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

Event-Driven

<ul>
<li>There will be passive buying in <a href="https://www.smartkarma.com/entities/nextdc-ltd" target="_blank" data-smartkarma-citation="entities:8570:1" rel="noopener">Nextdc Ltd (NXT AU)</a> and <a href="https://www.smartkarma.com/entities/charter-hall-group" target="_blank" data-smartkarma-citation="entities:5593:1" rel="noopener">Charter Hall (CHC AU)</a> and selling in <a href="https://www.smartkarma.com/entities/vital-healthcare-property-trust" target="_blank" data-smartkarma-citation="entities:3510:1" rel="noopener">Vital Healthcare Property Trust (VHP NZ)</a> at the close on 20 September.</li>
<li>
<a href="https://www.smartkarma.com/entities/charter-hall-group" target="_blank" data-smartkarma-citation="entities:5593:1" rel="noopener">Charter Hall (CHC AU)</a>'s stock price jumped following announcement of results and that was accompanied by big short covering. There should still be more positioning here. </li>
<li>
<a href="https://www.smartkarma.com/entities/nextdc-ltd" target="_blank" data-smartkarma-citation="entities:8570:1" rel="noopener">Nextdc Ltd (NXT AU)</a>'s increase in cumulative excess volume came on a drop in the stock price. There could be some covering here as positioning builds up.</li>
</ul>


There will be passive buying in Nextdc Ltd (NXT AU) and Charter Hall (CHC AU) and selling in Vital Healthcare Property Trust (VHP NZ) at the close on 20 September.

Charter Hall (CHC AU)'s stock price jumped following announcement of results and that was accompanied by big short covering. There should still be more positioning here. 

Nextdc Ltd (NXT AU)'s increase in cumulative excess volume came on a drop in the stock price. There could be some covering here as positioning builds up.


Australia/NZ Real Estate: Stocks With (Large) Passive Flows

New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Vital Healthcare Property Trust / Equity Bottom-Up

<ul><li>Vital Healthcare (VHP) reported a flat FY24 result and guided for another flat outcome in FY25, both as we had expected.</li><li>Non-core asset sales continued to fund development activity and support balance sheet gearing.</li><li>VHP has further divestments underway which will more than fund the remaining project spend, which largely completes over the next 12 months.</li></ul>

Vital Healthcare (VHP) reported a flat FY24 result and guided for another flat outcome in FY25, both as we had expected.Non-core asset sales continued to fund development activity and support balance sheet gearing.VHP has further divestments underway which will more than fund the remaining project spend, which largely completes over the next 12 months.

Vital Healthcare - FY24 Result — Passing Its Annual Physical

<ul><li>We upgrade Vital Healthcare (VHP) to OUTPERFORM. VHP's share price has declined -18% over the last two months, reflecting: (1) higher short-term Australian interest rates (75% of VHP's assets are in Australia), (2) hospital operator profitability pressure in Australia, and (3) expected index removals.</li><li>It now looks attractive vs its historical relationship to bond yields.</li><li> VHP's portfolio is defensive and benefits from long CPI-linked leases to private hospital operators. </li></ul>

We upgrade Vital Healthcare (VHP) to OUTPERFORM. VHP's share price has declined -18% over the last two months, reflecting: (1) higher short-term Australian interest rates (75% of VHP's assets are in Australia), (2) hospital operator profitability pressure in Australia, and (3) expected index removals.It now looks attractive vs its historical relationship to bond yields. VHP's portfolio is defensive and benefits from long CPI-linked leases to private hospital operators. 

Vital Healthcare - Solid Vital Signs, up to OUTPERFORM

<ul><li>Vital Healthcare (VHP) provided a largely uneventful 1H24 result, with a small adjusted funds from operation (AFFO) decline driven largely by higher interest costs and asset sales.</li><li>Over the last 12 months VHP has been busy selling non-core assets (c.NZ$220m) to help fund its development pipeline and support its balance sheet.</li><li>With c.NZ$210m to spend on committed developments and gearing close to its 40% top end, more work needs to be done. </li></ul>

Vital Healthcare (VHP) provided a largely uneventful 1H24 result, with a small adjusted funds from operation (AFFO) decline driven largely by higher interest costs and asset sales.Over the last 12 months VHP has been busy selling non-core assets (c.NZ$220m) to help fund its development pipeline and support its balance sheet.With c.NZ$210m to spend on committed developments and gearing close to its 40% top end, more work needs to be done. 

Vital Healthcare - 1H24 Result — Recycling for Growth

<ul><li>Vital Healthcare (VHP) announced its 1H24 revaluations which saw the value of its property portfolio decline by -4% or -NZ$145m.</li><li>This was driven by a +16 bps expansion in cap rate to 5.21%, with the share price implying cap rates will expand further.</li><li>The declines were larger in Australia (-5%) than NZ (-3%), which is a reversal of recent trends where NZ valuations reacted faster to higher interest rates. </li></ul>

Vital Healthcare (VHP) announced its 1H24 revaluations which saw the value of its property portfolio decline by -4% or -NZ$145m.This was driven by a +16 bps expansion in cap rate to 5.21%, with the share price implying cap rates will expand further.The declines were larger in Australia (-5%) than NZ (-3%), which is a reversal of recent trends where NZ valuations reacted faster to higher interest rates. 

Vital Healthcare - 1H24 Valuation Check-Up

New Zealand

Vital Healthcare Property Trust is a property trust that invests in and manages healthcare facilities in New Zealand and Australia.

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Vital Healthcare Property Trust (VHP NZ)

Australia/NZ Real Estate: Stocks With (Large) Passive Flows

Charter Hall Group and NEXTDC will be added to global real estate indices and Vital Healthcare will be deleted. With positioning low, expect the...

Brian Freitas

Vital Healthcare - FY24 Result — Passing Its Annual Physical

The key risks are further downward pressure on the share price in the short term from index selling, and stronger-for-longer interest rates in...

Forsyth Barr

Vital Healthcare - Solid Vital Signs, up to OUTPERFORM

VHP's share price has declined -18% over the last two months, reflecting: (1) higher short-term Australian interest rates (75% of VHP's assets are...

Forsyth Barr

Vital Healthcare - 1H24 Result — Recycling for Growth

Vital Healthcare (VHP) provided a largely uneventful 1H24 result, with a small adjusted funds from operation (AFFO) decline driven largely by...

Forsyth Barr

Vital Healthcare - 1H24 Valuation Check-Up

Vital Healthcare (VHP) announced its 1H24 revaluations which saw the value of its property portfolio decline by -4% or -NZ$145m.

Forsyth Barr

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