In today’s briefing:
- Light & Wonder (LNW AU): Index Implications of NASDAQ Delisting & ASX Primary Listing
- HSTECH Index Rebalance Preview: Can Leapmotor Leap into the Index?
- India: Potential Free Float Changes & Passive Flows in November
- HSCEI Index Rebalance Preview: 3 Changes as Adds Go Up, Up & Away
- KOSDAQ150 Index Rebalance Preview: Large Number of Changes Likely in December; Huge Outperformance
- SSE50 Index Rebalance Preview: 4 Potential Changes in December
- CES China Semiconductor Chips Index Rebalance Preview: One Change Likely in Dec
- HEW: Caution Echoes Outside the BoE
- Pinelabs IPO Review – Another Fintech IPO Exactly 4yrs After Paytm – Can It Buck the Trend?
- Hong Kong Single Stock Options Weekly (Nov 03–07): Growing Split Between Old and New Economy Sectors
Light & Wonder (LNW AU): Index Implications of NASDAQ Delisting & ASX Primary Listing
- Light & Wonder (LNW US) will stop trading on the NASDAQ after the close on 12 November and the sole primary listing will move to Light & Wonder (LNW AU).
- Index trackers will need to sell a lot of Light&Wonder (LNW US) at the close on 12 November. The buying in Light&Wonder (LNW AU) is a lot smaller.
- Light & Wonder (LNW AU) trades at a much lower forward PE compared to Aristocrat Leisure (ALL AU) and there could be a re-rating over the medium-term.
HSTECH Index Rebalance Preview: Can Leapmotor Leap into the Index?
- There could be 1 change for the Hang Seng TECH Index (HSTECH INDEX) in December. Announcement is on 21 November with implementation at the close on 5 December.
- Depending on the stocks included in the universe, ASM Pacific Technology (522 HK) could be deleted and that could lead to Zhejiang Leapmotor Technologie (9863 HK)‘s inclusion.
- If the add and deletes are as forecast, one-way turnover will be 4.25% and will result in a round-trip trade of HK$25.3bn (US$3.22bn).
India: Potential Free Float Changes & Passive Flows in November
- Companies in India have disclosed their shareholding pattern as of end-September in October. There are companies with significant float changes from end-June and/or end-March.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in flow from passive trackers.
- Depending on the date that the shareholding was published, there could be 20 stocks with passive inflows from global trackers while 6 could have passive outflows in November.
HSCEI Index Rebalance Preview: 3 Changes as Adds Go Up, Up & Away
- There could be 3 changes for the Hang Seng China Enterprises Index (HSCEI INDEX) in December. Announcement is on 21 November with implementation at the close on 5 December.
- The forecast adds have moved higher over the last few months and handily outperformed the forecast deletes and the Hang Seng China Enterprises Index (HSCEI INDEX).
- There has been aggressive short covering in the forecast adds and there could be more in stocks where short interest is still a high percentage of float.
KOSDAQ150 Index Rebalance Preview: Large Number of Changes Likely in December; Huge Outperformance
- With the review period for the December rebalance complete, we highlight 17 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
- The estimated impact on the potential inclusions ranges from 0.1-3.2 days of ADV while the impact on the potential deletions varies from 0.7-11.2 days of ADV.
- The forecast adds have outperformed the forecast deletes over the last 6 months with a big move higher in the last couple of months. Trim positions into strength.
SSE50 Index Rebalance Preview: 4 Potential Changes in December
- With the review period complete, there are 6 non-constituents in direct inclusion zone and 4 current constituents in direct deletion zone. However, as usual, there will be discretion used.
- 4 changes result in a one-way turnover of 4%, leading to a round-trip trade of CNY 17bn (US$2.4bn). Index arb balances will increase the impact on the stocks.
- The index committee has used discretion in selecting the index adds and deletes and that could continue to be the case at this review too.
CES China Semiconductor Chips Index Rebalance Preview: One Change Likely in Dec
- All Winner Technology (300458 CH) could replace StarPower Semiconductor (603290 CH) in the CES China Semiconductor Chips Index at the close of trading on 12 December.
- Cambricon Technologies Lt (688256 CH)‘s index weight is currently higher than 10% and the stock will be capped to limit its index weight.
- The forecast add has outperformed the forecast delete over the last year and recent market volatility (and valuations) has narrowed the gap.
HEW: Caution Echoes Outside the BoE
- The BoE resisted cavalier calls for a rate cut this week, but it is much less cautious than we expected. A December rate cut is now likely, absent significant upside surprises.
- All other central bank announcements this week fit the trend, with cautious holds in Australia, Sweden, Norway, Malaysia and Brazil, and a more careful cut in Mexico.
- Next week’s UK labour market (and GDP) data are one of the few things that could clear the evidential hurdle to block a cut, although we doubt good news will extend that far.
Pinelabs IPO Review – Another Fintech IPO Exactly 4yrs After Paytm – Can It Buck the Trend?
- Pine Labs is a fintech company supporting digitization of commerce through digital payments and issuing solutions for merchants, consumer brands and enterprises, and financial institutions.
- While the company has been growing in line with peers, its focus on enterprise customers and subscription pricing stands out, while peers have focused on merchants with a %-fee model.
- IPO priced at sharp discount to expectations ($2.5bn vs $6bn), which is fair given changing business/industry dynamics. Pending RBI investigation and potential selling from early investors are other near-term concerns.
Hong Kong Single Stock Options Weekly (Nov 03–07): Growing Split Between Old and New Economy Sectors
- Markets steadied in North America suggesting a firmer open for Hong Kong stock on Monday.
- Hong Kong market breadth improved notably, suggesting broader participation despite uneven performance across sectors.
- Option activity eased slightly, though Call demand remained steady relative to overall volume.
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