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>There has been an increase of 700m shares held in HK CCASS for <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> on 11 April.</li>
<li>The largest part of 421.5m shares is likely the conversion of Class B to Class A shares following Richard Liu stepping down as CEO of the company.</li>
<li>The rest is unknown at this point but could be <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> moving their shares to HK to sell-down and use the cash to buy back their own stock.</li>
</ul>


There has been an increase of 700m shares held in HK CCASS for JD.com Inc. (9618 HK) on 11 April.
The largest part of 421.5m shares is likely the conversion of Class B to Class A shares following Richard Liu stepping down as CEO of the company.
The rest is unknown at this point but could be Prosus (PRX NA) moving their shares to HK to sell-down and use the cash to buy back their own stock.


JD.com (9618 HK): CCASS Share Increase Driver & Potential Prosus Selldown

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's bear turn at 22,500 is in line with 21k the level to break for further bear traction.</li>
<li>HSI downside targets remain at 20,200 and 19,700 but below 19,500 would induce a weaker cycle into May with risk of re testing key lows.</li>
<li>HK tech index, JD and Tencent levels are reiterated. Summer cycle lows to set up a more bullish second half of 2022.</li>
</ul>


HSI's bear turn at 22,500 is in line with 21k the level to break for further bear traction.
HSI downside targets remain at 20,200 and 19,700 but below 19,500 would induce a weaker cycle into May with risk of re testing key lows.
HK tech index, JD and Tencent levels are reiterated. Summer cycle lows to set up a more bullish second half of 2022.


Orient Overseas International / Event-Driven

<ul>
<li>Current at 66 constituents, we expect to reach 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a> constituents by the end of the year before moving higher towards 100 index members in 2023.</li>
<li>We list 10 stocks that could be added to the index in June - with one-way turnover close to 6%, the actual number of inclusions will be lower.</li>
<li>We also list out another 8 stocks that could possibly be added in June, though the probability of a September/ December inclusion is higher.</li>
</ul>


Current at 66 constituents, we expect to reach 80 HSI INDEX constituents by the end of the year before moving higher towards 100 index members in 2023.
We list 10 stocks that could be added to the index in June - with one-way turnover close to 6%, the actual number of inclusions will be lower.
We also list out another 8 stocks that could possibly be added in June, though the probability of a September/ December inclusion is higher.


HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?

Korea Stock Exchange KOSPI 200 / Technical Analysis

<ul>
<li>Asia top shorts are Taiwan and Korea followed by HSI and the Nikkei. All are rolling over under key trendline barriers. Need to break near support pivots for downside traction.</li>
<li>SPX 4,470 is the key support to break below to add to selling pressure in Asia that would crack pivot supports.</li>
<li>Early April call for increased volatility with a weaker April in store, assuming we see downside follow through below noted pivot supports.</li>
</ul>


Asia top shorts are Taiwan and Korea followed by HSI and the Nikkei. All are rolling over under key trendline barriers. Need to break near support pivots for downside traction.
SPX 4,470 is the key support to break below to add to selling pressure in Asia that would crack pivot supports.
Early April call for increased volatility with a weaker April in store, assuming we see downside follow through below noted pivot supports.


<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> passes the velocity test and could replace <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> 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 June rebalance.</li>
<li>Given the low trading volumes and the large assets tracking 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>, passive trackers will need to buy around 10 days of ADV on <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</a>. </li>
<li>Passive trackers need to sell around 7 days of ADV on <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>. Given implementation is two months away, sell the stock on rallies. </li>
</ul>



NIO Inc (9866 HK) passes the velocity test and could replace ASM Pacific Technology (522 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the June rebalance.
Given the low trading volumes and the large assets tracking the Hang Seng Tech Index (HSTECH INDEX), passive trackers will need to buy around 10 days of ADV on NIO. 
Passive trackers need to sell around 7 days of ADV on ASM Pacific Technology (522 HK). Given implementation is two months away, sell the stock on rallies. 


Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)

Hong Kong

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964.

Hang Seng Index (HSI INDEX)

HSI 21k and HK Tech Acceleration Levels

HSI's bear turn at 22,500 is in line with 21k the level to break for further bear traction. Near resistance comes in at 21,800/900.

Thomas Schroeder

HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?

There could be 5-6 inclusions to the HSI in June as part of the move to 80 members. We list 10 stocks that could be added to the index, and another...

Brian Freitas

Asia High Conviction Shorts

Asia top shorts are Taiwan and Korea followed by HSI and the Nikkei. All are rolling over under key trendline barriers. Need to break near support...

Thomas Schroeder

Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)

NIO (9866) could replace ASM Pacific (522) in the HSTECH at the June rebal. Passive trackers will need to buy 10 days of ADV on NIO while selling 7...

Brian Freitas

JD.com (9618 HK): CCASS Share Increase Driver & Potential Prosus Selldown

There has been a big increase in JD.com (9618 HK) CCASS shares. A large part should be a conversion of Class B to Class A shares. The missing piece...

Brian Freitas

HSI 21k and HK Tech Acceleration Levels

HSI's bear turn at 22,500 is in line with 21k the level to break for further bear traction. Near resistance comes in at 21,800/900.

Thomas Schroeder

HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?

There could be 5-6 inclusions to the HSI in June as part of the move to 80 members. We list 10 stocks that could be added to the index, and another...

Brian Freitas

Asia High Conviction Shorts

Asia top shorts are Taiwan and Korea followed by HSI and the Nikkei. All are rolling over under key trendline barriers. Need to break near support...

Thomas Schroeder

Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)

NIO (9866) could replace ASM Pacific (522) in the HSTECH at the June rebal. Passive trackers will need to buy 10 days of ADV on NIO while selling 7...

Brian Freitas