Most Read Archives | Page 73 of 91 | Smartkarma

Most changes expected at the MSCI August QIR are in China. This will be the last QIR using the current methodology. The Feb 2023 QIR will use the comprehensive methodology.
There are a lot of changes expected to the FTSE All-World and All-Cap indices at the September SAIR and we list out potential inclusions and exclusions.
Inflows to the KraneShares CSI China Internet ETF (KWEB US) continue as sentiment around China stocks, especially tech, improves.

TOPIX Rebalance: End-July Rebal Is $3.5bn One-Way – Some Big Sell Names

The July-end TOPIX FFW Rebalance is larger than most expected, I believe.
There should be US$3.5bn one-way, with only a couple of major buy names.
Chugai Pharmaceutical (4519 JP), Canon Inc (7751 JP), Unicharm Corp (8113 JP), Kubota Corp (6326 JP), Asahi Group Holdings (2502 JP), and Shiseido (4911) are each US$170mm+ to sell.

KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

A third of the way through the review period, we see one potential change. There are four stocks that are close to inclusion zone and could lead to more changes.
Currently, Miwon Specialty Chemical Co (268280 KS) is an add while Hyundai Home Shopping Network (057050 KS) is a delete.
Samyang Foods (003230 KS), Lotte Confectionery (280360 KS), Unid Co Ltd (014830 KS) and Miwon Commercial (002840 KS) are close adds currently.

TOPIX July Rebalance: Mercari Inclusion, FFW Changes, US$6.5bn To Trade

Mercari Inc (4385 JP) will be added to the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) at the close on 28 July.
There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.
We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).

Mercari (4385) – End-July TOPIX Inclusion Update

In mid-January, I wrote about Mercari’s likely TOPIX inclusion 4-5 months later. 4.5mos later, it had been included (Mercari (4385) TOPIX Inclusion, Finally… And It’s Bigger Than It Looks) .
The publicly-visible announcement data often does not show TOPIX inclusion parameters. A little sleuthing gets you there.
It’s still bigger than it looks, but some large holders have recently been selling.

Hong Kong CEO & Director Dealings – 11th July 2022

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
This insight also flags those companies where shares have been pledged, both recently and ongoing.

China’s Crackdown on Big Tech: Not Over by Any Means

By Oshadhi Kumarasiri

Just as investors were starting to get comfortable investing in Chinese big tech, the Government has imposed new fines on a range of tech companies.
Meanwhile, the June ending quarter could yet again be a disspointment with growth curtailed through lack of funding for loss making businesses.
Having gained around 50% in June 2022 through signs of easing the tech crackdown, these new fines and a weak June-ending quarter could resend tech valuations to March-2022 lows.

Link’s Board Shows Its Hand

By Arun George

The Link Administration (LNK AU) Board will not recommend Dye&Durham/DND’s revised lower offer of A$4.57 per share due to shareholder feedback, the underlying value and alternative options.
The slightly above guidance is designed to show that Link’s contribution to DND’s build a billion objective remains on track and there is little chance of triggering the MAC clause.
DND needs to secure a deal this week to use its attractive deal financing, according to AFR. This could be the cue for DND to give a little more.

Local Pensions’ Spot/Futures Arb on Samsung Electronics & 1P Discount Distortion

The Samsung Electronics single-stock futures trading volume has increased significantly. In the most recent F 202207, the futures/cash TV ratio soared to 80%, considerably higher than the usual 40% level.
Local pension funds are doing spot/futures arbitrage quite aggressively on Samsung Electronics, resulting in unintended consequences, including the 1P discount distortion we witnessed on June 16.
This 1P discount distortion provides a higher spread than futures/spot arbitrage. So, we need to preemptively set up pref arbitrage while closely monitoring Samsung Electronics’ basis.

SOCAR IPO Likely to Be Delayed

By Douglas Kim

After the market close today, Seoul Economic Daily reported that Socar is likely to delay its IPO to later on.
Although Socar has not formally announced that it will delay the IPO, we believe that there is a high probability that the IPO will be postponed.
The overall sentiment on the Socar IPO appears to be negative by many institutional investors, unless the company reduces the IPO price range substantially.

