Most Read Archives | Page 75 of 91 | Smartkarma

We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.
There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the ‘sell-only’ Southbound Stock Connect list.
Some of the stocks that remain in the HSCI could move to the ‘sell-only’ Southbound Stock Connect list since their average market cap drops below HKD 5bn.

SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out

Bangkok Life Assurance (BLA), JMT Network Services (JMT) and Jaymart (JMART) will replace Com7 (COM7), Ratch Group (RATCH) and Sri Trang Gloves (STGT) in the SET50 INDEX.
Estimated one-way turnover is 2.1% and will result in a one-way trade of THB 1,914m. There is little funding flow on the other index stocks.
The inclusion of Bangkok Life Assurance (BLA TB) is a minor surprise. The deletion of Com7 PCL (COM7 TB) is a much bigger surprise.

Alibaba: More Money to Be Made on The Short Side

By Oshadhi Kumarasiri

After rising more than 40% since Q4 earnings, Alibaba (ADR) (BABA US) is threatening to break out from a downtrend that lasted a little less than 20 months.
We think this bounce is quite normal given the fact that the stock lost more than 76% of its value during a challenging time period.
We remain confident that Alibaba has more downside potential and thinks that this is yet another opportunity to make money on the short side.

Toshiba (6502) Strong Vs Peers on No News Means Susceptible to Risk On Underperformance

Toshiba Corp (6502 JP) sees its AGM next week with new directors and a possible privatisation process ongoing. But the AGM is a done deal and privatisation is not.
The event-i-ness of Toshiba keeps it “supported” while its better-valued and higher-growth peers fall harder in the face of recent overall market weakness.
Toshiba promised transparency on its privatisation process, and so far, it has delivered everything it promised. The next “transparency” likely comes in November.

Thai Life Insurance Pre-IPO – Industry Dynamics and Domestic Peer Comparison Aren’t Very Encouraging

Thai Life Insurance is looking to raise up to US$1bn in its upcoming Thailand IPO.
Thai Life Insurance is one of the largest life insurance companies in Thailand, third by assets. As of Mar 2022, it had 64,000 insurance agents.
In this note, we will talk about the industry dynamics and undertake a peer comparison versus its domestic peers.

Before it’s here, it’s on Smartkarma

Jun 21

Most Read: Ping An Insurance (H), SK Telecom, Softbank Group, Com7 PCL, Policybazaar and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Ping An A/H: Position for Premium Contraction
A Detailed Guide About Korea’s FOL Stocks & MSCI Treatments
Softbank – Director Shuffling At The AGM
SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out
India: AMFI Stock Reclassification Preview

Ping An A/H: Position for Premium Contraction

The Ping An AH premium has traded around 10% over the last few days – this is near its historical highs and close to where reversals take place from.
The AH premium of the broader market is below its highs, while the AH premium on large cap financials has been trending lower over the last few months.
Northbound Stock Connect holdings on the A-shares have been decreasing, while Southbound Stock Connect holdings on the H-shares have been increasing over the last few months.

A Detailed Guide About Korea’s FOL Stocks & MSCI Treatments

Korea has a total of 33 FOL stocks. The Korean government restricts foreign ownership in major national infrastructure operators such as broadcasting companies, airlines, and telecommunication companies.
They each have a different FOL % in the range of 0-49.99%, and five are currently included in the MSCI Standard: SKT, LG Uplus, CJ ENM, KEPCO, & KAL.
Those located on the borderline that will trigger a meaningful event in the MSCI Standard Index are the three telecom companies: SKT, KT, & LG Uplus.

Softbank – Director Shuffling At The AGM

By Mio Kato

With Softbank’s AGM coming up we examine some of the curious events that surround the firm as usual.
Following in the footsteps of former governance director Yuko Kawamoto, VC founder Lip-Bu Tan has also penned a curious resignation message.
Then there are the continuing questions surrounding Kenneth Siegel and his reappointment is not guaranteed in our view.

SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out

Bangkok Life Assurance (BLA), JMT Network Services (JMT) and Jaymart (JMART) will replace Com7 (COM7), Ratch Group (RATCH) and Sri Trang Gloves (STGT) in the SET50 INDEX.
Estimated one-way turnover is 2.1% and will result in a one-way trade of THB 1,914m. There is little funding flow on the other index stocks.
The inclusion of Bangkok Life Assurance (BLA TB) is a minor surprise. The deletion of Com7 PCL (COM7 TB) is a much bigger surprise.

India: AMFI Stock Reclassification Preview

Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.
We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.
Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.

Before it’s here, it’s on Smartkarma

Jun 20

Most Read: SenseTime Group, SK Telecom, Infomedia Ltd, Ping An Insurance (H), Hana Tour Service and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance & ETF Flow Recap: HSCEI, LQ45, Kakao Pay, Thai Life
SK Telecom / KT Corp: Foreign Room, Passive Flow & Trade Update
Merger Arb Mondays (20 Jun) – Link Admin, Infomedia, ResApp, Ramsay Health, Frasers Hospitality
Ping An A/H: Position for Premium Contraction
TIGER Theme ETF “Tour Leisure” Rebalancing Projections: Hanatour, Asiana, Kangwon Land, & T’way Air

Index Rebalance & ETF Flow Recap: HSCEI, LQ45, Kakao Pay, Thai Life

It was a busy Friday with multiple implementations of the June rebalance – FTSE All-World/All-Cap, FTSE China 50/A50/TW50, S&P/ASX, REMX and GDXJ among others.
We highlight potential upcoming changes to the HSCEI INDEX and LQ45 Index, when Kakao Pay (377300 KS) could be added in MSCI Korea & the Thai Life IPO index inclusion.
There were large inflows to China and Korea focused ETFs during the week.

SK Telecom / KT Corp: Foreign Room, Passive Flow & Trade Update

On 20 May, we recommended selling SK Telecom (017670 KS) and buying KT Corp (030200 KS). That trade is up 12% over the last month.
Foreign investors have sold 2.5m shares of SK Telecom (017670 KS) in the last month while buying 2.8m shares of KT Corp (030200 KS).
With the price ratio trading at a 4 year low, we feel is is time to start unwinding the trade and waiting for a little bit before reversing it.

Merger Arb Mondays (20 Jun) – Link Admin, Infomedia, ResApp, Ramsay Health, Frasers Hospitality

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), Resapp Health (RAP AU).
The lowest gross spreads are Irongate Group (IAP AU), AKM Industrial (1639 HK), Beijing Enterprises Urban Resources (3718 HK), Hwa Hong Corp (HWAH SP), Uniti Group Ltd (UWL AU).

Ping An A/H: Position for Premium Contraction

The Ping An AH premium has traded around 10% over the last few days – this is near its historical highs and close to where reversals take place from.
The AH premium of the broader market is below its highs, while the AH premium on large cap financials has been trending lower over the last few months.
Northbound Stock Connect holdings on the A-shares have been decreasing, while Southbound Stock Connect holdings on the H-shares have been increasing over the last few months.

TIGER Theme ETF “Tour Leisure” Rebalancing Projections: Hanatour, Asiana, Kangwon Land, & T’way Air

This ETF’s AUM has decreased by 17% over the past three months to ₩200B. It has 18 constituents, and it is unlikely that there will be any addition/deletion.
The first thing to note is Hana Tour because the increase in the number of shares through an offering will be reflected its the market cap right before the rebalancing.
Among the top stocks by market cap, Asiana Airlines (020560 KS) (+0,.20x ADTV) and Kangwon Land (035250 KS) (-0.21x ADTV) will likely have a significant passive impact.

