In today’s briefing:
- HSI Index Rebalance: Yippee! Finally at 80!
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- China Cooling?
- HSCEI Index Rebalance: China Shenhua (1088 HK) Replaces Country Garden (2007 HK); Div Impact
- China Healthcare Weekly (May.12) – Three Globalization Strategies, GLP-1/Weight Loss Drug, Bio-Heart
- ECM Weekly (14th May 2023) – Mankind, Nexus REIT, SCG Chemicals, Guoquan, Shiyue, Medanta, Bikaji
HSI Index Rebalance: Yippee! Finally at 80!
- The Hang Seng index committee has added four stocks to take the number of Hong Kong Hang Seng Index (HSI INDEX) constituents to 80. A year late, but we’re there!
- The next leg of the increase in the number of index constituents will take us up to 100. There is no timeline, so this should take a couple of years.
- Estimated one-way turnover is 2.93% leading to a one-way trade of HK$5.7bn (US$730m). All adds will have over 2x ADV to buy from passive trackers.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- China Cooling?
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
HSCEI Index Rebalance: China Shenhua (1088 HK) Replaces Country Garden (2007 HK); Div Impact
- As expected, China Shenhua Energy Co H (1088 HK) replaces Country Garden Holdings Co (2007 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close 2 June.
- Using prices from the close on 12 May, estimated one-way turnover is 2.1% leading to a one-way trade of HK$1.3bn (US$170m).
- The change will lead to an increase in the fair value of the HSCEI 2023 Dividend Futures. We’d be sellers on a move higher towards 240 DIPS.
China Healthcare Weekly (May.12) – Three Globalization Strategies, GLP-1/Weight Loss Drug, Bio-Heart
- There are three main ways for Chinese pharmaceutical companies to enter global markets, but the results are completely different. Investors are advised to make cautious judgments based on different cases.
- Speed is a crucial factor in the competition for drug development, but there’re precedents in history that late-comers are still able to turn things around, such as GLP-1/weight loss drugs.
- We remain conservative about the future commercialization performance of Bio-Heart’s BRS and Iberis 2nd. However, the product launch is a catalyst for share price, which provides a good short-term trade opportunity.
ECM Weekly (14th May 2023) – Mankind, Nexus REIT, SCG Chemicals, Guoquan, Shiyue, Medanta, Bikaji
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- Mankind Pharma delivered some joy to the Indian equity markets over the past week.
- There were no major placements over the past week but there were some lockup expiries.
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