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Jul 09
0

Most Read: Hang Seng China Enterprises Index, Baidu, Asmedia Technology, Giordano International, WCP and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
  • HSI Index Rebalance Preview: Finding the Balance
  • FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades
  • Giordano (709 HK): Cheng Family’s Offer (Even) Less Viable After Positive Profit Alert
  • WCP IPO Preview

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

By Brian Freitas

HSI Index Rebalance Preview: Finding the Balance

By Brian Freitas

  • Currently at 69 constituents, it is unlikely that we reach 80 member by year end. Hang Seng Indexes is finding it tough to reach the target by excluding unprofitable companies.
  • We list 11 stocks that could be added to the index in September – with one-way turnover just over 5%, the actual number of inclusions will be lower.
  • There are a few potential inclusions where short interest is over 5% of the free float. These stocks could see short covering ahead of announcement of the changes.

FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades

By Janaghan Jeyakumar, CFA

  • The FTSE TWSE Taiwan Dividend+ Index is an index of stocks with the highest dividend yields in the universe of the FTSE TWSE Taiwan 50 and Mid-Cap 100 Indices.
  • According to our estimates, the historical average return for index rebalance trades seems to be extremely attractive and the potential volume impact can be significant too.
  • We feel this is one of the most interesting esoteric indices in the Asia-Pacific region for index rebalance trades.

Giordano (709 HK): Cheng Family’s Offer (Even) Less Viable After Positive Profit Alert

By David Blennerhassett

  • After the close of trading yesterday, Giordano International (709 HK)  announced a positive  profit alert
  • Giordano expects an interim net profit of HK$91mn-HK$101mn, a 52%-68% increase over the corresponding period.
  • The Cheng family’s HK$1.88/share Offer was low-balled from the onset. Substantial shareholder David Webb agrees. This deal is dead without a bump.

WCP IPO Preview

By Douglas Kim

  • WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea post LG Energy Solution (373220 KS).
  • The IPO price range is from 80,000 won to 100,000 won. The IPO base deal size is from $560 million to $700 million.
  • WCP is a leading maker of separators which are key materials used in EV batteries.

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Jul 08
0

Most Read: Tianqi Lithium, Baidu, Asmedia Technology, TPG Telecom Ltd, Link Administration and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MSCI August 2022 Index Rebalance Preview: The Last QIR?
  • HSI Index Rebalance Preview: Finding the Balance
  • FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades
  • TPG Telecom Possible Selldown – Founder Could Look to Raise up to US$1bn with a Clean Exit
  • Link Admin Mulls Dye & Durham’s Upped Bid

MSCI August 2022 Index Rebalance Preview: The Last QIR?

By Brian Freitas

HSI Index Rebalance Preview: Finding the Balance

By Brian Freitas

  • Currently at 69 constituents, it is unlikely that we reach 80 member by year end. Hang Seng Indexes is finding it tough to reach the target by excluding unprofitable companies.
  • We list 11 stocks that could be added to the index in September – with one-way turnover just over 5%, the actual number of inclusions will be lower.
  • There are a few potential inclusions where short interest is over 5% of the free float. These stocks could see short covering ahead of announcement of the changes.

FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades

By Janaghan Jeyakumar, CFA

  • The FTSE TWSE Taiwan Dividend+ Index is an index of stocks with the highest dividend yields in the universe of the FTSE TWSE Taiwan 50 and Mid-Cap 100 Indices.
  • According to our estimates, the historical average return for index rebalance trades seems to be extremely attractive and the potential volume impact can be significant too.
  • We feel this is one of the most interesting esoteric indices in the Asia-Pacific region for index rebalance trades.

TPG Telecom Possible Selldown – Founder Could Look to Raise up to US$1bn with a Clean Exit

By Sumeet Singh

  • TPG Telecom was formed by a merger of Vodafone and TPG in Jul 2020. The merger resulted in the shares owned by Vodafone, Hutchison and DavidTeoh, being put in escrow.
  • The lockup on those shares will expire this month. David Teoh, TPG’s founder, has sold some stock before in Dec 21 and could look to exit his remaining shareholding.
  • In this note, we talk about the upcoming lock-up release and its dynamics.

