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>The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.</li>
<li>Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a> a high probability inclusion candidate.</li>
<li>We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.</li>
</ul>


The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.
Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes Samsonite (1910 HK) a high probability inclusion candidate.
We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.


Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December

<ul>
<li>The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> on Friday.</li>
<li>The review period for the December rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index</a>, <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</a> and the HSCI Index ends on Friday.</li>
<li>Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.</li>
</ul>


The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the Nikkei 225 (NKY INDEX) on Friday.
The review period for the December rebalance of the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI Index ends on Friday.
Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.


Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>On the 11 June, broker <a href="https://www.smartkarma.com/entities/mason-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:17664:1" rel="noopener">Mason Group (273 HK)</a> announced a Scheme at HK$0.0338/share, a 20.7% premium to last close. Terms had not been declared final.</li>
<li>The Offeror is Red Emerald. which holds no shares in Mason. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme. </li>
<li>The Scheme Doc is now out. The EGM/Court Meeting will be held on the 3 Oct with expected payment around the 21 November. Trading wide to terms.</li>
</ul>


On the 11 June, broker Mason Group (273 HK) announced a Scheme at HK$0.0338/share, a 20.7% premium to last close. Terms had not been declared final.
The Offeror is Red Emerald. which holds no shares in Mason. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme. 
The Scheme Doc is now out. The EGM/Court Meeting will be held on the 3 Oct with expected payment around the 21 November. Trading wide to terms.


External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Smoore International Holdings / Equity Bottom-Up

<ul><li>Net profit of RMB717mn came in at the low end of the pre-announcement, when revenue reportedly stood at a 9.4% YoY decline to RMB5.1bn.</li><li>A large part of the decline was explained by an 81.5% YoY tumble in China revenue to RMB393mn (or 96.3% YoY to RMB62mn should we excluding re-exporters), as a result of the enactment of the new national standard governing e-vapor, together with other market malignant practices.</li><li>From here, China revenue only represents only 1.2% to the total, and will no longer move the needle. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Net profit of RMB717mn came in at the low end of the pre-announcement, when revenue reportedly stood at a 9.4% YoY decline to RMB5.1bn.A large part of the decline was explained by an 81.5% YoY tumble in China revenue to RMB393mn (or 96.3% YoY to RMB62mn should we excluding re-exporters), as a result of the enactment of the new national standard governing e-vapor, together with other market malignant practices.From here, China revenue only represents only 1.2% to the total, and will no longer move the needle. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Smoore Int’l (6969 HK) – 1H Rev/Np -9%/-48%; Potential Turn-Around by 2024

<ul>
<li>Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, a review of the seven Industry Groups and number of HK constituents.</li>
<li>We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.</li>
<li>There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.</li>
</ul>


Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.


HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

China

Smoore International Holdings Limited offering vaping technology solutions with advanced research and development technology. The Company manufactures and produces closed system vaping devices, self branded open system vaping devices, vaping components, and other products. Smoore International Holdings markets its products throughout Hong Kong.

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Smoore International Holdings (6969 HK)

Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December

There are 8 trading days to the announcement of the December rebalance results. With foreign companies newly eligible, Samsonite is a high...

Brian Freitas

Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

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

Brian Freitas

3rd Oct Scheme Vote For Mason (273 HK)

Trading wide at 9%/53.2% gross/annualised spread. Get involved if illiquid arbs are your thing. Terms may still be bumped. I wouldn't bet on it.

David Blennerhassett

Smoore Int’l (6969 HK) – 1H Rev/Np -9%/-48%; Potential Turn-Around by 2024

Net profit of RMB717mn came in at the low end of the pre-announcement, when revenue reportedly stood at a 9.4% YoY decline to RMB5.1bn.

CMB International

HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

The conclusions of the market consultation have been announced. Primary-listed foreign companies will be eligible for inclusion in the HSI and...

Brian Freitas

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