Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

Smoore International Holdings / Event-Driven

For our next Webinar, we 're excited to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> , who will discuss the upcoming rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>. Scheduled for June 2021, the HSI rebalance is slated to increase constituents to 80 by mid-2022, better balance representation among industry groups, and rationalise the weighting cap to 8% for all stocks.<h3>The webinar will be hosted on Wednesday, 19 May 2021, 17:00 SGT/HKT.</h3><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=87998710285" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>Brian Freitas is a highly experienced ex-delta one trader with over 17 years of experience. He was previously with Barclays, Macquarie, Credit Suisse and BNP Paribas.

For our next Webinar, we 're excited to welcome back Insight Provider Brian Freitas , who will discuss the upcoming rebalance of the Hong Kong Hang Seng Index (HSI INDEX). Scheduled for June 2021, the HSI rebalance is slated to increase constituents to 80 by mid-2022, better balance representation among industry groups, and rationalise the weighting cap to 8% for all stocks.The webinar will be hosted on Wednesday, 19 May 2021, 17:00 SGT/HKT.Register for the Webinar hereBrian Freitas is a highly experienced ex-delta one trader with over 17 years of experience. He was previously with Barclays, Macquarie, Credit Suisse and BNP Paribas.

Smartkarma Webinar | Hang Seng (HSI INDEX) Rebalance: What's in Store for June?

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Hang Seng China Enterprises Index / Technical Analysis

China A shares remains a bullish bet on dips and able to weather speed bumps in the global cycle.Our HK short is meeting downside targets where we want to layer out of our short and into a long for a tactical bounce cycle but the macro picture remains dim.Taiwan call to transition from long to short at the top of the rising wedge is unfolding. We like building a short into the outlined top zone. Taiwan was the next line to short/roll over following leads in Nikkei, HK, India.Weakening signals and breadth splinters in Asia a warning for a bigger cycle peak brewing in the global cycle.

China A shares remains a bullish bet on dips and able to weather speed bumps in the global cycle.Our HK short is meeting downside targets where we want to layer out of our short and into a long for a tactical bounce cycle but the macro picture remains dim.Taiwan call to transition from long to short at the top of the rising wedge is unfolding. We like building a short into the outlined top zone. Taiwan was the next line to short/roll over following leads in Nikkei, HK, India.Weakening signals and breadth splinters in Asia a warning for a bigger cycle peak brewing in the global cycle.

Hong Kong Short Reduce - Taiwan Add to Short on Strength

FTSE China A50 Index / Technical Analysis

<a href="https://www.smartkarma.com/entities/ftse-china-a50-index" target="_blank" data-smartkarma-citation="entities:22905:1" rel="noopener">FTSE China A50 Index (XIN9I INDEX)</a> kissed the lower pattern long support zone at 16,500 amid maturing bull divergence that sets the stage for a counter trend risk to the underside of broken trendline that will act as the next big upside target and short zone.A share exhibit the higher conviction long set up with HK still vulnerble to any SPX pullback (dip and rally the bias into late April).Hong Kong - Conviction rests with buying a swing lower near HSI 27,500 and HSCEI 10,500-600 or a breakout now as we challenge the HSI 29,200 pivot barrier with 29,500 the next hurdle.

FTSE China A50 Index (XIN9I INDEX) kissed the lower pattern long support zone at 16,500 amid maturing bull divergence that sets the stage for a counter trend risk to the underside of broken trendline that will act as the next big upside target and short zone.A share exhibit the higher conviction long set up with HK still vulnerble to any SPX pullback (dip and rally the bias into late April).Hong Kong - Conviction rests with buying a swing lower near HSI 27,500 and HSCEI 10,500-600 or a breakout now as we challenge the HSI 29,200 pivot barrier with 29,500 the next hurdle.

A50 Long Signal and Hurdles to Backswing Target

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

The Ping An A-shares <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-china" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance Group Co Of China (601318 CH)</a> are trading at parity versus the H-shares <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>. This continues the cycle of premiums and discounts going back to 2015.The last time the A-shares traded at parity to the H-shares was in July last year. Since then, the premium of A-shares to H-shares touched a high of over 16% before moving lower to trade at parity again.With the Ping An A-shares trading at parity versus the H-shares, the risk/reward is attractive to setting up a premium expansion trade.In this Insight, we look at the historical premium for Ping An and compare it to the premium on the AH index and other large caps, and look at some catalysts that could lead to an expansion of the premium.

The Ping An A-shares Ping An Insurance Group Co Of China (601318 CH) are trading at parity versus the H-shares Ping An Insurance (H) (2318 HK). This continues the cycle of premiums and discounts going back to 2015.The last time the A-shares traded at parity to the H-shares was in July last year. Since then, the premium of A-shares to H-shares touched a high of over 16% before moving lower to trade at parity again.With the Ping An A-shares trading at parity versus the H-shares, the risk/reward is attractive to setting up a premium expansion trade.In this Insight, we look at the historical premium for Ping An and compare it to the premium on the AH index and other large caps, and look at some catalysts that could lead to an expansion of the premium.