Link Admin Mulls Dye & Durham’s Upped Bid

By David Blennerhassett

  • Dye & Durham (D&D) has bumped its offer for Link Administration (LNK AU) to $4.57/share after its prior revised $4.30/share bid was rejected. 
  • Link shareholders may also receive an additional A$0.13 from the sale of the Banking and Credit Management (BCM) business under the latest offer.
  • Link said it will consider the proposal and continue to engage with D&D.

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Jul 07
0

Most Read: Tianqi Lithium, Mapletree Commercial Trust, Hwa Hong Corp, Bank of Kyoto, SK IE Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MSCI August 2022 Index Rebalance Preview: The Last QIR?
  • MCT SP as MPACT Creeping Ever Higher Vs Peers
  • Hwa Hong (HWAH SP): MGO Triggered, Offeror Now Controls 38.2%
  • JAPAN ACTIVISM:  Silchester’s Bank of Kyoto AGM Results – Activism Still Failing
  • SKIET Block Deal: Passive Impact on TIGER (WISE) Secondary Cell ETF Rebalancing

MSCI August 2022 Index Rebalance Preview: The Last QIR?

By Brian Freitas

MCT SP as MPACT Creeping Ever Higher Vs Peers

By Travis Lundy

  • Mapletree Commercial Trust (MCT SP) has crept higher vs the Peer Baskets, especially in the last 4-6 weeks as Other S-REITs have weakened. 
  • This sets the stage for a potentially large flowback into S-REITs as a class coming in a few weeks.
  • It may be time to reconsider positioning, looking at where MPACT has been and will be.

Hwa Hong (HWAH SP): MGO Triggered, Offeror Now Controls 38.2%

By David Blennerhassett

  • As a result of market acquisitions, the Offeror for Hwa Hong Corp (HWAH SP) now holds 30.0%, triggering a mandatory general offer (MGO). 
  • Including shares tendered, the Offeror controls 38.24%. The Offer remains subject to a 50% acceptance condition. HWAH directors holding 29.26% of shares still do not intend to accept the Offer. 
  • The S$0.40/share Offer price has been declared final. The final closing date is 1 August. This transaction will go down to the wire.

JAPAN ACTIVISM:  Silchester’s Bank of Kyoto AGM Results – Activism Still Failing

By Travis Lundy

  • Silchester, after holding Bank of Kyoto (8369 JP) shares 16 years, becoming the largest investor, FINALLY publicly asked the bank to make a gesture to pay out a tiny special div. 
  • The bank rejected them, but they took it to to the AGM. And there Silchester got rejected by the shareholders. Soundly. Hostile activism is not going to be easy here. 
  • But all is not lost. Since December, the bank has raised its payout ratio to 50% and has promised to cut a piece of its cross-holdings in the MTMP.

SKIET Block Deal: Passive Impact on TIGER (WISE) Secondary Cell ETF Rebalancing

By Sanghyun Park

  • This block deal won’t lead to a float increase event. Nevertheless, it will substantially impact the rebalancing of the TIGER (WISE) Secondary Cell ETF next week.
  • A passive net inflow of up to ₩10B occurs, equivalent to 0.5x ADTV. Indeed, this level provides a significant day trade setup.
  • With today’s price correction, SKIET’s index weight will drop to the high 4% range. Applying the 36% float to today’s price will increase the weight to 5.5% at the rebalancing. 

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Jul 06
0

Most Read: Powerchip Semiconductor Manufacturing Corp, Kasikornbank PCL, SPH REIT, SK IE Technology, Tianqi Lithium and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE All-World/​​​All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China
  • Kasikornbank (KBANK TB): Potential MSCI Inclusion
  • SPH REIT Float Drops – Index Impacts To Come (Today and Beyond)
  • SK IE Technology Placement – Last Deal Didn’t Do Well, More Discount and Cleanup Should Help
  • MSCI August 2022 Index Rebalance Preview: The Last QIR?

FTSE All-World/​​​All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 16 September.
  • For Asia ex-Japan ex-China, we see 7 inclusions to All-World, 58 inclusions to All-Cap, 9 migrations from All-Cap to All-World, 5 migrations from All-World to All-Cap, and 20 deletions.
  • There are quite a few names in Australia that could have same way flows from the S&P/ASX 200 and S&P/ASX 300 Index trackers on the same day as the FTSE trackers.

