In today’s briefing:
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in June & September
- Yuanta/P-Shares Taiwan Dividend+ ETF Preview: Two Weeks to Cutoff
- Alibaba (9988 HK): Chinese Authorities Turning Opposite to Encourage Non-State-Owned Companies
- Skyworth (751 HK): Thoughts On Proration
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in June & September
- There is only one new listing as a potential inclusion to the HSCI in June. If added to the HSCI, it will also be added to Southbound Stock Connect.
- There are 18 potential inclusions and 19 potential deletions for the HSCI in September. There are a few close adds and there could be another 5 deletions on Prolonged Suspension.
- A lot of the potential deletions have large Southbound holdings. With all the stocks becoming sell-only, there could be unwinding of some positions over the next couple of months.
Yuanta/P-Shares Taiwan Dividend+ ETF Preview: Two Weeks to Cutoff
- With two weeks left to the cutoff, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- Apart from the adds/deletes, there will also be capping and funding flows that will lead to an estimated one-way turnover of 13.5% and a one-way trade of US$886m.
- There are 9 stocks with at least 5 days ADV to trade from passive trackers and another 12 stocks that have at least 1 day ADV to trade.
Alibaba (9988 HK): Chinese Authorities Turning Opposite to Encourage Non-State-Owned Companies
- Chinese authorities have begun to ban public opinion against non-state-owned companies.
- These actions were the opposite to what the authorities did in past years.
- We believe the authorities need non-state-owned companies to bail the unemployed young people out of the weak job market.
Skyworth (751 HK): Thoughts On Proration
- Back on the 23 December, Skyworth Group (751 HK) announced another partial buyback – this time for 100mn shares (3.87% of shares out), at HK$3.80/share, a 20.25% premium to undisturbed.
- On the 28 March, terms were bumped to $5.00/share. Independent shareholders approved the whitewash waiver on the 5 May.
- The Offer closes on the 18 May. The minimum proration is 7.8%. Expect the final proration to be higher.
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