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

Hoymiles Power Electronics / Event-Driven

<ul>
<li>The index committee has continued to use a 6 month minimum listing history leading to five changes to the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> in September.</li>
<li>One-Way turnover is estimated at 4.07% and will result in a one-way trade of CNY 2,265m. Passive trackers will need to trade between 1-5 days ADV on the adds/deletes.</li>
<li>The adds have outperformed the deletes and the CSI500 Index since the end of the review period. We'd look to buy the adds and hedge with CSI500 Index futures.</li>
</ul>


The index committee has continued to use a 6 month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in September.
One-Way turnover is estimated at 4.07% and will result in a one-way trade of CNY 2,265m. Passive trackers will need to trade between 1-5 days ADV on the adds/deletes.
The adds have outperformed the deletes and the CSI500 Index since the end of the review period. We'd look to buy the adds and hedge with CSI500 Index futures.


STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shandong Weigao Orthopaedic De / Equity Bottom-Up

<ul>
<li>Although Weigao achieved solid growth in 2021 after pandemic was under control,the real test will come in 2022. The implementation of centralized procurement will have a significant impact on performance.</li>
<li>After spinal implants are included in centralized procurement this year, all of Weigao’s three major businesses (spinal implants/trauma implants/joint implants) are within the scope. Short-term performance pressure is inevitable.</li>
<li>As a result of the pandemic/lockdown in 2022H1, we lowered our performance forecast on Weigao.   </li>
</ul>


Although Weigao achieved solid growth in 2021 after pandemic was under control,the real test will come in 2022. The implementation of centralized procurement will have a significant impact on performance.
After spinal implants are included in centralized procurement this year, all of Weigao’s three major businesses (spinal implants/trauma implants/joint implants) are within the scope. Short-term performance pressure is inevitable.
As a result of the pandemic/lockdown in 2022H1, we lowered our performance forecast on Weigao.   


Shandong Weigao Orthopaedic - 2022 Is the Real Test. Short-Term Performance Pressure Is Inevitable

<ul>
<li>Over 96% of the way through the review period, we see 1 change using a 12 month minimum listing history, and 5 changes using a 6 month minimum listing history.</li>
<li>We expect the index committee to continue using the shorter minimum listing history since the potential adds have much larger market caps than the potential deletes.</li>
<li>The potential adds have outperformed the potential deletes over the last month and there could be more once the current consolidation is complete.</li>
</ul>


Over 96% of the way through the review period, we see 1 change using a 12 month minimum listing history, and 5 changes using a 6 month minimum listing history.
We expect the index committee to continue using the shorter minimum listing history since the potential adds have much larger market caps than the potential deletes.
The potential adds have outperformed the potential deletes over the last month and there could be more once the current consolidation is complete.


STAR50 Index Rebalance Preview (Sep): Adds Outperforming the Deletes

Thematic (Sector/Industry)

<ul>
<li>The 7th National VBP released results. 60 kinds of drugs won the bidding successfully, with price reduction of 48% on average. We analyzed its impact on companies. </li>
<li>The newly issued document about the payment management measures for new technology out of CHS-DRG payment scope is a solid encouragement to innovation and an important policy reform signal.</li>
<li>The national centralized procurement of orthopedic spine consumables has officially started, which is beneficial to those leading companies with complete product line.</li>
</ul>


The 7th National VBP released results. 60 kinds of drugs won the bidding successfully, with price reduction of 48% on average. We analyzed its impact on companies. 
The newly issued document about the payment management measures for new technology out of CHS-DRG payment scope is a solid encouragement to innovation and an important policy reform signal.
The national centralized procurement of orthopedic spine consumables has officially started, which is beneficial to those leading companies with complete product line.


China Healthcare Weekly (July.15)-7th VBP, Policy Correction Signs, Orthopedic Spine Consumables VBP

<ul>
<li>With only one change expected in September using a 12 month minimum listing history, we expect the index committee to continue using a 6 month minimum listing history.</li>
<li>That will see the maximum of 5 changes that are permitted at a single rebalance resulting in a one-way turnover just shy of 5%.</li>
<li>Over the last few rebalances, the adds have outperformed the deletes post the end of the review period. That's expected given passive trackers need to buy/sell a lot of stock.</li>
</ul>


With only one change expected in September using a 12 month minimum listing history, we expect the index committee to continue using a 6 month minimum listing history.
That will see the maximum of 5 changes that are permitted at a single rebalance resulting in a one-way turnover just shy of 5%.
Over the last few rebalances, the adds have outperformed the deletes post the end of the review period. That's expected given passive trackers need to buy/sell a lot of stock.


STAR50 Index Rebalance Preview (Sep): Change Is the Only Constant

China

Shandong Weigao Orthopaedic Device Company Limited produces and sells medical devices. The Company manufactures and sells orthopedic implants and other products. Shandong Weigao Orthopaedic Device markets its products throughout China.

Shandong Weigao Orthopaedic De (688161 CH)

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Shandong Weigao Orthopaedic De (688161 CH)

STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced

There are 5 changes to the STAR50 in September as the index committee sticks to a 6 month minimum listing history. The adds have outperformed the...

Brian Freitas

Shandong Weigao Orthopaedic - 2022 Is the Real Test. Short-Term Performance Pressure Is Inevitable

All of Weigao’s three major businesses are included in centralized procurement, which will have a significant impact on performance this year....

Xinyao (Criss) Wang

STAR50 Index Rebalance Preview (Sep): Adds Outperforming the Deletes

There could be 5 changes if the index committee continues using a 6 month minimum listing history. The adds have outperformed the deletes over the...

Brian Freitas

China Healthcare Weekly (July.15)-7th VBP, Policy Correction Signs, Orthopedic Spine Consumables VBP

The 7th National VBP released results. New technology payment management measures out of CHS-DRG scope is a policy correction signal.Orthopedic...

Xinyao (Criss) Wang

STAR50 Index Rebalance Preview (Sep): Change Is the Only Constant

We expect the index committee to continue using a 6 month minimum listing history and that will lead to 5 changes in September. Buying the adds and...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)