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>There are 2 additions and 1 deletion for the MVIS Vietnam Index at the upcoming rebalance at the close on 17 June. Plus capping and float changes.</li>
<li>The adds are <a href="https://www.smartkarma.com/entities/saigon-hanoi-commercial" target="_blank" data-smartkarma-citation="entities:17575:1" rel="noopener">Saigon - Hanoi Commercial (SHB VN)</a> and <a href="https://www.smartkarma.com/entities/viet-nam-construction-impo" target="_blank" data-smartkarma-citation="entities:17309:1" rel="noopener">Viet Nam Construction &amp; Impo (VCG VN)</a>, while Tien Phong Securities (ORS VN) is the deletion.</li>
<li>The largest passive outflows are on <a href="https://www.smartkarma.com/entities/vingroup-jsc" target="_blank" data-smartkarma-citation="entities:13213:1" rel="noopener">Vingroup Jsc (VIC VN)</a>, <a href="https://www.smartkarma.com/entities/feng-tay-enterprise-co-ltd" target="_blank" data-smartkarma-citation="entities:18329:1" rel="noopener">Feng Tay Enterprise (9910 TT)</a> and <a href="https://www.smartkarma.com/entities/eclat-textile-company-ltd" target="_blank" data-smartkarma-citation="entities:13209:1" rel="noopener">Eclat Textile Company (1476 TT)</a>. </li>
</ul>


There are 2 additions and 1 deletion for the MVIS Vietnam Index at the upcoming rebalance at the close on 17 June. Plus capping and float changes.
The adds are Saigon - Hanoi Commercial (SHB VN) and Viet Nam Construction &amp; Impo (VCG VN), while Tien Phong Securities (ORS VN) is the deletion.
The largest passive outflows are on Vingroup Jsc (VIC VN), Feng Tay Enterprise (9910 TT) and Eclat Textile Company (1476 TT). 


MVIS Vietnam Index Rebalance: Two Adds, One Delete, Capping & Float Changes

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Vietnam allocations hit all-time highs in Asia Ex-Japan active portfolios.</li>
<li>Still a minor allocation in absolute terms, it's out-of-benchmark status makes it the 2nd largest country overweight.</li>
<li>Vietnam Dairy Products is the most widely held stock, otherwise investment is spread lightly across a dozen or so stocks, invested in by 2 or 3 funds.</li>
</ul>


Vietnam allocations hit all-time highs in Asia Ex-Japan active portfolios.
Still a minor allocation in absolute terms, it's out-of-benchmark status makes it the 2nd largest country overweight.
Vietnam Dairy Products is the most widely held stock, otherwise investment is spread lightly across a dozen or so stocks, invested in by 2 or 3 funds.


Asia Ex-Japan Funds:  Vietnam Allocations Hit All-Time Highs

<ul>
<li>There are 8 additions to the MVIS Vietnam Index at the upcoming rebalance at the close on 18 March. Moderate impact on most of the adds.</li>
<li>There are some stocks that have large float changes; watch <a href="https://www.smartkarma.com/entities/saigon-thuong-tin-commercial" target="_blank" data-smartkarma-citation="entities:650:1" rel="noopener">Saigon Thuong Tin Commercial (STB VN)</a>. Over 1 day of ADV to sell on some stocks due to capping changes.</li>
<li>At the December rebalance, all 5 adds jumped the day post announcement and then stayed in a range till implementation of the changes.</li>
</ul>


There are 8 additions to the MVIS Vietnam Index at the upcoming rebalance at the close on 18 March. Moderate impact on most of the adds.
There are some stocks that have large float changes; watch Saigon Thuong Tin Commercial (STB VN). Over 1 day of ADV to sell on some stocks due to capping changes.
At the December rebalance, all 5 adds jumped the day post announcement and then stayed in a range till implementation of the changes.


MVIS Vietnam Index Rebalance: Eight Additions & Some Big Float Changes

<p>Average weights among Frontier market countries stand at a combined 0.86%, with 42.5% of the EM funds in our analysis having some exposure to Frontier.  On a country level, Vietnam dominates, held by 19.6% of funds, followed by Kazakhstan and Panama.</p><p>The most widely held stocks are <a href="https://www.smartkarma.com/entities/copa-holdings-sa-class-a" target="_blank" data-smartkarma-citation="entities:6110:1" rel="noopener">Copa Holdings Sa Class A (CPA US)</a> and <a href="https://www.smartkarma.com/entities/kaspi-kz-jsc" target="_blank" data-smartkarma-citation="entities:33382:1" rel="noopener">Kaspi.KZ JSC (KSPI LI)</a> , with 10.4% and 10% of funds invested respectively.</p><p>On a fund level, openings in <a href="https://www.smartkarma.com/entities/kaspi-kz-jsc" target="_blank" data-smartkarma-citation="entities:33382:1" rel="noopener">Kaspi.KZ JSC (KSPI LI)</a> dominate the picture, with Carmignac Emerging Discovery, Fidelity and BlackRock opening positions, among others.  Closures in Nova Ljubljanska Banka from TT International, Goldman Sachs and Polar Capital are the stand outs.  </p><p></p><p><em>Analysis taken from our Emerging Markets Research, covering 242 active GEM funds with combined AUM of $500bn</em></p>

