Equity Analyst (Index Flows & Special Situations), Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst (Index Flows & Special Situations)

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Beijing Strong Biotechnolo-A / Event-Driven

<ul>
<li>We have already discussed our flow expectations for the mainstream indices in the CSI family such as CSI300/500, SSE50/100, and the STAR50/100 for the June 2024 index rebal event.</li>
<li>In this insight, we take a look at our flow expectations for the ADDs/DELs involved in the rebalance of some of the lesser known indices in the CSI family.</li>
<li>The indices covered in this insight are All Share Brokerage, China Internet, Medical Devices, National Defense, and Livestock Breeding indices.</li>
</ul>


We have already discussed our flow expectations for the mainstream indices in the CSI family such as CSI300/500, SSE50/100, and the STAR50/100 for the June 2024 index rebal event.
In this insight, we take a look at our flow expectations for the ADDs/DELs involved in the rebalance of some of the lesser known indices in the CSI family.
The indices covered in this insight are All Share Brokerage, China Internet, Medical Devices, National Defense, and Livestock Breeding indices.


CSI Esoteric Index Rebals Jun 24: All Share Brokerage, China Internet, Medical, Defense, & Livestock

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

<ul>
<li>CSI announced the changes for the June rebalance after market close on 31 May and the changes will be effective after the close of trading on 14 June.</li>
<li>There are 5 adds/deletes - we correctly forecasted 3 adds and all 5 deletes. Passives need to trade 0.5-3x ADV on the adds and 0.5-2.1x ADV on the deletes.</li>
<li>With the index not very widely forecasted, the adds could outperform the deletes over the next week in a repeat of the performance at the December rebalance.</li>
</ul>


CSI announced the changes for the June rebalance after market close on 31 May and the changes will be effective after the close of trading on 14 June.
There are 5 adds/deletes - we correctly forecasted 3 adds and all 5 deletes. Passives need to trade 0.5-3x ADV on the adds and 0.5-2.1x ADV on the deletes.
With the index not very widely forecasted, the adds could outperform the deletes over the next week in a repeat of the performance at the December rebalance.


CSI Medical Service Index Rebalance: Adds Could Outperform Deletes in the Coming Week

Shinva Medical Instrument A / Event-Driven

<ul>
<li>The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.</li>
<li>We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.</li>
<li>At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?</li>
</ul>


The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.
We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.
At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?


CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>IVD field ushered in the largest centralized procurement in history - the liver function biochemical testing reagents,which would bring great reshuffle effect to the competition pattern of biochemical diagnostics market.</li>
<li>
<a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK) </a>and Sanofi reached two major cooperation. Meanwhile, Innovent’s CCO Liu Min resigned. We deep dived the logic and impact behind. </li>
<li>For HK IPO, market participants have come up with ways to reduce issuance scale in an attempt to stabilize the performance of new shares after IPO, which wouldn’t help.</li>
</ul>


IVD field ushered in the largest centralized procurement in history - the liver function biochemical testing reagents,which would bring great reshuffle effect to the competition pattern of biochemical diagnostics market.

Innovent Biologics Inc (1801 HK) and Sanofi reached two major cooperation. Meanwhile, Innovent’s CCO Liu Min resigned. We deep dived the logic and impact behind. 
For HK IPO, market participants have come up with ways to reduce issuance scale in an attempt to stabilize the performance of new shares after IPO, which wouldn’t help.


China Healthcare Weekly (Aug.5) - HK IPO, Innovent, BeiGene, the Largest IVD Centralized Procurement

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p style="text-align: justify;">The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and EAFE indexes ended up breaking down. Additionally, the aforementioned indexes and major indexes in Europe, Japan, and Hong Kong have been unable to break above longer-term resistance. While we believe global equities remain vulnerable to a pullback, some near-term consolidation is another possibility. For now we believe some consolidation makes sense as we remain in a sort of wait-and-see period as it relates to what will happen as countries and states aim to re-open.</p>

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and EAFE indexes ended up breaking down. Additionally, the aforementioned indexes and major indexes in Europe, Japan, and Hong Kong have been unable to break above longer-term resistance. While we believe global equities remain vulnerable to a pullback, some near-term consolidation is another possibility. For now we believe some consolidation makes sense as we remain in a sort of wait-and-see period as it relates to what will happen as countries and states aim to re-open.

Global Equity Rally Losing Upside Momentum

China

Beijing Strong Biotechnologies, Inc. operates in the IVD industry, where they specialize in the manufacturing of clinical chemistry liquid reagents.

Price Gauge
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Beijing Strong Biotechnolo-A (300406 CH)

CSI Medical Service Index Rebalance: Adds Could Outperform Deletes in the Coming Week

There are 5 changes for the index in June. We correctly forecast 3 adds and all 5 deletes. The adds outperformed the deletes post announcement in...

Brian Freitas

CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

There could be 5 changes for the CSI Medical Service Index in June. Trackers will need to trade between 0.7-2.6x ADV. There was big outperformance...

Brian Freitas

China Healthcare Weekly (Aug.5) - HK IPO, Innovent, BeiGene, the Largest IVD Centralized Procurement

IVD field ushered in the largest VBP in history. Innovent/Sanofi reached major cooperation, and Innovent’s CCO resigned. We deep dived the logic...

Xinyao (Criss) Wang

Global Equity Rally Losing Upside Momentum

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CSI Esoteric Index Rebals Jun 24: All Share Brokerage, China Internet, Medical, Defense, & Livestock

We expect the the CSI Medical Services ADDs to outperform the Medical Services DELs over the next few days. The Inclusion/Exclusion events could...

Janaghan Jeyakumar, CFA

CSI Medical Service Index Rebalance: Adds Could Outperform Deletes in the Coming Week

There are 5 changes for the index in June. We correctly forecast 3 adds and all 5 deletes. The adds outperformed the deletes post announcement in...

Brian Freitas

CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains

There could be 5 changes for the CSI Medical Service Index in June. Trackers will need to trade between 0.7-2.6x ADV. There was big outperformance...

Brian Freitas

China Healthcare Weekly (Aug.5) - HK IPO, Innovent, BeiGene, the Largest IVD Centralized Procurement

IVD field ushered in the largest VBP in history. Innovent/Sanofi reached major cooperation, and Innovent’s CCO resigned. We deep dived the logic...

Xinyao (Criss) Wang

Global Equity Rally Losing Upside Momentum

The global rally appears to be losing steam as the bearish rising wedge patterns we highlighted last week in the MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research