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Jul 11

Most Read: Pylon Technologies Co Ltd, Tianqi Lithium, Giordano International, Yaskawa Electric, Hyundai Home Shopping Network and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance & ETF Flow Recap: MSCI STD, FTSE AW/AC, HSI, KBANK, MDKA
ECM Weekly (10th Jul 2022) -Tianqi, Thai Life, TPG, SK IE, Weilong, Emperador, Soosan, SoCar, Deewin
Merger Arb Mondays (11 Jul) – Link Admin, Ramsay Health, Giordano, VNET, DTAC/True, Hwa Hong
Yaskawa Electric (6506) | Don’t Be Fooled by the “strong” Q1 Print
KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

Index Rebalance & ETF Flow Recap: MSCI STD, FTSE AW/AC, HSI, KBANK, MDKA

Most changes expected at the MSCI August QIR are in China. This will be the last QIR using the current methodology. The Feb 2023 QIR will use the comprehensive methodology.
There are a lot of changes expected to the FTSE All-World and All-Cap indices at the September SAIR and we list out potential inclusions and exclusions.
Inflows to the KraneShares CSI China Internet ETF (KWEB US) continue as sentiment around China stocks, especially tech, improves.

ECM Weekly (10th Jul 2022) -Tianqi, Thai Life, TPG, SK IE, Weilong, Emperador, Soosan, SoCar, Deewin

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
Tianqi managed to pull off the largest HK IPO so far this year, a good listing could see a pickup in other large deals.
For placements, SK IE couldn’t hold on to its deal price, while Ming Yang kicked off what might be a busy GDR season.

Merger Arb Mondays (11 Jul) – Link Admin, Ramsay Health, Giordano, VNET, DTAC/True, Hwa Hong

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
The highest spreads are 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Link Administration (LNK AU), Australian Unity Office Fund (AOF AU).
The lowest gross spreads are Hwa Hong Corp (HWAH SP), Excelpoint Technology (EXLP SP), Uniti Group Ltd (UWL AU), Giordano International (709 HK), MyDeal.com.au Ltd (MYD AU).

Yaskawa Electric (6506) | Don’t Be Fooled by the “strong” Q1 Print

By Mark Chadwick

Q1 OP +8%, but core OP (pre-adjustments) fell 18% YoY on significant decline in profitability
Bulls may point to the surprising strength in orders, but the boost from China re-opening and weaker yen are not reflective of the underlying outlook
We think Yaskawa will be hard-pressed to make full year guidance of ¥72b. Stay bearish for now

KOSPI200 Dec Index Rebalance Preview: Stocks Nearing the Inclusion Zone

A third of the way through the review period, we see one potential change. There are four stocks that are close to inclusion zone and could lead to more changes.
Currently, Miwon Specialty Chemical Co (268280 KS) is an add while Hyundai Home Shopping Network (057050 KS) is a delete.
Samyang Foods (003230 KS), Lotte Confectionery (280360 KS), Unid Co Ltd (014830 KS) and Miwon Commercial (002840 KS) are close adds currently.

Before it’s here, it’s on Smartkarma

Jul 10

Most Read: Nexteer Automotive, Pylon Technologies Co Ltd, Bank Of Iwate, Asbury Automotive and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nexteer (1316): Unjustly Punished and Bounce Soon?
China Stimulus: These Are the Key Beneficiaries
Index Rebalance & ETF Flow Recap: MSCI STD, FTSE AW/AC, HSI, KBANK, MDKA
JAPAN ACTIVISM: Silchester AGM Effort Fails But Bank of Iwate (8345) Is Cheap As Chips
LRT Capital Management June 2022 Investor Update

Nexteer (1316): Unjustly Punished and Bounce Soon?

By Henry Soediarko

Nexteer Automotive (1316 HK) share price fell 50% in Q1 22 due to the China lockdown scare although it has manufacturing facilities all over the world.
It traded below book value at some point and rallied alongside other Chinese names in the past month to currently at book value.
Most of the new business won is from EV OEMs thus the company deserves a higher multiple given the high growth in the EV sector.

