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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.</p><p>For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.</p><p>Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.</p><p>Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.</p><p>Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.</p><p>We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.</p>

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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<p>This week in StubWorld ...</p>
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<div>Preceding my comments on Hang Lung &amp; <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</div>
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<p><em>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20</em></p>
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This week in StubWorld ...


Preceding my comments on Hang Lung &amp; BYD (1211 HK) are the weekly setup/unwind tables for Asia-Pacific Holdcos.




These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20




StubWorld: Hang Lung Group (10 HK) Back To Buy Levels; BYD Coming Up "Cheap"

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<p>This week in StubWorld ...</p>
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<p>With Tokyo Disneyland opening tomorrow, <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> is coming up "expensive" on the stub monitor. However, it is <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> that is trading rich ahead of the theme park reopening.</p>
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<p>Preceding my comments on Keisei/Oriental Land, <a href="https://www.smartkarma.com/entities/first-pacific-co-ltd" target="_blank" data-smartkarma-citation="entities:173:1" rel="noopener">First Pacific Co (142 HK)</a> and <a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (A) (19 HK)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...



With Tokyo Disneyland opening tomorrow, Keisei Electric Railway Co (9009 JP) is coming up "expensive" on the stub monitor. However, it is Oriental Land (4661 JP) that is trading rich ahead of the theme park reopening.

Preceding my comments on Keisei/Oriental Land, First Pacific Co (142 HK) and Swire Pacific (A) (19 HK) are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



StubWorld: Keisei Electric And Taking The Mickey. Plus First Pac and Swire.

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<p><a href="https://www.smartkarma.com/entities/hang-lung-group-ltd" target="_blank" data-smartkarma-citation="entities:50:1" rel="noopener">Hang Lung (10 HK)</a>'s 58% stake in <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> currently accounts for 217% of its market cap, up from 170% at the beginning of year, and compares to 157% a year ago. This is beyond extreme.</p>
<p>Ronnie Chan should either take HLG private or in-specie distribute the stake in HLP.</p>
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<p>Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...




Hang Lung (10 HK)'s 58% stake in Hang Lung Properties (101 HK) currently accounts for 217% of its market cap, up from 170% at the beginning of year, and compares to 157% a year ago. This is beyond extreme.
Ronnie Chan should either take HLG private or in-specie distribute the stake in HLP.




Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.




These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.




StubWorld: Hang Lung Group (10 HK) Is A Buy

<p><a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, Hong Kong's largest listed REIT, has not avoided the uncertainties generated by COVID-19.</p>
<p>Its current P/B of 0.75x compares to its five-year average of 0.94x. Shares are down 28% yoy - which were impacted by localised protests - and down 18% YTD. This compares with 35% and 25% respectively for REIT peers.</p>
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<div style="text-align: left;" class="content-caption">Source: CapIQ</div>
<p>Retail accounts for 74.6% of Link's HK$224bn portfolio, the majority situated in Hong Kong.</p>
<p>Hong Kong just recorded a decline of 42% yoy in retail sales in March as various measures brought tourism to a standstill.</p>
<p>Link has diversified its portfolio into an office development project in Kowloon, a shopping mall in Australia - its first foray - and additional shopping malls in China. </p>
<p>Further diversification is needed - and expected.</p>

Link REIT (823 HK), Hong Kong's largest listed REIT, has not avoided the uncertainties generated by COVID-19.
Its current P/B of 0.75x compares to its five-year average of 0.94x. Shares are down 28% yoy - which were impacted by localised protests - and down 18% YTD. This compares with 35% and 25% respectively for REIT peers.

Source: CapIQ
Retail accounts for 74.6% of Link's HK$224bn portfolio, the majority situated in Hong Kong.
Hong Kong just recorded a decline of 42% yoy in retail sales in March as various measures brought tourism to a standstill.
Link has diversified its portfolio into an office development project in Kowloon, a shopping mall in Australia - its first foray - and additional shopping malls in China. 
Further diversification is needed - and expected.

Hong Kong

Great Eagle Holdings Limited, through its subsidiaries, develops and invests in properties, operates hotels and restaurants, and trades building materials.  The Company also invests in securities and provides management, maintenance, and insurance agency services.  In addition, Great Eagle operates sports clubs.

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Great Eagle Holdings (41 HK)

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

StubWorld: Hang Lung Group (10 HK) Back To Buy Levels; BYD Coming Up "Cheap"

This week in StubWorld ... Preceding my comments on Hang Lung & BYD (1211 HK) are the weekly setup/unwind tables for Asia-Pacific...

David Blennerhassett

StubWorld: Keisei Electric And Taking The Mickey. Plus First Pac and Swire.

This week in StubWorld ... With Tokyo Disneyland opening tomorrow, Keisei Electric Railway Co (9009 JP) is coming up "expensive" on the stub...

David Blennerhassett

StubWorld: Hang Lung Group (10 HK) Is A Buy

This week in StubWorld ... Hang Lung (10 HK)'s 58% stake in Hang Lung Properties (101 HK) currently accounts for 217% of its market cap, up...

David Blennerhassett

Link REIT: Options Amidst Retail Pain

Link REIT (823 HK), Hong Kong's largest listed REIT, has not avoided the uncertainties generated by COVID-19. Its current P/B of 0.75x compares to...

David Blennerhassett

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