Kasikornbank (KBANK TB): Potential MSCI Inclusion

By Brian Freitas

  • Kasikornbank PCL (KBANK-R TB) was deleted from the MSCI Thailand Index in June 2021 following the issuance of NVDR’s approaching its permitted limit of 25% of issued shares.
  • With 12 months since deletion complete and meeting market cap, liquidity and foreign room thresholds, Kasikornbank PCL (KBANK TB) could be added to the MSCI Thailand Index in August.
  • If added to the MSCI Thailand Index, we estimate passive trackers will need to buy 47.39m shares (US$199m; 3.9 days of ADV) of Kasikornbank PCL (KBANK TB) on 31 August.

SPH REIT Float Drops – Index Impacts To Come (Today and Beyond)

By Travis Lundy

SK IE Technology Placement – Last Deal Didn’t Do Well, More Discount and Cleanup Should Help

By Sumeet Singh

  • SK IE Technology’s (SKIE) shareholder aims to raise around US$228m via selling their remaining shareholding.
  • The same shareholder had sold some of their stake earlier in Nov 21. That deal didn’t end up doing well.
  • In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.

MSCI August 2022 Index Rebalance Preview: The Last QIR?

By Brian Freitas

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Jul 05
0

Most Read: Gcl Poly Energy Holdings Limited, Tianqi Lithium, Powerchip Semiconductor Manufacturing Corp, Tokyo Stock Exchange Tokyo Price Index Topix, SK Telecom and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline
  • FTSE All-World/​​​All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China
  • JAPAN PASSIVE – The GPIF in FY2021
  • Critical Flaws in the MSCI Methodology for SK Telecom’s Foreign Room Calculation

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline

By Brian Freitas

  • Tianqi Lithium (9696 HK) is looking to sell up to 188.74m shares to raise up to US$1.97bn. Pricing at HK$69-82/share is a 52-43% discount to Tianqi Lithium (002466 CH).
  • Between 32-38% of the total offer size is being taken by 7 cornerstone investors and they are locked in for 6 months from listing date (expected 13 July).
  • Tianqi Lithium (9696 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in December. Southbound Stock Connect could come online soon after listing.

FTSE All-World/​​​All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 16 September.
  • For Asia ex-Japan ex-China, we see 7 inclusions to All-World, 58 inclusions to All-Cap, 9 migrations from All-Cap to All-World, 5 migrations from All-World to All-Cap, and 20 deletions.
  • There are quite a few names in Australia that could have same way flows from the S&P/ASX 200 and S&P/ASX 300 Index trackers on the same day as the FTSE trackers.

JAPAN PASSIVE – The GPIF in FY2021

By Travis Lundy

  • The GPIF reported its annual investment results for the FY to March 2022 last Friday. The investment report makes for interesting reading.
  • The GPIF made 5.42% but alpha was negative 6bp vs time-weighted and money-weighted benchmarks.
  • The re-allocations amongst asset classes now means more money tracks TOPIX, and it means active managers have their work cut out for them going forward.

Critical Flaws in the MSCI Methodology for SK Telecom’s Foreign Room Calculation

By Sanghyun Park

  • MSCI does not have any explicitly-defined foreign room calculation method for Korean FOL stocks with DRs.
  • 58M shares can still be converted into ADRs, close to 27% of SO. There are still ample foreign rooms for SKT, making its situation quite different from KT’s in 2019.
  • MSCI, which places the most importance on actual investability, won’t delete SKT, which has a substantial real-world foreign room simply because the nominal value has fallen below the threshold.

