In today’s briefing:
- HSCEI Index Rebalance Preview: China Shenhua (1088) Could Replace Country Garden (2007); Div Impact
- Index Rebalance & ETF Flow Recap: MSCI China, S&P/ASX, KOSDAQ150, KOSPI, CPSE/Bharat22, YES, OZL
- MVIS Australia Equal Weight Index Rebalance: One Deletion & Other Changes
- MVIS Global Junior Gold Miners Index Rebalance: Three Deletions & Float Changes
- MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes on Friday
- MVIS Australia A-REITs Index Rebalance: Float/Capping Changes
- KOSDAQ150 Ad Hoc Index Rebalance: Lake Materials (281740) To Replace Kuk Il Paper (078130)
- CSI300 Index Rebalance Preview: Narrowing the Gap
- 3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
HSCEI Index Rebalance Preview: China Shenhua (1088) Could Replace Country Garden (2007); Div Impact
- China Shenhua Energy Co H (1088 HK) could replace Country Garden Holdings Co (2007 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance.
- Short interest on China Shenhua Energy Co H (1088 HK) is pretty small while the short interest on Country Garden Holdings Co (2007 HK) is large and possibly getting bigger.
- The change could result in a big increase in the fair value for the HSCEI 2023 dividend futures. Currently, we estimate an increase of up to 9 DIPS.
Index Rebalance & ETF Flow Recap: MSCI China, S&P/ASX, KOSDAQ150, KOSPI, CPSE/Bharat22, YES, OZL
- Some KOSPI indices rebalanced at the close on Thursday while the Hang Seng family of indices and the SSE STAR50 (STAR50 INDEX) rebalanced at the close on Friday.
- The S&P/ASX family, MVIS family and a bunch of other indices will rebalance at the close on coming Friday.
- After seeing big inflows over the last couple of years, outflows from Samsung KODEX Secondary Battery ETF (305720) and Mirae Asset TIGER Secondary Cell ETF (305540) have started to pick up.
MVIS Australia Equal Weight Index Rebalance: One Deletion & Other Changes
- Harvey Norman Holdings (HVN AU) will be deleted from the MVIS Australia Equal Weight Index at the close of trading on 17 March.
- One way turnover is 3.9% resulting in a one-way trade of A$68m. Only Harvey Norman Holdings (HVN AU) has more than 1 day of ADV to sell from passive trackers.
- Harvey Norman Holdings (HVN AU) has underperformed Myer Holdings (MYR AU) significantly over the recent past and the index deletion could provide an entry point into a trade.
MVIS Global Junior Gold Miners Index Rebalance: Three Deletions & Float Changes
- Dacian Gold Ltd (DCN AU), Gold Resource (GORO US) and Wallbridge Mining Co (WM CN) will be deleted from the index at the close on 17 March.
- One way turnover is estimated at 2.8% resulting in a one-way trade of US$96m. There is over 1 day of ADV to trade on 22 stocks.
- The largest inflows are on Triple Flag Precious Metals (TFPM US), Osisko Gold Royalties, Zhaojin Mining Industry, New Found Gold (NFG CN), Yamana Gold, IAMGOLD and First Majestic Silver.
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes on Friday
- There are no constituent changes for the MVIS Global Rare Earth/Strategic Metals Index at the March rebalance. There are free float and capping changes though.
- One way turnover is estimated at 3.1% and will result in a one-way trade of US$19m. Flows are relatively small with no impact over 1x ADV on any stock.
- The June rebalance should have constituent changes with an increase in the number of stocks in the index universe.
MVIS Australia A-REITs Index Rebalance: Float/Capping Changes
- The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 17 March. There are no constituent changes, but there are float and capping changes.
- Estimated one-way turnover at the rebalance is 1.8% resulting in a one-way trade of A$11.1m. There is limited impact on the index constituents.
- The largest inflows are on Stockland, HomeCo Daily Needs REIT, Gpt Group and Charter Hall, while the largest outflows are on Goodman Group, Vicinity Centres, Dexus Property and Scentre Group.
KOSDAQ150 Ad Hoc Index Rebalance: Lake Materials (281740) To Replace Kuk Il Paper (078130)
- Following Kuk Il Paper Mfg (078130 KS)‘s designation as an Administrative Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Lake Materials (281740 KS).
- The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 6 April.
- Lake Materials (281740 KS) was up today and is nearing its highs. There could be another leg higher on the inclusion but we’d be wary of chasing the stock higher.
CSI300 Index Rebalance Preview: Narrowing the Gap
- Over 85% of the way through the review period, we see 14 potential index changes at the June rebalance that will be implemented at the close on 9 June.
- We estimate a one-way turnover of 2.28% at the June rebalance leading to a one-way trade of CNY 5.95bn.
- The potential adds have outperformed the CSI 300 Index over the last two months but have underperformed the potential deletes. The gap has been narrowing recently.
3P Learning (3PL): Rare Listed EdTech, Offering Exposure to the Growth in Digital Instruction
- Addition of Writing Legends to existing maths and literacy apps will create more opportunities to upsell and cross-sell.
- Brightpath, the recently acquired assessments technology provider, adds a new horizontal with the potential to reduce school customer churn
- Competition is high from groups such as DreamBox, IXL, ABC Mouse, Khan Academy and BYJU’S . 3P Learning remains a significant player with a strong customer base and improving product portfolio.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
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