In today’s briefing:
- STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
- CSI300/CSI500/CSI1000 Index Rebalance: US$9bn Round-Trip Trade
- A/H Premium Tracker (To 29 Nov 2024): AH Premia Flat, Volumes Low; Premia Should Fall More
- Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group
- Korean Air Spearheading the Korean Airline Industry Consolidation
- Flowserve Corporation: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
STAR50/STAR100 Index Rebalance: No Changes for STAR50; 4 Changes for STAR100
- As forecast, there are no changes for the SSE STAR50 (STAR50 INDEX) in December while there are 4 changes for the STAR100 Index.
- There will be big outflows for Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) due to SSE STAR50 (STAR50 INDEX) capping. There will be selling from other index trackers too.
- Hainan Jinpan Smart Technology (688676 CH) had been ignored by the index committee at the September rebalance, so this inclusion in the STAR100 Index could come as a surprise.
CSI300/CSI500/CSI1000 Index Rebalance: US$9bn Round-Trip Trade
- There are 16 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 December.
- There are 257 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$9bn.
- Stocks with the largest inflows and impact have outperformed stocks with the largest outflows and impact over the last few weeks. That could continue for the next couple of weeks.
A/H Premium Tracker (To 29 Nov 2024): AH Premia Flat, Volumes Low; Premia Should Fall More
- Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB continues to buy tech.
- Stocks in HK and mainland markets bounced a bit this week as Scott Bessent named incoming Treasury Secretary and tariff talk diverges from China. Non-economic China policy matters more near-term.
- H/A Pairs were surprisingly un-volatile on the week. There are a fair number of wider spreads. Non-bank financials AH Premia remain at the low end of their 52-week range.
Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group
- Remain BULLISH Keisei Electric Railway Co (9009 JP) with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.
- Vitasoy Intl Holdings (345 HK)‘s share price run up is excessive as Philip Ng andYeo Hiap Seng (YHS SP) over-extend their hand.
- Nec Networks (1973 JP) has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.
Korean Air Spearheading the Korean Airline Industry Consolidation
- Nearly four years have passed since Korean Air first proposed a merger with Asiana Airlines in November 2020. Despite repeated delays, it appears that this merger could finally occur.
- There is now a higher probability of Korean Air and Asiana Airlines receiving the final merger approval from the United States Department of Justice.
- Combined with attractive valuations, better balance sheet, and improved profitability from the merged entity, we believe that Korean Air shares could continue to outperform KOSPI in the next 12 months.
Flowserve Corporation: These Are The 7 Biggest Factors Impacting Its Performance In 2025 & Beyond! – Major Drivers
- Flowserve Corporation’s third-quarter 2024 financial results reveal a mix of strengths and ongoing challenges as the company continues to execute its strategic growth plans.
- The company demonstrated notable progress in several key areas, while also acknowledging factors that moderated its performance in the quarter.
- On the positive side, Flowserve achieved a book-to-bill ratio exceeding 1.06, with bookings hitting $1.2 billion—a clear indicator of demand across its business segments.
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