In today’s briefing:
- Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Methodology Change Leads to US$1.25bn Trade
- CSI500/1000 Index Rebalance Preview: Adds Outperform Deletes Early On, Then Hit a Wall
- UK: Jobless Embolden Bailey’s Cut
- CSI All Share Semiconductor Index Rebalance Preview: Adds Starting to Outperform
- SENSEX Index Rebalance Preview: Tata Motors OUT; Indigo IN; Grasim – Dark Horse
- Quiddity Leaderboard HSIII Dec25/Mar26: One Change for Dec25; New Expected ADD/DELs for Mar26
- [Quiddity Index] Light & Wonder (LNW US/AU) US Delisting Event – Updating The Assumptions/Estimates
- Kangji Medical (9997 HK): A Close Run Thing
- On China Shengmu (1432)’s Conditional MGO
- Happy Singles’ Day! How Alibaba (9988 HK) And JD.com (9618 HK) Move After 11/11
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Methodology Change Leads to US$1.25bn Trade
- Following the methodology update for the HSIII Index, there could be up to 5 constituent changes in December.
- Estimated one-way turnover is 12.8% and that will result in a round-trip trade of HK$9.8bn (US$1.25bn).
- Xiaomi (1810 HK) is the biggest beneficiary of the new methodology while there will be large funding outflows for a lot of the current index constituents.
CSI500/1000 Index Rebalance Preview: Adds Outperform Deletes Early On, Then Hit a Wall
- With the review period complete, we forecast 50 changes for the CSI Smallcap 500 Index and 100 changes for the CSI 1000 Index at the December rebalance.
- We estimate a one-way turnover of 10.15% for the CSI Smallcap 500 Index and 10.22% for the CSI1000 Index. Gross round-trip trade across both indices is CNY 73.4bn (US$10.3bn).
- The outright forecast adds have outperformed the outright forecast deletes over the last 6 months with most of the outperformance coming between June and August.
UK: Jobless Embolden Bailey’s Cut
- Another disappointing rise in the unemployment rate should embolden Bailey’s bias to cut rates in December. Falling net underemployment contradicts, but is easily ignored.
- Another step down in payrolls, matched by employment this time, could be blamed on fears for the Budget. Redundancies also spiked, although vacancies are stable.
- Headline pay growth is slowing as expected, while the monthly impulse remains excessively strong, so the hawks are unlikely to see inflation persistence as broken.
CSI All Share Semiconductor Index Rebalance Preview: Adds Starting to Outperform
- The review period for the December rebalance of the CSI All Share Semiconductor Index ended 31 October. The changes should be announced on 28 November and implemented on 12 December.
- We forecast 3 adds and 6 deletes for the index with a one-way turnover of 1.4% and a round-trip trade of CNY 609m (US$85m).
- The forecast adds have outperformed the forecast deletes over the last few weeks and stocks that have same-way flows from other index trackers could exhibit higher volatility near-term.
SENSEX Index Rebalance Preview: Tata Motors OUT; Indigo IN; Grasim – Dark Horse
- With the review period complete, there could be one change for the S&P BSE SENSEX Index (SENSEX INDEX) at the December rebalance.
- Following the demerger of the Commercial Vehicle business, the drop in market cap for Tata Motors (TTMT IN) could result in index deletion.
- InterGlobe Aviation Ltd (INDIGO IN) is a potential inclusion to the index, but there is a small possibility of Grasim Industries (GRASIM IN) being added to the index instead.
Quiddity Leaderboard HSIII Dec25/Mar26: One Change for Dec25; New Expected ADD/DELs for Mar26
- The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
- We expect one index change in December 2025 translating to capping flows of US$530mn one-way.
- We also expect seven index changes for the next semiannual index review which will take place in March 2026.
[Quiddity Index] Light & Wonder (LNW US/AU) US Delisting Event – Updating The Assumptions/Estimates
- Light & Wonder (LNW US) will be delisted at the close of tomorrow US time (two trading days left) and shares converted to Australian CDIs.
- After studying the matter we have amended our assumptions on how flows work. More net selling than expected in November, irksome uncertainy in December, more buyback flows in the meantime.
- The stock was higher on earnings in Australia, skipped a day, then skipped another day, then jumped in the US yesterday.
Kangji Medical (9997 HK): A Close Run Thing
- 6.95%. That’s the key number at yesterday’s Scheme Meeting for Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK).
- That’s still below the 10% blocking stake. But closer than the bankers and the market was anticipating.
- Arguably, the terms were therefore bang on. Last day of trading is today, with payment on the 16th December.
On China Shengmu (1432)’s Conditional MGO
- On the 30th October, China Modern Dairy (1117 HK) (CMD) entered into a conditional SPA to acquire a 1.28% stake in raw milk producer China Shengmu Organic Milk (1432 HK) (CSM).
- CMD currently holds 29.99% in CSM. Should the SPA complete, CMD clears 30% and will be obligated to make an Offer for all shares not held.
- The Offer Price will be A$0.35/share, a 14.75% premium to undisturbed. The Offer will be conditional on a 50% acceptance hurdle.
Happy Singles’ Day! How Alibaba (9988 HK) And JD.com (9618 HK) Move After 11/11
- Alibaba (9988 HK) and JD.com (9618 HK) often see heightened volatility following Singles’ Day (11 November), though performance varies by year.
- Alibaba’s post-event returns are mixed, averaging nearly twice its normal four-day move, while JD.com has shown stronger and more consistent gains.
- Option markets imply elevated short-term volatility—especially for JD.com—with potential trading opportunities around the 14 November expiry.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
