In today’s briefing:
- MSCI Annual Market Classification Review: Korea Doesn’t Make It to the Watchlist
- China E-Commerce Pair Trade: Long Bozun Short Huitongda
- Korea May Continue to Fail MSCI DM Inclusion Unless Allowing for K200 Options Listing on SGX
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (24 June 2022)
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (24 June 2022)
MSCI Annual Market Classification Review: Korea Doesn’t Make It to the Watchlist
- MSCI had announced the results of the 2022 Global Market Accessibility Review earlier this month. Based on that, no changes were expected at the Market Classification Review.
- Earlier this morning, MSCI announced the results of the Market Classification Review and there are no changes for Asia.
- Korea has not been placed on the watchlist for an upgrade from Emerging to Developed Market. The earliest that Korea could be reclassified from EM to DM is now 2025.
China E-Commerce Pair Trade: Long Bozun Short Huitongda
- Chinese e-commerce is having a solid month with most names up 30% in June. Yet this seems more a dead-cat-bounce than a change in direction of the share price momentum.
- While there’s plenty of additional downside to big e-commerce players in e-commerce, smaller ones such as Baozun Inc. (BZUN US) has limited down side with shares trading near 1.0x P/B multiple.
- Meanwhile Huitongda (9878 HK) is yet to experience the post IPO sell-off and trading at expensive multiples. This raises an opportunity for a Long Bozun Short Huitongda trade.
Korea May Continue to Fail MSCI DM Inclusion Unless Allowing for K200 Options Listing on SGX
- The KRX and the MSCI have not agreed on the full right to use the KRX indexes’ price information. This should be the essential cause of Korea’s failed DM inclusion.
- The MSCI wants to list the KOSPI 200 Options on the SGX, which the MSCI sees as a prerequisite for taking the lead in the Korean passive market.
- Suppose the government takes a forward-looking approach to this issue. In that case, we may see the K200 Options SGX listing that has a bigger market impact before DM inclusion.
Shanghai/Shenzhen Southbound Connect: Weekly Moves (24 June 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, net inflow over the past week was ~US$1.3bn, split US$0.4bn for Shanghai and US$0.9bn for Shenzhen.
- The largest inflows were into XPeng (9868 HK) and HKEX (388 HK). The largest outflow was in Meituan (3690 HK) and Koolearn (1797 HK).
Shanghai/Shenzhen Northbound Connect: Weekly Moves (24 June 2022)
- Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
- Overall, net inflow over the past week was ~US$1.7bn, split between Shanghai (+US$1.8bn) and Shenzhen (-US$0.1bn).
- The largest inflows were into NARI Technology (600406 CH) and Kweichow Moutai (600519 CH). The largest outflows were in CATL (300750 CH) and Wuliangye Yibin Co Ltd (000858 CH).
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