In today’s briefing:
- Taishin (2887 TT)/Shin Kong (2888 TT) Merger: Index Flows in July
- HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added
- FWD Group (1828 HK): Offering Details & Index Entry Timeline
- Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes
- HSTECH Index Rebalance Preview: Universe Expansion Could Lead to One Change
- AMFI Stock Reclassification Preview (Jun 2025): Active Flows Lead to Passive Flows
- HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace J&T Global (1519 HK)
- KOSPI Size Indices: Overlaps Between Active & Passive Flows
- Johns Lyng (JLG AU): PEP’s A$4/Share Offer Looks Light
- HEW: Kicked Can Lands Steady
Taishin (2887 TT)/Shin Kong (2888 TT) Merger: Index Flows in July
- Taishin Financial Holding (2887 TT) and Shin Kong Financial Holding (2888 TT) announced a Merger of Equals in August 2024 and completion is expected on 24 July.
- Taishin Financial Holding (2887 TT) has underperformed its peers over the last 18 months while Shin Kong Financial Holding (2888 TT) has underperformed its peers following the merger announcement.
- There will be passive flows in the merged entity following the completion of the merger and could help reverse some of Taishin Financial Holding (2887 TT)‘s underperformance.
HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added
- We see 28 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.
- A lot of the potential adds are very recently listed stocks that have a limited trading history. The low free float could lead to price spikes in the stocks.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
FWD Group (1828 HK): Offering Details & Index Entry Timeline
- FWD Group Holdings (FWD HK) is looking to raise up to HK$3.99bn (US$508m) in its IPO, valuing the company at HK$48.82bn (US$6.22bn).
- Cornerstone investors will take up more than half the base offering and that will delay index inclusion to well into 2026.
- FWD Group Holdings (FWD HK) could be added to the HSCI Index and Southbound Stock Connect in December. That could bring some buying into the stock from mainland investors.
Nikkei 225 Index Rebalance Preview (Sep 2025): Potential Adds, Deletes, PAF, Capping & Other Changes
- The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in 4 weeks. There could be one outright change and one or two others driven by sector balance.
- There will be passive buying in BayCurrent Consulting as the PAF moves from 0.5 to 1. Fast Retailing (9983 JP)‘s index weight is below the 10% cap for now.
- ROHM Co Ltd (6963 JP) replaces NTT Data Corp (9613 JP) later this week and there will be a lot of focus on those names.
HSTECH Index Rebalance Preview: Universe Expansion Could Lead to One Change
- The review period for the September rebalance of the Hang Seng TECH Index ended on 30 June, the changes will be announced on 22 August and implemented on 5 September.
- No constituent changes will result in a one-way turnover of 4.1% and that will mean a round-trip trade of HK$15.2bn (US$1.94bn).
- An expansion of the index universe could lead to one constituent change and that increases the one-way turnover to 6.2% and the round-trip trade to HK$23.1bn (US$2.94bn).
AMFI Stock Reclassification Preview (Jun 2025): Active Flows Lead to Passive Flows
- We forecast 10 stocks moving from MidCap to LargeCap, 11 stocks moving from LargeCap to MidCap, 10 stocks from SmallCap to MidCap, and 13 stocks from MidCap to SmallCap.
- From the new listings, 1 stock is expected to be added to Large cap, 2 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
- There are multiple stocks among the AMFI changes that will be changes for global indices, NIFTY Index, NSE Nifty Next 50 Index and/or Nifty Midcap 150 Index in September.
HSCEI Index Rebalance Preview: Pop Mart (9992 HK) Could Replace J&T Global (1519 HK)
- The review period for the September rebalance of the HSCEI INDEX ended on 30 June, the results will be announced on 22 August and will be implemented on 5 September.
- Pop Mart International Group L (9992 HK) could be added to the index while J&T Global Express (1519 HK) could be deleted from the index.
- There is a possibility of Pop Mart International Group L (9992 HK) being added to the Hang Seng Index (HSI INDEX) as well.
KOSPI Size Indices: Overlaps Between Active & Passive Flows
- The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
- Nearing halfway in the review period, we forecast 53 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.
- Two potential downward migrations could be deleted from a global index in August. The new listing that is a potential LargeCap add could be added to a globalindex in September.
Johns Lyng (JLG AU): PEP’s A$4/Share Offer Looks Light
- A month ago, Integrated building services provider Johns Lyng (JLG AU) fielded a non-binding Offer, by way of a Scheme, from Aussie fund manager Pacific Equity Partners (PEP).
- JLG and PEP have now entered into a SID at A$4/share, a 77% premium to undisturbed. CEO Scott Didier, JLG’s largest shareholder with 17.64%, is supportive.
- A shareholder vote is expected to take place in October, with the transaction potentially wrapping up in November. This may need more gruel.
HEW: Kicked Can Lands Steady
- Trump kicked the tariff can a few weeks to 1 August, leaving other policymakers and markets in a wait-and-see mode. Pricing was little changed amid little news elsewhere.
- We thematically explored the market implications of resilience rolling cuts later, how healthy the US labour market data is, and dug into the UK’s political problems.
- Next week’s UK labour market and inflation data are critical ahead of an August BoE decision we believe remains finely balanced. US and EA inflation are other highlights.
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