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>One third of the way through the review period, we forecast 10 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 December.</li>
<li>Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.</li>
<li>The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We'd wait for a pullback to re-enter positions.</li>
</ul>


One third of the way through the review period, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in December.
Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We'd wait for a pullback to re-enter positions.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

<ul>
<li>Hang Seng has announced the conclusions of the market consultation. Primary-listed foreign stocks will be eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH INDEX</a> from the December rebalance.</li>
<li>The coming week has the rebalances for the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">Nifty Bank Index</a> and <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">SENSEX Index</a> as a result of the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a>/ <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a> merger.</li>
<li>There were inflows to <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong Ltd (2800 HK)</a> and outflows from <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a> during the week.</li>
</ul>


Hang Seng has announced the conclusions of the market consultation. Primary-listed foreign stocks will be eligible for inclusion in the HSI INDEX and HSTECH INDEX from the December rebalance.
The coming week has the rebalances for the NIFTY Index, Nifty Next 50 Index, Nifty Bank Index and SENSEX Index as a result of the HDFC Limited/ HDFC Bank merger.
There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and outflows from Hang Seng H Share Index ETF (2828 HK) during the week.


Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

Shanghai United Imaging Health / Event-Driven

<ul>
<li>Two thirds of the way through the review period, we see 14 potential index changes at the December rebalance that will be implemented at the close on 8 December.</li>
<li>We estimate a one-way turnover of 1.98% at the December rebalance leading to a one-way trade of CNY 5.32bn.</li>
<li>The potential adds have outperformed the potential deletes and the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> over the last five months, though there is some near-term underperformance.</li>
</ul>


Two thirds of the way through the review period, we see 14 potential index changes at the December rebalance that will be implemented at the close on 8 December.
We estimate a one-way turnover of 1.98% at the December rebalance leading to a one-way trade of CNY 5.32bn.
The potential adds have outperformed the potential deletes and the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) over the last five months, though there is some near-term underperformance.


CSI300 Index Rebalance Preview: Early Look at Potential Changes in December

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The investment logic of vaccine companies is different that of biotech. Generally speaking, vaccine companies cannot develop to large scale without successfully betting on big vaccine varieties.</li>
<li>The most fatal problem of CanSino is that there’re no other blockbuster varieties except COVID-19 vaccine. So, either CanSino develops a big variety,or it would gradually enter a vicious circle.</li>
<li>CanSino’s current valuation is at a low level. Even with many negative factors, that doesn't mean CanSino's stock price won't rebound. </li>
</ul>


The investment logic of vaccine companies is different that of biotech. Generally speaking, vaccine companies cannot develop to large scale without successfully betting on big vaccine varieties.
The most fatal problem of CanSino is that there’re no other blockbuster varieties except COVID-19 vaccine. So, either CanSino develops a big variety,or it would gradually enter a vicious circle.
CanSino’s current valuation is at a low level. Even with many negative factors, that doesn't mean CanSino's stock price won't rebound. 


CanSino Biologics (6185.HK) 2022 Results - It Is Time to Reassess CanSino and Its Future Prospects

Equity Capital Markets

Changchun BCHT Biotechnology C / Equity Capital Markets

<ul>
<li>Single product structure is the biggest risk of BCHT. Varicella vaccine is hard to drive BCHT’s performance growth in the future and the sales of influenza vaccine are not ideal. </li>
<li>There’re concerns about the protection rate of attenuated zoster vaccine,which won't be officially sold until 2023H2/2024. It’s not sure whether the situation can be reversed by attenuated zoster vaccine alone.</li>
<li>BCHT is inferior to CanSino in terms of pipeline quality and R&amp;D capability. The investment value of BCHT is not high. We think its valuation should be lower than CanSino.</li>
</ul>


Single product structure is the biggest risk of BCHT. Varicella vaccine is hard to drive BCHT’s performance growth in the future and the sales of influenza vaccine are not ideal. 
There’re concerns about the protection rate of attenuated zoster vaccine,which won't be officially sold until 2023H2/2024. It’s not sure whether the situation can be reversed by attenuated zoster vaccine alone.
BCHT is inferior to CanSino in terms of pipeline quality and R&amp;D capability. The investment value of BCHT is not high. We think its valuation should be lower than CanSino.


Pre-IPO Changchun BCHT Biotechnology - The Risk of Single-Product Dependence and Uncertain Outlook

China

Shenzhen Kangtai Biological Products Co., Ltd. operates biological product manufacturing businesses. The Company produces biological vaccines and other vaccine products. Shenzhen Kangtai Biological Products conducts businesses in China.

Shenzhen Kangtai Biological Pr (300601 CH)

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Shenzhen Kangtai Biological Pr (300601 CH)

ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

There are many overlapping changes for the Chinext and Chinext50 indices. The potential adds have outperformed the potential deletes and flow could...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

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

Brian Freitas

CSI300 Index Rebalance Preview: Early Look at Potential Changes in December

We currently have 14 changes for the CSI300 Index in December. Most changes are high probability and the potential adds have outperformed the...

Brian Freitas

CanSino Biologics (6185.HK) 2022 Results - It Is Time to Reassess CanSino and Its Future Prospects

CanSino had poor performance last year,but share price could bounce back in the next “sector resonance".There's no long-term investment value until...

Xinyao (Criss) Wang

Pre-IPO Changchun BCHT Biotechnology - The Risk of Single-Product Dependence and Uncertain Outlook

BCHT plans to IPO in Swiss. The risk of its over-reliance on a single product remains unresolved.The outlook of new attenuated zoster vaccine may...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ChiNext/​​​ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

There are many overlapping changes for the Chinext and Chinext50 indices. The potential adds have outperformed the potential deletes and flow could...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

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

Brian Freitas

CSI300 Index Rebalance Preview: Early Look at Potential Changes in December

We currently have 14 changes for the CSI300 Index in December. Most changes are high probability and the potential adds have outperformed the...

Brian Freitas

CanSino Biologics (6185.HK) 2022 Results - It Is Time to Reassess CanSino and Its Future Prospects

CanSino had poor performance last year,but share price could bounce back in the next “sector resonance".There's no long-term investment value until...

Xinyao (Criss) Wang

Pre-IPO Changchun BCHT Biotechnology - The Risk of Single-Product Dependence and Uncertain Outlook

BCHT plans to IPO in Swiss. The risk of its over-reliance on a single product remains unresolved.The outlook of new attenuated zoster vaccine may...

Xinyao (Criss) Wang

ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance