In today’s briefing:
- Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide
- A/H Premium Tracker (To 23 Feb 2024): Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time
- HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Boral, CSR, Ansarada, TCM, Snow Peak, Azure Min, Genetron
- Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells
- China Healthcare Weekly (Feb.23)- TCM Ushers in a Harvest Period, Biotech Bottom-Line, Kelun-Biotech
- STAR50 Index Rebalance: Three Changes a Side; One Surprise Change
Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide
- The changes for the SSE STAR50 (STAR50 INDEX) and STAR100 Index were announced post market close on Friday.
- The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.
- With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the CSI 300, CSI 500, ChiNext and STAR50 indices.
A/H Premium Tracker (To 23 Feb 2024): Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND and NORTHBOUND flows net positive. AH premia on average fell so Hs OUTperformed As by 2.1%. Liquid Hs saw their H outperform the A by 3.1% on average.
- Last week was the sharpest one-week fall in AH premium in a very long time. SOUTHBOUND Flows Monitor here. NORTHBOUND Flows Monitor here.
HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs
- A great week for HK and Chinese shares, especially the larger caps. Mainland indices were up 8 days in a row to Friday, helping HK shares stay bid.
- Net SOUTHBOUND buying was HK$20.0bn in the first post-holiday week. LOTS of SOEs on the net buying side.
- Remarkable this past week, was a new tendency to net sell names which were up a lot and net buy names which haven’t performed as well.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Boral, CSR, Ansarada, TCM, Snow Peak, Azure Min, Genetron
- I tally 53 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Five new deals discussed this week on Smartkarma! Boral Ltd (BLD AU), CSR Ltd (CSR AU), Ansarada Group Ltd (AND AU),TCM (570 HK), and Snow Peak Inc (7816 JP).
- Key updates took place on Azure Minerals (AZS AU), CIMC Vehicle Group Co Ltd (1839 HK), Outsourcing Inc (2427 JP), and Genetron Holdings Ltd (GTH US).
Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells
- 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 BUY RMB 10.7bn of A-shares on strong average activity after RMB +16.1bn, +9.9bn and +12.1bn the three weeks before. More National Team buying this week.
- Five of the top ten buys among liquid NORTHBOUND stocks were finance. Again. Info Tech saw net selling. Again. People trading long gamma now instead of short gamma.
China Healthcare Weekly (Feb.23)- TCM Ushers in a Harvest Period, Biotech Bottom-Line, Kelun-Biotech
- Thanks to the continuous support of policies, the TCM industry has ushered in a harvest period. So, TCM remains to be a relatively certain field for investment in China healthcare.
- Biotech companies must meet several conditions in order to have good long-term development, such as sufficient financial support, at least one blockbuster product and high moral standard of the management.
- Reasonable valuation of Sichuan Kelun-Biotech Biopharm (6990 HK) is about RMB15 billion. So, we think it is now overvalued. Meanwhile, restricted shares will be lifted 12 months after the IPO.
STAR50 Index Rebalance: Three Changes a Side; One Surprise Change
- There are three constituent changes for the SSE STAR50 (STAR50 INDEX) at the March rebalance. One inclusion and one non-inclusion are surprises.
- One way turnover is estimated at 2.9% and will result in a one-way trade of CNY 4,075m with over 2.5x ADV to trade on all constituent changes.
- The adds have outperformed the deletes over the last few months with a jump in the last few trading sessions. There could be more outperformance over the next two weeks.
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