In today’s briefing:
- HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect
- HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer
- Alibaba: FY3Q23 Results Presenting An Opportunity In Disguise
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
HSCI Index Rebalance: 35 Adds, 28 Deletes & Changes to Southbound Stock Connect
- There are 35 adds and 28 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents up to 527.
- We expect 29 of the 35 inclusions to the HSCI will be added to Stock Connect, while 20 of the 28 HSCI deletions will be removed from Southbound Stock Connect.
- 19 stocks could be deleted from Stock Connect only since their average market cap has dropped below HK$5bn- unless the new threshold of HK$4bn is approved in the next week.
HSCEI Index Rebalance: Xpeng (9868) Replaces China Feihe (6186); Li Auto (2015) Biggest Gainer
- As expected, XPeng (9868 HK) replaces China Feihe (6186 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 10 March.
- Using prices from the close on 24 February, estimated one-way turnover is 3.28% and will result in a one-way trade of HK$2,162m at the close on 10 March.
- Short interest on XPeng (9868 HK), Li Auto (2015 HK), China Feihe (6186 HK) is quite high in terms of days of ADV to cover and in terms of float.
Alibaba: FY3Q23 Results Presenting An Opportunity In Disguise
- BABA’s December results highlighted how the performance of this e-commerce giant – as a proxy for China consumption – increasingly tracks Chinese economy.
- The Alibaba that suffered from China’s slump in 2022 should also be the Alibaba that stands to reap the fruits from China’s recovery in 2023.
- Trading at 12x PE on the cusp of economic recovery, the payoff of BABA is much better for bulls than bears. Maintain $500 billion target valuation. Buy.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- 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
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