In today’s briefing:
- MSCI May 2022 Index Rebalance: In-Line With a Few Surprises
- MSCI May 2022 Index Rebalance: Flow Due to FIF Changes
- MSCI May 2022 Index Rebalance: Small Cap Changes and Flow
- Cosmo Oil (5021) Shareholder Return Policy Is Bigger Than It Looks
- Short-Term Reverse Flow Trading on SK Telecom
MSCI May 2022 Index Rebalance: In-Line With a Few Surprises
- For Asia Pacific, there are 48 adds/76 deletes across markets with the most changes in China and the highest net changes in Japan. We got 94% of the names right.
- Surprise names are MR D.I.Y. Group, AU Small Finance Bank, Guangzhou Automobile Group, Yunnan Botanee Bio-Technology, Westports Holdings, Indocement Tunggal Prakarsa, DiDi Global and Yantai Eddie Precision Mac-A.
- As expected, there are listing switches for Baidu (BIDU US), Bilibili Inc (BILI US), New Oriental Education (EDU US) and GDS Holdings (ADR) (GDS US).
MSCI May 2022 Index Rebalance: Flow Due to FIF Changes
- There are quite a lot of stocks that have changes to their Foreign Inclusion Factor (FIF) at the May SAIR since MSCI comprehensively assesses the float for stocks.
- The largest passive inflows will be on Tencent, Kuaishou Technology, JD Health, Macquarie Group, Shin Etsu Chemical, Recruit Holdings, Olympus Corp, Naver Corp and Sun Hung Kai Properties.
- Changes to FIFs are tougher to forecast and not very widely tracked, so pre-positions are likely to be lower and the stocks with higher ADV to buy/sell should outperform/underperform.
MSCI May 2022 Index Rebalance: Small Cap Changes and Flow
- MSCI has announced changes to the Small Cap Index. For Asia Pacific, there are 220 adds and 160 deletes. Most adds are in India, most deletes are in Japan.
- Flows are not huge, but there is a big impact on a lot of stocks. Some of the stocks have moved today and there could be more.
- There are a lot of stocks that crossover with changes on other indices and there will be same way flow on a lot of stocks over the next few weeks.
Cosmo Oil (5021) Shareholder Return Policy Is Bigger Than It Looks
- Cosmo Energy Holdings (5021 JP), subject of a selldown by its major shareholder (discussed here), then a large stake purchase by activist Murakami-san (discussed here) announced earnings and a buyback.
- The buyback is large enough to matter to other shareholders.
- The shareholder structure is interesting enough that investors need to pay attention to the possibilities.
Short-Term Reverse Flow Trading on SK Telecom
- Heavy shorts came out in a short trading window. Usually, this is likely to be strategic trading by a few institutional investors, which causes PBS to set up loan transactions.
- We should then consider the possibility that short positions betting on MSCI deletion will be sold back to the market by PBS who set up loan transactions after short-covering
- SKT is likely to undergo a share price correction due to a short-term overhang, and we need to consider setting up a position aimed at this.
Before it’s here, it’s on Smartkarma