China Stimulus: These Are the Key Beneficiaries

By Osbert Tang, CFA

China may bring ahead quota for special purpose bond issuance in 2023 to 2H22. This may potentially at Rmb1.5trn (US$220bn), which will provide big boost to the economy.
For 5M22, the three most important areas of spending of local government bond proceeds are urban construction and industrial park, social services and transport infrastructure.
China State Construction Int’l (3311 HK), Anhui Conch Cement (914 HK), China Railway Group (390 HK), China Conch Venture (586 HK) and Anta Sports (2020 HK) are the top picks.

Index Rebalance & ETF Flow Recap: MSCI STD, FTSE AW/AC, HSI, KBANK, MDKA

Most changes expected at the MSCI August QIR are in China. This will be the last QIR using the current methodology. The Feb 2023 QIR will use the comprehensive methodology.
There are a lot of changes expected to the FTSE All-World and All-Cap indices at the September SAIR and we list out potential inclusions and exclusions.
Inflows to the KraneShares CSI China Internet ETF (KWEB US) continue as sentiment around China stocks, especially tech, improves.

JAPAN ACTIVISM: Silchester AGM Effort Fails But Bank of Iwate (8345) Is Cheap As Chips

Silchester aimed at four mid-sized regional banks and one tiny one. All four efforts failed, but two of the four banks are probably worth looking at.
Bank Of Iwate (8345 JP) is the small one (tiny) worth looking at. It is 0.17x book, <7x earnings, 1.2x market cap in equity holdings, and better-than-average NIM.
Over time, value will out. And while not multi-bagger compelling, the mechanical value arithmetic is interesting.

LRT Capital Management June 2022 Investor Update

By Fund Newsletters

LRT Capital is a fundamental investment hedge fund. We invest only in companies with durable competitive advantages, i.e. “moats.”.
June’s strong results were driven primarily by our hedges, with our portfolio companies declining much less than the market as a whole.
What is likely to determine the directions of stocks over the short-term (the next 6 months), is the outlook for inflation and interest rates over the coming year.
We will happily own many technology companies if their valuations become more attractive.

Before it’s here, it’s on Smartkarma

Jul 09

Most Read: Hang Seng China Enterprises Index, Baidu, Asmedia Technology, Giordano International, WCP and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
HSI Index Rebalance Preview: Finding the Balance
FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades
Giordano (709 HK): Cheng Family’s Offer (Even) Less Viable After Positive Profit Alert
WCP IPO Preview

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

Bilibili (9626 HK) will replace Sunac China Holdings (1918 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 8 July.
While Bilibili (9626 HK)‘s index inclusion is a surprise, the impact from passive fund trading is not a lot. Nothing much one can do on Sunac China Holdings (1918 HK).
The Hang Seng China Enterprises Index (HSCEI INDEX) will drop 16.12 points at the close on 8 July. Something for traders to watch out for over the next week.

HSI Index Rebalance Preview: Finding the Balance

Currently at 69 constituents, it is unlikely that we reach 80 member by year end. Hang Seng Indexes is finding it tough to reach the target by excluding unprofitable companies.
We list 11 stocks that could be added to the index in September – with one-way turnover just over 5%, the actual number of inclusions will be lower.
There are a few potential inclusions where short interest is over 5% of the free float. These stocks could see short covering ahead of announcement of the changes.

FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades

By Janaghan Jeyakumar, CFA

The FTSE TWSE Taiwan Dividend+ Index is an index of stocks with the highest dividend yields in the universe of the FTSE TWSE Taiwan 50 and Mid-Cap 100 Indices.
According to our estimates, the historical average return for index rebalance trades seems to be extremely attractive and the potential volume impact can be significant too.
We feel this is one of the most interesting esoteric indices in the Asia-Pacific region for index rebalance trades.

Giordano (709 HK): Cheng Family’s Offer (Even) Less Viable After Positive Profit Alert

After the close of trading yesterday, Giordano International (709 HK) announced a positive profit alert
Giordano expects an interim net profit of HK$91mn-HK$101mn, a 52%-68% increase over the corresponding period.
The Cheng family’s HK$1.88/share Offer was low-balled from the onset. Substantial shareholder David Webb agrees. This deal is dead without a bump.