Ping An A/H Premium: Nearing a Discount; Set Up for Expansion

Evergrande Property Services / Event-Driven

The Hang Seng Indexes Company Limited (HSIL) will announce the results of the June 2021 review of the Hang Seng Family of Indexes on 21 May. The constituent changes will be effective after the close of trading on 4 June.The review period for the June review ended on 31 March and stocks that had at least 1 month of trading history by that date are eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a>.<a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> will be a Fast Entry inclusion into the index at the close of trading on 8 April and no stock will be deleted on that date.At the June review, we see a high probability of <a href="https://www.smartkarma.com/entities/china-evergrande-new-energy-vehicle-group-ltd" target="_blank" data-smartkarma-citation="entities:713:1" rel="noopener">Evergrande Auto (708 HK)</a> and <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> and being included in the index, and of <a href="https://www.smartkarma.com/entities/china-tower-corp-ltd" target="_blank" data-smartkarma-citation="entities:27037:1" rel="noopener">China Tower (788 HK)</a>, <a href="https://www.smartkarma.com/entities/guangdong-investment-ltd" target="_blank" data-smartkarma-citation="entities:12109:1" rel="noopener">Guangdong Investment (270 HK)</a> and <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom Hong Kong (762 HK)</a> being deleted from the index.There is a slightly lower probability of <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> being included in the index and of <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement Co Ltd H (914 HK)</a> being excluded.<a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning Co Ltd (2331 HK)</a> is a close add and the corresponding deletion is <a href="https://www.smartkarma.com/entities/shimao-property-holdings-limited" target="_blank" data-smartkarma-citation="entities:8375:1" rel="noopener">Shimao Property Holdings (813 HK)</a>.The June review also sees a change in the index methodology where all stocks will be capped at 8% of the index weight.

The Hang Seng Indexes Company Limited (HSIL) will announce the results of the June 2021 review of the Hang Seng Family of Indexes on 21 May. The constituent changes will be effective after the close of trading on 4 June.The review period for the June review ended on 31 March and stocks that had at least 1 month of trading history by that date are eligible for inclusion in the Hang Seng China Enterprises Index (HSCEI INDEX).Baidu (9888 HK) will be a Fast Entry inclusion into the index at the close of trading on 8 April and no stock will be deleted on that date.At the June review, we see a high probability of Evergrande Auto (708 HK) and BYD (1211 HK) and being included in the index, and of China Tower (788 HK), Guangdong Investment (270 HK) and China Unicom Hong Kong (762 HK) being deleted from the index.There is a slightly lower probability of Evergrande Property Services (6666 HK) being included in the index and of Anhui Conch Cement Co Ltd H (914 HK) being excluded.Li Ning Co Ltd (2331 HK) is a close add and the corresponding deletion is Shimao Property Holdings (813 HK).The June review also sees a change in the index methodology where all stocks will be capped at 8% of the index weight.

HSCEI June 2021 Index Rebalance Preview - Three Adds, Four Deletes Possible

China

The Hang Seng China Enterprises Index is a free-float capitalization-weighted index comprised of H-Shares listed on the Hong Kong Stock Exchange and included in the Hang Seng Mainland Composite Index. The base value of this index is 2000 as of Jan 3, 2000. This index replaced the old HSCE index on Oct. 3, 2001.

Hang Seng China Enterprises Index (HSCEI INDEX)

Hang Seng China Enterprises Index (HSCEI INDEX)

Smartkarma Webinar | Hang Seng (HSI INDEX) Rebalance: What's in Store for June?

On 19 May, 5PM SGT, join our webinar with Brian Freitas, where we will discuss the upcoming rebalance of the Hong Kong Hang Seng Index (HSI INDEX)...

Smartkarma Research

Hong Kong Short Reduce - Taiwan Add to Short on Strength

HK short is meeting downside targets to turn from short to long - tactical bounce cycle but the macro picture remains dim. Taiwan call to...

Thomas Schroeder

A50 Long Signal and Hurdles to Backswing Target

FTSE China A50 Index (XIN9I INDEX) kissed the lower pattern long support zone at 16,500 amid maturing bull divergence that sets the stage for a...

Thomas Schroeder

Ping An A/H Premium: Nearing a Discount; Set Up for Expansion

With the Ping An Insurance A-shares trading at parity to the H-shares, the risk/reward favours an AH Premium expansion trade. Watch for change in H...

Brian Freitas

HSCEI June 2021 Index Rebalance Preview - Three Adds, Four Deletes Possible

We forecast 3 inclusions and 4 exclusions from the HSCEI at the June review. Along with capping changes, we estimate a one-way turnover of 9.75%....

Brian Freitas