In today’s briefing:
- HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect
- Hang Seng TECH Index Rebalance: No Changes BUT Big Turnover
- Last Week in Event SPACE: Tencent/Meituan, Jardine Matheson, Giordano, Nearmap, Fraser Hospitality
- Index Rebalance & ETF Flow Recap: S&P/ASX, CSI300, SSE50, HSI, HSCEI, HSTECH, HSCI, CTG IPO, KQ150
- ECM Weekly (21st Aug 2022) – China Tourism, SoCar, Beauty Farm, ANZ, Max, Judo, Steadfast, Cleanaway
HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect
- There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
- 19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
- Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.
Hang Seng TECH Index Rebalance: No Changes BUT Big Turnover
- There are no changes to the index names, but FAF and capping changes will lead to a one-way turnover of 4.5% and one-way flow of HK$3,287m.
- An increase in the FAF from 3% to 40% will result in passive inflows of HK$1.18bn for SenseTime Group (20 HK) – that is over 5 days of ADV.
- There are large shorts on some of the stocks that will have passive outflows and some of these positions could be covered on implementation day.
Last Week in Event SPACE: Tencent/Meituan, Jardine Matheson, Giordano, Nearmap, Fraser Hospitality
- Chinese food delivery giant Meituan (3690 HK) shed 9% after Tencent (700 HK) reportedly planned to divest its $24bn stake. But it may just be a misunderstanding. Maybe.
- Given Jardine Matheson Holdings (JM SP)‘s strong underlying operating performance, the 40% discount to NAV – one in which there are discounts of discounts – JMH appears attractive here.
- Expect a firm Offer for Nearmap Ltd (NEA AU) shortly. Thoma Bravo’s due diligence is already at an advanced stage. And why Nearmap entered into the break fee.
Index Rebalance & ETF Flow Recap: S&P/ASX, CSI300, SSE50, HSI, HSCEI, HSTECH, HSCI, CTG IPO, KQ150
- A busy Friday with the end of the S&P/ASX review period and announcement of changes to the Hang Seng family of indices and FTSE AW/AC at the September rebalance.
- Monday is the review cutoff for the FTSE TWSE Taiwan 50, STI, FTSE China 50 and A50 indices, among others. STAR50 Sep changes announcement expected post market close on Friday.
- There were some big inflows into Asia focused ETFs during the week, while the outflows from KraneShares CSI China Internet ETF (KWEB US) continued for yet another week.
ECM Weekly (21st Aug 2022) – China Tourism, SoCar, Beauty Farm, ANZ, Max, Judo, Steadfast, Cleanaway
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, China Tourism managed to price its IPO above the mid-point.
- There were a host of placements and blocks this week across the region.
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