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>Nearly halfway through the review period, we forecast 7 changes for the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index (SZ399006 INDEX EQUITY)</a> and 5 changes for the ChiNext 50 Index in June.</li>
<li>Some of the potential changes will also have passive flows from the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500 Index</a> trackers at the same time as the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index</a> rebalance.</li>
<li>The potential inclusions and deletions have slipped over the last couple of months along with the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index</a>, but the potential inclusions have outperformed as the deletions have dropped more.</li>
</ul>


Nearly halfway through the review period, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
Some of the potential changes will also have passive flows from the CSI 500 Index trackers at the same time as the ChiNext Index rebalance.
The potential inclusions and deletions have slipped over the last couple of months along with the ChiNext Index, but the potential inclusions have outperformed as the deletions have dropped more.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the <a href="https://investor.chindatagroup.com/static-files/cb5912cf-662a-4900-8c41-751c53513ef4" target="_blank" rel="noopener">11 August</a>, Chinese data center provider <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.</li>
<li>The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. </li>
<li>All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. </li>
</ul>


Back on the 11 August, Chinese data center provider Chindata Group (CD US) and major shareholder Bain Capital entered into a definitive agreement at US$8.60/ADS.
The EGM was held yesterday, the 4 December, and the merger was approved by 97.75% of the total votes cast. No specific PRC regulatory approval is needed for this merger. 
All good right? Not quite. There's still the nagging issue involving 22.79% of shares out objecting to the deal, exceeding the 12% dissenting threshold, a condition to the merger. 


Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

<ul>
<li>Back on the 7 June, <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata Group (CD US)</a> announced Bain Capital's NBIO to buy all shares of the Chinese data center provider it does not already own for $8/ADS.</li>
<li>On the <a href="https://investor.chindatagroup.com/news-releases/news-release-details/chindata-group-receives-non-binding-take-private-proposal-cmc" target="_blank" rel="noopener">13 July</a>, Chindata announced that China Merchants Capital has made an NBIO at $9.20/ADS.</li>
<li>Now Bain has entered into a definitive agreement with Chindata at US$8.60/ADS. Bain holds more than 2/3s of Chindata to vote this through. And there is no PRC regulator approval.</li>
</ul>


Back on the 7 June, Chindata Group (CD US) announced Bain Capital's NBIO to buy all shares of the Chinese data center provider it does not already own for $8/ADS.
On the 13 July, Chindata announced that China Merchants Capital has made an NBIO at $9.20/ADS.
Now Bain has entered into a definitive agreement with Chindata at US$8.60/ADS. Bain holds more than 2/3s of Chindata to vote this through. And there is no PRC regulator approval.


<ul>
<li>My read of Bain's Offer last month, was a tactic to flesh out a competing Offer.  It seemed unlikely Bain would get the regulatory approval to take <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> private. </li>
<li>Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.</li>
<li>This Offer is indicative. But an SOE taking over data centres makes a lot of sense. </li>
</ul>


My read of Bain's Offer last month, was a tactic to flesh out a competing Offer.  It seemed unlikely Bain would get the regulatory approval to take Chindata (CD US) private. 
Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.
This Offer is indicative. But an SOE taking over data centres makes a lot of sense. 


Chindata: Bain's Move Spurs China Merchants Into Action

<ul>
<li>Chinese data centre outfit <a href="https://www.smartkarma.com/entities/chindata-group-holdings-adr" target="_blank" data-smartkarma-citation="entities:29274:1" rel="noopener">Chindata (CD US)</a> has no end of alleged suitors, rumoured to include SOE-backed China Merchants, <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS (GDS US)</a>, PE outfit PAG, and <a href="https://www.smartkarma.com/entities/eqt-ab" target="_blank" data-smartkarma-citation="entities:28922:1" rel="noopener">EQT (EQT SS)</a>-backed EdgeConneX.</li>
<li>Now Bain Capital, Chindata's largest shareholder with 42.17% (and 87.39% of the voting power) has made a non-binding proposal of $8/share per ADS, a 33% premium to last close.</li>
<li>Chindata's board has made no decision on the proposal. It's hardly a knockout Offer. But the key question is whether Bain will get regular approval to take Chindata private. </li>
</ul>


Chinese data centre outfit Chindata (CD US) has no end of alleged suitors, rumoured to include SOE-backed China Merchants, GDS (GDS US), PE outfit PAG, and EQT (EQT SS)-backed EdgeConneX.
Now Bain Capital, Chindata's largest shareholder with 42.17% (and 87.39% of the voting power) has made a non-binding proposal of $8/share per ADS, a 33% premium to last close.
Chindata's board has made no decision on the proposal. It's hardly a knockout Offer. But the key question is whether Bain will get regular approval to take Chindata private. 


China

Wangsu Science & Technology Co., Ltd. provides online business solutions in China. The Company also provides Content Delivery Network (CDN), and Internet Data Centers (IDC).

Shanghai Wangsu Science & Technology Co (300017 CH)

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

Shanghai Wangsu Science & Technology Co (300017 CH)

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

There could be 7 changes for the ChiNext and 5 changes for the ChiNext50. Round trip trade is estimated at US$636m. There is overlap between the...

Brian Freitas

Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

This is done. Trading at a 2% gross spread to terms, or ~14% annualised assuming late-Jan completion. Not bad. Not great. It was certainly more...

David Blennerhassett

Chindata Backs Bain's Revised Terms

Chindata is still cheap. But Bain & Co have the necessary votes to push this through. Trading at a 6% gross spread to terms, or ~13% annualised...

David Blennerhassett

Chindata: Bain's Move Spurs China Merchants Into Action

A unit of China Merchants is the right vehicle for this Offer. Trading at a 13.1% gross spread to terms, which is indicative of the non-binding...

David Blennerhassett

Is Bain Permitted To Take Over Chindata?

Trading at a 15.3% gross spread to terms, which is indicative of the non-binding nature of the Offer, and what might be involved in the due...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ChiNext/​​​ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow

There could be 7 changes for the ChiNext and 5 changes for the ChiNext50. Round trip trade is estimated at US$636m. There is overlap between the...

Brian Freitas

Dissenters Mobilise As Chindata (CD US)'s Shareholders Approve Bain's Offer

This is done. Trading at a 2% gross spread to terms, or ~14% annualised assuming late-Jan completion. Not bad. Not great. It was certainly more...

David Blennerhassett

Chindata Backs Bain's Revised Terms

Chindata is still cheap. But Bain & Co have the necessary votes to push this through. Trading at a 6% gross spread to terms, or ~13% annualised...

David Blennerhassett

Chindata: Bain's Move Spurs China Merchants Into Action

A unit of China Merchants is the right vehicle for this Offer. Trading at a 13.1% gross spread to terms, which is indicative of the non-binding...

David Blennerhassett

Is Bain Permitted To Take Over Chindata?

Trading at a 15.3% gross spread to terms, which is indicative of the non-binding nature of the Offer, and what might be involved in the due...

David Blennerhassett

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow