In today’s briefing:
- Hang Seng TECH Index Rebalance: NIO (9866 HK) To Replace ASM Pacific (522 HK)
- HSCEI Index Rebalance: Lenovo In, Hansoh Out; Sunac Survives (For Now)
- KOSPI 200 IT Sector Index Rebalancing Flow: Watch Kakao Pay & LG Corp
- Index Rebalance & ETF Flow Recap: MSCI, ASX, NIFTY, KRX, PCOMP, HSI, HSCEI, HSTECH, SK Tel, GoTo
- Asia-Pac Weekly Risk Arb Wrap: Kinetsu World, Hwa Hong, MyDeal, Kito, Virtus Health, Irongate, HKBN
- Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan
Hang Seng TECH Index Rebalance: NIO (9866 HK) To Replace ASM Pacific (522 HK)
- As expected, NIO Inc (9866 HK) will be added to the Hang Seng Tech Index (HSTECH INDEX) at the close on 10 June replacing ASM Pacific Technology (522 HK).
- We estimate passive trackers will need to buy over 9 days of ADV on NIO Inc (9866 HK) while selling 11 days of ADV on ASM Pacific Technology (522 HK).
- NIO Inc (9866 HK)‘s inclusion in the Hang Seng Tech Index (HSTECH INDEX) could create significant arb opportunities versus NIO Inc (NIO US) on 10 June.
HSCEI Index Rebalance: Lenovo In, Hansoh Out; Sunac Survives (For Now)
- As expected, Lenovo (992 HK) will replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) after the close of trading on 10 June.
- Sunac China Holdings (1918 HK) has been kept in the index for now, though suspension till 30 June will see it deleted early July.
- Changes to the stocks, number of shares, float and capping results in an estimated one-way turnover of 3.7% and will result in a one-way trade of HK$2,977m.
KOSPI 200 IT Sector Index Rebalancing Flow: Watch Kakao Pay & LG Corp
- We should focus on the weight changes of the existing constituents. For this, two names really stand out: Kakao Pay (+0.44x ADTV) and LG Corp (+0.37x ADTV).
- It is because Kakao Pay and LG Corp will undergo an increase in their float rate in the KOSPI 200 rebalancing, and these up-weights will also affect this sector index.
- Their combined inflow size (KOSPI 200 & KOSPI 200 IT) will be 1.41x and 1.16x ADTVs. This will be the most substantial, except for Kakao Bank and the new additions.
Index Rebalance & ETF Flow Recap: MSCI, ASX, NIFTY, KRX, PCOMP, HSI, HSCEI, HSTECH, SK Tel, GoTo
- Plenty of review announcements after the close on Friday – HSI, HSCEI, HSTECH, FTSE AW/AC, Sensex. Most changes were as expected.
- There are a lot of review cutoffs on Monday and announcements expected later in the week (KOSPI200, KOSDAQ150, CSI300, STAR50).
- There were inflows to Hong Kong, Taiwan, Korea and Australia focused ETFs during the week, while there were outflows from China, Japan and India focused ETFs.
Asia-Pac Weekly Risk Arb Wrap: Kinetsu World, Hwa Hong, MyDeal, Kito, Virtus Health, Irongate, HKBN
- There are 41 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three news deals this week: Kintetsu World Express (9375 JP)‘s Tender Offer, Woolies tilt for MyDeal.com (MYD AU), Hwa Hong (HWAH SP)‘s MBO, & KKR’s bid for Kito (6409 JP)
- Key updates took place for: Virtus Health (VRT AU) &Irongate Group (IAP AU)
Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan
- The downside to Woodside Petroleum (WPL AU) remains, but the reasoned downside is smaller than it was before.
- CVC walks, but it doesn’t stop Brambles Ltd (BXB AU) privatisation speculation.
- If Tabcorp and The Lottery Corp are seen as low volatility growth properties, then the stability of cashflow puts it into rarified air among “growth bias” which has gotten trashed.
Before it’s here, it’s on Smartkarma
