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>In a surprise, the Hang Seng index committee has decided not to make any changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> at the March rebalance.</li>
<li>This further delays the timeline for the index to reach 80 constituents. The earliest we will reach the target now is June 2023 (a year later than targeted).</li>
<li>Despite no changes to the index constituents, capping and float changes will lead to a one-way turnover of 2.61% resulting in a one-way trade of HK$5.1bn.</li>
</ul>


In a surprise, the Hang Seng index committee has decided not to make any changes to the Hong Kong Hang Seng Index (HSI INDEX) at the March rebalance.
This further delays the timeline for the index to reach 80 constituents. The earliest we will reach the target now is June 2023 (a year later than targeted).
Despite no changes to the index constituents, capping and float changes will lead to a one-way turnover of 2.61% resulting in a one-way trade of HK$5.1bn.


HSI Index Rebalance: No Changes & Further Delays to Reaching the 80 Member Target

<ul>
<li>There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.</li>
<li>We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.</li>
<li>All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.</li>
</ul>


There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.
We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.
All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.


HSI Index Rebalance Preview: Better Late Than Never?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The gradual lifting of the lockdown in two major cities means that China's industries are recovering. In healthcare, there are both opportunities and challenges worth discussing.</li>
<li>As China restores normal production and life, we analyzed the impact/logic on nucleic acid testing business, local fiscal expenditure, pharmaceutical/medical device companies, IVD, hospital operations, global supply chain, digital healthcare.</li>
<li>Due to geopolitical conflicts, negative impact of lockdown on economy, resource shortage,inflation, the priority of healthcare may decline.The performance/returns on advanced technology/pharmaceuticals/devices or nonrigid demand could be lower than expected. </li>
</ul>


The gradual lifting of the lockdown in two major cities means that China's industries are recovering. In healthcare, there are both opportunities and challenges worth discussing.
As China restores normal production and life, we analyzed the impact/logic on nucleic acid testing business, local fiscal expenditure, pharmaceutical/medical device companies, IVD, hospital operations, global supply chain, digital healthcare.
Due to geopolitical conflicts, negative impact of lockdown on economy, resource shortage,inflation, the priority of healthcare may decline.The performance/returns on advanced technology/pharmaceuticals/devices or nonrigid demand could be lower than expected. 


China Reopen - Opportunities and Challenges in China Healthcare

Ping An Healthcare and Technology / Event-Driven

<ul>
<li>PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to "exit".</li>
<li>Privatizing PAGD at low price and integrating it into the Ping An Group's system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.</li>
<li>Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.</li>
</ul>


PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to "exit".
Privatizing PAGD at low price and integrating it into the Ping An Group's system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.
Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.


Ping An Healthcare and Technology (1833 HK) - Privatization Ahead?

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>On October 18, JD denies there is a run on JD Finance.</li>
<li>Many male users claimed they boycott JD for the invitation of Miss Yang, a talk show celebrity.</li>
<li>We believe the event will negatively impact JD and benefit Alibaba.</li>
</ul>


On October 18, JD denies there is a run on JD Finance.
Many male users claimed they boycott JD for the invitation of Miss Yang, a talk show celebrity.
We believe the event will negatively impact JD and benefit Alibaba.


JD.com (JD US): Boycotted by Male Users, Denies Run on JD Finance

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

Price Gauge
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JD Health International (6618 HK)

HSI Index Rebalance: No Changes & Further Delays to Reaching the 80 Member Target

In a surprise, there are no adds/deletes in March. There are some large capping changes that result in a one-way turnover of 2.6% and a one-way...

Brian Freitas

HSI Index Rebalance Preview: Better Late Than Never?

Adding 4 stocks gets us to 80 members - a target that was to be reached by mid-2022. We list 10 potential adds where passive trackers will need to...

Brian Freitas

China Reopen - Opportunities and Challenges in China Healthcare

As China restores normal production/life, we analyzed positive/negative impact on different healthcare sectors. There could be policy shifts. What...

Xinyao (Criss) Wang

Ping An Healthcare and Technology (1833 HK) - Privatization Ahead?

Shrinking scale/poor outlook prompts management to seek "exit".Privatization at low price and integrating into Ping An Group is wise...

Xinyao (Criss) Wang

JD.com (JD US): Boycotted by Male Users, Denies Run on JD Finance

JD denies there is a run on JD Finance. Many male users claimed they boycott JD for the invitation of Miss Yang, a talk show celebrity.

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)