In today’s briefing:
- CATL (3750 HK): Cornerstone Lock-Up Expiry, Passive Flows, H/A Premium
- Alibaba Drops 8%: What Friday’s U.S. Sell-Off Means for Hong Kong Stocks
- Hunting Trades in Korea Semis Materials & Equip ETF Ahead of the Dec Rebalance
- Merger Arb Mondays (13 Oct) – Dongfeng, Hang Seng, Soft99, Toyota Industries, Pacific Ind, Mandom
- Hanon Systems Rights Deal Suddenly Heating Up for CJ CGV–Style Arb as Hahn & Co Confirms Sitting Out
- Lynas Rare Earths (LYC AU): Global Index Inclusion & Passive Flows as Rare Earths Get Rarer
- TSMC (2330.TT; TSM.US): U.S. Stocks Plunged on October 10 Under Heavy Selling Pressure.
- Quiddity Leaderboard HSIII Dec25/Mar26: Expected ADDs Strongly Outperforming Expected DELs
- Zijin Gold (2259 HK): Global Index Inclusion Post-IPO Price Surge & Lock-Up Expiry
- Quiddity Leaderboard HSTECH Dec25: Final Ranks; US$1.7bn One-Way
CATL (3750 HK): Cornerstone Lock-Up Expiry, Passive Flows, H/A Premium
- CATL (3750 HK) listed in May by selling 135.579m shares (including the Offer Size Adjustment Option) at HK$263/share. The overallotment option of 20.337m shares was also exercised in full.
- Nearly 50% of the IPO shares were allotted to cornerstone investors. The lock-up on those investors ends on 19 November. That increases float and will bring in passive flows.
- CATL (3750 HK) is trading at a big premium to CATL (300750 CH) and that could start to move lower as the number of free float shares increases.
Alibaba Drops 8%: What Friday’s U.S. Sell-Off Means for Hong Kong Stocks
- Context: Friday’s sell-off occurred after the Hong Kong market closed, but several Hong Kong–listed companies were caught up in the rout through their U.S.-listed ADRs.
- This Insight details the impact on 15 prominent Hang Seng Index constituents — including Alibaba, Tencent, and HSBC. Implied volatility in U.S.-traded options on these ADRs moved sharply in response.
- Why Read: Understand what to expect when the Hong Kong market reopens after the weekend — both in terms of price performance and implied volatility.
Hunting Trades in Korea Semis Materials & Equip ETF Ahead of the Dec Rebalance
- Next rebalance is Dec 12; Simmtech (222800 KS) looks set to replace Philoptics, with a KRW 0.8T market cap gap making it a high-conviction front-runner.
- Dongjin Semicam and Daeduck clear market cap but face keyword-score risk; PSK Holdings vs S&S Tech is tight — final screening will decide, so front-running carries caution.
- December rebalance AUM doubled; Simmtech and Philoptics could see ~1x DTV passive flows, likely triggering an even stronger passive price impact than last cycle.
Merger Arb Mondays (13 Oct) – Dongfeng, Hang Seng, Soft99, Toyota Industries, Pacific Ind, Mandom
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Smart Share Global (EM US), Mayne Pharma (MYX AU), ENN Energy (2688 HK), Soft99 Corp (4464 JP), Dongfeng Motor (489 HK), Joy City Property (207 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Mandom Corp (4917 JP), Humm Group (HUM AU), Ainsworth Game Technology (AGI AU), Seven West Media (SWM AU).
Hanon Systems Rights Deal Suddenly Heating Up for CJ CGV–Style Arb as Hahn & Co Confirms Sitting Out
- Hahn & Co, holding 21.63% of Hanon, won’t join the rights issue, raising the odds of a CJ CGV–style stock rights dump hitting the market.
- Hanon’s rights float mirrors CJ CGV (~17% post-ESOP), with Hahn & Co likely to sell, limited local demand, and potential follow-on selling pressure.
- Hanon’s 50% rights at 15% discount offer smaller float than CJ CGV, but larger deal size and weak EV sentiment create a potential CJ CGV–style arb, with SSF tradability.
Lynas Rare Earths (LYC AU): Global Index Inclusion & Passive Flows as Rare Earths Get Rarer
- Lynas Corp Ltd (LYC AU)‘s stock price has more than doubled in the last few months as equity markets rally, the rare earth boom continues, and export restrictions are imposed.
- The significant increase in market cap and free float market cap should result in the stock being added to a global index in November.
- There will be positioning for the inclusion (and that partly explains the recent run-up in the stock). But with export controls continuing, there could be further upside.
TSMC (2330.TT; TSM.US): U.S. Stocks Plunged on October 10 Under Heavy Selling Pressure.
- U.S. President Donald Trump announced a 100% tariff on China.
- Facing the escalation of the U.S.–China tariff war, U.S. stocks plunged on October 10 under heavy selling pressure.
- Facing the escalation of the U.S.–China tariff war, U.S. stocks plunged on October 10 under heavy selling pressure.
Quiddity Leaderboard HSIII Dec25/Mar26: Expected ADDs Strongly Outperforming Expected DELs
- The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
- In this insight, we take a look at the December 2025 index capping flows.
- We have also presented our index change expectations for the next semiannual index review which will take place in March 2026.
Zijin Gold (2259 HK): Global Index Inclusion Post-IPO Price Surge & Lock-Up Expiry
- Zijin Gold (2259 HK) debuted on the HKEX on 30 September and soared more than 80% from its IPO offer price reaching a market cap of ~$44bn.
- Inclusion in Global All-World is expected in March 2026, with an upweight in June 2026 following the lock-up expiry.
- Inclusion in Global Standard is expected in May 2026 following the lock-up expiry. Inclusion in February 2026 is not unlikely despite the low float due to price surge.
Quiddity Leaderboard HSTECH Dec25: Final Ranks; US$1.7bn One-Way
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at our final expectations of index changes and the resultant capping flows for HSTECH index rebal event in December 2025.
- We expect one index change and roughly US$1.7bn in one-way index flows in December 2025.
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