Average weights among Frontier market countries stand at a combined 0.86%, with 42.5% of the EM funds in our analysis having some exposure to Frontier.  On a country level, Vietnam dominates, held by 19.6% of funds, followed by Kazakhstan and Panama.The most widely held stocks are Copa Holdings Sa Class A (CPA US) and Kaspi.KZ JSC (KSPI LI) , with 10.4% and 10% of funds invested respectively.On a fund level, openings in Kaspi.KZ JSC (KSPI LI) dominate the picture, with Carmignac Emerging Discovery, Fidelity and BlackRock opening positions, among others.  Closures in Nova Ljubljanska Banka from TT International, Goldman Sachs and Polar Capital are the stand outs.  Analysis taken from our Emerging Markets Research, covering 242 active GEM funds with combined AUM of $500bn

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

China Youran Dairy Group Ltd / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/china-youran-dairy-group-ltd" target="_blank" data-smartkarma-citation="entities:31075:1" rel="noopener">China Youran Dairy Group Ltd (9858 HK)</a> is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of <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 (A) (600887 CH)</a> until PAG Capital’s investment in 2015.</p>
<p>At the proposed IPO price range of HK$6.98-8.66 per share, Youran will have a market cap of HK$26,492-32,868 million ($3.4-4.2 billion). At the mid-point of the IPO price range, the gross proceeds are HK$5,595 million ($722 million). The primary/secondary split is 69%/31%. The selling shareholder is PAG Capital.</p>
<p>The cornerstone support is unusually low. Two cornerstone investors will purchase $50 million worth of the offer shares (6.94% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are CITIC-Prudential Life Insurance and Harvest Fund Management.</p>
</div><div>
<p>In <a href="https://www.smartkarma.com/insights/china-youran-dairy-group-ipo-initiation-ecownomics" target="_blank" data-smartkarma-citation="insights:51709" rel="noopener">China Youran Dairy Group IPO Initiation: Ecownomics</a>, we stated that notwithstanding its high revenue dependence on Yili, Youran is capitalising on the favourable demand-supply imbalance for raw milk in China by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. We concluded that Youran is worth a look.</p>
<div class="content-highlight"><p>Based on our forecasts, Youran is attractively valued to its H-share peer group, which are largely downstream players, at the low-end of the IPO price range. Compared to <a href="https://www.smartkarma.com/entities/china-modern-dairy-holdings" target="_blank" data-smartkarma-citation="entities:6785:1" rel="noopener">China Modern Dairy (1117 HK)</a>, an upstream dairy peer (arguably the key listed comp), Youran trades at a substantial premium on a CY2021 P/E basis but trades at a substantial discount on a CY2021 PEG basis. Overall, we are inclined to participate at most at the low end of the IPO price range due to the decent upside potential. </p></div>
</div>


China Youran Dairy Group Ltd (9858 HK) is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of Inner Mongolia Yili Industrial Group (A) (600887 CH) until PAG Capital’s investment in 2015.
At the proposed IPO price range of HK$6.98-8.66 per share, Youran will have a market cap of HK$26,492-32,868 million ($3.4-4.2 billion). At the mid-point of the IPO price range, the gross proceeds are HK$5,595 million ($722 million). The primary/secondary split is 69%/31%. The selling shareholder is PAG Capital.
The cornerstone support is unusually low. Two cornerstone investors will purchase $50 million worth of the offer shares (6.94% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are CITIC-Prudential Life Insurance and Harvest Fund Management.

In China Youran Dairy Group IPO Initiation: Ecownomics, we stated that notwithstanding its high revenue dependence on Yili, Youran is capitalising on the favourable demand-supply imbalance for raw milk in China by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. We concluded that Youran is worth a look.
Based on our forecasts, Youran is attractively valued to its H-share peer group, which are largely downstream players, at the low-end of the IPO price range. Compared to China Modern Dairy (1117 HK), an upstream dairy peer (arguably the key listed comp), Youran trades at a substantial premium on a CY2021 P/E basis but trades at a substantial discount on a CY2021 PEG basis. Overall, we are inclined to participate at most at the low end of the IPO price range due to the decent upside potential. 


China Youran Dairy Group IPO: Valuation Insights

Vietnam

Vietnam Dairy Products JSC produces dairy foods. The Company produces milk, condensed milk, milk powder, yoghurt, ice cream and cheese. Vietnam Dairy Products also produces cookies, coffee and tea and bottled water.

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Vietnam Dairy Products JSC (VNM VN)

MVIS Vietnam Index Rebalance: Two Adds, One Delete, Capping & Float Changes

There are 2 adds, 1 delete, float and capping changes for the MVIS Vietnam Index to be implemented at the close on 17 June. One-way turnover is...

Brian Freitas

Asia Ex-Japan Funds: Vietnam Allocations Hit All-Time Highs

Vietnam allocations hit all-time highs in Asia Ex-Japan active portfolios, making it the 2nd largest overweight among active Asian investors.

Steven Holden

MVIS Vietnam Index Rebalance: Eight Additions & Some Big Float Changes

There are 8 additions and quite a few float changes to the MVIS Vietnam Index at the March rebalance. The one-way trade is US$80m and over a day of...

Brian Freitas

Frontier Markets Exposure in EM Funds

With Argentina and Kuwait moving up to Emerging status, how are active EM investors positioned in the current crop of Frontier Markets?

Steven Holden

China Youran Dairy Group IPO: Valuation Insights

At the mid-point of the IPO price range, the gross proceeds are $722 million. Overall, we are inclined to participate at most at the low end of the...

Arun George

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