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>Based on the close of 24 May, there could be three changes for the <a href="https://www.smartkarma.com/entities/ishares-ftse-a50-china-index-etf" target="_blank" data-smartkarma-citation="entities:249:1" rel="noopener">iShares A50 China (2823 HK)</a>/ <a href="https://www.smartkarma.com/entities/csop-ftse-china-a50-etf-26e3b671-fa47-4165-a12e-bf841640c5a3" target="_blank" data-smartkarma-citation="entities:23664:1" rel="noopener">CSOP China A50 (HKD) (2822 HK)</a> in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/cosco-shipping-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:27590:1" rel="noopener">COSCO SHIPPING (601919 CH)</a>, <a href="https://www.smartkarma.com/entities/crrc-corp-ltd" target="_blank" data-smartkarma-citation="entities:122:1" rel="noopener">CRRC (601766 CH)</a> and <a href="https://www.smartkarma.com/entities/china-national-nuclear-power-c" target="_blank" data-smartkarma-citation="entities:25348:1" rel="noopener">China National NuclearPower (601985 CH)</a> could replace <a href="https://www.smartkarma.com/entities/longi-green-energy-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:12703:1" rel="noopener">LONGi GreenEnergy (601012 CH)</a>, <a href="https://www.smartkarma.com/entities/csc-financial-co-ltd" target="_blank" data-smartkarma-citation="entities:27823:1" rel="noopener">CSC Financial (601066 CH)</a> and <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group DutyFree (601888 CH)</a>. </li>
<li>There are a couple of stocks that are close adds and could become adds if they outperform higher ranked stocks in trading today.</li>
</ul>


Based on the close of 24 May, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) in June.

COSCO SHIPPING (601919 CH), CRRC (601766 CH) and China National NuclearPower (601985 CH) could replace LONGi GreenEnergy (601012 CH), CSC Financial (601066 CH) and China Tourism Group DutyFree (601888 CH). 
There are a couple of stocks that are close adds and could become adds if they outperform higher ranked stocks in trading today.


Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

COSCO SHIPPING Holdings   / Equity Bottom-Up

<ul><li>The WTO has forecasted a rise in global trade volume in 2024, especially for business cycle related goods.</li><li>In Singapore, the 10 most traded stocks of the Sector have averaged 5.8% gains while booking S$25 million of combined net institutional inflow.</li><li>Among Singapore’s 10 most traded Transportation stocks, the three strongest performing stocks over the past fortnight included COSCO Shipping Singapore, Chasen and Samudera Shipping, averaging 16.6% gains, with all three notching up higher trading turnover levels compared to 2023 levels.</li></ul>

The WTO has forecasted a rise in global trade volume in 2024, especially for business cycle related goods.In Singapore, the 10 most traded stocks of the Sector have averaged 5.8% gains while booking S$25 million of combined net institutional inflow.Among Singapore’s 10 most traded Transportation stocks, the three strongest performing stocks over the past fortnight included COSCO Shipping Singapore, Chasen and Samudera Shipping, averaging 16.6% gains, with all three notching up higher trading turnover levels compared to 2023 levels.

Transportation Stocks on Move in Early 2024

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 analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 28th.</li>
<li>We estimate the weekly outflows to be US$1,763.0 million, led by information technology, consumer staples, consumer discretionary, and offset by utilities.</li>
<li>We highlight flows for Foxconn Industrial Internet, Zhejiang Sanhua Intelligent Controls, Wanhua Chemical, BYD.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 28th.
We estimate the weekly outflows to be US$1,763.0 million, led by information technology, consumer staples, consumer discretionary, and offset by utilities.
We highlight flows for Foxconn Industrial Internet, Zhejiang Sanhua Intelligent Controls, Wanhua Chemical, BYD.


Northbound Flows (Jun 28th): Foxconn Industrial Internet, Wanhua Chemical, BYD

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>The 72.5% decline in <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a>'s FY23 earnings is disappointing but should already reflected in the share price given the profit warning. Instead, this may be the trough.  </li>
<li>Spot freight rates for key intra-Asia routes have already recovered since 3Q23, with the YTD level higher than the 2H23 average. The 1H24 result may show a sequential rebound.</li>
<li>Even assuming flat YoY earnings in FY24, it still sits on a 9% dividend yield. The projected ROE of over 24% and net cash position mean 1.6-1.7x P/B undemanding.</li>
</ul>


The 72.5% decline in SITC International (1308 HK)'s FY23 earnings is disappointing but should already reflected in the share price given the profit warning. Instead, this may be the trough.  
Spot freight rates for key intra-Asia routes have already recovered since 3Q23, with the YTD level higher than the 2H23 average. The 1H24 result may show a sequential rebound.
Even assuming flat YoY earnings in FY24, it still sits on a 9% dividend yield. The projected ROE of over 24% and net cash position mean 1.6-1.7x P/B undemanding.


SITC International (1308 HK): Bidding Farewell to the Trough

Orient Overseas International / Equity Bottom-Up

<ul>
<li>The Shanghai Containerised Freight Index has popped by 25% in the first two weeks of 2024 due to the Red Sea crisis. <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a> is a beneficiary.</li>
<li>There are already signs of bottoming out of realised freight rate and load factor in 4Q23. The spike in freight rate means that consensus forecasts are too bearish. </li>
<li>OOIL's net cash of US$5.6bn equals 58% of its market capitalisation, making its 0.7x P/B and 8% yield attractive. There is also a possibility for a higher dividend payout. </li>
</ul>


The Shanghai Containerised Freight Index has popped by 25% in the first two weeks of 2024 due to the Red Sea crisis. Orient Overseas International (316 HK) is a beneficiary.
There are already signs of bottoming out of realised freight rate and load factor in 4Q23. The spike in freight rate means that consensus forecasts are too bearish. 
OOIL's net cash of US$5.6bn equals 58% of its market capitalisation, making its 0.7x P/B and 8% yield attractive. There is also a possibility for a higher dividend payout. 


Orient Overseas Intl (316 HK): Is It Time for a Reversal?

China

COSCO SHIPPING Holdings Co., Ltd offers marine freight transportation services.  The Company offers container shipping, dry bulk shipping, logistics services, freight forwarding, and terminal and container leasing services internationally.  COSCO SHIPPING Holdings Co., Ltd operates container ships and terminals, and manufactures shipping containers.

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COSCO Shipping Holdings (1919 HK)

Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

There could be 3 changes for 2823HK/2822HK in June. Today is the price cutoff and there are a couple of close adds. Impact is not very large but...

Brian Freitas

Transportation Stocks on Move in Early 2024

The WTO has forecasted a rise in global trade volume in 2024, especially for business cycle related goods. In Singapore, the 10 most traded stocks...

Singapore Exchange Ltd (SGX)

Northbound Flows (Jun 28th): Foxconn Industrial Internet, Wanhua Chemical, BYD

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Foxconn Industrial Internet, Zhejiang Sanhua...

Ke Yan, CFA, FRM

SITC International (1308 HK): Bidding Farewell to the Trough

SITC's disappointing FY23 earnings decline may be already priced in. With sequentially higher freight rates, there is a potential for a rebound in...

Osbert Tang, CFA

Orient Overseas Intl (316 HK): Is It Time for a Reversal?

SCFI surged 25% due to the Red Sea crisis, benefiting OOIL, suggesting consensus forecasts are too bearish. It is attractive at 0.7x P/B and 8%...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today

There could be 3 changes for 2823HK/2822HK in June. Today is the price cutoff and there are a couple of close adds. Impact is not very large but...

Brian Freitas

Transportation Stocks on Move in Early 2024

The WTO has forecasted a rise in global trade volume in 2024, especially for business cycle related goods. In Singapore, the 10 most traded stocks...

Singapore Exchange Ltd (SGX)

Northbound Flows (Jun 28th): Foxconn Industrial Internet, Wanhua Chemical, BYD

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Foxconn Industrial Internet, Zhejiang Sanhua...

Ke Yan, CFA, FRM

SITC International (1308 HK): Bidding Farewell to the Trough

​SITC's disappointing FY23 earnings decline may be already priced in. With sequentially higher freight rates, there is a potential for a rebound in...

Osbert Tang, CFA

Orient Overseas Intl (316 HK): Is It Time for a Reversal?

​SCFI surged 25% due to the Red Sea crisis, benefiting OOIL, suggesting consensus forecasts are too bearish. It is attractive at 0.7x P/B and 8%...

Osbert Tang, CFA

SITC's disappointing FY23 earnings decline may be already priced in. With sequentially higher freight rates, there is a potential for a rebound in...

SCFI surged 25% due to the Red Sea crisis, benefiting OOIL, suggesting consensus forecasts are too bearish. It is attractive at 0.7x P/B and 8%...