In today’s briefing:
- FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses
- Hang Seng Index Rebalance – FOUR Names IN, None Out (The March to 80 Continues)
- Hang Seng Tech Rebalance – No Name Changes But Lots of Flow
- HSCEI Rebalance – One In, One Out, 3.1% One-Way Flow
- Merger Arb Mondays (22 Aug) – Link, Alliance, Nearmap, Genex, Ramsay, Lifestyle, EVOC, Giordano
- Overheated Short Selling Designation in Korea: Precise Definitions for the Confusing Terms
- Weekly Deals Digest (21 Aug) – CTGDF, Frasers Hospitality, Nearmap, Alliance, Tassal, Yashili
FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses
- FTSE announced the results of the September SAIR for the FTSE All-World/All-Cap indices on Friday. There are 243 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
- The largest inflows will go to PSMC (6770 TT), Sumber Alfaria Trijaya (AMRT IJ), Daqo New Energy (DQ US) and Tianqi Lithium (002466 CH).
- FTSE will switch index membership from the US ADRs to the HK listings for New Oriental Education & Technology Group (9901 HK) and XPeng (9868 HK).
Hang Seng Index Rebalance – FOUR Names IN, None Out (The March to 80 Continues)
- The Hang Seng Index Team announced four changes to the Hang Seng Index, bringing membership to 73 from 69, on its way to 80, but later than originally targeter mid-2022.
- Additions are China Shenhua Energy Co H (1088 HK), Chow Tai Fook Jewellery (1929 HK), Hansoh Pharmaceutical (3692 HK), and Baidu (9888 HK).
- Official placeholder turnover is about 3.8%. Small changes due to capping updates still to come. China Shenhua and possibly Chow Tai Fook look interesting as trades.
Hang Seng Tech Rebalance – No Name Changes But Lots of Flow
- The Hang Seng Index Team announced the index review for the Hang Seng Tech Index Friday after the close. There were no additions or deletions.
- However, there is a 4.9% one-way turnover on reasonably heavy FAF and capping changes. Sensetime sees a huge FAF increase. Tencent, Meituan, and Kuaishou get re-capped higher. Xiaomi lower.
- There is a fair bit of flow, but the obvious big name – SenseTime Group (20 HK) – has potential overhang. Watch Haier Smart Home Co Ltd (6690 HK).
HSCEI Rebalance – One In, One Out, 3.1% One-Way Flow
- On Friday the Hang Seng announced the changes to the HSCEI for the September rebalance. SenseTime Group (20 HK) is an ADD. China Pacific Insurance (2601 HK) a DELETE.
- Meituan (3690 HK) and Tencent (700 HK) see their weights re-capped upwards. Alibaba Group (9988 HK) capped slightly lower. There are a number of FAF changes.
- Little stands out other than the China Pacific Insurance (2601 HK) deletion. It runs low volatility vs Peers so could be a good buy on dip.
Merger Arb Mondays (22 Aug) – Link, Alliance, Nearmap, Genex, Ramsay, Lifestyle, EVOC, Giordano
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
- Highest spreads are 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Resapp Health (RAP AU), Lifestyle International Holdings (1212 HK).
- Lowest gross spreads are MACA Ltd (MLD AU), Dongzheng Automotive Finance (2718 HK), Excelpoint Technology (EXLP SP), Xiamen International Port H (3378 HK), MyDeal.com, Giordano International (709 HK).
Overheated Short Selling Designation in Korea: Precise Definitions for the Confusing Terms
- The definitions of the terms used in this designation rule have not been clearly disclosed. Even the words used in the original Korean text make interpreting quite tricky.
- What confuses investors the most is the Short Selling Proportion, basically the ratio of a stock’s short-selling to the market.
- Amount Increase in Short Selling Transactions is also quite confusing. It is the ratio of a stock’s short selling to its 40-day average daily short selling volume.
Weekly Deals Digest (21 Aug) – CTGDF, Frasers Hospitality, Nearmap, Alliance, Tassal, Yashili
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – China Tourism Group Duty Free Corp Ltd (1880 HK) priced its H Share at HK$158, WCP (WCP KS) issued an updated prospectus.
- Event-Driven developments Alliance Aviation Services (AQZ AU), Nearmap Ltd (NEA AU), Tassal (TGR AU), Genex Power Ltd (GNX AU), Yashili International Holdings (1230 HK), Xiamen International Port H (3378 HK).
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