In today’s briefing:
- HSCEI Index Rebalance Preview: Four Sets of Changes from July to September
- TOPIX Rebalance: Flows at the Close on 29 June
- Prosus, Tencent, JD.com – Good Intentions but Questionable Timing
- GCL Poly (3800 HK): Double Index Inclusion & HUGE Passive Inflows
- Prosus/Naspers – Operation Ouroboros Commences, And It’s Big (Discount, Flows, Index Impact)
HSCEI Index Rebalance Preview: Four Sets of Changes from July to September
- Sunac China Holdings (1918 HK) is still suspended from trading and could be deleted from the index in July and replaced by SenseTime Group (20 HK) or PetroChina (857 HK).
- SenseTime (20 HK) or PetroChina (857 HK), Great Wall (2333 HK) and Zhongsheng (881 HK) could replace Haidilao (6862 HK), CPIC (2601 HK) and Alibaba Health (241 HK) in September.
- There will be buying on SenseTime Group (20 HK) from HSCEI INDEX and HSTECH INDEX trackers. But there is also a big lock-up expiry on 29 June.
TOPIX Rebalance: Flows at the Close on 29 June
- The third tranche of the FFW methodology change for the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) will be implemented at the close of trading on 29 June.
- One-Way flow is ~JPY 742bn and will be spread across 2170 stocks. The largest inflow will be on NTT (9432 JP) and the largest outflow on Toyota Motor (7203 JP).
- Stocks with the largest impact of inflows have outperformed stocks with the largest impact of outflows, but there has been underperformance over the last couple of weeks.
Prosus, Tencent, JD.com – Good Intentions but Questionable Timing
- Today Prosus announced that it will begin an open-ended share repurchase programme of Prosus and Naspers shares which will be funded by on-market sale of Tencent shares.
- Prosus also announced that it has sold its entire shareholding in JD.com, to raise US$3.67bn, on-market in Jun 2022.
- In this note, we talk about the implication and timing of today’s announcements.
GCL Poly (3800 HK): Double Index Inclusion & HUGE Passive Inflows
- After being suspended for 7 months for not publishing its 2020 annual results, Gcl Poly Energy Holdings Limited (3800 HK) resumed trading on 1 November 2021.
- We expect Gcl Poly Energy Holdings Limited (3800 HK) to be added to the MSCI China Index in August and to the FTSE All-World Index in September.
- Passive index trackers will need to buy over US$1.1bn of stock over the next few months. The stock has run-up inline with peers and this demand could keep it supported.
Prosus/Naspers – Operation Ouroboros Commences, And It’s Big (Discount, Flows, Index Impact)
- I wanted to write this insight over the weekend but could not finish it, but now there is new news to warrant it.
- Today, Prosus (PRX NA) announced it had sold the 131,873,028 JD.com Inc. (9618 HK) shares it received in the Tencent (700 HK) distribution. This is as expected. Proceeds were US$3.67bn.
- Also announced this morning is “the beginning of an open-ended share repurchase programme of Prosus and Naspers (NPN SJ) shares.” The details are the key to everything.
Before it’s here, it’s on Smartkarma
