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>The inclusion of <a href="https://www.smartkarma.com/entities/china-shenhua-energy-co-h" target="_blank" data-smartkarma-citation="entities:382:1" rel="noopener">China Shenhua Energy Co H (1088 HK)</a>, <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a>, <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a> and <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> takes us to 73 index constituents.</li>
<li>Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 5.09% and will result in a one-way trade of HK$10,562m.</li>
<li>There are large shorts on <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> and <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a> and there could be some short covering from now to implementation.</li>
</ul>


The inclusion of China Shenhua Energy Co H (1088 HK), Chow Tai Fook Jewellery (1929 HK), Hansoh Pharmaceutical (3692 HK) and Baidu (9888 HK) takes us to 73 index constituents.
Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 5.09% and will result in a one-way trade of HK$10,562m.
There are large shorts on Chow Tai Fook Jewellery (1929 HK) and Hansoh Pharmaceutical (3692 HK) and there could be some short covering from now to implementation.


HSI Index Rebalance: Another Small Step Towards 80 Members, But BIG Impact

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>Many consumers bought household freezers after the lift of lockdown.</li>
<li>Strict rules on physical stores drive consumers to online e-commerce platform.</li>
<li>Total express parcels increased by 8% YoY in China in July.</li>
</ul>


Many consumers bought household freezers after the lift of lockdown.
Strict rules on physical stores drive consumers to online e-commerce platform.
Total express parcels increased by 8% YoY in China in July.


JD.com (9618 HK): Pre-2Q22 Earnings, Will Slow Down and Then Recover from Lockdown

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>'s reported sale of its <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> stake led to a selloff on Meituan and on other companies that Tencent has invested in.</li>
<li>There are 10 listed companies where <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>'s holding is over US$1bn. Some stakes are more likely to be sold than others. </li>
<li>A complete stake sale will benefit some companies more than others since they are part of a wider array of indices and that will bring in passive flow.</li>
</ul>



Tencent (700 HK)'s reported sale of its Meituan (3690 HK) stake led to a selloff on Meituan and on other companies that Tencent has invested in.
There are 10 listed companies where Tencent (700 HK)'s holding is over US$1bn. Some stakes are more likely to be sold than others. 
A complete stake sale will benefit some companies more than others since they are part of a wider array of indices and that will bring in passive flow.


Tencent's Potential Sale of Meituan Stake - Read Across to Other Stocks & Index Implications

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Express parcels increased by 8% YoY in China in July.</li>
<li>TikTok was still the top non-game app in the world in July.</li>
<li>Meituan raised its prices of bike sharing on August 10.</li>
</ul>


Express parcels increased by 8% YoY in China in July.
TikTok was still the top non-game app in the world in July.
Meituan raised its prices of bike sharing on August 10.


China Internet Weekly (15Aug2022): Alibaba, Tencent, Meituan, TikTok, JD, NetEase, Dingdong

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Aug 5th. </li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short covers for Alibaba, AIA and Country Garden.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Aug 5th. 
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short covers for Alibaba, AIA and Country Garden.


HK Short Interest: Alibaba, AIA, Country Garden Short Covers

China

JD.com, Inc. is an online direct sales company in China. The Company offers a wide selection of products through its website and mobile applications. JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com (9618 HK)

HSI Index Rebalance: Another Small Step Towards 80 Members, But BIG Impact

There are 4 adds to the index in September - China Shenhua, Chow Tai Fook, Baidu & Hansoh Pharma. There will be big impact on some of the stocks...

Brian Freitas

JD.com (9618 HK): Pre-2Q22 Earnings, Will Slow Down and Then Recover from Lockdown

Many consumers bought household freezers after the lift of lockdown. Strict rules on physical stores drive consumers to online shopping. Total...

Ming Lu

Tencent's Potential Sale of Meituan Stake - Read Across to Other Stocks & Index Implications

A Reuters report that Tencent intended to sell its stake in Meituan led to a selloff across Tencent's investee companies. The impact of passive...

Brian Freitas

China Internet Weekly (15Aug2022): Alibaba, Tencent, Meituan, TikTok, JD, NetEase, Dingdong

Express parcels increased by 8% YoY in China in July. TikTok is still the top non-game app in the world in July. Meituan raised its prices of bike...

Ming Lu

HK Short Interest: Alibaba, AIA, Country Garden Short Covers

We highlight week on week short covers for Alibaba, AIA and Country Garden based on latest HK SFC short aggregate report.

Ke Yan, CFA, FRM

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