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>At 82 index constituents currently, we expect the index committee to progress towards reaching 100 constituents. We are (highly) unlikely to reach the target this calendar year though.</li>
<li>We highlight nine stocks that have a decent chance at being added to the index over the next couple of rebalances. All companies are profitable and meet inclusion requirements.</li>
<li>The market consultation on proposed changes to the Hang Seng Industry Classification System (HSICS) could lead to more inclusions from the Information Technology sector from the June rebalance.</li>
</ul>


At 82 index constituents currently, we expect the index committee to progress towards reaching 100 constituents. We are (highly) unlikely to reach the target this calendar year though.
We highlight nine stocks that have a decent chance at being added to the index over the next couple of rebalances. All companies are profitable and meet inclusion requirements.
The market consultation on proposed changes to the Hang Seng Industry Classification System (HSICS) could lead to more inclusions from the Information Technology sector from the June rebalance.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

<ul>
<li>The review period for the next rebalance of a global index kicks off this week and that is where a lot of eyes will be focused.</li>
<li>There were big inflows to ETFs tracking the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX)</a> while there were redemptions from the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a>. </li>
<li>Inflows continue for <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex China (EMXC US)</a> while there were outflows from <a href="https://www.smartkarma.com/entities/ishares-msci-acwi-etf" target="_blank" data-smartkarma-citation="entities:24402:1" rel="noopener">iShares ACWI ETF (ACWI US)</a>. </li>
</ul>


The review period for the next rebalance of a global index kicks off this week and that is where a lot of eyes will be focused.
There were big inflows to ETFs tracking the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX) while there were redemptions from the Hang Seng H Share Index ETF (2828 HK). 
Inflows continue for iShares Emerging Markets ex China (EMXC US) while there were outflows from iShares ACWI ETF (ACWI US). 


Index Rebalance & ETF Flow Recap: HSI, LQ45, FXI, 2823 HK, SENSEX

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Intco Medical Technology  Lt / Equity Bottom-Up

<ul>
<li>The 2023 NRDL negotiation has officially begun since Friday. Pharmaceutical enterprises predict the price reduction would be more reasonable. But some company representatives were dissatisfactory with first-day negotiation results. </li>
<li>Although there're many optimistic judgments about the improved financing environment in both China and overseas markets, this may not be the case. Based on the data, we remain cautious instead.</li>
<li>As the disposable glove market gradually shows a warming trend, we are optimistic that <a href="https://www.smartkarma.com/entities/intco-medical-technology-co-lt" target="_blank" data-smartkarma-citation="entities:29782:1" rel="noopener">Intco Medical </a>would achieve a performance reversal in the future. The current valuation has bottomed out.</li>
</ul>


The 2023 NRDL negotiation has officially begun since Friday. Pharmaceutical enterprises predict the price reduction would be more reasonable. But some company representatives were dissatisfactory with first-day negotiation results. 
Although there're many optimistic judgments about the improved financing environment in both China and overseas markets, this may not be the case. Based on the data, we remain cautious instead.
As the disposable glove market gradually shows a warming trend, we are optimistic that Intco Medical would achieve a performance reversal in the future. The current valuation has bottomed out.


China Healthcare Weekly (Nov.17) - 2023 NRDL Negotiation, Financing Data Won't Lie, Intco Medical

Thematic (Sector/Industry)

<ul>
<li>The Development and Reform Commission of Shenzhen Municipality issued a document about the subsidy for VBP, which is a positive policy and is good for innovation.</li>
<li>The approval of Genuine Biotech’s Azvudine could greatly increase the unpredictability of the approval of domestic innovative drugs, thus greatly increasing the unpredictable risk of domestic innovative drug enterprises.</li>
<li>In terms of internationalization, we summarized what Chinese pharmaceutical companies could do at the current stage. But they are hard to become the mainstream in pharmaceuticals globally in short term.</li>
</ul>


The Development and Reform Commission of Shenzhen Municipality issued a document about the subsidy for VBP, which is a positive policy and is good for innovation.
The approval of Genuine Biotech’s Azvudine could greatly increase the unpredictability of the approval of domestic innovative drugs, thus greatly increasing the unpredictable risk of domestic innovative drug enterprises.
In terms of internationalization, we summarized what Chinese pharmaceutical companies could do at the current stage. But they are hard to become the mainstream in pharmaceuticals globally in short term.


China Healthcare Weekly (July.29)-Subsidy for VBP, Unpredictable NMPA, Ways for Internationalization

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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 19 based on HKEx daily reports.</li>
<li>In the past 7 days, top 3 companies that repurchased the most shares from the market were China Medical System (867.HK), Kangji Medical (9997.HK), Nissin Foods (1475.HK).</li>
<li>In the past 30 days, top 3 companies that repurchased the most shares from the market were China Gas (384.HK), Sihuan Pharmaceutical (460.HK), Fosun International (656.HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 19 based on HKEx daily reports.
In the past 7 days, top 3 companies that repurchased the most shares from the market were China Medical System (867.HK), Kangji Medical (9997.HK), Nissin Foods (1475.HK).
In the past 30 days, top 3 companies that repurchased the most shares from the market were China Gas (384.HK), Sihuan Pharmaceutical (460.HK), Fosun International (656.HK).


Hong Kong Buybacks: China Medical System, Kangji, Nissin Foods

China

China Medical System Holdings Limited manufactures pharmaceutical and medical products primarily in China.

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China Medical System (867 HK)

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

The announcement of the inclusions to the HSI at the March rebalance will be made post market close today. Most stocks are trading lower which is...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSI, LQ45, FXI, 2823 HK, SENSEX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

China Healthcare Weekly (Nov.17) - 2023 NRDL Negotiation, Financing Data Won't Lie, Intco Medical

The 2023 NRDL negotiation has officially begun since Friday. Based on 23Q3 data, financing environment in China and overseas markets is far from...

Xinyao (Criss) Wang

China Healthcare Weekly (July.29)-Subsidy for VBP, Unpredictable NMPA, Ways for Internationalization

The policy about subsidy for VBP is a positive sign for innovation. NMPA is unpredictable, increasing the uncertainty of drug approval. Here's what...

Xinyao (Criss) Wang

Hong Kong Buybacks: China Medical System, Kangji, Nissin Foods

We highlight the top 3 companies that repurchased the most shares in HK were China Medical System Holdings Limited (867 HK), Kangji Medical (9997...

Ke Yan, CFA, FRM

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52-week Range

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