Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>In a surprise (maybe should not have been!), there are no constituent changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> in September. However, there are float and capping changes.</li>
<li>Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.</li>
<li>We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.</li>
</ul>


In a surprise (maybe should not have been!), there are no constituent changes for the Hang Seng Index (HSI INDEX) in September. However, there are float and capping changes.
Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.
We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.


Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Japan equity ETF flows have not recovered from the carry trade sell off.  Hong Kong Southbound Connect flows continue to be positive this month.</li>
<li>
<a href="https://www.smartkarma.com/entities/qifu-technology-inc" target="_blank" data-smartkarma-citation="entities:36657:1" rel="noopener">Qifu Technology (3660 HK)</a> , <a href="https://www.smartkarma.com/entities/q-technology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:79:1" rel="noopener">Q Technology Group (1478 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> all advanced on strong 2Q earnings announcements. 
</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> disappointed on earnings and monthly user numbers.  <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a> declined in anticipation of a large drop in earnings in 2Q 2024.
</li>
</ul>


Japan equity ETF flows have not recovered from the carry trade sell off.  Hong Kong Southbound Connect flows continue to be positive this month.

Qifu Technology (3660 HK) , Q Technology Group (1478 HK) and JD Logistics (2618 HK) all advanced on strong 2Q earnings announcements. 


Tencent Music Entertainment Group (1698 HK) disappointed on earnings and monthly user numbers.  Country Garden Services (6098 HK) declined in anticipation of a large drop in earnings in 2Q 2024.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 16)

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Aug 9th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Aug 9th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent.


HK Short Interest Weekly: Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 16th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent (700 HK) , China Mobile (941 HK) .</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 16th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent (700 HK) , China Mobile (941 HK) .


Hong Kong Connect Flows (Aug 16th): Tencent, China Mobile

<ul>
<li>
<a href="https://www.smartkarma.com/entities/j-t-global-express-ltd" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1519 HK)</a> and <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education (9901 HK)</a> will replace <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> and <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime (20 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a> at the close on 6 September.</li>
<li>The inclusion of <a href="https://www.smartkarma.com/entities/j-t-global-express-ltd" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1519 HK)</a> is a big surprise and the stock could move higher over the next couple of weeks.</li>
<li>The non-inclusion of <a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> is another surprise since we had the stock highly ranked in the universe.</li>
</ul>



J&amp;T Global Express (1519 HK) and New Oriental Education (9901 HK) will replace JD Logistics (2618 HK) and SenseTime (20 HK) in the HSCEI at the close on 6 September.
The inclusion of J&amp;T Global Express (1519 HK) is a big surprise and the stock could move higher over the next couple of weeks.
The non-inclusion of PICC Property &amp; Casualty H (2328 HK) is another surprise since we had the stock highly ranked in the universe.


HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

No constituent changes so we stay at 82 stocks. Reaching 100 stocks is few years away. FAF/capping changes lead to 1-way turnover of 1% and round...

Brian Freitas

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 16)

Japan ETF flows have been light after the massive outflow from carry trade unwind. Qifu Tech, Q Tech and JDL all had positive earnings announcement...

David Mudd

HK Short Interest Weekly: Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent

We analyzed the latest HK SFC report for aggregate short position as of Aug 9th and highlight short interest changes in Baba, HSBC, Ntes, AIA,...

Ke Yan, CFA, FRM

Hong Kong Connect Flows (Aug 16th): Tencent, China Mobile

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent (700 HK) , China Mobile (941 HK) .

Ke Yan, CFA, FRM

HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises

There are 2 sets of changes for the index in Sep. 1 add is a big surprise, as is 1 non-inclusion. JT Global Express should pop on Monday but there...

Brian Freitas

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