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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>We do not expect there will be huge selling in <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> immediately. However, there will be an overhang on the stock in the near to medium term.</li>
<li>JD.com could drop in the next few days as the ADR allotment is sold in the market. Shorts that have been built up could soak up some of the flow.</li>
<li>The big worry is the US$4bn of JD.com stock that <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus</a> will receive. It is likely they will look to sell and use the cash to buy back their own stock.</li>
</ul>


We do not expect there will be huge selling in JD.com Inc. (9618 HK) immediately. However, there will be an overhang on the stock in the near to medium term.
JD.com could drop in the next few days as the ADR allotment is sold in the market. Shorts that have been built up could soak up some of the flow.
The big worry is the US$4bn of JD.com stock that Prosus will receive. It is likely they will look to sell and use the cash to buy back their own stock.


JD.com (9618 HK): Overhang a Bigger Worry than Immediate Selling

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

<ul>
<li>HSI sliced below the 19,600 projection with the next level at 18,450 and the big dual lows from 2012 and 2016 at 18,100 and a big level to hold.</li>
<li>Sell volumes and sell momentum remain high, equating to more short term pain.</li>
<li>HK tech index break below 4,000 support set to test key lows from 2018 and 2019 as the levels to hold to avert new chart lows.</li>
</ul>


HSI sliced below the 19,600 projection with the next level at 18,450 and the big dual lows from 2012 and 2016 at 18,100 and a big level to hold.
Sell volumes and sell momentum remain high, equating to more short term pain.
HK tech index break below 4,000 support set to test key lows from 2018 and 2019 as the levels to hold to avert new chart lows.


KraneShares CSI China Internet ETF / Event-Driven

<ul>
<li>China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).</li>
<li>Then <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global</a> dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC's requirements and work on the HK listing was halted.</li>
<li>With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.</li>
</ul>


China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).
Then DiDi Global dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC's requirements and work on the HK listing was halted.
With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.


China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO Inc (9866 HK)</a> is expected to list on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.</li>
<li>We do not expect <a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO Inc (9866 HK)</a> to get Fast Entry to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH INDEX</a>, though inclusion in the HSTECH could take place in June.</li>
<li>
<a href="https://www.smartkarma.com/entities/nio-inc-2d526675-c878-4104-840f-87fed1735e85" target="_blank" data-smartkarma-citation="entities:35652:1" rel="noopener">NIO Inc (9866 HK)</a> is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.</li>
</ul>



NIO Inc (9866 HK) is expected to list on the HKEX (388 HK) tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.
We do not expect NIO Inc (9866 HK) to get Fast Entry to the HSCEI INDEX and HSTECH INDEX, though inclusion in the HSTECH could take place in June.

NIO Inc (9866 HK) is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.


NIO (9866 HK) Secondary Listing: HSTECH Inclusion in June Likely

<ul>
<li>The March rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituents at 8%. This will lead to large flows.</li>
<li>The largest inflows will be on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a>, <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> and <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>. </li>
<li>The largest outflows will be on <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a> and <a href="https://www.smartkarma.com/entities/tongcheng-elong-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng-Elong Holdings Ltd (780 HK)</a>.</li>
</ul>


The March rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituents at 8%. This will lead to large flows.
The largest inflows will be on Alibaba Group (9988 HK), JD.com Inc. (9618 HK), Meituan (3690 HK), Nongfu Spring (9633 HK), Li Auto (2015 HK) and Lenovo (992 HK). 
The largest outflows will be on HSBC Holdings (5 HK), Kuaishou Technology (1024 HK), China Construction Bank H (939 HK) and Tongcheng-Elong Holdings Ltd (780 HK).


HSI, HSCEI, HSTECH: March Rebalance Flows Post Capping

Hong Kong

The Hang Seng TECH Index aims to represent the 30 largest technology companies listed in Hong Kong which have high business exposure to the Innovative Tech Themes.

Hang Seng TECH Index (HSTECH INDEX EQUITY)

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

Hang Seng TECH Index (HSTECH INDEX EQUITY)

JD.com (9618 HK): Overhang a Bigger Worry than Immediate Selling

The JD.com shares from Tencent's in-specie dividend settle today. There will be immediate selling from the ADR depositaries, while Prosus' holding...

Brian Freitas

HSI 18,100 a Big Level

HSI sliced below the 19,600 projection with the next level at 18,450 and the big dual lows from 2012 and 2016 at 18,100 and a big level to hold.

Thomas Schroeder

China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications

The SEC naming 5 companies under the HFCAA put China ADRs under pressure last week. The news that the CAC had nixed DIDI's HK listing plans added...

Brian Freitas

NIO (9866 HK) Secondary Listing: HSTECH Inclusion in June Likely

NIO is expected to list on the HKEX tomorrow as a Secondary Listing. We do not expect any passive inflows to the stock in the short-term. HSTECH...

Brian Freitas

HSI, HSCEI, HSTECH: March Rebalance Flows Post Capping

The March rebalance of the Hang Seng family of indexes will use todays closing price to cap the stocks. The one-way trade across the HS, HSCEI and...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)