In today’s briefing:
- CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon
- Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, Div+, Top50, ASX, FXI, Xiaomi, Tata Tech
- STAR50 Index Rebalance: Big Impact Expected; Inclusion Up 40% in One Month
- A/H Premium Tracker (To 24 Nov 23): H Down Vs A, SOUTHBOUND Selling Continues, Tech Still Sold
- ECM Weekly (26th Nov 2023) – Zeekr, Cirrus, Tata Tech, IREDA, FedBank, Juniper, GS Yuasa, AZ Com
- Mainland Connect NORTHBOUND Flows (To 24 Nov 23): Chongqing Changan (Bought) Vs BYD (Sold)
- HK Connect SOUTHBOUND Flows (To 24 Nov 23); ETF Buying Offsets Broad Selling, Especially in Tech
- Wanda Unit Seeks Extension for $600 Million Dollar Bonds
- SSE50 Index Rebalance: Five Changes; Adds & Deletes Moving in Lockstep
CES China Semiconductor Chips Index Rebalance: Another Inclusion for Hygon
- There are 3 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 8 December.
- Hygon Information Technology C (688041 CH) will be added to a global index in a week and then there will be multiple index inflows at the close on 8 December.
- After underperforming from May to September, the adds have gained ground on the deletes over the last two months and there could be further outperformance over the next two weeks.
Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, Div+, Top50, ASX, FXI, Xiaomi, Tata Tech
- The capping for the Hang Seng family of indices will use closing prices from 28 November while implementation will take place at the close on 1 December.
- The changes for the next S&P/ASX 200 (AS51 INDEX) rebalance will be announced after the close of trading on 1 December.
- It was another week of inflows for the iShares Emerging Markets (EMXC US) to take units outstanding to a new high.
STAR50 Index Rebalance: Big Impact Expected; Inclusion Up 40% in One Month
- As expected, the index committee has used a 6-month minimum listing history and that results in one change to the SSE STAR50 (STAR50 INDEX) in December.
- Sichuan Biokin Pharmaceutical (688506 CH) will replace Ninebot (689009 CH) in the index at the close on 8 December.
- One way turnover is estimated at 2.18% and will result in a one-way trade of CNY 3,065m. Sichuan Biokin Pharmaceutical (688506 CH) has moved up and there will be pre-positioning.
A/H Premium Tracker (To 24 Nov 23): H Down Vs A, SOUTHBOUND Selling Continues, Tech Still Sold
- The New and Better (17 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- Hs with H/A pairs under-perform their As on average. H/A Pair intracorrelation is up and A premia continue to trend better.
- SOUTHBOUND and NORTHBOUND were net sells overall. Everybody sold tech.
ECM Weekly (26th Nov 2023) – Zeekr, Cirrus, Tata Tech, IREDA, FedBank, Juniper, GS Yuasa, AZ Com
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- In the IPO space, Tata Technologies didn’t disappoint Tata Group fans, at least on the subscription front.
- The placements continued to flow in this week as well in Japan.
Mainland Connect NORTHBOUND Flows (To 24 Nov 23): Chongqing Changan (Bought) Vs BYD (Sold)
- This is the somewhat-brand-spanking-new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
- The same few names continue at the top of the gross flows list – Kweichow Moutai, Contemporary Amperex, Zhongji Innolight, etc, but the nets are changing (and Chongqing Changan)
- Last week, NORTHBOUND were again net sellers (RMB -3.16bn), but Shanghai saw net buys. The top two flows were Chongqing Changan Automobile Company (200625 CH) to buy, BYD to sell.
HK Connect SOUTHBOUND Flows (To 24 Nov 23); ETF Buying Offsets Broad Selling, Especially in Tech
- This is the somewhat brand-spanking-new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
- SOUTHBOUND flows the last several weeks clearly indicated a momentum move. The top net sells were all down. The top buys were all up. We saw a pause, then continued.
- SOUTHBOUND sees more net selling this week of stocks. Last week ETF selling turned flows negative. This week, ETF flows flattered the net sell. Tech still being sold.
Wanda Unit Seeks Extension for $600 Million Dollar Bonds
The property management unit of Dalian Wanda Group Co. wants to push back the maturity of a $600 million bond by nearly a year, highlighting the property conglomerate’s deepening liquidity crunch.
Dalian Wanda Commercial Management Group Co. said Tuesday that it is seeking to delay the payment on the 7.25% note by 11 months due to liquidity pressures.
The 10-year dollar-denominated notes, issued by its subsidiary Wanda Properties International Co., are set to mature on Jan. 29, 2024, Wanda Commercial, the guarantor of the bond, said in a filing to the Hong Kong stock exchange.
SSE50 Index Rebalance: Five Changes; Adds & Deletes Moving in Lockstep
- There are 5 changes for the SSE50 Index (SSE50 INDEX) that will be implemented at the close on 8 December. There is over 1x ADV to trade on some stocks.
- We estimate a one-way turnover of 5.4% at the December rebalance leading to a one-way trade of CNY 4.85bn. Index arb activity could add to the impact on the stocks.
- The adds, deletes and SSE50 Index (SSE50 INDEX) have moved nearly in lockstep since May and the passive flows could move things around a bit.
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