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Jul 04
0

Most Read: Gcl Poly Energy Holdings Limited, Seven & I Holdings, Link Administration, SK IE Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
  • Seven & I Sale of Sogo Seibu Moves Closer
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

By Brian Freitas

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

  • Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
  • Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
  • The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George

WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

By Sanghyun Park

  • Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
  • Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
  • These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

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Jul 03
0

Most Read: HKEX, Hang Seng China Enterprises Index, Hong Kong Hang Seng Index, Gcl Poly Energy Holdings Limited, Korea Stock Exchange Kospi 200 Index and more

By | Daily Briefs, Most Read

In today’s briefing:

  • ETFs in Stock Connect: List Announced; Effective 4 July
  • HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
  • Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec’s in Hong Kong, China, & Japan
  • Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
  • Buying the Most Unloved Asian Market

ETFs in Stock Connect: List Announced; Effective 4 July

By Brian Freitas

  • CSRC and SFC have approved the inclusion of eligible ETFs in Stock Connect and trading of the ETFs under Stock Connect would begin from 4 July.
  • There are 4 ETFs included in Southbound Stock Connect, while there are 83 ETFs that have been included in Northbound Stock Connect.
  • Under Stock Connect, only secondary trading is allowed in the ETFs with no creations or redemptions permitted. This will have implications for short-term and long-term repo on the HSI/HSCEI/HSTECH indices.

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

By Brian Freitas

Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec’s in Hong Kong, China, & Japan

By Joe Jasper

  • Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.
  • Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.
  • Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China’s MSCI China (MCHI-US) and China Internet (KWEB-US).

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

By Brian Freitas

Buying the Most Unloved Asian Market

By Thomas Schroeder

  • Korea is a market we have been shorting from the summer of 2021 and just turned long near compelling physical support.
  • Closed short positions from 366 and 353 for gains of 20% and 15%. A rally opportunity should open up if the global cycle gets a few lifts in July.
  • 300 price support from 2020-21 previous highs and lows makes for a natural platform for short covering that may lead to a move to 324/328 where noted retracements lie.

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Jul 02
0

Most Read: Hang Seng China Enterprises Index, Shinko Electric Industries, Tesla Motors, LG Energy Solution and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
  • JPX-Nikkei 400 2022 Rebal: Final Predictions
  • Elon Suddenly Admits Massive Tesla Losses (Because Other News Out Soon Is Even Worse)
  • End of Mandatory Lock-Up Periods for 40 Companies in Korea in July 2022
  • Defensive & Diversifying Strategies in YTD 2022

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

By Brian Freitas

JPX-Nikkei 400 2022 Rebal: Final Predictions

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.
  • The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.
  • In this insight, we take a look at Quiddity’s final predictions for Potential ADDs/DELs for the August 2022 review.

Elon Suddenly Admits Massive Tesla Losses (Because Other News Out Soon Is Even Worse)

By Vicki Bryan

  • Elon Musk suddenly admitted Tesla is burning billions at its Austin & Berlin plants.
  • This happened to come just as he likely saw Q2 becoming “super bad,” as I had warned, since plunging China sales mean Tesla can’t mask big losses as usual.
  • Tesla’s problems are bigger than second quarter woes—and they’re not going away anytime soon.

End of Mandatory Lock-Up Periods for 40 Companies in Korea in July 2022

By Douglas Kim

  • We discuss end of the mandatory lock-up periods for 40 stocks in Korea in July 2022, among which 7 are in KOSPI and 33 are in KOSDAQ.
  • These 40 stocks on average could be subject to further selling pressures in July and could underperform relative to the market. 
  • Among these 40 stocks, LG Energy Solution (373220 KS) and Heung A Shipping (003280 KS) could face further selling pressures in the coming weeks.

Defensive & Diversifying Strategies in YTD 2022

By Nicolas Rabener

  • Most defensive and diversifying strategies generated negative returns in YTD 2022
  • The correlation of almost all of these strategies to equities was too high
  • Only managed futures generated attractive diversification benefits in YTD 2022

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Jul 01
0

Most Read: SenseTime Group, HKEX, Tianqi Lithium, Softbank Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow
  • ETFs in Stock Connect: List Announced; Effective 4 July
  • Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline
  • Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go
  • Softbank Group – Expiration of SenseTime Lock-Up Has Lopped $1.5bn off the VF Valuation

SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow

By Brian Freitas

  • SenseTime Group (20 HK) currently has a float of 1.4%. That will increase to 46% at the end of June as pre-IPO and cornerstone investor lock-ups end.
  • The Hang Seng Tech Index FAF increase and potential inclusion in the Hang Seng China Enterprises Index will require passive trackers to buy 700m shares early September.
  • Economic stimulus in China, outlook for China tech, lock-up expiry, inclusion in Southbound Connect and flows from passive trackers will drive the stock for few months and provide trading opportunities.