WCP IPO Preview

By Douglas Kim

WCP is getting ready for an IPO in Korea in August. This is expected to be one of the largest IPOs in Korea post LG Energy Solution (373220 KS).
The IPO price range is from 80,000 won to 100,000 won. The IPO base deal size is from $560 million to $700 million.
WCP is a leading maker of separators which are key materials used in EV batteries.

Before it’s here, it’s on Smartkarma

Jul 08

Most Read: Tianqi Lithium, Baidu, Asmedia Technology, TPG Telecom Ltd, Link Administration and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MSCI August 2022 Index Rebalance Preview: The Last QIR?
HSI Index Rebalance Preview: Finding the Balance
FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades
TPG Telecom Possible Selldown – Founder Could Look to Raise up to US$1bn with a Clean Exit
Link Admin Mulls Dye & Durham’s Upped Bid

MSCI August 2022 Index Rebalance Preview: The Last QIR?

We see 8 potential inclusions and 1 potential deletion for the MSCI Standard index at the August QIR. Announcement on 12 August (Asia time) and implementation on 31 August.
Largest passive inflows expected on Gcl Poly Energy (3800 HK), Kasikornbank (KBANK TB), Tianqi Lithium (002466 CH) and Qinghai Salt Lake Industry (000792 CH).
There are a few of the China/ Hong Kong listed stocks that could have same way flows from the FTSE trackers a couple of weeks later at the September SAIR.

HSI Index Rebalance Preview: Finding the Balance

Currently at 69 constituents, it is unlikely that we reach 80 member by year end. Hang Seng Indexes is finding it tough to reach the target by excluding unprofitable companies.
We list 11 stocks that could be added to the index in September – with one-way turnover just over 5%, the actual number of inclusions will be lower.
There are a few potential inclusions where short interest is over 5% of the free float. These stocks could see short covering ahead of announcement of the changes.

FTSE TWSE Taiwan Dividend+ Index: A Rare Gem for Index Rebal Trades

By Janaghan Jeyakumar, CFA

The FTSE TWSE Taiwan Dividend+ Index is an index of stocks with the highest dividend yields in the universe of the FTSE TWSE Taiwan 50 and Mid-Cap 100 Indices.
According to our estimates, the historical average return for index rebalance trades seems to be extremely attractive and the potential volume impact can be significant too.
We feel this is one of the most interesting esoteric indices in the Asia-Pacific region for index rebalance trades.

TPG Telecom Possible Selldown – Founder Could Look to Raise up to US$1bn with a Clean Exit

By Sumeet Singh

TPG Telecom was formed by a merger of Vodafone and TPG in Jul 2020. The merger resulted in the shares owned by Vodafone, Hutchison and DavidTeoh, being put in escrow.
The lockup on those shares will expire this month. David Teoh, TPG’s founder, has sold some stock before in Dec 21 and could look to exit his remaining shareholding.
In this note, we talk about the upcoming lock-up release and its dynamics.

Link Admin Mulls Dye & Durham’s Upped Bid

Dye & Durham (D&D) has bumped its offer for Link Administration (LNK AU) to $4.57/share after its prior revised $4.30/share bid was rejected.
Link shareholders may also receive an additional A$0.13 from the sale of the Banking and Credit Management (BCM) business under the latest offer.
Link said it will consider the proposal and continue to engage with D&D.

Before it’s here, it’s on Smartkarma

Jul 07

Most Read: Tianqi Lithium, Mapletree Commercial Trust, Hwa Hong Corp, Bank of Kyoto, SK IE Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MSCI August 2022 Index Rebalance Preview: The Last QIR?
MCT SP as MPACT Creeping Ever Higher Vs Peers
Hwa Hong (HWAH SP): MGO Triggered, Offeror Now Controls 38.2%
JAPAN ACTIVISM: Silchester’s Bank of Kyoto AGM Results – Activism Still Failing
SKIET Block Deal: Passive Impact on TIGER (WISE) Secondary Cell ETF Rebalancing

MSCI August 2022 Index Rebalance Preview: The Last QIR?

