In today’s briefing:
- Hang Seng Tech Dec23 Index Review/Flows – No Name Changes, Some Big Capping Flows
- Tata Technologies IPO: Valuation Insights
- HSCI Index Rebalance: Keep (3650 HK) & TUHU Car (9690 HK) Added
- Tata Technologies IPO: Offering Details & Index Inclusion
- OpenAI Boardroom Battle: Safety First
Hang Seng Tech Dec23 Index Review/Flows – No Name Changes, Some Big Capping Flows
- The Dec 23 review results for the Hang Seng Tech Index were announced on Friday 17 November after the close.
- There were no ADDs to or DELETEs from the index, in something of a surprise.
- The “big flow” on HS TECH is the downweight on Xiaomi Corp (1810 HK) due to sharp capping after significant outperformance since the August review.
Tata Technologies IPO: Valuation Insights
- Tata Technologies (TATATECH IN), the largest India-based ER&D service provider, seeks to raise gross proceeds up to US$366 million in a pure secondary offering.
- We previously discussed the IPO in Tata Technologies IPO: The Investment Case, Tata Technologies IPO: The Bull Case and Tata Technologies IPO: The Bear Case.
- Our valuation analysis suggests that the IPO price range of Rs475-500 per share is attractive. Therefore, we would participate in the IPO.
HSCI Index Rebalance: Keep (3650 HK) & TUHU Car (9690 HK) Added
- Keep Inc (3650 HK) and Tuhu Car (9690 HK) will be added to the Hang Seng Composite Index (HSCI) after the close of trading on 1 December.
- Keep (3650 HK) will be added to Southbound Stock Connect from the open on 4 December while Tuhu Car (9690 HK) will only be added to Stock Connect in April.
- There are lock-up expiries on both stocks, prior to or after inclusion in Stock Connect, and trading strategies will need to take that into account.
Tata Technologies IPO: Offering Details & Index Inclusion
- Existing Tata Technologies (TATATECH IN) shareholders are looking to sell 60.85m shares and raise between INR 28.9-30.4bn (US$347-365m) giving the company a market cap of between US$2.31-2.44bn.
- Tata Technologies (TATATECH IN) will have a float of around 10% at the time of listing and that will increase close to 30% after the pre-IPO lock-up ends.
- Tata Technologies (TATATECH IN) could be added to global indices in May and June, but inclusion in local indices with meaningful tracking assets will take longer.
OpenAI Boardroom Battle: Safety First
- OpenAI was founded in 2015 by investors, including Elon Musk, Reid Hoffman, Peter Thiel, AWS, and YC Research.
- The goal was to pursue Artificial General Intelligence (AGI) safely for the benefit of humanity.
- There was an initial pledge of $1 billion, but the money that came in was $100 million from Elon Musk and $30 million from Open Philanthropy.
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