ETFs in Stock Connect: List Announced; Effective 4 July

By Brian Freitas

  • CSRC and SFC have approved the inclusion of eligible ETFs in Stock Connect and trading of the ETFs under Stock Connect would begin from 4 July.
  • There are 4 ETFs included in Southbound Stock Connect, while there are 83 ETFs that have been included in Northbound Stock Connect.
  • Under Stock Connect, only secondary trading is allowed in the ETFs with no creations or redemptions permitted. This will have implications for short-term and long-term repo on the HSI/HSCEI/HSTECH indices.

Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline

By Brian Freitas

  • Tianqi Lithium (9696 HK) is looking to sell up to 188.74m shares to raise up to US$1.97bn. Pricing at HK$69-82/share is a 52-43% discount to Tianqi Lithium (002466 CH).
  • Between 32-38% of the total offer size is being taken by 7 cornerstone investors and they are locked in for 6 months from listing date (expected 13 July).
  • Tianqi Lithium (9696 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in December. Southbound Stock Connect could come online soon after listing.

Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go

By Sumeet Singh

  • Tianqi Lithium (TL) is looking to raise up to US$1.7bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
  • TL was the largest producer of mined lithium globally in terms of output in 2020 and ranked third in terms of revenue generated from lithium in 2020.
  • In this note, we take about the deal pricing and run the deal through our ECM framework.

Softbank Group – Expiration of SenseTime Lock-Up Has Lopped $1.5bn off the VF Valuation

By Kirk Boodry

  • Just as the December quarter was flattered by the last minute IPO of SenseTime Group (20 HK), expiration of the lockup six months later has delivered a corresonding valuation hit
  • Vision Fund is still up on that investment but the public portfolio is flirting with a $10bn loss for the quarter depending on how US shares trade later
  • The discount has improved modestly to 49% from 51% but remains at the high end of the recent range as worries on tech valuations cast a long shadow 

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Jun 30
0

Most Read: HKEX, SenseTime Group, Sichuan Tianqi Lithium Industries, Inc, Toshiba Corp, MTR Corp and more

By | Daily Briefs, Most Read

In today’s briefing:

  • ETFs in Stock Connect: List Announced; Effective 4 July
  • HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows
  • Tianqi Lithium H Share Listing: AH Discount Views
  • Toshiba (6502) Ownership Structure – “Hostage to Toshiba” Larger Than Real World Float
  • MTR (66): Open or Closed?

ETFs in Stock Connect: List Announced; Effective 4 July

By Brian Freitas

  • CSRC and SFC have approved the inclusion of eligible ETFs in Stock Connect and trading of the ETFs under Stock Connect would begin from 4 July.
  • There are 4 ETFs included in Southbound Stock Connect, while there are 83 ETFs that have been included in Northbound Stock Connect.
  • Under Stock Connect, only secondary trading is allowed in the ETFs with no creations or redemptions permitted. This will have implications for short-term and long-term repo on the HSI/HSCEI/HSTECH indices.

HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

By Brian Freitas

  • We do not expect any inclusions or exclusions for the Hang Seng Tech Index (HSTECH INDEX) at the September rebalance.
  • Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.
  • SenseTime Group (20 HK) will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the HSCEI INDEX in September.

Tianqi Lithium H Share Listing: AH Discount Views

By Arun George

Toshiba (6502) Ownership Structure – “Hostage to Toshiba” Larger Than Real World Float

By Travis Lundy

  • Every year, the yukashoken hokokusho shows a breakdown of share ownership by owner category. It only happens once a year for most companies. 
  • It is a crucial input to knowing where the shares are and how people are positioned. It also shows who and how big is Real World Float.
  • This year’s data shows a surprisingly small change year-on-year for Foreign Active Ownership, which is the biggest category. A little musical chairs, but no chairs removed. 

MTR (66): Open or Closed?

By Henry Soediarko

  • HK reopening is debatable and seems to be very hard to predict as the Chinese government is keen to keep zero COVID stands although recent quarantine time reduction is positive. 
  • The number of passengers remains weak although the shorter quarantine reduction could provide short-term relief to the share price. 
  • Valuation looks undemanding compared to the peers although the outlook is more uncertain. Stay out for now. 

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