We see 8 potential inclusions and 1 potential deletion for the MSCI Standard index at the August QIR. Announcement on 12 August (Asia time) and implementation on 31 August.
Largest passive inflows expected on Gcl Poly Energy (3800 HK), Kasikornbank (KBANK TB), Tianqi Lithium (002466 CH) and Qinghai Salt Lake Industry (000792 CH).
There are a few of the China/ Hong Kong listed stocks that could have same way flows from the FTSE trackers a couple of weeks later at the September SAIR.

MCT SP as MPACT Creeping Ever Higher Vs Peers

Mapletree Commercial Trust (MCT SP) has crept higher vs the Peer Baskets, especially in the last 4-6 weeks as Other S-REITs have weakened.
This sets the stage for a potentially large flowback into S-REITs as a class coming in a few weeks.
It may be time to reconsider positioning, looking at where MPACT has been and will be.

Hwa Hong (HWAH SP): MGO Triggered, Offeror Now Controls 38.2%

As a result of market acquisitions, the Offeror for Hwa Hong Corp (HWAH SP) now holds 30.0%, triggering a mandatory general offer (MGO).
Including shares tendered, the Offeror controls 38.24%. The Offer remains subject to a 50% acceptance condition. HWAH directors holding 29.26% of shares still do not intend to accept the Offer.
The S$0.40/share Offer price has been declared final. The final closing date is 1 August. This transaction will go down to the wire.

JAPAN ACTIVISM: Silchester’s Bank of Kyoto AGM Results – Activism Still Failing

Silchester, after holding Bank of Kyoto (8369 JP) shares 16 years, becoming the largest investor, FINALLY publicly asked the bank to make a gesture to pay out a tiny special div.
The bank rejected them, but they took it to to the AGM. And there Silchester got rejected by the shareholders. Soundly. Hostile activism is not going to be easy here.
But all is not lost. Since December, the bank has raised its payout ratio to 50% and has promised to cut a piece of its cross-holdings in the MTMP.

SKIET Block Deal: Passive Impact on TIGER (WISE) Secondary Cell ETF Rebalancing

This block deal won’t lead to a float increase event. Nevertheless, it will substantially impact the rebalancing of the TIGER (WISE) Secondary Cell ETF next week.
A passive net inflow of up to ₩10B occurs, equivalent to 0.5x ADTV. Indeed, this level provides a significant day trade setup.
With today’s price correction, SKIET’s index weight will drop to the high 4% range. Applying the 36% float to today’s price will increase the weight to 5.5% at the rebalancing.

Before it’s here, it’s on Smartkarma

Jul 06

Most Read: Powerchip Semiconductor Manufacturing Corp, Kasikornbank PCL, SPH REIT, SK IE Technology, Tianqi Lithium and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE All-World/All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China
Kasikornbank (KBANK TB): Potential MSCI Inclusion
SPH REIT Float Drops – Index Impacts To Come (Today and Beyond)
SK IE Technology Placement – Last Deal Didn’t Do Well, More Discount and Cleanup Should Help
MSCI August 2022 Index Rebalance Preview: The Last QIR?

FTSE All-World/All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China

The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 16 September.
For Asia ex-Japan ex-China, we see 7 inclusions to All-World, 58 inclusions to All-Cap, 9 migrations from All-Cap to All-World, 5 migrations from All-World to All-Cap, and 20 deletions.
There are quite a few names in Australia that could have same way flows from the S&P/ASX 200 and S&P/ASX 300 Index trackers on the same day as the FTSE trackers.

Kasikornbank (KBANK TB): Potential MSCI Inclusion

Kasikornbank PCL (KBANK-R TB) was deleted from the MSCI Thailand Index in June 2021 following the issuance of NVDR’s approaching its permitted limit of 25% of issued shares.
With 12 months since deletion complete and meeting market cap, liquidity and foreign room thresholds, Kasikornbank PCL (KBANK TB) could be added to the MSCI Thailand Index in August.
If added to the MSCI Thailand Index, we estimate passive trackers will need to buy 47.39m shares (US$199m; 3.9 days of ADV) of Kasikornbank PCL (KBANK TB) on 31 August.

SPH REIT Float Drops – Index Impacts To Come (Today and Beyond)

The SPH REIT Mandatory Chain Offer resulted in Cuscaden owning 61.68% of SPH REIT (SPHREIT SP)
As per SPH REIT Offer Goes Unconditional – The Option Now and Index Impacts To Come, that meant substantial index downweights to come.
One of those is today. Watch for a chunk of selling at the close.

SK IE Technology Placement – Last Deal Didn’t Do Well, More Discount and Cleanup Should Help

By Sumeet Singh

SK IE Technology’s (SKIE) shareholder aims to raise around US$228m via selling their remaining shareholding.
The same shareholder had sold some of their stake earlier in Nov 21. That deal didn’t end up doing well.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

MSCI August 2022 Index Rebalance Preview: The Last QIR?

We see 8 potential inclusions and 1 potential deletion for the MSCI Standard index at the August QIR. Announcement on 12 August (Asia time) and implementation on 31 August.
Largest passive inflows expected on Gcl Poly Energy (3800 HK), Kasikornbank (KBANK TB), Tianqi Lithium (002466 CH) and Qinghai Salt Lake Industry (000792 CH).
There are a few of the China/ Hong Kong listed stocks that could have same way flows from the FTSE trackers a couple of weeks later at the September SAIR.

Before it’s here, it’s on Smartkarma

Jul 05

Most Read: Gcl Poly Energy Holdings Limited, Tianqi Lithium, Powerchip Semiconductor Manufacturing Corp, Tokyo Stock Exchange Tokyo Price Index Topix, SK Telecom and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE All-World/All-Cap Index Rebalance Preview: Some Big Changes in China
Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline
FTSE All-World/All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China
JAPAN PASSIVE – The GPIF in FY2021
Critical Flaws in the MSCI Methodology for SK Telecom’s Foreign Room Calculation

FTSE All-World/All-Cap Index Rebalance Preview: Some Big Changes in China

The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline

Tianqi Lithium (9696 HK) is looking to sell up to 188.74m shares to raise up to US$1.97bn. Pricing at HK$69-82/share is a 52-43% discount to Tianqi Lithium (002466 CH).
Between 32-38% of the total offer size is being taken by 7 cornerstone investors and they are locked in for 6 months from listing date (expected 13 July).
Tianqi Lithium (9696 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in December. Southbound Stock Connect could come online soon after listing.

FTSE All-World/All-Cap Sep Index Rebalance Preview: Asia Ex Japan Ex China

The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 16 September.
For Asia ex-Japan ex-China, we see 7 inclusions to All-World, 58 inclusions to All-Cap, 9 migrations from All-Cap to All-World, 5 migrations from All-World to All-Cap, and 20 deletions.
There are quite a few names in Australia that could have same way flows from the S&P/ASX 200 and S&P/ASX 300 Index trackers on the same day as the FTSE trackers.

JAPAN PASSIVE – The GPIF in FY2021

The GPIF reported its annual investment results for the FY to March 2022 last Friday. The investment report makes for interesting reading.
The GPIF made 5.42% but alpha was negative 6bp vs time-weighted and money-weighted benchmarks.
The re-allocations amongst asset classes now means more money tracks TOPIX, and it means active managers have their work cut out for them going forward.

Critical Flaws in the MSCI Methodology for SK Telecom’s Foreign Room Calculation

MSCI does not have any explicitly-defined foreign room calculation method for Korean FOL stocks with DRs.
58M shares can still be converted into ADRs, close to 27% of SO. There are still ample foreign rooms for SKT, making its situation quite different from KT’s in 2019.
MSCI, which places the most importance on actual investability, won’t delete SKT, which has a substantial real-world foreign room simply because the nominal value has fallen below the threshold.

Before it’s here, it’s on Smartkarma

Jul 04

Most Read: Gcl Poly Energy Holdings Limited, Seven & I Holdings, Link Administration, SK IE Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE All-World/All-Cap Index Rebalance Preview: Some Big Changes in China
Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
Seven & I Sale of Sogo Seibu Moves Closer
Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

FTSE All-World/All-Cap Index Rebalance Preview: Some Big Changes in China

The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

30 June was the review cutoff date for the next rebalance of the FTSE All-World/All-Cap Index, HSI INDEX, HSCEI INDEX, HSTECH INDEX, HSCI Index, PCOMP INDEX and the LQ-45 Index.
Bilibili (9626 HK) replaces Sunac China Holdings (1918 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 8 July.
There were big inflows to iShares MSCI China (ETF) (MCHI US) during the week while the largest outflow was from the Tracker Fund of Hong Kong Ltd (2800 HK).

Seven & I Sale of Sogo Seibu Moves Closer

By Michael Causton

Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
The highest spreads are Sezzle Inc (SZL AU), Link Administration (LNK AU), 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Australian Unity Office Fund.
The lowest gross spreads are Hwa Hong Corp (HWAH SP), Irongate Group (IAP AU), Giordano International (709 HK), Uniti Group Ltd (UWL AU), Excelpoint Technology (EXLP SP).

WISE Theme Indexes (TIGER ETFs): Rebalancing Flow Estimations

Among the local theme indexes in Korea, we have three noteworthy ones for July. They are the WISE theme indexes. They will all rebalance on July 15.
Due to some constituents’ recent significant price movements, we can now expect some notable passive flows.
These names are worthy of our attention: SKIET, Solus Advanced, Kangwon Land, Hanatour, T’way Air, Yong Pyong Resort, HYBE, CJ ENM, and Studio Dragon.

Before it’s here, it’s on Smartkarma

Jul 03

Most Read: HKEX, Hang Seng China Enterprises Index, Hong Kong Hang Seng Index, Gcl Poly Energy Holdings Limited, Korea Stock Exchange Kospi 200 Index and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

ETFs in Stock Connect: List Announced; Effective 4 July
HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec’s in Hong Kong, China, & Japan
Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
Buying the Most Unloved Asian Market

ETFs in Stock Connect: List Announced; Effective 4 July

CSRC and SFC have approved the inclusion of eligible ETFs in Stock Connect and trading of the ETFs under Stock Connect would begin from 4 July.
There are 4 ETFs included in Southbound Stock Connect, while there are 83 ETFs that have been included in Northbound Stock Connect.
Under Stock Connect, only secondary trading is allowed in the ETFs with no creations or redemptions permitted. This will have implications for short-term and long-term repo on the HSI/HSCEI/HSTECH indices.

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

Bilibili (9626 HK) will replace Sunac China Holdings (1918 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 8 July.
While Bilibili (9626 HK)‘s index inclusion is a surprise, the impact from passive fund trading is not a lot. Nothing much one can do on Sunac China Holdings (1918 HK).
The Hang Seng China Enterprises Index (HSCEI INDEX) will drop 16.12 points at the close on 8 July. Something for traders to watch out for over the next week.

Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec’s in Hong Kong, China, & Japan

By Joe Jasper

Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.
Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.
Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China’s MSCI China (MCHI-US) and China Internet (KWEB-US).

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

30 June was the review cutoff date for the next rebalance of the FTSE All-World/All-Cap Index, HSI INDEX, HSCEI INDEX, HSTECH INDEX, HSCI Index, PCOMP INDEX and the LQ-45 Index.
Bilibili (9626 HK) replaces Sunac China Holdings (1918 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 8 July.
There were big inflows to iShares MSCI China (ETF) (MCHI US) during the week while the largest outflow was from the Tracker Fund of Hong Kong Ltd (2800 HK).

Buying the Most Unloved Asian Market

By Thomas Schroeder

Korea is a market we have been shorting from the summer of 2021 and just turned long near compelling physical support.
Closed short positions from 366 and 353 for gains of 20% and 15%. A rally opportunity should open up if the global cycle gets a few lifts in July.
300 price support from 2020-21 previous highs and lows makes for a natural platform for short covering that may lead to a move to 324/328 where noted retracements lie.

Before it’s here, it’s on Smartkarma