Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. </li>
<li>In June 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 200, ASX 100, ASX 50, and ASX 20.</li>
<li>In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Rebalance and other potential irregular changes.</li>
</ul>


The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. 
In June 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 200, ASX 100, ASX 50, and ASX 20.
In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Rebalance and other potential irregular changes.


S&P/​​​ASX Indices: Quiddity Leaderboard for June 2022 Rebalance

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hochtief-ag" target="_blank" data-smartkarma-citation="entities:21652:1" rel="noopener">Hochtief AG (HOT GR)</a> has finally launched an unconditional offer for the rest of <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a> (where it already owns 78.58%).</li>
<li>As <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> writes in <a href="https://www.smartkarma.com/insights/hochtief-s-unconditional-offer-for-cimic" target="_blank" data-smartkarma-citation="insights:65774" rel="noopener">Hochtief's Unconditional Offer For CIMIC</a>, this should be a done deal. Completion would free up a place in the S&amp;P/ASX200.  </li>
<li>This looks to be one of the earlier Q2 intra-quarter changes, but there are technicalities.</li>
</ul>



Hochtief AG (HOT GR) has finally launched an unconditional offer for the rest of CIMIC Group Ltd (CIM AU) (where it already owns 78.58%).
As David Blennerhassett writes in Hochtief's Unconditional Offer For CIMIC, this should be a done deal. Completion would free up a place in the S&amp;P/ASX200.  
This looks to be one of the earlier Q2 intra-quarter changes, but there are technicalities.


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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hochtief-ag" target="_blank" data-smartkarma-citation="entities:21652:1" rel="noopener">Hochtief AG (HOT GR)</a> holds 78.58% of <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a> and has made an offer to acquire the remaining shares at A$22/share.</li>
<li>Hochtief will squeeze out the remaining shareholders once it holds more than 90% of the shares in <a href="https://www.smartkarma.com/entities/cimic-group-ltd" target="_blank" data-smartkarma-citation="entities:20030:1" rel="noopener">CIMIC Group Ltd (CIM AU)</a>. </li>
<li>We think the offer is fair and expect the stock to open close to A$22/share tomorrow. There could be ad hoc inclusion to the ASX200 index in May or June.</li>
</ul>



Hochtief AG (HOT GR) holds 78.58% of CIMIC Group Ltd (CIM AU) and has made an offer to acquire the remaining shares at A$22/share.
Hochtief will squeeze out the remaining shareholders once it holds more than 90% of the shares in CIMIC Group Ltd (CIM AU). 
We think the offer is fair and expect the stock to open close to A$22/share tomorrow. There could be ad hoc inclusion to the ASX200 index in May or June.


CIMIC (CIM AU) Takeover Offer: Should Get Done; Index Implications

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> received the ATO tax ruling on 18 February. This creates some uncertainty around the timing of the <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT</a> inclusion in the ASX200 Index.</li>
<li>Given the 'latest available shares in issue' are used, we think there is a better than even chance of the stock being included in the index at the March rebalance.</li>
<li>If <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> is not included in March, then it could replace Crown Resorts in May. Else, the stock will be added at the June rebalance.</li>
</ul>



Aventus Group (AVN AU) received the ATO tax ruling on 18 February. This creates some uncertainty around the timing of the HomeCo Daily Needs REIT inclusion in the ASX200 Index.
Given the 'latest available shares in issue' are used, we think there is a better than even chance of the stock being included in the index at the March rebalance.
If HomeCo Daily Needs REIT (HDN AU) is not included in March, then it could replace Crown Resorts in May. Else, the stock will be added at the June rebalance.


ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)

<ul>
<li>Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.</li>
<li>An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.</li>
<li>Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.</li>
</ul>


Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.
An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an 'Administrative Issue'. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.
Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.


Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

Australia

BWP Trust operates as a real estate investment trust. The Trust invests and manages commercial properties. BWP Trust serves customers in Australia.

Charter Hall Long WALE REIT operates as a real estate investment trust. The Company invests in office, industrial, and retail properties that are leased to corporate and government tenants on long-term. Charter Hall Long WALE REIT conducts business in Australia.

Ingenia Communities Group manages, develops and invests in a portfolio of retirement village accomodation housing units.

Charter Hall Retail REIT owns a portfolio of supermarkets and shopping centers located in non-metropolitan areas throughout Australia, New Zealand and the United States.

National Storage REIT is a Real Estate Investment Trust.  The Trust owns self storage facilities in Brisbane, Sunshine Coast and Gold Coast in Queensland, Sydney Western Suburbs in New South Wales, Melbourne and Geelong in Victoria, Adelaide in South Australia, Perth in Western Australia and Hobart in Tasmania.

