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 ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.</li>
<li>The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.</li>
<li>In this insight, we take a look at our final expectations for the ADDs and DELs for the December 2023 and their flow implications.</li>
</ul>


The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we take a look at our final expectations for the ADDs and DELs for the December 2023 and their flow implications.


Quiddity Leaderboard ChiNext & ChiNext 50: Final Expectations

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

Wuhan Jingce Electronic Group / Event-Driven

<ul>
<li>Nearing the end of the review period, we forecast 8 changes for the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index (SZ399006 INDEX)</a> and 5 changes for the ChiNext 50 Index in December.</li>
<li>Given stock selection uses liquidity as a major input, the impact of passive trading will be much larger on the deletions as compared to the additions.</li>
<li>The potential adds have outperformed the potential deletes, but relative performance has been drifting lower over the last few months. There are stocks that will have flows from other indices.</li>
</ul>


Nearing the end of the review period, we forecast 8 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
Given stock selection uses liquidity as a major input, the impact of passive trading will be much larger on the deletions as compared to the additions.
The potential adds have outperformed the potential deletes, but relative performance has been drifting lower over the last few months. There are stocks that will have flows from other indices.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Sector Rotation Continues

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Intco Medical Technology  Lt / Equity Bottom-Up

<ul>
<li>NDRC issued "<em>Guiding Catalogue for Industrial Structure Adjustment</em>". The newly proposed adjustments deserve investors' attention, because they are the areas where investors could receive excess returns in China healthcare.</li>
<li>Obtaining assets from external sources remains paramount for MNCs. License-in mode isn’t outdated. As long as companies can make money, the ways to acquire assets can be diversified.</li>
<li>Intco's performance/stock price has bottomed out, and would gradually resume growth/rebound afterwards. Its market value would return to RMB20-30 billion. Intco would achieve a distress reversal, with attractive investment value.</li>
</ul>


NDRC issued "Guiding Catalogue for Industrial Structure Adjustment". The newly proposed adjustments deserve investors' attention, because they are the areas where investors could receive excess returns in China healthcare.
Obtaining assets from external sources remains paramount for MNCs. License-in mode isn’t outdated. As long as companies can make money, the ways to acquire assets can be diversified.
Intco's performance/stock price has bottomed out, and would gradually resume growth/rebound afterwards. Its market value would return to RMB20-30 billion. Intco would achieve a distress reversal, with attractive investment value.


China Healthcare Weekly (Jul.21) - New Growth Points by NDRC, License-In Model Isn’t Outdated, Intco

<ul>
<li>Busy week in India with the adhoc changes to the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">NSE Nifty Next 50</a>, <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX</a> and <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">Nifty Bank</a> due to the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a> and <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a> merger.</li>
<li>The IDX could announce the changes to the IDX30, LQ45 and IDX80 indices in the coming week, though there is no firm schedule for announcements.</li>
<li>Yet another week of inflows to the <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong Ltd (2800 HK)</a> ETF and outflows from the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a>. </li>
</ul>


Busy week in India with the adhoc changes to the NIFTY, NSE Nifty Next 50, S&amp;P BSE SENSEX and Nifty Bank due to the HDFC Limited and HDFC Bank merger.
The IDX could announce the changes to the IDX30, LQ45 and IDX80 indices in the coming week, though there is no firm schedule for announcements.
Yet another week of inflows to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF and outflows from the Hang Seng H Share Index ETF (2828 HK). 


Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY

<ul>
<li>One third of the way through the review period, we forecast 10 changes for the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index (SZ399006 INDEX EQUITY)</a> and 5 changes for the ChiNext 50 Index in December.</li>
<li>Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.</li>
<li>The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We'd wait for a pullback to re-enter positions.</li>
</ul>


One third of the way through the review period, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in December.
Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We'd wait for a pullback to re-enter positions.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

China

Intco Medical Technology Co.,Ltd. manufactures and distributes medical supplies. The Company produces disposable gloves, wheelchairs, gauzes, electrodes, and other products. Intco Medical Technology markets its products throughout China.

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

Intco Medical Technology Lt (300677 CH)

Quiddity Leaderboard ChiNext & ChiNext 50: Final Expectations

I expect 4 ADDs/DELs for the ChiNext index and 4 ADDs/DELs for the ChiNext 50 index. Over the next 2 months, the expected ChiNext and ChiNext 50...

Janaghan Jeyakumar, CFA

ChiNext/ChiNext50 Index Rebalance Preview: Sector Rotation Continues

There could be 8 changes for the Chinext and 5 for the Chinext50. Impact is higher on the deletions. The IT sector gains index spots while...

Brian Freitas

China Healthcare Weekly (Jul.21) - New Growth Points by NDRC, License-In Model Isn’t Outdated, Intco

NDRC proposed adjustments for China healthcare, which indicates new growth points. Obtaining assets from external sources remains important...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY

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

Brian Freitas

ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

There are many overlapping changes for the Chinext and Chinext50 indices. The potential adds have outperformed the potential deletes and flow could...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard ChiNext & ChiNext 50: Final Expectations

I expect 4 ADDs/DELs for the ChiNext index and 4 ADDs/DELs for the ChiNext 50 index. Over the next 2 months, the expected ChiNext and ChiNext 50...

Janaghan Jeyakumar, CFA

ChiNext/​​​ChiNext50 Index Rebalance Preview: Sector Rotation Continues

There could be 8 changes for the Chinext and 5 for the Chinext50. Impact is higher on the deletions. The IT sector gains index spots while...

Brian Freitas

China Healthcare Weekly (Jul.21) - New Growth Points by NDRC, License-In Model Isn’t Outdated, Intco

NDRC proposed adjustments for China healthcare, which indicates new growth points. Obtaining assets from external sources remains important...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY

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

Brian Freitas

ChiNext/​​​ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

There are many overlapping changes for the Chinext and Chinext50 indices. The potential adds have outperformed the potential deletes and flow could...

Brian Freitas

ChiNext/ChiNext50 Index Rebalance Preview: Sector Rotation Continues

ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance