In today’s briefing:
- Hang Seng Indexes: Announcement Tomorrow; Potential Changes & Updated Flows
- Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25
- NIFTY MIDCAP150 Index Rebalance: 13 Changes a Side; Lots of Overlap with Other Index Flow
- Dongfeng Motor (489 HK): DFM’s Attractive Privatisation Offer
- Hang Seng Biotech Index Rebalance: 1 Add & 21 Deletes as Methodology Changes
- S&P/ASX 200: Profit Targets After Sep-25 Rebalance Methodology Finalized
- Biologics Spinco Filing: Posts Far More Aggressive Post-Listing Share Swap Lock-Up Than Expected
- Hang Seng Internet & IT Index (HSIII) Rebalance: 3 Changes; Big FAF Increase for Horizon Robotics
- [Quiddity Index] The Sony Financial Spinoff – What To Do?
Hang Seng Indexes: Announcement Tomorrow; Potential Changes & Updated Flows
- Hang Seng Indexes announces changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index, HSIII Index, HSHKBIO Index and HSCI Index post market close tomorrow.
- The net round-trip trade across the stocks is estimated to be HK$54.3bn (US$6.9bn) with big impact in a lot of names.
- The largest inflows will be in Geely Auto if added to the HSTECH, Pop Mart if added to the HSCEI and HSI, and Horizon Robotics due to a FAF increase.
Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning
- The changes to the Nikkei 225 (NKY INDEX) as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.
- BayCurrent Consulting‘s PAF will double, Fast Retailing‘s CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from Sony Corp (6758 JP).
- Sanrio (8136 JP)‘s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.
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.
NIFTY MIDCAP150 Index Rebalance: 13 Changes a Side; Lots of Overlap with Other Index Flow
- There are 13 changes a side for the NIFTY Midcap 150 Index at the September rebalance. There are many stocks with flows from passive trackers of other indices.
- Estimated one-way turnover is 7.8% resulting in a round-trip trade of INR 18.23bn (US$209m). With over US$43bn tracking the index actively, the impact on the stocks will be much larger.
- The adds to the index have outperformed the deletes over the last 5 months and there has been noticeable outperformance in the last couple of weeks.
Dongfeng Motor (489 HK): DFM’s Attractive Privatisation Offer
- Dongfeng Motor (489 HK) disclosed a pre-conditional privatisation by merger by absorption by Dongfeng Motor Corporation, along with a proposed distribution and listing of VOYAH shares.
- The offer comprises HK$6.68 + 0.3552608 VOYAH H Shares per H Share, which is valued at HK$10.85 per H Share, a 81.7% premium to the last close price.
- The vote is low risk as the offer is attractive. It values the remaining business at a premium multiple, and the appraised value of HK$11.735 per VOYAH share is conservative.
Hang Seng Biotech Index Rebalance: 1 Add & 21 Deletes as Methodology Changes
- There is 1 add and 21 deletions for the Hang Seng Biotech Index (HSHKBIO Index) at the September rebalance.
- Estimated one-way turnover at the rebalance is 11.25% resulting in a round-trip trade of HK$1.77bn (US$226m).
- The deletes have underperformed the HSHKBIO Index since the start of the year with the gap opening up over the last two months following the announcement of the methodology change.
S&P/ASX 200: Profit Targets After Sep-25 Rebalance Methodology Finalized
- As reported by Brian Freitas , 2 days ago S&P DJI confirmed that the proposals in the market consultation will be implemented at the September 25 rebalance. Details here.
- The S&P/ASX 200 (AS51 INDEX) is currently OVERBOUGHT according to our models: the index reached an 83% probability of reversal at the intraweek high (9025). Incoming pullback.
- The index could rally one more week (next week), that should be the end of this rally (short-term forecast), but could also pull back this week, checkour modelkey-supports.
Biologics Spinco Filing: Posts Far More Aggressive Post-Listing Share Swap Lock-Up Than Expected
- KRX’s prelim review forced Biologics into tough commitments: no share swaps or carve-out IPOs for three years, effectively blocking any Samsung C&T stake sell-down and overlapping-listing risks.
- FSS appears satisfied with Biologics’ aggressive commitments, but may push for more—most likely a lock-up from Samsung C&T preventing share sales in both parent and spinco for a set period.
- Trading setup remains short Samsung C&T; recent Life bill chatter is noise. Samsung governance reform is low-priority, and Biologics’ aggressive spinco lock-ups reinforce C&T as the near-term underperformer.
Hang Seng Internet & IT Index (HSIII) Rebalance: 3 Changes; Big FAF Increase for Horizon Robotics
- There will be 3 changes for the Hang Seng Internet & Information Technology Index (HSIII Index) at the September rebalance.
- Estimated one-way turnover at the rebalance is 10.3% resulting in a round-trip trade of HK$6.4bn (US$818m). There are a bunch of stocks with over 0.5x ADV to trade.
- There is a huge FAF increase for Horizon Robotics and that will bring passive buying from the HSTECH trackers too. The stock is being added to a global index on Tuesday.
[Quiddity Index] The Sony Financial Spinoff – What To Do?
- Sony Financial Group (perhaps 8729 JP) will be spun off from SONY on 29 September 2025. The nominal share price will be “low” – likely 4-6% of Sony’s price.
- Index treatment is largely known with the exception of a market cap trigger to stay in or get the boot from one major global index provider’s set of large-midcap indices.
- There is a buyback to come which will offset global active manager “I don’t want this” overhang. There are technical trades to do here too but overall I am positive.
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