Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Event-Driven

<ul>
<li>Tencent reported a softer set of results for Q2 relative to Q1. Revenue for the quarter was up 1% QoQ and 8% YoY.</li>
<li>Since our last discount update mid-August, the discounts of both Naspers and Prosus have continued to narrow.</li>
<li>Naspers' discount is trading well off the lows reached at the end of July (~45%). </li>
</ul>


Tencent reported a softer set of results for Q2 relative to Q1. Revenue for the quarter was up 1% QoQ and 8% YoY.
Since our last discount update mid-August, the discounts of both Naspers and Prosus have continued to narrow.
Naspers' discount is trading well off the lows reached at the end of July (~45%). 


Naspers X Prosus Discount Update Post Tencent 2Q FY24 Results, Narrowing Gains Momentum

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

<ul>
<li>Media reports indicate that <a href="https://www.smartkarma.com/entities/walmart-inc" target="_blank" data-smartkarma-citation="entities:11134:1" rel="noopener">Walmart (WMT US)</a> is looking to sell 144.5m shares of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com (JD US)</a> to raise up to US$3.74bn. That would be substantially all of its stake.</li>
<li>There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.</li>
<li>There will be no passive buying from <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.</li>
</ul>


Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.


JD.com (9618 HK): Index Implications of Walmart Placement

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> will replace <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> at the close on 6 September.</li>
<li>Estimated one-way turnover at the rebalance is 3.2% resulting in a round-trip trade of HK$6.5bn. Passives need to buy over 7x ADV in <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a>. </li>
<li>Positioning appears light in both stocks. Expect <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> to move up and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a> to move lower near-term.</li>
</ul>


As expected, ASM Pacific Technology (522 HK) will replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 6 September.
Estimated one-way turnover at the rebalance is 3.2% resulting in a round-trip trade of HK$6.5bn. Passives need to buy over 7x ADV in ASM Pacific Technology (522 HK). 
Positioning appears light in both stocks. Expect ASM Pacific Technology (522 HK) to move up and Ping An Healthcare and Technol (1833 HK) to move lower near-term.


HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)

<ul>
<li>There will be 3 changes for the Hang Seng Internet &amp; Information Technology Index (HSIII) at the September rebalance. There are some surprises.</li>
<li>Estimated one-way turnover at the rebalance is 3.4% resulting in a round-trip trade of HK$2.04bn (US$262m). 7 stocks will have over 1x ADV to trade.</li>
<li>
<a href="https://www.smartkarma.com/entities/weimob-inc" target="_blank" data-smartkarma-citation="entities:27394:1" rel="noopener">Weimob Inc. (2013 HK)</a> is a surprise add. There is 6x ADV to buy from passive trackers and shorts are 12% of shares out and 24x ADV to cover.</li>
</ul>


There will be 3 changes for the Hang Seng Internet &amp; Information Technology Index (HSIII) at the September rebalance. There are some surprises.
Estimated one-way turnover at the rebalance is 3.4% resulting in a round-trip trade of HK$2.04bn (US$262m). 7 stocks will have over 1x ADV to trade.

Weimob Inc. (2013 HK) is a surprise add. There is 6x ADV to buy from passive trackers and shorts are 12% of shares out and 24x ADV to cover.


Hang Seng Internet & IT Index Rebalance: Three Changes & A Few Surprises

<ul>
<li>In a surprise (maybe should not have been!), there are no constituent changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> in September. However, there are float and capping changes.</li>
<li>Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.</li>
<li>We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.</li>
</ul>


In a surprise (maybe should not have been!), there are no constituent changes for the Hang Seng Index (HSI INDEX) in September. However, there are float and capping changes.
Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.
We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.


Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

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)

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Hang Seng TECH Index (HSTECH INDEX EQUITY)

Naspers X Prosus Discount Update Post Tencent 2Q FY24 Results, Narrowing Gains Momentum

The discounts of Naspers and Prosus have continued to narrow through August. We provide an update on how the discounts have traded since Tencent...

DMA

JD.com (9618 HK): Index Implications of Walmart Placement

Walmart is looking to sell its entire stake in JD.com. The ADR is lower in the aftermarket and the HK-line is down 10.8%. Passive trackers will buy...

Brian Freitas

HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)

ASMPT will replace Ping An Healthcare in the HSTECH at the close on 6 Sep. Changes were expected but positioning appears light. With 6.5% of float...

Brian Freitas

Hang Seng Internet & IT Index Rebalance: Three Changes & A Few Surprises

There are 3 changes for the HSIII in Sep. Estimated one-way turnover at the rebalance is 3.4% resulting in a round-trip trade of HK$2.04bn...

Brian Freitas

Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

No constituent changes so we stay at 82 stocks. Reaching 100 stocks is few years away. FAF/capping changes lead to 1-way turnover of 1% and round...

Brian Freitas

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52-week Range

Market Cap (USDm)

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