In today’s briefing:
- NIFTY Bank Index: Big Flows & The Upcoming Methodology Change
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25
- FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in September
- UK Excess Inflation Expectations
- Hanon Systems Announces a Major Potential Rights Offering
- Hansoh Pharma Placement – Somewhat Expected but Still Opportunistic
- Pop Mart (9992 HK) – Core Reasons for High Growth and Performance Forecast
- MV Australia Equal Weight Index Rebalance Preview: Three Potential Deletions in September
- M&A Battle for TaylorMade
- HMM Tender Side Play: Targeting a Basis Squeeze Ahead of Sep Expiry
NIFTY Bank Index: Big Flows & The Upcoming Methodology Change
- In May, SEBI recommended changes to the minimum number of constituents for non-benchmark indices and the capping for those indices. The recommendations have to be implemented by 3 November.
- There is a high probability that NSE Indices implements the changes for the NSE Nifty Bank Index (NSEBANK INDEX) at the September rebalance. Nothing has been announced yet though.
- If implemented in September, Yes Bank and Union Bank Of India could be added to the index. Estimated one-way turnover is 22.35% and the round-trip trade is INR 149bn (US$1.7bn).
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25
- 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 September.
- 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 completes 3 months of listing just prior to the review meeting date and is a dark horse candidate, though the committee could let the stock season for another quarter.
FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in September
- With the averaging period for the October rebalance starting in two weeks, we forecast 2 changes for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.
- Based on the passive assets tracking the index, there will be between 1.5-4.7x ADV to trade in the forecast changes.
- On average, the forecast adds have outperformed the forecast deletes by a wide margin over the last 3 months and could reverse some of the changes from the April rebalance.
UK Excess Inflation Expectations
- The upwards trend in consensus inflation forecasts reflects persistent excess effective expectations supporting wages amid policymakers’ failure to re-anchor at the target.
- Easing on the assumption of success predictably negated the required conditions, so we forecasted the problem. Nonetheless, expectations were also stickier than we assumed.
- Without renewed progress, wage growth should keep trending above the BoE’s forecast, discouraging further rate cuts. Hikes may even be needed in 2026 to break excesses.
Hanon Systems Announces a Major Potential Rights Offering
- On 14 August, Hanon Systems (018880 KS) announced a potential rights offering capital raise. The exact amount will be finalized at the EGM next month.
- The significant size of the rights offering is expected to burden its largest shareholder Hankook Tire & Technology (161390 KS) which owns a 54.8% stake in Hanon Systems.
- We believe the potential rights offering is likely to continue to negatively impact Hanon Systems by diluting its existing shareholders.
Hansoh Pharma Placement – Somewhat Expected but Still Opportunistic
- Hansoh Pharmaceutical Group (3692 HK) aims to raise around US$500m via a primary placement.
- The stock has done exceptionally well this year but is now trading at near its all-time highs and it doesn’t really need the cash.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Pop Mart (9992 HK) – Core Reasons for High Growth and Performance Forecast
- In bleak consumption environment, Pop Mart is definitely an “outsider”.Explanations such as “lipstick effect” are more like a self-consistent logic, which may have some sense, but doesn’t constitute core contradiction.
- To truly understand the investment value of Pop Mart, it’s necessary to assess future growth potential.We think overseas revenue could reach RMB16-17 billion in 2025 and RMB42 billion in 2026.
- Net profit CAGR in 2024-2026 could be about 79.5%. Pop Mart would still maintain high growth in short-term. But after 2026, there are uncertainties of channel policies and IP-driven factors.
MV Australia Equal Weight Index Rebalance Preview: Three Potential Deletions in September
- Nearing the end of the review period, we forecast no inclusions to the index in September. There could be up to 3 deletions at the review though.
- Even if there are no constituent changes, capping changes will lead to one-way turnover of 3.8% and a round-trip trade of A$232m.
- If there are 3 deletes as forecast, one-way turnover increases to 6.3% resulting in a round-trip trade of A$384m.
M&A Battle for TaylorMade
- TaylorMade is up for sale. TaylorMade is one of the most valuable, golf equipment brands globally.
- We labeled this article as Bearish due to concerns about F&F getting into this M&A battle for TaylorMade in the first place which could result in overpaying for this deal.
- We would rather have F&F take the win and provide higher returns to its shareholders.
HMM Tender Side Play: Targeting a Basis Squeeze Ahead of Sep Expiry
- Most traders are starting in September, rolling into October. Sep/Oct spread volume has picked up unusually fast, clearly reflecting hedge demand linked to the tender
- As September expiry approaches, basis-squeeze risk rises, likely pushing September cheap and October expensive, widening the spread — creating a clear side trade opportunity.
- With a basis squeeze expected near September expiry, we could enter a Sep/Oct spread (short Sep, long Oct) and also watch for spot-futures decoupling to play the cash-futures spread.
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