Growthpoint Properties Australia Limited operates as a real estate investment trust. The Company focuses on office, residential, and industrial sectors. Growthpoint Properties Australia serves customers in Australia.

Growthpoint Properties Australia (GOZ AU)

Arena REIT operates as a real estate investment trust. The Trust owns a portfolio in sectors such as childcare, healthcare, education and government tenanted facilities in Australia.

Cromwell Property Group is a property and funds manager. The Company, through its subsidiary, provides funds management, property transactions, property and facilities management, finance, compliance, debenture issues, and debt management.

Charter Hall Social Infrastructure REIT operates as a real estate investment trust. The Company invests in social infrastructure properties, as well as provides assets and capital management services. Charter Hall Social Infrastructure serves clients in Australia and New Zealand.

Charter Hall Social Infrastructure REIT (CQE AU)

Rural Funds Group is a real estate property trust which owns Australian agricultural assets.

MORI HILLS REIT INVESTMENT CORPORATION is a real estate investment trust (REIT). The Company invests in real estate properties such as commercial and office buildings.

Mori Hills REIT Investment Corporation (3234 JP)

Retail Opportunity Investments Corp. is a fully integrated and self-managed real estate investment trust ("REIT").  The Company specializes in the acquisition, ownership and management of necessity-based community, and neighborhood shopping centers in the western and eastern regions of the United States anchored by national and regional supermarkets and drugstores.

Retail Opportunity Investments Corp. (ROIC US)

SPH REIT is a Singapore-based REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets.

Comforia Residential REIT, Inc. is a real estate investment trust (REIT). The company invests in leasing city apartments mainly in Tokyo area.

MORI TRUST Sogo Reit, Inc. is a real estate investment trust (REIT), which invests in income producing properties.  The Company mainly invests in office buildings in metropolitan area and local cities.

Getty Realty Corporation owns and leases properties in the Northeastern and Middle Atlantic states. These properties, consisting of service stations, convenience stores and petroleum marketing terminals are leased to Getty Petroleum Marketing Inc. Getty Realty Holding is also a marketer of heating oil in Pennsylvania and Maryland.

Activia Properties, Inc. is a real estate investment trust (J-REIT). The company mainly invests in commercial and office buildings in the Tokyo metropolitan area.

DiamondRock Hospitality Company is a self-advised real estate investment trust. The Company owns, acquires, and invests in upper scale and upscale hotel properties located in North America.  DiamondRock also invests in premium limited-service and extended-stay hotel properties in urban locations.

RLJ Lodging Trust is a self-advised and self-administered Maryland real estate investment trust. The Trust invests primarily in premium-branded, focused-service and compact full-service hotels. RLJ Lodging owns hotels in multiple states and the District of Columbia.

Empire State Realty Trust Inc. is a real estate investment trust. The trust owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area.

HomeCo Daily Needs REIT operates as a real estate investment trust. The Company invests in and manages portfolio of retail assets.

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HomeCo Daily Needs REIT (HDN AU)

S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance

A discussion on potential ADDs and DELETEs to the S&P ASX Indices between now and the completion of the June 2022 Regular Rebalance.

Janaghan Jeyakumar, CFA

CIMIC (CIM AU) Replacement in ASX200

CIMIC's takeover by Hochtief triggers another index change in ASX200 - likely sometime in April. This brings forward the first intra-quarter ASX200...

Travis Lundy

CIMIC (CIM AU) Takeover Offer: Should Get Done; Index Implications

Hochtief has offered to buy the shares it does not own in CIMIC at A$22/share. At a one year high and in line with peer valuation, we think this...

Brian Freitas

ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)

We think there is a better than even chance of HDN being included in the ASX200 Index at the March rebalance. Else, HDN will replace Crown Resorts...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

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

Brian Freitas

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S&P/​​​ASX Indices: Quiddity Leaderboard for June 2022 Rebalance

A discussion on potential ADDs and DELETEs to the S&P ASX Indices between now and the completion of the June 2022 Regular Rebalance.

Janaghan Jeyakumar, CFA

CIMIC (CIM AU) Replacement in ASX200

CIMIC's takeover by Hochtief triggers another index change in ASX200 - likely sometime in April. This brings forward the first intra-quarter ASX200...

Travis Lundy

CIMIC (CIM AU) Takeover Offer: Should Get Done; Index Implications

Hochtief has offered to buy the shares it does not own in CIMIC at A$22/share. At a one year high and in line with peer valuation, we think this...

Brian Freitas

ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)

We think there is a better than even chance of HDN being included in the ASX200 Index at the March rebalance. Else, HDN will replace Crown Resorts...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

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

Brian Freitas

S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance