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>With no stocks in inclusion or deletion zone, we do not expect any constituent changes for 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> in December.</li>
<li>Capping changes will result in a one-way turnover of a touch below 1% and that will result in a round-trip trade of US$255m.</li>
<li>The impact on the stocks is relatively small for now but that could increase till the end of November when the stocks will be capped.</li>
</ul>


With no stocks in inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in December.
Capping changes will result in a one-way turnover of a touch below 1% and that will result in a round-trip trade of US$255m.
The impact on the stocks is relatively small for now but that could increase till the end of November when the stocks will be capped.


HSTECH Index Rebalance Preview: Round-Trip Trade of US$255m in December

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Tongcheng Travel Holdings  / Event-Driven

<ul>
<li>In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in December 2023.</li>
<li>There could be one ADD and one DELETE for HSTECH in December 2023 but I would treat them as low-conviction changes.</li>
<li>At present, I see one-way flows for the December 2023 rebalance to be around US$250mn but as prices change, our index change and flow expectations will change too.</li>
</ul>


In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in December 2023.
There could be one ADD and one DELETE for HSTECH in December 2023 but I would treat them as low-conviction changes.
At present, I see one-way flows for the December 2023 rebalance to be around US$250mn but as prices change, our index change and flow expectations will change too.


Quiddity HSTECH Dec 23 Flow Expectations: One Low-Conviction Change, US$250mn One-Way

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Ping An Healthcare and Technology / Equity Bottom-Up

<ul><li>PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.</li><li>The significantly narrowed adjusted net loss was mainly driven by the execution of its Strategy 2.0 Continuum to focus on corporate (B-end) clients as well as various cost saving measures during the period.</li><li>In 1H23, PAGD had largely completed its business adjustment, through which the Company proactively reduced low-synergy businesses with its Strategy 2.0 Continuum. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.The significantly narrowed adjusted net loss was mainly driven by the execution of its Strategy 2.0 Continuum to focus on corporate (B-end) clients as well as various cost saving measures during the period.In 1H23, PAGD had largely completed its business adjustment, through which the Company proactively reduced low-synergy businesses with its Strategy 2.0 Continuum. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PA Good Doctor (1833 HK) – Business Restructuring Closes to the End

<ul>
<li>The JPX Nikkei 400 index rebalance will take place on Wednesday, MSIC on Thursday and <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSCI on Friday.</li>
<li>There are review cutoffs for the MVIS family of indices, and multiple announcements of changes to various indices during the week.</li>
<li>There were inflows to mainland China ETFs, <a href="https://www.smartkarma.com/entities/ishares-msci-india-etf" target="_blank" data-smartkarma-citation="entities:282:1" rel="noopener">iShares India ETF (INDA)</a>, <a href="https://www.smartkarma.com/entities/ishares-msci-india-small-cap" target="_blank" data-smartkarma-citation="entities:32064:1" rel="noopener">Ishares India Small-Cap (SMIN)</a> and <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares EmergingMarkets ex China (EMXC)</a> while there were outflows for <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets" target="_blank" data-smartkarma-citation="entities:438:1" rel="noopener">iShares Emerging Markets (EEM)</a>.</li>
</ul>


The JPX Nikkei 400 index rebalance will take place on Wednesday, MSIC on Thursday and HSI, HSCEI, HSTECH and HSCI on Friday.
There are review cutoffs for the MVIS family of indices, and multiple announcements of changes to various indices during the week.
There were inflows to mainland China ETFs, iShares India ETF (INDA), Ishares India Small-Cap (SMIN) and iShares EmergingMarkets ex China (EMXC) while there were outflows for iShares Emerging Markets (EEM).


Index Rebalance & ETF Flow Recap: HSCEI, HSI, HSTECH, Yuanta ETFs, China ETFs, REMX, KOSPI

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> replaces <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 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 close on 1 September.</li>
<li>Estimated one-way turnover is 3.5% leading to a one-way trade of HK$3.4bn (US$435m). There are 4 stocks with over 1 day of ADV to trade.</li>
<li>Short interest is 15% of float on both stocks. Short covering could take <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> higher while providing support for <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies (2018 HK)</a> closer to deletion.</li>
</ul>


As expected, East Buy Holding (1797 HK) replaces AAC Technologies Holdings (2018 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 1 September.
Estimated one-way turnover is 3.5% leading to a one-way trade of HK$3.4bn (US$435m). There are 4 stocks with over 1 day of ADV to trade.
Short interest is 15% of float on both stocks. Short covering could take East Buy Holding (1797 HK) higher while providing support for AAC Technologies (2018 HK) closer to deletion.


HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks

China

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

Ping An Healthcare and Technology (1833 HK)

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Ping An Healthcare and Technology (1833 HK)

HSTECH Index Rebalance Preview: Round-Trip Trade of US$255m in December

We do not see any constituents changing in December. Capping will lead to a one-way turnover of 1% resulting in a round-trip trade of US$255m....

Brian Freitas

Quiddity HSTECH Dec 23 Flow Expectations: One Low-Conviction Change, US$250mn One-Way

I see Tongcheng Travel Holdings (780 HK) as a low-conviction ADD and Ping An Healthcare and Technol (1833 HK) as a low-conviction DEL for HSTECH in...

Janaghan Jeyakumar, CFA

PA Good Doctor (1833 HK) – Business Restructuring Closes to the End

PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.

CMB International

Index Rebalance & ETF Flow Recap: HSCEI, HSI, HSTECH, Yuanta ETFs, China ETFs, REMX, KOSPI

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

Brian Freitas

HSTECH Index Rebalance: East Buy (1797 HK) Replaces AAC Tech (2018 HK); Big Shorts on Both Stocks

East Buy (1797) replaces AAC Tech (2018) in the HSTECH in Sep. Two-way turnover is 7% and the round-trip trade is US$870m. There are big shorts on...

Brian Freitas

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