Before it’s here, it’s on Smartkarma

Jun 19

Most Read: Sea Ltd, GoGoX Holdings, Russell 2000 Index, Sk Chemicals Co Ltd/New, World Co Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Sea Ltd (SE US) – Navigating Challenging Waters With Sails Set
GOGOX IPO: Growth at All Costs
US Small Caps Macro Buy Zone
MSCI Korea August QIR Preview
Japan Apparel Rethink: World Tries Diversification

Sea Ltd (SE US) – Navigating Challenging Waters With Sails Set

By Angus Mackintosh

There has been a recent press commentary about Sea Ltd laying off staff, which although unpleasant reflects management’s decisive and pragmatic decision-making style which is no bad thing.
It is unclear how many staff are being laid off and where but it seems that Indonesia is not impacted in a big way and core markets continue to perform.
We will not follow on the coattails of liquidity with a negative recommendation when what management is doing looks positive and Sea Ltd (SE US) is batting above its peers.

GOGOX IPO: Growth at All Costs

GoGoX Holdings (GOGO HK) is a major online intra-city logistics platform in Asia. It has passed the listing hearing for an HKEx IPO to raise US$100-150 million.
In GOGOX IPO Initiation: A Less than Perfect Delivery, we noted that as the losses are expected to persist over the next three years, we would avoid the IPO.
In this note, we examine the PHIP for the 2021 results and recent developments. The fundamentals remain unattractive and we would give the IPO a pass.

US Small Caps Macro Buy Zone

By Thomas Schroeder

We continue to see US equity downside risk on the back of earnings estimates seeing further downgrades. Small caps are at/near some interesting macro support.
RTY met key support to establish a perform position as the SPX finds a foothold into late June. Near term cycle date due early this week.
June bottoming cycle into July ahead of a more bullish August that then runs into the dreaded weak September cycle.

MSCI Korea August QIR Preview

Small Caps → Standard migrations do not seem to happen at all in this QIR. Similarly, there will likely be no deletion of the existing constituents.
Among the Outside IMIs, Kakao Pay is the only one that has the possibility of inclusion. However, it also has uncertainty about the float rate in this QIR.
For FOL stocks, the telcos are on the event-triggering borderline. In particular, SKT deserves attention. But its foreign room is now above 3%, so its deletion possibility is getting slimmer.

Japan Apparel Rethink: World Tries Diversification

By Michael Causton

The outlook for big apparel remains uncertain; most executives are optimistic about a rebound in sales of premium apparel brands, they are also running around looking for ways to diversify.
Despite years of closing stores and a recent re-listing, World Co Ltd (3612 JP) remains in uncertain territory as it tries to boost sales of key brands.
More brands may need to close but the apparel firm is at least investing in new ventures, even if small scale.

Before it’s here, it’s on Smartkarma

Jun 18

Most Read: Sichuan Tianqi Lithium Industries, Inc, Nexon, Thai Life Insurance, Viva China Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Tianqi Lithium A/H Listing – Back once Again, This Time with a More Compelling Industry Backdrop
Thai Life Insurance IPO: The Bull Case
Nexon Buyback May Signal End To Near-Term Relative Outperformance
Thai Life Insurance: Offering Details & Index Entry Timeline
Viva China: Perennially Inexpensive Li Ning Exposure

Tianqi Lithium A/H Listing – Back once Again, This Time with a More Compelling Industry Backdrop

Tianqi Lithium (TL) is looking to raise up to US$1.5bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
TL was the largest producer of mined lithium globally in terms of output and ranked third in terms of revenue generated from lithium in 2020, according to Wood Mackenzie .
In this note, we look at the company’s past performance and the deal dynamics.

Thai Life Insurance IPO: The Bull Case

Thai Life Insurance (124744Z TB) has started to meet investors ahead of its $1 billion IPO. The roadshow will run till early July with a listing targeted later in July.
Thai Life is the third-largest life insurer in Thailand with a 12.9% market share as measured by gross premium income in 1Q22.
The key elements of the bull case rest on a strong brand, the largest agent network, return to APE growth, high persistency ratio and improving VONB margin.

Nexon Buyback May Signal End To Near-Term Relative Outperformance

Nexon (3659 JP) founder Kim Jung Ju tried to sell his holdco in 2019, didn’t, now shares are higher, but he passed suddenly in Q1. The stock popped.
Inheritance tax issues for the estate are complicated, but the buyback just executed might signal a “pause” for a while.
In the meantime, recent underperformance in terms of Peer-relative earnings forecasts suggests the stock could drift.

Thai Life Insurance: Offering Details & Index Entry Timeline

Thai Life Insurance (124744Z TB) is looking to raise US$1bn in its IPO by selling up to 2.207bn shares. This will value the company at around US$5.18bn.
Inclusion in the SET50 INDEX will depend on the float exceeding 20% and a rally that leads to its market cap exceeding 1% of the SET INDEX market cap.
Fast Entry to the MSCI Thailand and FTSE All-World indices is not likely. MSCI inclusion could take place at the November SAIR and FTSE inclusion at the December QIR.

Viva China: Perennially Inexpensive Li Ning Exposure

By David Blennerhassett

Viva China (8032 HK) trades at a large discount to its 10.6% holding in Li Ning (2331 HK).
Apart from its Li Ning exposure, Viva has a controlling stake in Bossini International Holdings (592 HK), a sports experience segment, and net cash.
The current NAV discount of ~46% is unlikely to meaningfully narrow near term given management’s reluctance to pay out a large dividend or undertake a corporate restructuring.

Before it’s here, it’s on Smartkarma

Jun 17

Most Read: SenseTime Group, Coronado Global Resources Inc, Link Administration, Sichuan Tianqi Lithium Industries, Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow
Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday
Link Admin: Dye & Durham’s Deal All But Dead
Tianqi Lithium A/H Listing – Back once Again, This Time with a More Compelling Industry Backdrop
ACCC’s Concerns Likely to End in a Link-DND Deal Bust

SenseTime (20 HK): Lock-Up Expiry Will Bring BIG Passive Flow

SenseTime Group (20 HK) currently has a float of 1.4%. That will increase to 46% at the end of June as pre-IPO and cornerstone investor lock-ups end.
The Hang Seng Tech Index FAF increase and potential inclusion in the Hang Seng China Enterprises Index will require passive trackers to buy 700m shares early September.
Economic stimulus in China, outlook for China tech, lock-up expiry, inclusion in Southbound Connect and flows from passive trackers will drive the stock for few months and provide trading opportunities.

Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday

Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close tomorrow.
The stocks with passive inflows have outperformed the stocks with passive outflows over the last couple of months and post-announcement. There will be pre-positions on a lot of names.
Short interest has increased on nearly all the deletes from the S&P/ASX indices, while short interest movement on the stocks with passive inflows has been mixed.

Link Admin: Dye & Durham’s Deal All But Dead

By David Blennerhassett

This transaction is looking increasingly toast. The ACCC has outlined significant preliminary competition concerns with Dye & Durham’s (D&D) proposed acquisition of Link Administration (LNK AU).
Separately, Link’s subsidiary, Link Fund Solutions Limited, has been notified that an application for a “Group Litigation Order” has been filed in the English High Court.
Link has to exit PEXA for this transaction to proceed. But how badly do D&D want PEXA? Will they walk? Time to look at Link fundamentally, separate from D&D’s Offer.

Tianqi Lithium A/H Listing – Back once Again, This Time with a More Compelling Industry Backdrop

Tianqi Lithium (TL) is looking to raise up to US$1.5bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
TL was the largest producer of mined lithium globally in terms of output and ranked third in terms of revenue generated from lithium in 2020, according to Wood Mackenzie .
In this note, we look at the company’s past performance and the deal dynamics.

ACCC’s Concerns Likely to End in a Link-DND Deal Bust

The ACCC’s Statement of Issues noted “significant preliminary competition concerns” in relation to Dye & Durham/DND’s acquisition of Link Administration (LNK AU). The findings will be announced on 8 September.
There is no easy fix. We think that satisfying the ACCC requires a PEXA Group (PXA AU) stake disposal which could trigger a material adverse clause.
Link aims to proceed with the 13 July scheme meeting but this is a broken deal. While our SoTP suggests upside, there are no short-term positive catalysts.

Before it’s here, it’s on Smartkarma

Jun 16

Most Read: Whitehaven Coal, Bank Jago Tbk PT, Kito Corporation, Coronado Global Resources Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements
FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments
LQ45 Index Rebalance Preview (July 2022): Candidates for Change
Kito (6409) – Now Sitting Pretty
Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday

Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements

Crown Resorts (CWN AU)‘s Second Court hearing is scheduled for 15 June and the stock is likely to stop trading at the close on that day.
Estimated passive tracker selling is 62m shares (A$809m; 31.2 days of ADV) of Crown Resorts (CWN AU) and that could open up some arb opportunities.
We expect Whitehaven Coal (WHC AU) will be added to the S&P/ASX 100 Index, while Coronado Global Resources Inc (CRN AU) could be added to the S&P/ASX 200 (AS51 INDEX).

FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments

Between tightening regulations to government and regulatory support for the market to geopolitical issues, there has been a lot of market volatility and investor focus on China.
Valuations of China focused indices are lower than those of other Developed and Emerging markets.
Investors can use the SGX FTSE China A50 Index futures and the SGX FTSE China H50 Index futures to get exposure to the onshore and offshore China market.

LQ45 Index Rebalance Preview (July 2022): Candidates for Change

The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 29 July.
Potential adds are Bank Jago Tbk PT (ARTO IJ), Adaro Minerals (ADMR IJ), Bumi Resources Minerals Tbk (BRMS IJ), Transcoal Pacific Tbk PT (TCPI IJ) and Mitratel (MTEL IJ).
Potential deletions are Pembangunan Perumahan (Persero) (PTPP IJ), Pabrik Kertas Tjiwi Kimia (TKIM IJ), Media Nusantara Citra (MNCN IJ), Gudang Garam (GGRM IJ) and Chandra Asri Petrochemical (TPIA IJ).

Kito (6409) – Now Sitting Pretty

Kito Corporation (6409 JP) is under offer by KKR unit Crosby, which announced a takeover in mid-May.
Anti-Trust and foreign review will take a few months, and so we wait. In the meantime, the shareholder register has changed significantly. This remains an interesting option.
And now, global market ructions offer arbitrageurs a meaningful opportunity.

Australia: S&P/ASX, FTSE, REMX, GDXJ Flows on Friday

Changes to the S&P/ASX indices, FTSE All-World/All-Cap, VanEck Vectors Rare Earth/Strategic Metals (REMX US) and VanEck Vectors Junior Gold Miners (GDXJ US) will be implemented at the close tomorrow.
The stocks with passive inflows have outperformed the stocks with passive outflows over the last couple of months and post-announcement. There will be pre-positions on a lot of names.
Short interest has increased on nearly all the deletes from the S&P/ASX indices, while short interest movement on the stocks with passive inflows has been mixed.

Before it’s here, it’s on Smartkarma

Jun 15

Most Read: Whitehaven Coal, Kakao Pay, Singtel, LG Energy Solution and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements
FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments
Kakao Pay (377300 KS): Alipay Overhang and Potential MSCI Inclusion
Bharti Singtel Possible Selldown/Holdco Trade – Singtel Appears to Be Ready for Cashing in US$1-2bn
FTSE GEIS Korea: Rebalancing Week Trades

Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements

Crown Resorts (CWN AU)‘s Second Court hearing is scheduled for 15 June and the stock is likely to stop trading at the close on that day.
Estimated passive tracker selling is 62m shares (A$809m; 31.2 days of ADV) of Crown Resorts (CWN AU) and that could open up some arb opportunities.
We expect Whitehaven Coal (WHC AU) will be added to the S&P/ASX 100 Index, while Coronado Global Resources Inc (CRN AU) could be added to the S&P/ASX 200 (AS51 INDEX).

FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments

Between tightening regulations to government and regulatory support for the market to geopolitical issues, there has been a lot of market volatility and investor focus on China.
Valuations of China focused indices are lower than those of other Developed and Emerging markets.
Investors can use the SGX FTSE China A50 Index futures and the SGX FTSE China H50 Index futures to get exposure to the onshore and offshore China market.

