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>
<a href="https://www.smartkarma.com/entities/fenbi-ltd" target="_blank" data-smartkarma-citation="entities:36640:1" rel="noopener">Fenbi Ltd (2469 HK)</a> was added to the Hang Seng Composite Index (HSCI) at the close Friday and will be added to Southbound Stock Connect from open of trading today.</li>
<li>We see 22 potential adds, 19 potential deletes, couple of close deletes, 5 deletes on prolonged suspension and 4 close liquidity deletes for the HSCI in September.</li>
<li>There are 11 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.</li>
</ul>



Fenbi Ltd (2469 HK) was added to the Hang Seng Composite Index (HSCI) at the close Friday and will be added to Southbound Stock Connect from open of trading today.
We see 22 potential adds, 19 potential deletes, couple of close deletes, 5 deletes on prolonged suspension and 4 close liquidity deletes for the HSCI in September.
There are 11 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September

Super Hi International Holding / Index Rebalance

<ul>
<li>There is only one new listing as a potential inclusion to the HSCI in June. If added to the HSCI, it will also be added to Southbound Stock Connect.</li>
<li>There are 18 potential inclusions and 19 potential deletions for the HSCI in September. There are a few close adds and there could be another 5 deletions on Prolonged Suspension.</li>
<li>A lot of the potential deletions have large Southbound holdings. With all the stocks becoming sell-only, there could be unwinding of some positions over the next couple of months.</li>
</ul>


There is only one new listing as a potential inclusion to the HSCI in June. If added to the HSCI, it will also be added to Southbound Stock Connect.
There are 18 potential inclusions and 19 potential deletions for the HSCI in September. There are a few close adds and there could be another 5 deletions on Prolonged Suspension.
A lot of the potential deletions have large Southbound holdings. With all the stocks becoming sell-only, there could be unwinding of some positions over the next couple of months.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in June & September

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>After one month from the March batch of Hong Kong Connect inclusion, we provide an analysis on the stock inclusion for 24 stocks. </li>
<li>We analysed the inclusion by performance post announcement, performance post inclusion, inflows and analyst coverage.</li>
<li>This time we observe outperformance when inclusion took place but not between announcement and inclusion. Southbound trade account for a significant portion of the trading volumes, still.</li>
</ul>


After one month from the March batch of Hong Kong Connect inclusion, we provide an analysis on the stock inclusion for 24 stocks. 
We analysed the inclusion by performance post announcement, performance post inclusion, inflows and analyst coverage.
This time we observe outperformance when inclusion took place but not between announcement and inclusion. Southbound trade account for a significant portion of the trading volumes, still.


HK Connect: Mar '22 Inclusion Post-Event Analysis

Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>Despite shipment continued to fall y/y, all major markets experienced deceleration in decline.</li><li>DMs like US &amp; W Europe did better with more material deceleration, which helped Apple to solidify its market position.</li><li>EMs remained weak with APAC (ex-Jap &amp; China), CEE and MEA falling 17-20% y/y, which was a bigger headache to the Android camp, especially the Chinese players, among which, Xiaomi had relatively poorer performance.</li></ul></div></div></div></div>

Despite shipment continued to fall y/y, all major markets experienced deceleration in decline.DMs like US &amp; W Europe did better with more material deceleration, which helped Apple to solidify its market position.EMs remained weak with APAC (ex-Jap &amp; China), CEE and MEA falling 17-20% y/y, which was a bigger headache to the Android camp, especially the Chinese players, among which, Xiaomi had relatively poorer performance.

Smartphone – Global Vs China Decelerated Downtrends

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus, largely due to weak macro and iPhone 14 Pro/Max supply chain constraints on COVID-19 in China.</li><li>Looking into FY2Q23, mgmt. expected revenue to perform similarly to FY1Q23 (-5% YoY) with iPhone to accelerate and Mac/iPad to decline double digit YoY.</li><li>Given the challenging revenue outlook, we expect near-term profit taking on slower iPhone/Mac/iPad, but we remain positive on Apple supply chain over Android camp in 2H23E, given iPhone replacement cycle and share gain from Samsung/Android camp. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus, largely due to weak macro and iPhone 14 Pro/Max supply chain constraints on COVID-19 in China.Looking into FY2Q23, mgmt. expected revenue to perform similarly to FY1Q23 (-5% YoY) with iPhone to accelerate and Mac/iPad to decline double digit YoY.Given the challenging revenue outlook, we expect near-term profit taking on slower iPhone/Mac/iPad, but we remain positive on Apple supply chain over Android camp in 2H23E, given iPhone replacement cycle and share gain from Samsung/Android camp. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Technology Sector – Apple FY1Q23 Miss on Macro and Supply Chain Issues

Hong Kong

Truly International Holdings Limited, through its subsidiaries, manufactures and sells liquid crystal display products, electronic consumer products including calculators, pagers, MP3 player, and electronic components.

Truly International Holdings Ltd (732 HK)

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Truly International Holdings Ltd (732 HK)

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September

A month out from review cutoff, there are 22 potential adds and 19 potential deletes for the HSCI in Sep. Most stocks will then be added to or...

Brian Freitas

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in June & September

For the HSCI, there could be 1 add in June and 18 adds/19 deletes in Sep. There are some close adds and 5 potential deletes on prolonged...

Brian Freitas

HK Connect: Mar '22 Inclusion Post-Event Analysis

We analyzed the performance of stocks for the March 2023 batch of Hong Kong Connect inclusion, including the performance post announcement, post...

Ke Yan, CFA, FRM

Smartphone – Global Vs China Decelerated Downtrends

Despite shipment continued to fall y/y, all major markets experienced deceleration in decline. DMs like US & W Europe did better with more material...

Quam Securities

China Technology Sector – Apple FY1Q23 Miss on Macro and Supply Chain Issues

Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus

CMB International

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