In today’s briefing:
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25
- KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December
- China Hongqiao (1378 HK): Index Impact of US$1.2bn Placement
- AMFI Stock Reclassification Preview (Dec 2025): New Listings Shaking Up the Rankings
- KOSPI200 Index Rebalance: Nearly Perfect
- KOSDAQ150 Index Rebalance: 16 Changes a Side; Fadu a Casualty Yet Again
- HSI INDEX Tactical Outlook Ahead of December 6 Rebalance
- Korea’s 25% Dividend Tax Basically Locked In, Market Now Trading the 30% Payout Angle
- [Quiddity Index] SP500/600 Dec25 Rebal: Two ADDs Two DELs and 3 Intra-Review Changes Likely Soon
- HSTECH Index Rebalance: Leapmotor (9863 HK) To Replace ASMPT (522 HK) As Trade Hits US$3.5bn
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 5 December.
- We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.
- CATL (3750 HK) will have a 6-month trading history by implementation of the index changes and is a high probability inclusion to the index. But cornerstone lock-up ends tomorrow.
KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December
- The review period for the December rebalance of the CSI Overseas China Internet Index ended 31 October. The changes should be announced 28 November and implemented close on 12 December.
- There could be 6 inclusions for the KraneShares CSI China Internet ETF (KWEB US) in December with most inclusions being high probability.
- Impact on the inclusions varies between 1.3-5 days of ADV. There will be stocks with float increases and some capping changes.
China Hongqiao (1378 HK): Index Impact of US$1.2bn Placement
- China Hongqiao (1378 HK) is looking to raise US$1.2bn via a top-up placement at an indicative price of HK$29.2/share, a 9.6% discount from the last close.
- There will be limited passive buying from global index trackers at the time of settlement of the placement shares. However, there are a couple of potential index inclusions in December.
- Then there will be more passive buying from trackers of a global index, Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) next year.
AMFI Stock Reclassification Preview (Dec 2025): New Listings Shaking Up the Rankings
- We forecast 7 stocks moving from MidCap to LargeCap, 10 stocks moving from LargeCap to MidCap, 3 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.
- From the new listings, 13 stocks are expected to be added to Large Cap, 5 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
- With the review period nearing completion, there could still be more outperformance given the momentum, but we would look to take profit on the stocks as the divergence gets wider.
KOSPI200 Index Rebalance: Nearly Perfect
- There will be 7 additions and 8 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 11 December.
- As expected, there are no adhoc inclusions as Samsung Epis Holdings is added to the index to offset the gap created by the Hyundai Heavy/ Hyundai Mipo merger.
- The adds have outperformed the deletes very handily while also outperforming the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) but by a much narrower margin.
KOSDAQ150 Index Rebalance: 16 Changes a Side; Fadu a Casualty Yet Again
- There will be 16 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 11 December.
- Making use of their discretionary powers, the index committee has not added Wonik Holdings Co., Ltd (030530 KS), Samhyun (437730 KS) and Fadu (440110 KS) to the index.
- The adds have outperformed the deletes and the KOSDAQ 150 Index over the last 6 months and there has been a short-term move higher too. Watch out for short covering.
HSI INDEX Tactical Outlook Ahead of December 6 Rebalance
- As Brian Freitas recently outlined, the Hang Seng Index (HSI INDEX) changes will be announced November 21st (this Friday) and take effect on December 6th.
- Brian predicted index additions and no deletions. As with all rebalances, inflows, outflows, and adjustments could trigger volatility. Our models, trained on decades of market data, help forecast these moves.
- Currently the HSI INDEX is in a mild WEEKLY correction, after a previous modest 2-week rally. We are still waiting for a meaningful correction, after the recent monster rally.
Korea’s 25% Dividend Tax Basically Locked In, Market Now Trading the 30% Payout Angle
- Starting next week, the tax subcommittee is set to hash out the 25% proposal, and with the opposition unlikely to block it, the 25% top rate is basically locked in.
- The street’s treating 30% payout as base case, betting on more upside. The committee may pick it up next week, with headlines likely hitting the KRX tape fast.
- Locals are already chasing 30%+ payout, deep-value names, with gov’t aiming for a Taiwan-style re-rating. If dividend-tax headlines drop next week, these screened names could rip.
[Quiddity Index] SP500/600 Dec25 Rebal: Two ADDs Two DELs and 3 Intra-Review Changes Likely Soon
- The SP 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- In this insight, we take a look at the upcoming constituent changes in the run up to the December 2025 index rebal event.
- We expect two regular changes in December 2025. There are also multiple live M&A events which are likely to trigger intra-review index changes.
HSTECH Index Rebalance: Leapmotor (9863 HK) To Replace ASMPT (522 HK) As Trade Hits US$3.5bn
- As expected, Zhejiang Leapmotor Technologie (9863 HK) will replace ASM Pacific Technology (522 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the December rebalance.
- Estimated one-way turnover is 4.7% and that results in a round-trip trade of HK$27.5bn (US$3.5bn). There is between 8.7-9.8 days of ADV to trade in the two stocks.
- Capping and float changes results in chunky flows to some other stocks and there could be big price moves over the next week.
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