream.</li>
<li>The changes will be implemented in a single step at the December rebalance and that creates a lot of flow for all the index members, current and new.</li>
</ul>


On 7 October, Hang Seng announced the conclusions of the market consultation to increase the number of Hang Seng TECH Index (HSTECH INDEX) constituents from 30 to 50.
While most of the proposals will be implemented as proposed, a liquidity requirement has been tightened, and revenue thresholds have been imposed for companies qualifying through the Sales Growth Stream.
The changes will be implemented in a single step at the December rebalance and that creates a lot of flow for all the index members, current and new.


HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names

APAC IPOs & Placements, Aequitas Research

Akshat Shah

APAC IPOs & Placements

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.

Equity Capital Markets

Time Interconnect Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/time-interconnect-technology-limited" target="_blank" data-smartkarma-citation="entities:34829:1" rel="noopener">Time Interconnect Technology (1729 HK)</a> is looking to raise around US$300m from a primary share placement.</li>
<li>TIME Interconnect Technology Limited (TIME) makes cable assembly products, server products, and networking and speciality cables.</li>
<li>In this note we talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Time Interconnect Technology (1729 HK) is looking to raise around US$300m from a primary share placement.
TIME Interconnect Technology Limited (TIME) makes cable assembly products, server products, and networking and speciality cables.
In this note we talk about the deal dynamics and run the deal through our ECM framework.


Aequitas:Time Interconnect Placement-Opportunistic Raising but Momentum Is Strong;Last Deal Did Well

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The HSTECH Index tracks the performance of the top technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>The market consultation results have been announced. All proposed changes will be adopted in full with two additional requirements to avoid low-liquidity and low-revenue names.</li>
<li>We expect 20 ADDs and no DELs in December 2026. We estimate one-way flow of around US$4bn with 11 expected ADDs having more than 3x ADV to buy.</li>
</ul>


The HSTECH Index tracks the performance of the top technology companies listed in Hong Kong that have high business exposure to certain technology themes.
The market consultation results have been announced. All proposed changes will be adopted in full with two additional requirements to avoid low-liquidity and low-revenue names.
We expect 20 ADDs and no DELs in December 2026. We estimate one-way flow of around US$4bn with 11 expected ADDs having more than 3x ADV to buy.


Quiddity Leaderboard HSTECH Dec26: New Rules Confirmed with Some Modifications; Latest Expectations

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.</li>
<li>The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. </li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, and <a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> are badly exposed.</li>
</ul>


Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.
The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. 

Semiconductor Manufacturing International Corp (SMIC) (981 HK), Kuaishou Technology (1024 HK), Alibaba (9988 HK), and Hua Hong Semiconductor (1347 HK) are badly exposed.


Hong Kong

Time Interconnect Technology Limited is an investment holding company primarily engaged in the manufacture and sale of cable assembly products, server products, and digital cable products. The company supplies a wide variety of copper and optical fiber cable assemblies, digital cable products, medical products, and servers. It was founded in 1992 and is headquartered in Hong Kong.

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Time Interconnect Technology (1729 HK)

HSTECH Index: Market Consultation, 20 Adds in December, Trade of US$9.3bn

Following a market consult, there could be 20 adds for the index in Dec leading to a one-way turnover of 13.4% and a round-trip trade of US$9.3bn....

Brian Freitas

HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names

Introduction/tightening of revenue/liquidity criteria changes the list of potential adds. Estimated one-way turnover at the Dec rebalance is 14.2%...

Brian Freitas

Aequitas:Time Interconnect Placement-Opportunistic Raising but Momentum Is Strong;Last Deal Did Well

Time Interconnect Technology (1729 HK) is looking to raise around US$300m from a primary share placement. In this note we talk about the deal...

Akshat Shah

Quiddity Leaderboard HSTECH Dec26: New Rules Confirmed with Some Modifications; Latest Expectations

There could be more than 5x ADV to buy for the top 5 expected ADDs. Many other names have more than 1x ADV to trade. The flow expectations can...

Janaghan Jeyakumar, CFA

HK Strategy: Who Will Suffer the Most?

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSTECH Index: Market Consultation, 20 Adds in December, Trade of US$9.3bn

Following a market consult, there could be 20 adds for the index in Dec leading to a one-way turnover of 13.4% and a round-trip trade of US$9.3bn....

Brian Freitas

HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names

Introduction/tightening of revenue/liquidity criteria changes the list of potential adds. Estimated one-way turnover at the Dec rebalance is 14.2%...

Brian Freitas

Aequitas:Time Interconnect Placement-Opportunistic Raising but Momentum Is Strong;Last Deal Did Well

Time Interconnect Technology (1729 HK) is looking to raise around US$300m from a primary share placement. In this note we talk about the deal...

Akshat Shah

Quiddity Leaderboard HSTECH Dec26: New Rules Confirmed with Some Modifications; Latest Expectations

There could be more than 5x ADV to buy for the top 5 expected ADDs. Many other names have more than 1x ADV to trade. The flow expectations can...

Janaghan Jeyakumar, CFA

HK Strategy: Who Will Suffer the Most?

​Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...