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>Post market close on Friday, Hang Seng Indexes will announce the changes for 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 (HSI INDEX)</a> that will be implemented at the close on 6 September.</li>
<li>With no constituent changes in March and 1 add/1 delete in June, there could be more changes in September with Health Care stocks among the potential inclusions.</li>
<li>Changes to the Hang Seng Industry Classification System (HSICS) will be implemented from the September rebalance and that will alter industry coverage.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 September.
With no constituent changes in March and 1 add/1 delete in June, there could be more changes in September with Health Care stocks among the potential inclusions.
Changes to the Hang Seng Industry Classification System (HSICS) will be implemented from the September rebalance and that will alter industry coverage.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net SELL RMB 14.8bn of A-shares. It was a big net sell week in relatively low gross NORTHBOUND volume.</li>
<li>HK large caps outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 14.8bn of A-shares. It was a big net sell week in relatively low gross NORTHBOUND volume.
HK large caps outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.


Mainland Connect NORTHBOUND Flows (To 9 Aug 2024): Back to Net Selling of Renewables and Consumer

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 9th.</li>
<li>We estimate the weekly outflows to be US$2,018.4 million, led by information technology, consumer discretionary, financials, and offset by health care, consumer staples, utilities.</li>
<li>We highlight flows for Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of August 9th.
We estimate the weekly outflows to be US$2,018.4 million, led by information technology, consumer discretionary, financials, and offset by health care, consumer staples, utilities.
We highlight flows for Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight.


Northbound Flows (Aug 9th): Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight

<ul>
<li>We analyse the changes of A-H premium on 144 stocks over the last week. The average A-H premium was 112.4% as of Aug 9th.</li>
<li>The average A-H premium changed by 1.5ppt week-on-week, led by consumer discretionary, information technology, energy and offset by utilities, health care.</li>
<li>We highlight weekly changes in A-H premium for Asymchem Lab, Shanghai Pharm, China Eastern, Air China, Smic, Hepalink, WuXi AppTec, Pharmaron, Hangzhou Tiger.</li>
</ul>


We analyse the changes of A-H premium on 144 stocks over the last week. The average A-H premium was 112.4% as of Aug 9th.
The average A-H premium changed by 1.5ppt week-on-week, led by consumer discretionary, information technology, energy and offset by utilities, health care.
We highlight weekly changes in A-H premium for Asymchem Lab, Shanghai Pharm, China Eastern, Air China, Smic, Hepalink, WuXi AppTec, Pharmaron, Hangzhou Tiger.


A-H Premium Weekly (Aug 9th): Asymchem Lab, Shanghai Pharm, China Eastern, Air China, Smic, Hepalink

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>China ETF flows were steady for the week, however Southbound Connect flows were negative for the first time since February.</li>
<li><a href="https://www.smartkarma.com/entities/prada-s-p-a" target="_blank" data-smartkarma-citation="entities:889:1" rel="noopener">Prada S.P.A. (1913 HK)</a>  shares standout in the luxury brand sector as Miu Miu sales surged.  <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> slightly beat estimates but still have BioSecure Act overhang.</li>
<li>Property development firms <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/wharf-holdings-ltd" target="_blank" data-smartkarma-citation="entities:51:1" rel="noopener">Wharf Holdings (4 HK)</a> were hurt by poor results, while <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Techn (9901 HK)</a> saw earnings miss estimates.</li>
</ul>


China ETF flows were steady for the week, however Southbound Connect flows were negative for the first time since February.
Prada S.P.A. (1913 HK)  shares standout in the luxury brand sector as Miu Miu sales surged.  WuXi AppTec (2359 HK) slightly beat estimates but still have BioSecure Act overhang.
Property development firms Hang Lung Properties (101 HK) and Wharf Holdings (4 HK) were hurt by poor results, while New Oriental Education &amp; Techn (9901 HK) saw earnings miss estimates.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 2)

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September

Announcement on Friday post market close. Health Care industry still underweight. Index committee has a lot of discretion in stock selection. We...

Brian Freitas

Mainland Connect NORTHBOUND Flows (To 9 Aug 2024): Back to Net Selling of Renewables and Consumer

NORTHBOUND back to the sell side last week. Pretty much across the board but renewables-related (solar, btty, EVs) were all sells. EVs to be...

Travis Lundy

Northbound Flows (Aug 9th): Suzhou Dongshan Precision Manufacturing, Midea, CATL, Zhongji Innolight

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlighted flows for Suzhou Dongshan Precision Manufacturing, Midea,...

Ke Yan, CFA, FRM

A-H Premium Weekly (Aug 9th): Asymchem Lab, Shanghai Pharm, China Eastern, Air China, Smic, Hepalink

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Asymchem Lab, Shanghai Pharm, China Eastern, Air China,...

Ke Yan, CFA, FRM

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 2)

Southbound Connect flows were negative for the first week since February. Prada benefited from a weak JPY and Wuxi AppTec beat estimates. HK...

David Mudd

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