Kakao Pay (377300 KS): Alipay Overhang and Potential MSCI Inclusion

Alipay’s sale of 5m shares in Kakao Pay (377300 KS) has caused the stock to slide below its IPO price. Foreign investors have sold while retail have bought last week.
Alipay still holds 34.7% of Kakao Pay (377300 KS) and this will be an overhang on the stock for some time.
Kakao Pay (377300 KS) will be added to the FTSE All-World Index at the close on Friday. MSCI inclusion will likely be at the May 2023 SAIR.

Bharti Singtel Possible Selldown/Holdco Trade – Singtel Appears to Be Ready for Cashing in US$1-2bn

Various recent media reports have indicated that Singtel aims to sell 2-4% of its stake in Bharti Airtel. Singtel has officially dismissed the reports as media speculation.
There have been subsequent reports in the Indian media about the founder, Sunil Mittal, looking to raise around US$2bn in debt, to finance an increase in his stake in Airtel.
In this note, we talk about the possible deal and its implications.

FTSE GEIS Korea: Rebalancing Week Trades

We typically estimate the size of the FTSE All Cap tracking fund to be around $600B. However, empirically, one-third of this was witnessed in Korean stocks during the rebalancing week.
Estimating each passive flow based on this, we should expect LG Energy to receive the most significant flow at 1.16x ADTV from this point until the closing of this Friday.
As for Kakao Pay, the FTSE announced an increase in the investability to 15.8% (due to Alipay’s block deals), offering a passive inflow of 0.36x ADTV.

Before it’s here, it’s on Smartkarma

Jun 14

Most Read: PetroChina, Frasers Hospitality Trust, Whitehaven Coal and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSCEI Index Rebalance Preview: Four Sets of Changes from July to September
China’s Evolving EV Industry
Frasers Hospitality Trust Scheme Announced
FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments
Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements

HSCEI Index Rebalance Preview: Four Sets of Changes from July to September

Sunac China Holdings (1918 HK) is still suspended from trading and could be deleted from the index in July and replaced by SenseTime Group (20 HK) or PetroChina (857 HK).
SenseTime (20 HK) or PetroChina (857 HK), Great Wall (2333 HK) and Zhongsheng (881 HK) could replace Haidilao (6862 HK), CPIC (2601 HK) and Alibaba Health (241 HK) in September.
There will be buying on SenseTime Group (20 HK) from HSCEI INDEX and HSTECH INDEX trackers. But there is also a big lock-up expiry on 29 June.

China’s Evolving EV Industry

By Mio Kato

The EV market offers bright long term prospects supported by technological progress and government incentives, particularly in China.
In the short term, surging raw material costs and supply bottlenecks are significant risks and could take longer to resolve than many suspect.
We believe the high-end performance segment and low-end mini/city vehicle segments are most suitable for rapid EV penetration.

Frasers Hospitality Trust Scheme Announced

This morning, Frasers Hospitality Trust (FHT SP) announced a Scheme Implementation Deed was signed for the S-REIT’s privatisation by its current sponsors TCC Group Investments Limited and Frasers Property Limited.
The S$500mm borrowing mooted suggested S$0.69/unit; Scheme Consideration is S$0.70/unit in cash against the latest commissioned Adjusted NAV estimate of S$0.6519 (vs last NAV of S$0.6534/unit).
The deal comes at an all-time high price, slightly exceeding the end-2019 price on a dividend-adjusted basis. This should be done, but it is worth thinking about how.

FTSE China A50 and FTSE China H50 Indexes & Index Futures: Recent Developments

Between tightening regulations to government and regulatory support for the market to geopolitical issues, there has been a lot of market volatility and investor focus on China.
Valuations of China focused indices are lower than those of other Developed and Emerging markets.
Investors can use the SGX FTSE China A50 Index futures and the SGX FTSE China H50 Index futures to get exposure to the onshore and offshore China market.

