Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> after the close of trading on 4 February and <a href="https://www.smartkarma.com/entities/arena-reit" target="_blank" data-smartkarma-citation="entities:12209:1" rel="noopener">Arena Reit (ARF AU)</a> will be included.</li>
<li>With this change announced, <a href="https://www.smartkarma.com/entities/telix-pharmaceuticals-ltd" target="_blank" data-smartkarma-citation="entities:26052:1" rel="noopener">Telix Pharmaceuticals (TLX AU)</a> is a high probability inclusion to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> next week when <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/arena-reit" target="_blank" data-smartkarma-citation="entities:12209:1" rel="noopener">Arena Reit (ARF AU)</a> has outperformed its peers over the last year and now trades at higher valuations. We would use price spikes on inclusion to rotate into its peers.</li>
</ul>



Ausnet Services (AST AU) will be deleted from the S&amp;P/ASX 200 (AS51 INDEX) after the close of trading on 4 February and Arena Reit (ARF AU) will be included.
With this change announced, Telix Pharmaceuticals (TLX AU) is a high probability inclusion to the S&amp;P/ASX 200 (AS51 INDEX) next week when Sydney Airport (SYD AU) will be deleted.

Arena Reit (ARF AU) has outperformed its peers over the last year and now trades at higher valuations. We would use price spikes on inclusion to rotate into its peers.


ASX200 Index Rebalance: Arena REIT to Replace Ausnet

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> securityholders vote on the proposed merger with <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a>/ <a href="https://www.smartkarma.com/entities/home-consortium-ltd" target="_blank" data-smartkarma-citation="entities:29082:1" rel="noopener">Home Consortium Ltd (HMC AU)</a> on 25 January.</li>
<li>If approved, <a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> will stop trading after the close on 3 February and the shares in issue for <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> will increase substantially.</li>
<li>That will make <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HDN AU</a> the highest ranked non-ASX200 constituent and a high probability add for March. There could be an earlier inclusion to replace <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">SYD AU</a> in the index.</li>
</ul>



Aventus Group (AVN AU) securityholders vote on the proposed merger with HomeCo Daily Needs REIT (HDN AU)/ Home Consortium Ltd (HMC AU) on 25 January.
If approved, Aventus Group (AVN AU) will stop trading after the close on 3 February and the shares in issue for HomeCo Daily Needs REIT (HDN AU) will increase substantially.
That will make HDN AU the highest ranked non-ASX200 constituent and a high probability add for March. There could be an earlier inclusion to replace SYD AU in the index.


HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)

<ul>
<li>As expected, S&amp;P DJI have announced that <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a>'s weight in the S&amp;P/ASX indices will be increased all at once at the close of trading on 28 January. </li>
<li>We estimated passive S&amp;P/ASX trackers will need to buy over A$4bn of <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> leading to a funding sell of that size on the other index constituents.</li>
<li>
<a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> has risen 25% from its lows in November. We expect most UK shareholders have finished selling shares and the one-shot inclusion could take the stock higher.</li>
</ul>


As expected, S&amp;P DJI have announced that BHP Group (BHP AU)'s weight in the S&amp;P/ASX indices will be increased all at once at the close of trading on 28 January. 
We estimated passive S&amp;P/ASX trackers will need to buy over A$4bn of BHP Group (BHP AU) leading to a funding sell of that size on the other index constituents.

BHP Group (BHP AU) has risen 25% from its lows in November. We expect most UK shareholders have finished selling shares and the one-shot inclusion could take the stock higher.


BHP Unification - ASX Upweight in One Shot

<ul>
<li>There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> and <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a>. </li>
<li>There will also be the large <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> upweight and funding trade following unification, and possibly the <a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a> acquisition by <a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a>. </li>
<li>Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.</li>
</ul>


There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of Ausnet Services (AST AU) and Sydney Airport (SYD AU). 
There will also be the large BHP Group (BHP AU) upweight and funding trade following unification, and possibly the Afterpay Touch (APT AU) acquisition by Square Inc (SQ US). 
Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.


ASX100/​200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Provide Comprehensive Analysis & Commentary

SAV Markets

SAV Markets aims to provide comprehensive analysis & commentary on foreign exchange and asset markets. The approach is multi asset as markets are typically interlinked. Cause and effect are always at work, even if those effects take time to manifest. As nothing is permanent we strive to get ahead of the curve in an ever changing world.

Cross Asset Strategy

<ul>
<li>The Australian stock market has started the year with a decent pop through good levels amounting to a bullish breakout</li>
<li>The setup argues for a rally of 3% to new highs which could be seen in the days ahead</li>
<li>Additional developments in commodities and the currency also suggest a brighter outlook in the short term</li>
</ul>


The Australian stock market has started the year with a decent pop through good levels amounting to a bullish breakout
The setup argues for a rally of 3% to new highs which could be seen in the days ahead
Additional developments in commodities and the currency also suggest a brighter outlook in the short term


Australia

The S&P/ASX 200 measures the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. Representative liquid and tradable, it is widely considered Australia's preeminent benchmark index. The index is float-adjusted. The index was launched in April 2000.

S&P/ASX 200 (AS51 INDEX)

ASX200 Index Rebalance: Arena REIT to Replace Ausnet

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The breakout in Australia's stock market looks encouraging especially when coupled with indications in other related markets.

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Brian Freitas

HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)

Aventus shareholders vote on the proposed merger with HDN/HMC on 25 Jan. Approval by AVN shareholders will see a huge increase in shares out on HDN...

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The BHP upweight in the ASX indices will be done all at once at the close on 28 January. This will mean A$4bn of BHP to buy and a funding sell on...

Brian Freitas

ASX100/​200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March

There will be many changes to the ASX100/200/300 indices from now to March due to M&A activity & price moves. Plus a large funding trade following...

Brian Freitas

Australia’s Bullish Prospects

The breakout in Australia's stock market looks encouraging especially when coupled with indications in other related markets.

Shyam Devani

ASX100/200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March