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>
<a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a> stock has been crushed following the lock-up expiry at the end of June with the stock now trading 40% below the IPO price.</li>
<li>The company has recently bought back stock providing some support. More importantly, <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a> was included in Southbound Stock Connect on 29 July.</li>
<li>We expect a big increase in the free float adjustment factor (FAF) in the Hang Seng Indexes at the September rebalance that will provide some much needed passive inflows.</li>
</ul>



SenseTime Group (20 HK) stock has been crushed following the lock-up expiry at the end of June with the stock now trading 40% below the IPO price.
The company has recently bought back stock providing some support. More importantly, SenseTime Group (20 HK) was included in Southbound Stock Connect on 29 July.
We expect a big increase in the free float adjustment factor (FAF) in the Hang Seng Indexes at the September rebalance that will provide some much needed passive inflows.


SenseTime (20 HK): Lock-Up Expiry Done; Stock Connect Done; Passive Inflows Next

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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 Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.</li>
<li>There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.


ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Vision Fund's public portfolio lost $10bn in Q1 marking the third time in four quarters that valuation losses were in the tens of billions</li>
<li>Global tech weaness remains the main challenge as portfolio losses are matched with concerns on the private portfolio, especially ARM</li>
<li>And worries about ARM also feed into leverage concerns as Softbank's QoQ decline in reported LTV was driven by an ARM upgrade.  Meanwhile, CDS prices are near all-time highs</li>
</ul>


Vision Fund's public portfolio lost $10bn in Q1 marking the third time in four quarters that valuation losses were in the tens of billions
Global tech weaness remains the main challenge as portfolio losses are matched with concerns on the private portfolio, especially ARM
And worries about ARM also feed into leverage concerns as Softbank's QoQ decline in reported LTV was driven by an ARM upgrade.  Meanwhile, CDS prices are near all-time highs


Softbank Group - First Look at Q1 22 Performance

<ul>
<li>Just as the December quarter was flattered by the last minute IPO of <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a>, expiration of the lockup six months later has delivered a corresonding valuation hit</li>
<li>Vision Fund is still up on that investment but the public portfolio is flirting with a $10bn loss for the quarter depending on how US shares trade later</li>
<li>The discount has improved modestly to 49% from 51% but remains at the high end of the recent range as worries on tech valuations cast a long shadow </li>
</ul>


Just as the December quarter was flattered by the last minute IPO of SenseTime Group (20 HK), expiration of the lockup six months later has delivered a corresonding valuation hit
Vision Fund is still up on that investment but the public portfolio is flirting with a $10bn loss for the quarter depending on how US shares trade later
The discount has improved modestly to 49% from 51% but remains at the high end of the recent range as worries on tech valuations cast a long shadow 


Softbank Group - Expiration of SenseTime Lock-Up Has Lopped $1.5bn off the VF Valuation

<ul>
<li>We do not expect any inclusions or exclusions 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> at the September rebalance.</li>
<li>Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.</li>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a> will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> in September.</li>
</ul>


We do not expect any inclusions or exclusions for the Hang Seng Tech Index (HSTECH INDEX) at the September rebalance.
Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.

SenseTime Group (20 HK) will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the HSCEI INDEX in September.


HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

China

Kingsoft Corporation Ltd. develops and markets computer software.  The Company develops role-playing computer games and security, word processing, and spreadsheet software.

Hundsun Technologies Inc develops application software for security firms, commercial banks, fund management firms, and other industries.  The Company also sells computer hardware and provides system integration services.

Yonyou Network Technology Co., Ltd. develops and markets enterprise-wide business applications software, including financial, web-based, management, and security development software. The Company also offers training programs.

Kingdee International Software Group Company Limited, through its subsidiaries, develops and sells enterprise management software, e-commerce application software and middleware software.  The Company also provides internet-based services and setting up e-commerce platforms for enterprises. In addition, Kingdee provides solution consulting and technical support services.

