Daily Brief Energy/Materials: Hoymiles Power Electronics, iShares MSCI ACWI ETF, Chevron Corp and more

In today’s briefing:

STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced
Pullback Underway; Buy Ideas: Energy, Materials, Japan/India Motor Vehicles, Japan Health Care
Chevron Corp: The REG Acquisition & Other Developments

STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced

The index committee has continued to use a 6 month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in September.
One-Way turnover is estimated at 4.07% and will result in a one-way trade of CNY 2,265m. Passive trackers will need to trade between 1-5 days ADV on the adds/deletes.
The adds have outperformed the deletes and the CSI500 Index since the end of the review period. We’d look to buy the adds and hedge with CSI500 Index futures.

In last week’s Int’l Compass (Aug. 18) we discussed that global equities are going through a bottoming process, but that the real test will come during the eventual pullback.
We are getting the pullback now, but so far, there has yet to be any failed breakouts among the indexes discussed over the past month — a positive sign.
Worth noting- further breakout attempts have failed on some of the leading market indexes, notably the Nasdaq 100 and India’s SENSEX, but they remain well-above their breakout levels from July.

Chevron continued its restructuring efforts which included $200 million in asset sale gains and a $600 million charge to cancel an extended LNG regas contract at Sabine Pass.
Chevron’s results were encouraging as it managed to deliver an all-around beat with superior yields and reduced carbon in the Permian.
With the remaining project operations mostly concentrated on systems completion, commissioning, and start-up, Chevron anticipates finishing construction by year’s end.

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