In today’s briefing:
- HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect
- KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN
- The Weird Ways of the Aventus/HomeCo Daily Needs Index Rebalances (ASX200)
- FTSE GEIS March 2022 SAIR: Changes, Switches & Same-Way Index Flow
- Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown
- KOSPI Lockup Releases: Details & Trading Approaches
- Last Week in Event SPACE: SBI Sumishin Net Bank, Western Areas, Keisei Electric, Crown Resorts
- KOSDAQ150: Details of Osstem Implant Exclusion & Caregen Inclusion and Case Study of SillaJen
- Asia-Pac Weekly Risk Arb Summary: Crown Resorts, GJ Steel, Western Areas, Aussie Pharma, DTAC/True
HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect
- There are 29 inclusions and 12 deletions for the HSCI at the March rebalance. 26 of the inclusions will be added to Connect while all deletes will leave Stock Connect.
- Some of the Stock Connect deletions have a lot of mainland holdings and there could unwinding of some of the positions ahead of becoming sell-only on the link.
- Orient Overseas International, United Energy, Cloud Village and Gcl Poly Energy Holdings Limited could also move higher over the next couple of weeks before the stocks enter Stock Connect.
KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN
- Osstem Implant (048260 KS) has been suspended from trading this year following embezzlement that has nearly wiped out its equity capital.
- The stock was named an Administrative Issue on Friday and will be deleted from the KOSDAQ 150 Index (KOSDQ150 INDEX). Caregen Co Ltd (214370 KS) is the replacement.
- Passive funds will need to sell around KRW 60bn of Osstem Implant (048260 KS) if they can, and buy KRW 7bn of Caregen Co Ltd (214370 KS).
The Weird Ways of the Aventus/HomeCo Daily Needs Index Rebalances (ASX200)
- When the Aventus Group (AVN AU) / HomeCo Daily Needs REIT (HDN AU) Scheme was announced four months ago, it looked to complete in late January or very early February.
- Because of an ATO staff shortage, the Second Court Hearing was delayed by nearly three weeks, pushing implementation back. The calculation of S&P/ASX index rankings may not be as expected.
- Most or all of the AVN downweight is covered by a HDN upweight next Wednesday but whither ASX200 in March?
FTSE GEIS March 2022 SAIR: Changes, Switches & Same-Way Index Flow
- FTSE announced the results of the March SAIR for the FTSE All-World/All-Cap indices on Friday. There are 337 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
- Nongfu Spring (9633 HK) will have the largest inflows and is a high probability inclusion to the FTSE China 50 index. Its inclusion in the HSI INDEX was announced Friday.
- FTSE will switch index membership from the US ADRs to the HK listings for ZTO Express, GDS Holdings, Baidu and Bilibili. This should result in larger CCASS holdings.
Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown
- Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.
- An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an ‘Administrative Issue’. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.
- Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.
KOSPI Lockup Releases: Details & Trading Approaches
- The stocks worth our attention are mostly IPO institutional lockup releases. In particular, LG Energy, Iljin HySolus, and Hyundai Heavy Industries will be of the most interest.
- Most of these have undergone significant price corrections. Nevertheless, current prices significantly outperform the offering prices. So, the incentives for IPO institutional investors to realize profits should be pretty intense.
- Kakao Pay’s volume isn’t that much. Even with a heavier release last time, it didn’t meet our expectations. Probably it is because it is bottoming out at the current level.
Last Week in Event SPACE: SBI Sumishin Net Bank, Western Areas, Keisei Electric, Crown Resorts
- SBI Sumishin Net Bank (7163 JP) is likely to be a hot IPO. One small problem is the lack of dividends.
- Andrew Forrest’s Wyloo Metals pivots to a back-end JV with IGO Ltd (IGO AU) after recently paying through terms on Western Areas (WSA AU).
- Crown Resorts (CWN AU) enters into a Scheme with Blackstone as Star Entertainment Group (SGR AU) bows out.
KOSDAQ150: Details of Osstem Implant Exclusion & Caregen Inclusion and Case Study of SillaJen
- On 18 February, the KRX announced that the deletion of Osstem Implant (048260 KS) and the inclusion of Caregen Co Ltd (214370 KS) in KOSDAQ150.
- The South Korean Presidential election will be held on 9 March and the KRX is not likely to make sensitive decisions such as the delisting of Osstem Implant in March.
- We continue to like the pair trade (long KOSPI200 and short KOSDAQ150) which has worked out well in the past month and we expect continued gains on this trade.
Asia-Pac Weekly Risk Arb Summary: Crown Resorts, GJ Steel, Western Areas, Aussie Pharma, DTAC/True
- There are currently 43 – mostly firm – transactions currently being discussed and analysed on Smartkarma.
- One new deal this week: the unconditional Offer for Hock Seng Lee (HSL MK).
- Key updates took place for: Crown Resorts (CWN AU), Western Areas (WSA AU), Australian Pharmaceutical Industries (API AU), True/DTAC, and G J Steel PCL (GJS TB).
Before it’s here, it’s on Smartkarma
