In today’s briefing:
- HSI Index Rebalance: Baby Steps; Double Inclusion for Haier Smart Home
- HSCEI Index Rebalance: Four Sets of Changes; And Some Close Calls
- Hang Seng Index Dec22 Rebal – 3 IN, None Out (The March to 80 Continues)
- FTSE All-World/All-Cap Index Rebalance: Watch Golden Agri-Resources & Delhivery
- SENSEX Dec 22 Index Rebalance: Tata Motors (TTMT) To Replace Dr Reddy (DRRD)
- Hang Seng TECH Index Rebalance: Float & Capping Changes
- HSCEI Dec 2022 Rebalance – 4 IN, 4 OUT, 3% One-Way Flow
- Index Rebalance & ETF Flow Recap: HSCI, S&P/ASX, HSI, HSCEI, KOSPI2, KOSDAQ150, Wharf, Meituan
- ECM Weekly (20th Nov 2022) – I-Tail, Growatt, Lygend, SinoHytech, Meituan/Tencent, Olympus, Paytm
- S&P/ASX Quiddity Final Expectations Dec 22: Mostly Mining Companies, Avoid Short Buildup!
HSI Index Rebalance: Baby Steps; Double Inclusion for Haier Smart Home
- The inclusion of Tingyi Holding (322 HK), China Resources Mixc Lifestyle Services (1209 HK) and Haier Smart Home Co Ltd (6690 HK) gets us to 76 index constituents.
- Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 2.01% and will result in a one-way trade of HK$3,845m.
- Shorts on Haier Smart Home Co Ltd (6690 HK) and Tingyi Holding (322 HK) are around 5% of float and covering could take the stocks higher.
HSCEI Index Rebalance: Four Sets of Changes; And Some Close Calls
- There are 4 adds and 4 deletes for the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance. The only surprises are some non-adds and non-deletes.
- Using prices from the close on 18 November, estimated one-way turnover is 4.64% and will result in a one-way trade of HK$2,612m at the close on 2 December.
- Short interest is larger on the deletes than the adds. However, at 17 days of ADV to cover and 11.7% of float, short interest on Zhongsheng Group is huge.
Hang Seng Index Dec22 Rebal – 3 IN, None Out (The March to 80 Continues)
- Hang Seng Index continues its march to 80 names, after which it will commence a march, or a slog, to 100 names in an effort to gain more comprehensive coverage
- Doing so will admit names which move to Hong Kong from New York and will make way for more dynamism and lower SOE weights.
- The three ADDs are Tingyi Holding (322 HK), China Resources Mixc Lifestyle Services (1209 HK), and Haier Smart Home Co Ltd (6690 HK) with a pro-forma combined weight just <1%.
FTSE All-World/All-Cap Index Rebalance: Watch Golden Agri-Resources & Delhivery
- For Asia Pacific, there are 2 adds to the FTSE All-World Index, 2 adds to the FTSE All-Cap Index and 2 deletions from the FTSE All-World Index.
- All changes are on expected lines. The one surprise is the non-inclusion of Rainbow Children’s Hospital (RAINBOW IN) to the All-Cap Index where it likely just failed investable market cap.
- Sungeel Hitech (365340 KS) is also an add to the KOSDAQ 150 Index at the close on 8 December, while there is a huge lock-up expiry for Delhivery (DELHIVER IN).
SENSEX Dec 22 Index Rebalance: Tata Motors (TTMT) To Replace Dr Reddy (DRRD)
- As forecast, Tata Motors Ltd (TTMT IN) will be added to the S&P BSE SENSEX Index (SENSEX INDEX) in December to replace Dr. Reddy’s Laboratories (DRRD IN).
- We estimate passive trackers will need to buy 2.3x ADV (7.2x delivery volume) on Tata Motors Ltd (TTMT) while selling 5x ADV (10.5x delivery volume) on Dr. Reddy’s Laboratories (DRRD).
- The HDFC Limited (HDFC IN) / HDFC Bank (HDFCB IN) merger should see Adani Enterprises (ADE IN) added to the S&P BSE SENSEX Index (SENSEX INDEX) prior to the June rebalance.
Hang Seng TECH Index Rebalance: Float & Capping Changes
- As expected, there are no adds or deletes for the Hang Seng Tech Index (HSTECH INDEX) in December. However, there are plenty of capping and float changes to drive flows.
- The December rebalance is expected to have a one-way turnover of 2.3% resulting in a one-way trade of HK$1.9bn.
- Short interest is greater than 5% of float on a few stocks and a continued recovering in markets could lead to a squeeze higher.
HSCEI Dec 2022 Rebalance – 4 IN, 4 OUT, 3% One-Way Flow
- The HSCEI sees 4 names out, 4 names in. The ADDs are PetroChina (857 HK), Zhongsheng Group (881 HK), Li Auto (2015 HK), Haier Smart Home Co Ltd (6690 HK).
- The DELETEs are Alibaba Health Information Technology (241 HK), China Gas Holdings (384 HK), Innovent Biologics Inc (1801 HK), and Bilibili (9626 HK).
- One way volume is just under 4.7% with all the name changes, FAF changes, and capping flows.
Index Rebalance & ETF Flow Recap: HSCI, S&P/ASX, HSI, HSCEI, KOSPI2, KOSDAQ150, Wharf, Meituan
- Plenty of index change announcements in the last week – Kospi 200 Index, KOSDAQ 150 Index, Hang Seng Index, HSCEI, HSTECH, S&P BSE SENSEX Index and FTSE AW/AC Index.
- There are a bunch of indices that have the end of their review periods in the coming week while announcements for China indices are expected post market close on Friday.
- There were outflows from ETFs for most Asian markets over the week with China and Hong Kong ETFs taking the biggest hits.
ECM Weekly (20th Nov 2022) – I-Tail, Growatt, Lygend, SinoHytech, Meituan/Tencent, Olympus, Paytm
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, Indian IPOs delivered some decent performance while HK IPOs are likely to pick up as well.
- There were a number of placement and blocks this week, after the expiry of lockups in a few Indian names.
S&P/ASX Quiddity Final Expectations Dec 22: Mostly Mining Companies, Avoid Short Buildup!
- In this insight, we take a look at the potential index changes for S&P ASX 200, 100, 50, and 20 in the run up to the December 2022 Rebalance.
- The 6-month reference period for the December 2022 Rebalance is now complete.
- I do not see any changes for ASX 20 or ASX 100. I see one ADD/DEL for ASX 50 and three ADDs/DELs for ASX 200.
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