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>
<a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-c2975d60-47cd-4246-a7a6-25297586242b" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance (601318 CH)</a> trades at a 40% premium to <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (2318 HK)</a>. The premium has blown out the last week and there could be a reversal.</li>
<li>The difference in Ping An's AH premium versus the HSAHP Index has shrunk to its narrowest level in the last 10 years.</li>
<li>Shareholding in <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-c2975d60-47cd-4246-a7a6-25297586242b" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance Group of (601318 CH)</a> via Northbound Connect has dropped and shareholding in <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> via Southbound Connect has increased steadily.</li>
</ul>



Ping An Insurance (601318 CH) trades at a 40% premium to Ping An Insurance (2318 HK). The premium has blown out the last week and there could be a reversal.
The difference in Ping An's AH premium versus the HSAHP Index has shrunk to its narrowest level in the last 10 years.
Shareholding in Ping An Insurance Group of (601318 CH) via Northbound Connect has dropped and shareholding in Ping An Insurance (H) (2318 HK) via Southbound Connect has increased steadily.


Ping An A/​H Premium: Blow Out Could Lead to Sharp Reversal

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.</li>
<li>AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.</li>
<li>Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.</li>
</ul>


Given Pru's demerger in 2021, it now offers investors a good alternative to AIA to tap into the development and the growth potential of the life insurance sector in Pan-Asia.
AIA has a more balanced business across so many markets in APAC, while Pru skews toward Southeast Asia.
Pru's P/BV is currently at a 30% discount to AIA's and is trading at the same level as the year-end when China just announced the re-opening of its borders.


APAC Insurers Series (#2): AIA or Prudential?

<ul>
<li>Nearly 90% through the review period, we see 6 potential adds and 5 potential deletes in June. However, there can be a maximum of 5 changes at a rebalance.</li>
<li>We estimate a one-way turnover of 5.07% at the June rebalance leading to a one-way trade of CNY 3.97bn. Index arb activity could add to the impact on the stocks.</li>
<li>The potential adds have outperformed the potential deletes by 17% over the last month and by 21% over the last two months.</li>
</ul>


Nearly 90% through the review period, we see 6 potential adds and 5 potential deletes in June. However, there can be a maximum of 5 changes at a rebalance.
We estimate a one-way turnover of 5.07% at the June rebalance leading to a one-way trade of CNY 3.97bn. Index arb activity could add to the impact on the stocks.
The potential adds have outperformed the potential deletes by 17% over the last month and by 21% over the last two months.


SSE50 Index Rebalance Preview: BIG Outperformance Over the Last Month

PICC Property & Casualty H / Equity Bottom-Up

<ul>
<li>The insurance sector should definitely warrant more investor attention going forward as some insurance names in the region have had a very strong year in 2022.</li>
<li>Two key markets we view positively in 2023 are China's P&amp;C and Korea's L&amp;H insurance markets, given their favorable industry catalysts and tailwinds. </li>
<li>Among all the insurance stocks in these two markets, we believe PICC P&amp;C and Samsung Life will continue to have an exciting year ahead.</li>
</ul>


The insurance sector should definitely warrant more investor attention going forward as some insurance names in the region have had a very strong year in 2022.
Two key markets we view positively in 2023 are China's P&amp;C and Korea's L&amp;H insurance markets, given their favorable industry catalysts and tailwinds. 
Among all the insurance stocks in these two markets, we believe PICC P&amp;C and Samsung Life will continue to have an exciting year ahead.


APAC Insurers Series (#1): A Hidden Gem in This Bear Market?

<ul>
<li>China's motor insurance has been showing signs of growth after years of decline due to deregulations and reforms in the sector.</li>
<li>Motor insurance tailwind will benefit large players the most. Bullish on PICC P&amp;C since it's the largest player in motor insurance and to likely benefit the most from the tailwind.</li>
<li>Bearish on CPIC since its P&amp;C business is much smaller than PICC P&amp;C and Ping An P&amp;C, while its L&amp;H growth continues to be under pressure.  </li>
</ul>


China's motor insurance has been showing signs of growth after years of decline due to deregulations and reforms in the sector.
Motor insurance tailwind will benefit large players the most. Bullish on PICC P&amp;C since it's the largest player in motor insurance and to likely benefit the most from the tailwind.
Bearish on CPIC since its P&amp;C business is much smaller than PICC P&amp;C and Ping An P&amp;C, while its L&amp;H growth continues to be under pressure.  


China

China Pacific Insurance (Group) Company, Ltd. is an integrated insurance services provider. The Company offers life and property insurance products through its subsidiaries.

China Pacific Insurance (Group) Co., (601601 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

China Pacific Insurance (Group) Co., (601601 CH)

Ping An A/H Premium: Blow Out Could Lead to Sharp Reversal

The Ping An AH premium has dropped from the highs of 40% mid last week. There should be a further drop in the AH premium, but it could be a bumpy...

Brian Freitas

APAC Insurers Series (#2): AIA or Prudential?

Pru’s recent correction offers investors an opportune window to buy into its premium franchise (vs. AIA), although both stocks provide investors...

Alec Tseung

SSE50 Index Rebalance Preview: BIG Outperformance Over the Last Month

There could be 5 changes for the SSE50 in June. Estimate one-way turnover is 5.07% and the one-way trade is CNY 3.97bn. The potential adds have...

Brian Freitas

APAC Insurers Series (#1): A Hidden Gem in This Bear Market?

China P&C and Korea L&H are two insurance markets in Asia that we view positively in 2023, thanks to the continued catalysts. PICC P&C and Samsung...

Alec Tseung

China Insurance: PICC P&C Vs. CPIC

Bullish on PICC P&C outlook as it's expected to benefit the most from China's motor insurance recovery. Bearish on CPIC's because its P&C is much...

Alec Tseung

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Ping An A/​H Premium: Blow Out Could Lead to Sharp Reversal

The Ping An AH premium has dropped from the highs of 40% mid last week. There should be a further drop in the AH premium, but it could be a bumpy...

Brian Freitas

APAC Insurers Series (#2): AIA or Prudential?

Pru’s recent correction offers investors an opportune window to buy into its premium franchise (vs. AIA), although both stocks provide investors...

Alec Tseung

SSE50 Index Rebalance Preview: BIG Outperformance Over the Last Month

There could be 5 changes for the SSE50 in June. Estimate one-way turnover is 5.07% and the one-way trade is CNY 3.97bn. The potential adds have...

Brian Freitas

APAC Insurers Series (#1): A Hidden Gem in This Bear Market?

China P&C and Korea L&H are two insurance markets in Asia that we view positively in 2023, thanks to the continued catalysts. PICC P&C and Samsung...

Alec Tseung

China Insurance: PICC P&C Vs. CPIC

Bullish on PICC P&C outlook as it's expected to benefit the most from China's motor insurance recovery. Bearish on CPIC's because its P&C is much...

Alec Tseung

Ping An A/H Premium: Blow Out Could Lead to Sharp Reversal