Daily BriefsEvent-Driven

Daily Brief Event-Driven: HSCI Index Rebalance: 22 Adds and more

In today’s briefing:

  • HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect
  • Share Buybacks In Japan – A 2023 Primer
  • Joyful Honda (3191) – Repeats Its ASR In Double the Size
  • Last Week in Event SPACE: Aussie Tax-Loss Selling, Japan Post Bank/Holdings, AviChina, Hang Lung
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Celltrion, Sanei Architecture, T&K Toka, MPI, Chindata
  • HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)
  • Index Rebalance & ETF Flow Recap: ASX, NEXT50, MVMVA, MVMVW, Celltrion, Brilliance, KQ150, HSCI


HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect

By Brian Freitas

  • There are 22 adds and 27 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents down to 518.
  • We expect all 22 inclusions to the HSCI will be added to Stock Connect, while 24 of the 27 HSCI deletions will be removed from Southbound Stock Connect.
  • Since the end of June, shares held though Southbound Connect have increased on 20 of the 27 HSCI deletions and there could be some unwinding in the next two weeks.

Share Buybacks In Japan – A 2023 Primer

By Travis Lundy

  • The TSE and Government are pressuring low-PBR companies to DO SOMETHING to raise their PBR to >1.0x. The easiest way to do that is raise ROE.
  • Raising R requires customers “agree” (buying more, paying a higher price, etc). Lowering E means buying back shares or paying big special dividends. That’s easier for a company.
  • So buybacks have been increasing in number, and breadth, and to some degree in size. This insight describes the mechanics/details of how buybacks work in Japan.

Joyful Honda (3191) – Repeats Its ASR In Double the Size

By Travis Lundy

  • Last year, I wrote about Joyful Honda (3191 JP)‘s implementation of a ¥2.5bn ToSTNeT-3 into Accelerated Share Repurchase. It was the first such transaction I knew of in Japan.
  • This year, they have just announced another for nearly twice the size. It is worth looking at the details and comparing the stock vs Peers.
  • It is also worth understanding exactly what the incentives are for whom and how that impacts the path. And who might respond to it.

Last Week in Event SPACE: Aussie Tax-Loss Selling, Japan Post Bank/Holdings, AviChina, Hang Lung

By David Blennerhassett


(Mostly) Asia-Pac Weekly Risk Arb Wrap: Celltrion, Sanei Architecture, T&K Toka, MPI, Chindata

By David Blennerhassett


HSCEI Index Rebalance: Trip.com (9961 HK) Replaces CG Services (6098 HK)

By Brian Freitas


Index Rebalance & ETF Flow Recap: ASX, NEXT50, MVMVA, MVMVW, Celltrion, Brilliance, KQ150, HSCI

By Brian Freitas

  • Friday was the review cutoff for the September rebalance of the ASX family of indices. The September changes for the Hang Seng family of indices were also announced.
  • The September changes for the SSE STAR50 (STAR50 INDEX) will be announced after the close of trading on 25 August.
  • For a second week running, there were big inflows to mainland China ETFs and were spread across multiple index trackers. There were outflows from iShares Emerging Markets (EEM US)

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