In today’s briefing:
- Laopu Gold (6181 HK): Global Index Inclusion Likely Derailed by Full Circulation
- CSI Medical Service Index Rebalance Preview: Five Potential Changes in June
- IDX30/LQ45/IDX80 Index Rebalance: Few Changes
- FnGuide Top10 Index Rebalance Preview: Big Flow in Large Cap Stocks
- Evolution Mining (EVN AU): Global Index Inclusion in May as Gold Rallies
- Sigma Healthcare (SIG AU): Next Round of Passive Buying Around the Corner
- Hanwha Ocean (042660 KS) Placement: Index Implications; Stock Appears Wildly Overvalued
- Ather Energy IPO: Expensive and No Immediate Index Inclusion
- ASX200 (AS51 INDEX) Outlook: Rallying Out of a Bear Market Amid Passive Flows And Sector Strength
- Clarifying the Key Points on Lee Jae-Myung’s Legal Risk and How It Could Affect the Trade
Laopu Gold (6181 HK): Global Index Inclusion Likely Derailed by Full Circulation
- Laopu Gold (6181 HK) was on track to be added to a global index given its large H-share market cap and a free float that was close to 20%.
- Completion of the full circulation in April pushed H-share market cap higher while free float market cap remained the same. Crucially, free float dropped below 15%.
- Laopu Gold (6181 HK) could miss index inclusion in May, while inclusion in August will need some selling from non-float investors following lock-up expiry in June.
CSI Medical Service Index Rebalance Preview: Five Potential Changes in June
- The review period ends on 30 April, the changes should be announced on 30 May and will be effective after the close of trading on 13 June.
- We forecast 5 potential changes for the index in June where there could be buying of 0.5-2x ADV in the adds and selling of between 0.7-3.8x ADV in the deletes.
- The forecast adds and deletes have performed in line over the last few months and there could be outperformance as we near the end of the review period and announcement.
IDX30/LQ45/IDX80 Index Rebalance: Few Changes
- There is 1 constituent change for the IDX30 Index and 2 changes for the IDX80 Index to be implemented at the close on 30 April.
- The largest passive flows are expected in Bank Rakyat Indonesia, Bank Jago Tbk PT, Bank Mandiri Persero, Bank Tabungan Negara Persero, Adaro Energy and Bukalapak.com PT Tbk.
- There are only 4 days to implementation, so there could be relatively big moves on the changes to the IDX30 Index.
FnGuide Top10 Index Rebalance Preview: Big Flow in Large Cap Stocks
- The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of around US$660m.
- We currently forecast two potential changes at the next rebalance in June – both are high probability changes.
- The trade has performed well historically with positive performance till implementation followed by reversion post implementation in most cases.
Evolution Mining (EVN AU): Global Index Inclusion in May as Gold Rallies
- Evolution Mining‘s stock price has moved higher over the last year as Gold has gone on a big run. The increased market cap should result in a global index inclusion.
- Evolution Mining (EVN AU) has performed in line with its peers over the last year and trades in line with the group on most valuation parameters.
- Positioning has jumped in Evolution Mining (EVN AU) and its peers over the last couple of months. The index inclusion could result in outperformance over the next few weeks.
Sigma Healthcare (SIG AU): Next Round of Passive Buying Around the Corner
- There was big passive buying in Sigma Healthcare (SIG AU) in March from S&P/ASX trackers following the completion of the merger with Chemist Warehouse Group.
- Sigma Healthcare (SIG AU) should be added to a global index in May and those passive trackers will have a lot of stock to buy.
- While there will be positioning in the stock, it appears lighter than the estimated passive buying. Shorts are being covered and that could provide a boost.
Hanwha Ocean (042660 KS) Placement: Index Implications; Stock Appears Wildly Overvalued
- Korea Development Bank is looking to sell 13m shares of Hanwha Ocean (042660 KS). That is US$740m at the top end of the marketed range and 4x ADV.
- Following the sale, Korea Development Bank will still own over 15% of the company and that will be an overhang for the stock. Plus the stock appears wildly overvalued.
- There will be limited buying from passive trackers at the time of the placement with bigger passive flows coming through in June and August.
Ather Energy IPO: Expensive and No Immediate Index Inclusion
- Ather Energy is looking to raise INR 30bn (US$349m) in its IPO, valuing the company at INR 120bn (US$1.4bn). The company appears to be expensive compared to peers.
- Ather Energy could be added to one global smallcap index in August/November and to another in December/March. Small Cap classification for AMFI and no major local index inclusion.
- The continued selloff in Ola Electric will give investors pause, especially given Ather Energy‘s stagnant market share and continued losses. There is supply in Ola Electric with PE/VC investors selling.
ASX200 (AS51 INDEX) Outlook: Rallying Out of a Bear Market Amid Passive Flows And Sector Strength
- Over the past three weeks, the S&P/ASX 200 (AS51 INDEX) has staged one of the strongest rebounds since the early April Trump-tariff shock, rallying approximately +15% from its 16-month low.
- Several factors are driving the rally: recent passive flow activity, as highlighted by Brian Freitas but also broad-based sector strength, with notable gains in energy, healthcare, and consumer staples.
- Despite a positive outlook, our models indicate the index is currently OVERBOUGHT. This insight breaks down the key details.
Clarifying the Key Points on Lee Jae-Myung’s Legal Risk and How It Could Affect the Trade
- If the judicial overhang is overstated, it could distort the regime-change narrative and create new entry points for a deep value setup.
- The local tape is overpricing post-win disqualification risk, creating a fear premium that could be low-hanging alpha for contrarians willing to fade the noise.
- Monitor Lee’s poll numbers, as public sentiment impacts the judiciary. This offers a chance to front-run shifts and capitalize on the next rotation, potentially turning into a stealthy upside play.
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