ChinaDaily Briefs

China: SITC International, Wuxi Biologics, China Forestry Holdings Co, iShares Barclays USD Asia High Yield Bond Index ETF, Abbisko Cayman, Azure Power Global Ltd and more

In today’s briefing:

  • MSCI Aug 2021 Index Rebalance Preview: Changes After Day 1 in the Review Period
  • Wuxi Biologics Placement – Similar Deal Will Yield Similar Results
  • Forensics 101: Using the Fraud Triangle Framework to Detect Fraud Risks
  • Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Losers
  • Pre-IPO Abbisko Cayman – It Still Takes Some Time for Commercialization
  • Morning Views Asia: Azure Power Global Ltd, Yestar Healthcare Holdings
  • McLaren Lines Up $620mn Bond After Raising $750mn from Investors; Upgraded to CCC+ by S&P

MSCI Aug 2021 Index Rebalance Preview: Changes After Day 1 in the Review Period

By Brian Freitas

MSCI is scheduled to announce the results of the August 2021 Quarterly Index Review (QIR) on 11 August with the changes implemented after the close of trading on 31 August.

The review period for price cut-off began on 19 July and will run through to 30 July. For Asia, most of the changes are expected in China with a few changes for Hong Kong, Taiwan, Korea and Thailand.

MSCI generally picks a day from the first week to calculate the market cap on which it bases the list of inclusions and exclusions.

Post day 1 of the review period, we see SITC International (1308 HK), Huabao International Holdings (336 HK), Momo.Com Inc (8454 TT), Chinasoft International (354 HK), China United Network A (600050 CH), Ecopro BM Co Ltd (247540 KS), CRRC Corp Ltd A (601766 CH), SK IE Technology (361610 KS), Beijing Wantai Biological-A (603392 CH), Beijing Kingsoft Office Software-A (688111 CH), Beijing Roborock Technology-A (688169 CH), Imeik Technology Development (300896 CH), StarPower Semiconductor Ltd (603290 CH), Advanced Micro-Fabrication Equipment-A (688012 CH) and China Baoan (000009 CH) being added to the Standard index.

Likely deletions are Bank of East Asia (23 HK), Taiwan Business Bank (2834 TT), KMW Co Ltd (032500 KS), Perennial Energy Holdings Ltd (2798 HK), Bangkok Bank PCL (BBL/F TB) and Douyu International Holdings (DOYU US).

The August QIR will also implement tranche 2 of Sea Ltd (SE US)‘s inclusion in the MSCI indices and will result in the index inclusion factor increasing from 0.05 to 0.25.


Wuxi Biologics Placement – Similar Deal Will Yield Similar Results

By Sumeet Singh

Wuxi Biologics Holdings is looking to raise up to US$1.3bn by selling about 1.8% of Wuxi Biologics (2269 HK). This is the company’s 15th placement since it listed in June 2017. 

In this note, we will discuss deal dynamics, past deal performance, and share the scores of our ECM framework.

Links to our coverage of the IPO and past deals:


Forensics 101: Using the Fraud Triangle Framework to Detect Fraud Risks

By Jason Yap, CFA

If you asked anyone whether they think stealing is wrong, most of them would answer “Yes”.  Yet, the Association of Certified Fraud Examiners’ recent report highlighted that organisations globally lost an estimated total of USD4.5 trillion to fraud in 2020 and the truth is, this was not the work of an exceptional few.  Why does fraud happen?  This article explores the use of the Fraud Triangle framework to evaluate and detect fraud risks in a capital markets context. 


Macro; Rating Changes; New Issues; Talking Heads; Top Gainers & Losers

By BondEvalue

US markets started the week with the biggest drop of the year amid a sell-off over concerns over rising Delta variant cases. S&P and Nasdaq shed 1.6% and 1.1% respectively adding to the 0.8% drop on Friday. The new Covid-19 numbers seem to be overshadowing the strong earnings with sectors across the board experienced a whitewash. Energy extended its losses by another 3.6%, Financials, Materials and Industrials were all down more than 2%. Rest of the sectors with the exception of Consumer Staples were down more than 1%. Airlines and Cruise stocks fell more than 5% with Big Tech shares not spared either. US 10Y Treasury yields tightened by 7bp to 1.21% after it recovered from 1.19% – the lowest in the last five months. Germany and Belgium have started clearing the devastation caused by extensive flooding. European indices also nosedived ~2.5% – the DAX, CAC and FTSE were down 2.6%, 2.5% and 2.3% respectively. US IG CDS spreads widened 2.2bp and HY widened 10.2bp. EU Main spreads widened 1.6bp and Crossover spreads widened 8.6bp. Brazil’s Bovespa was down 1.2%. Gulf markets were spared as they were closed on account of Eid. The oil prices dropped ~2% after the successful OPEC+ deal. In Asia, Nikkei, Shanghai and HSI were down more than 0.5%. Asia ex-Japan CDS spreads were 0.6bp tighter.

Pre-IPO Abbisko Cayman – It Still Takes Some Time for Commercialization

By Xinyao (Criss) Wang

On June 16, Abbisko Cayman (ABB HK) submitted a prospectus to the HKEX to be listed on the main board. Abbisko is a R&D-driven, clinical-stage biopharmaceutical company dedicated to the discovery and development of innovative and differentiated small molecule oncology therapies, with a pipeline of 14 programs focused on oncology. This insight mainly analyzed the four important product candidates at the clinical stage (ABSK011, ABSK091, ABSK021 and ABSK081) in the pipeline.


Morning Views Asia: Azure Power Global Ltd, Yestar Healthcare Holdings

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.


McLaren Lines Up $620mn Bond After Raising $750mn from Investors; Upgraded to CCC+ by S&P

By BondEvalue

British sports carmaker McLaren is planning to raise $620mn via a new bond issue  in a bid to refinance existing bonds and boost its balance sheet. Bloomberg reported that unofficial indications are in the 8% yield range as per investors looking at the deal. This comes close on the heels of a capital raise of £550mn ($750mn) from investors including Saudi Arabia’s sovereign wealth fund announced last Friday. As per the company’s press release , “New investors, funds managed by the Private Equity and Credit Groups of Ares Management Corporation and Public Investment Fund (PIF) , have committed to invest a total of £400 million in McLaren Group Limited in the form of Preference Shares and equity Warrants, bringing capital as well as significant financial and strategic expertise to McLaren.” Further, existing investors including Bahrain’s Mumtalakat and “a limited number of private investors” will invest £150mn ($205mn) via convertible preference shares, which will be used towards repaying a loan from the National Bank of Bahrain that was taken in June last year.

Before it’s here, it’s on Smartkarma