Beijing Venustech Inc. provides a variety of information security products, information security services and information security solutions.  The Company's products and services are intrusion detection systems, intrusion prevention systems, firewalls, real-time monitoring and security management certification training services.

Jiangsu Hoperun Software Company Limited provides software outsourcing services for professional fields. The Company's main products include supply chain management software, intelligent terminal embedded software, and smart grid IT software outsourcing services.

Glodon Company Limited develops application softwares for basic construction industry. The Company's products include construction engineering cost management software and project cost management software. The Company also provides related training and consulting services.

China National Software & Service Co., Ltd designs, develops, and integrates application software used for the taxation, railway telecommunication, military, commercial aviation, and financial industries.  The Company also designs Chinasoft Linux operating system and develops language conversion software to support Chinese, English, and Japanese

Kingnet Network Co. Ltd. is a technology company involved in the development of social, browser, online games and mobile gaming.

YGSOFT Inc. develops financial and management software products for electricity industry. The company also provides computer software and hardware system integration and technology consulting services.

Technology One Limited is an Australian-based company that is engaged in the development, marketing, sales, implementation, support, and distribution of financial management and enterprise software solutions. The Company has operations in New Zealand, the United Kingdom, the South Pacific, and Malaysia.

International Games System Co., Ltd. plans, designs, develops, manufactures, and markets software and hardware for arcade games, PC games, and Internet on-line games.

Varonis Systems, Inc. designs and develops data security software solutions. The Company offers data management systems to organize, manage, and protect unstructured and semi-structured data such as documents, spreadsheets, presentations, media files, and other business data. Varonis Systems operates worldwide.

Blackbaud, Inc. provides software and related services designed specifically for non-profit organizations. The Company's products and services enable non-profit organizations to increase donations, reduce fundraising costs, improve communication with constituents, manage their finances, and optimize internal operations.

Qualys, Inc. provides information technology security risk and compliance management solutions. The Company offers products for vulnerability management, policy compliance, web application scanning, malware detection, and associated security products. Qualys conducts business in the United States.

CommVault Systems, Inc. provides data management software applications and related services. The Company develops, markets, and sells a suite of data management software applications designed to protect and manage data throughout its lifecycle.

Trend Micro Incorporated develops and markets anti-virus computer software and internet security software.  The Company also sells its products in the United States, Europe, and Asia.

Tata Elxsi Limited manufactures computers and workstations besides providing system design, software development and integration services. The Group supplies its products to a number of industries, including the automotive, metals, consumer products, finance, IT & Communications, energy, chemicals, engineering, pharmaceuticals, entertainment and agro industries.

ACI Worldwide, Inc. develops, markets, and supports software products for the global electronics funds transfer market.  The Company's products are used to process transactions involving credit cards, debit cards, smartcards, home banking services, checks, and automated clearing and settlement.

SQUARE ENIX HOLDINGS CO., LTD. develops and sells entertainment software for home video game consoles including Dragon Quest and Final Fantasy series. The Company also publishes books such as informational guide books for its game software, and comic magazines and books.  Additionally, Square Enix sells character goods and stationery items from its software products.

SenseTime Group Inc. offers information technology services. The Company develops artificial intelligence software products, computer vision software products, and other products. SenseTime Group provides its services throughout China.

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

SenseTime Group (20 HK)

SenseTime (20 HK): Lock-Up Expiry Done; Stock Connect Done; Passive Inflows Next

SenseTime is -40% from its IPO price following lock-up expiry. The company has bought back some stock and is now in Stock Connect. FAF increase in...

Brian Freitas

ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Softbank Group - First Look at Q1 22 Performance

Public valuation losses again exceeded $10bn as a last day meltdown for SenseTime marred an otherwise stable quarter for China. Global tech,...

Kirk Boodry

Softbank Group - Expiration of SenseTime Lock-Up Has Lopped $1.5bn off the VF Valuation

SenseTime's lock-up collapse has cost Vision Fund $1.5bn on the last trading day of the quarter, mirroring IPO gains when it listed six months prior

Kirk Boodry

HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

No adds/deletes likely in September but float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)