Crown Resorts (CWN AU): Passive Sell Flow and Potential ASX100/200 Replacements

Crown Resorts (CWN AU)‘s Second Court hearing is scheduled for 15 June and the stock is likely to stop trading at the close on that day.
Estimated passive tracker selling is 62m shares (A$809m; 31.2 days of ADV) of Crown Resorts (CWN AU) and that could open up some arb opportunities.
We expect Whitehaven Coal (WHC AU) will be added to the S&P/ASX 100 Index, while Coronado Global Resources Inc (CRN AU) could be added to the S&P/ASX 200 (AS51 INDEX).

Before it’s here, it’s on Smartkarma

Jun 13

Most Read: Bumi Resources Minerals Tbk, Lake Resources Nl, Toyo Construction, PetroChina, Orient Overseas International and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MVIS Global Junior Gold Miners Index Rebalance: Big Flows & Impact
MVIS Global Rare Earth/Strategic Metals Index Rebalance: CXO & LKE Added; AVZ Out
Toyo Construction – YFO Standstill Against TC Hostility
HSCEI Index Rebalance Preview: Four Sets of Changes from July to September
Index Rebalance & ETF Flow Recap: STAR50, S&P500, REMX, MVIS Vietnam, Atlas Arteria, OOIL

MVIS Global Junior Gold Miners Index Rebalance: Big Flows & Impact

Kinross Gold Corp (KGC US), Fresnillo PLC (FRES LN), Kingsgate Consolidated (KCN AU), Dakota Gold are adds; Merdeka Copper Gold Tbk PT (MDKA IJ) and PGM Gold Mining are deletes.
One way turnover is US$390m and there is a big impact on a lot of stocks due to addition, deletion and float changes. Implementation at the close on 17 June.
Bumi Resources Minerals Tbk (BRMS IJ) was added to the GDXJ in March and rallied over 30% in 4 days since announcement. Buying this time will be even larger.

MVIS Global Rare Earth/Strategic Metals Index Rebalance: CXO & LKE Added; AVZ Out

Core Lithium Ltd (CXO AU), Lake Resources Nl (LKE AU) and Piedmont Lithium ADR have been added to the MVIS Global Rare Earth/Strategic Metals Index. AVZ Minerals has been deleted.
Core Lithium Ltd (CXO AU) and Lake Resources Nl (LKE AU) are S&P/ASX 200 additions that will be also implemented at the close of trading on 17 June.
With only 4 trading days to implementation (Monday is a holiday), the stocks with significant days of ADV to trade could out(under)perform their peers and the market.

Toyo Construction – YFO Standstill Against TC Hostility

Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. Toyo Construction (1890 JP) got upset and called YFO names.
TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of “extreme dishonesty.” They have since met again, and finally signed a long standstill agreement.
But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction.

HSCEI Index Rebalance Preview: Four Sets of Changes from July to September

Sunac China Holdings (1918 HK) is still suspended from trading and could be deleted from the index in July and replaced by SenseTime Group (20 HK) or PetroChina (857 HK).
SenseTime (20 HK) or PetroChina (857 HK), Great Wall (2333 HK) and Zhongsheng (881 HK) could replace Haidilao (6862 HK), CPIC (2601 HK) and Alibaba Health (241 HK) in September.
There will be buying on SenseTime Group (20 HK) from HSCEI INDEX and HSTECH INDEX trackers. But there is also a big lock-up expiry on 29 June.

Index Rebalance & ETF Flow Recap: STAR50, S&P500, REMX, MVIS Vietnam, Atlas Arteria, OOIL

Last week saw the rebalance implementation of the KOSPI2 INDEX, KOSDAQ 150, HSI INDEX, HSCEI INDEX, HSTECH INDEX, CSI 300 Index, STAR50 INDEX and the SSE family of indices.
The coming week has the rebalance implementation of the FTSE All-World/All-Cap, EPRA Nareit, FTSE China 50, FTSE China A50, FTSE TWSE Taiwan 50 and S&P/ASX indices.
Big inflows to the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) as we enter dividend season. The trade looks bigger than usual this year.

Before it’s here, it’s on Smartkarma