Daily BriefsMost Read

Most Read: Brilliance China Automotive, Li Auto, PEXA Group, Adani Enterprises, Jinko Solar, Jb Financial Group, CP ALL PCL, Sabana Industrial REIT, Bank of Kyoto and more

In today’s briefing:

  • HSCI Index Rebalance Preview and Stock Connect: A Lot of Change
  • HSI Index Rebalance Preview: Better Late Than Never?
  • Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi
  • ASX200 Index Rebalance: PEXA to Replace Pendal
  • SENSEX Index Rebalance Preview: Adani Enterprises Could Replace Wipro
  • CSI300 Index Rebalance Preview: Early Look at Potential Changes in June
  • KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)
  • CP ALL PCL (CPALL TB) – A King for All Seasons
  • Sabana REIT (SSREIT SP): Partial Offer from Volare
  • Last Week In SPACE: Bank of Kyoto, WM Motors, Japanese Banks, Hong Kong Aerospace, CP ALL/MAKRO

HSCI Index Rebalance Preview and Stock Connect: A Lot of Change

By Brian Freitas

  • We see 44 potential adds (including plenty of new listings) and 19 potential deletes (on market cap, liquidity and suspension) for the Hang Seng Composite Index in March.
  • We expect 37 stocks to be added to Southbound Stock Connect following the rebalance while 37 stocks could be deleted from the trading link and become Sell-only. 
  • There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

HSI Index Rebalance Preview: Better Late Than Never?

By Brian Freitas

  • There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.
  • We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.
  • All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi

By Brian Freitas


ASX200 Index Rebalance: PEXA to Replace Pendal

By Brian Freitas


SENSEX Index Rebalance Preview: Adani Enterprises Could Replace Wipro

By Brian Freitas

  • A third of the way through the review period of the June rebalance, we see one potential index change with Adani Enterprises (ADE IN) replacing Wipro Ltd (WPRO IN)
  • Adani Enterprises (ADE IN) could move lower in the short-term due to the public issue of shares but should find support from passive buying from local and global index trackers.
  • Wipro Ltd (WPRO IN) has underperformed most of its peers by a wide margin over the last year and the passive selling could provide an entry point.

CSI300 Index Rebalance Preview: Early Look at Potential Changes in June

By Brian Freitas

  • Two thirds of the way through the review period, we see 15 potential index changes at the June rebalance that will be implemented at the close on 9 June.
  • We estimate a one-way turnover of 2.35% at the June rebalance leading to a one-way trade of CNY 5.57bn.
  • The potential adds have outperformed the potential deletes and the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) over the last six months, though there is some near-term deterioration.

KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)

By Brian Freitas


CP ALL PCL (CPALL TB) – A King for All Seasons

By Angus Mackintosh

  • CP ALL is a unique and high-quality proxy for the recovery in domestic consumer demand plus increasing tourist arrivals, which should soon see a further boost from China.
  • We would expect a strong finish to the year with an even stronger pickup in 2023 across convenience stores, Lotus supermarkets and hypermarkets, as well as Siam Makro cash-and-carry. 
  • CP ALL is a top growth pick in Thailand, with EPS expected to grow by +35% and 25% for FY2023E and FY2024E, with ongoing expansion and economic recovery.

Sabana REIT (SSREIT SP): Partial Offer from Volare

By Arun George

  • Sabana Industrial REIT (SSREIT SP) disclosed a partial offer from Volare to acquire a maximum of 109.6 million units at $0.465 per unit, a 9.4% premium to the undisturbed price.
  • The partial offer is conditional on minimum acceptances representing 10.00% of outstanding units. Quarz Capital, the activist fund, says the offer is attractive.
  • ESR Group (1821 HK), the sponsor, is unlikely to tender. Based on a proration of 13.54% and at the last close price of S$0.425, the breakeven price is S$0.420.

Last Week In SPACE: Bank of Kyoto, WM Motors, Japanese Banks, Hong Kong Aerospace, CP ALL/MAKRO

By David Blennerhassett

  • Japanese banks are the hottest new thing but unless you think Bank of Kyoto is going to change its spots, it’s still best thought of as a range trade. 
  • WM Motors opts for a backdoor listing via merging with WE Solutions Limited (860 HK). There’s probably a good reason for doing so.
  • You pay for the liquidity of Japanese banks by paying a higher PBR against not as much improvement in ROE. That’s life.

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