In today’s briefing:
- HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
- CATL (3750 HK): The Tail Wags the Dog
- Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
- China A50 ETFs Rebalance Preview: One Change Highly Likely
- CSI All Share Semiconductor Index Rebalance Preview: 13 Potential Changes in June
- PCOMP Index Rebalance Preview: One Set of Changes as PLUS Runs Away
- CSI Medical Service Index Rebalance Preview: Five Changes as Trade Flatlines
- Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (23 May to 6 June 2025)
- June Rebalance Intel: Announcement Date & Key Names for KOSPI 200 & KOSDAQ 150
- Eternal Vs. Swiggy: A Battle for Market Share or a Fight to Stay in the Game?
HSTECH Index Rebalance: BYD (1211 HK) To Replace China Literature (772 HK) As Trade Hits US$6bn
- As expected, BYD (1211 HK) will be added to the Hang Seng TECH Index (HSTECH INDEX) in June following the launch of God’s Eye, its Advanced Driver-Assistance System (ADAS).
- BYD (1211 HK)‘s inclusion results in China Literature (772 HK) being deleted from the index. China Literature stock should drop over the near-term.
- Estimated one-way turnover at the rebalance is 13% resulting in a round-trip trade of HK$46.5bn (US$5.95bn). There are 16 stocks that have at least 1x ADV to trade from passives.
CATL (3750 HK): The Tail Wags the Dog
- The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
- The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
- Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.
Hang Seng Index (HSI) Rebalance: Midea (300 HK) & ZTO Express (2057 HK) Added; Inching Towards a 100
- Midea Group (300 HK) and ZTO Express Cayman (2057 HK) will be added to the Hang Seng Index (HSI INDEX) in June to take us up to 85 index constituents.
- Estimated one-way turnover is 2.9% and the estimated round-trip trade is HK$11.3bn (US$1.44bn) with over 1x ADV to trade in the adds and in one stock with a FAF increase.
- There could be a short-term drop in the AH premium for Midea Group while this inclusion ensures ZTO Express Cayman is a member of all major indices where eligible.
China A50 ETFs Rebalance Preview: One Change Highly Likely
- With the review cutoff done, there could be one change for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in June.
- As the highest ranked non-ETF member, Seres Group (601127 CH) could replace China United Network A (600050 CH) in the ETF at the close on 20 June.
- China United Network A (600050 CH) was added to the ETF in March, so this could be a very short stint in the ETF for the stock.
CSI All Share Semiconductor Index Rebalance Preview: 13 Potential Changes in June
- The review period for the June rebalance of the CSI All Share Semiconductor Index ended 30 April. The changes should be announced on 30 May and implemented on 13 June.
- We forecast 4 adds and 9 deletes for the index with a one-way turnover of 2.7% and a round-trip trade of CNY 1.2bn (US$167m).
- Some stocks have overlaps with changes to the CES China Semiconductor Chips Index and the CNI Semiconductor Chips Index and there will be increased passive flow for those stocks.
PCOMP Index Rebalance Preview: One Set of Changes as PLUS Runs Away
- With 90% of the review period for the August rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) complete, there could be one change for the index.
- DigiPlus Interactive (PLUS PM) should replace Bloomberry Resorts (BLOOM PM) in the index. Bloomberry Resorts (BLOOM PM) also has some global passive selling at the close on 30 May.
- DigiPlus Interactive (PLUS PM) is up 25x over the last couple of years and is up 46% since we identified the stock as a potential index inclusion.
CSI Medical Service Index Rebalance Preview: Five Changes as Trade Flatlines
- The review period ended on 30 April, the changes should be announced on 30 May and will be effective after the close of trading on 13 June.
- There could be 5 changes in June where passive trackers will need to trade between 0.7-2x ADV in the forecast adds and sell between 1-4x ADV in the forecast deletes.
- A long adds/ short deletes trade has gone nowhere in the last 6-7 months, and the volatility of the trade has reduced even further in the last couple of months.
Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (23 May to 6 June 2025)
- In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks (23 May to 6 June 2025).
- Our top 10 picks were up on average 2.4% in the past two weeks (from 9 to 23 May), outperforming KOSPI which was up 0.6% in the same period.
- The top 10 picks in this bi-weekly include Samsung Securities, LG Uplus, Amorepacific Holdings, Samsung C&T, JYP Entertainment, Nongshim, Krafton, LS Electric, F&F, and Emart.
June Rebalance Intel: Announcement Date & Key Names for KOSPI 200 & KOSDAQ 150
- Looks like the KOSPI200/KOSDAQ150 June rebal is a lock for post-close Tuesday (27th)—KRX has already signaled this to local media over the weekend.
- Muted pre-positioning this time, likely from weak volumes and no market lead—sets up for punchier price action right after today’s rebalance drop.
- Over ~3 weeks, KRW 40T/3.5T passive AUM tracked KOSPI200/KOSDAQ150. With shorts fully back, deletes may trade heavy—sets up well for more aggressive long-short positioning.
Eternal Vs. Swiggy: A Battle for Market Share or a Fight to Stay in the Game?
- Zomato (ZOMATO IN) and Swiggy (SWIGGY IN) saw strong revenue growth, but intense competition and quick commerce costs led to declining profits or increased losses.
- Zomato(Eternal) holds a strong advantage in food delivery profitability, reporting INR 428 crore adjusted EBITDA, and its IOCC status offers potential inventory benefits.
- Swiggy uses quick commerce for acquisition, scaling Bolt for speed which drives over 12% of food orders and boosts retention.
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