In today’s briefing:
- MSCI Feb 2022 Index Rebalance Preview: Potential Changes as Review Period Starts
- Hitachi Construction Machinery Deal To Change “Parent” – There’s Not Much There There
- CSI300 Index Rebalance Preview (June 2022): Changes Near the Midway Mark
MSCI Feb 2022 Index Rebalance Preview: Potential Changes as Review Period Starts
- With a day to go to the start of the review period, we see 14 inclusions and 6 deletions for Asia. Most of the adds are in China and Korea.
- There are quite a few adds that will require passive trackers to buy more than 5 days of ADV. Some of the stocks have rallied strongly year to date.
- We expect large buying on SK Square (402340 KS), JD Health (6618 HK) and Sea Ltd (SE US) at the February QIR due to an increase in the FIF.
Hitachi Construction Machinery Deal To Change “Parent” – There’s Not Much There There
- On Thursday we saw news of a Hitachi sale of half its stake in HCM. Friday the stock traded down hard. Friday night saw news that underwhelmed further.
- The deal is big, but it is basically a deal to get Hitachi out as parent. There is no Capital Alliance and there is no Strategic Alliance yet.
- There simply is not much there, there yet. And the stock is less liquid than it looks, and that won’t get better any time soon.
CSI300 Index Rebalance Preview (June 2022): Changes Near the Midway Mark
- Nearly midway through the review period for the June rebalance of the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX), we see 29 potential changes to the index.
- There are a lot of high and medium probability changes that could result in a one-way turnover of 4.2% and a one-way trade of CNY 10.17bn at the June rebalance.
- The potential inclusions have underperformed the potential deletions by c.15% over the last month and this provides a good entry point into a long short/trade.
Before it’s here, it’s on Smartkarma
