In today’s briefing:
- FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change
- China Rebalances at the Close Today- BIG Flows
- HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- Infosys (INFY)’s US$1.1bn Buyback
- Can Son-San Take Over Softbank Group Through Buybacks?
- KODEX Battery Rebalancing Results Out: From Today to Next Tuesday
- VinFast Auto Pre-IPO – The Negatives – … But Starting Low
- JCNC Is Still Overstretched Vs. Astra
- MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
- MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes
FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change
- Beijing-Shanghai High Speed Railway-A (601816 CH) will be deleted from the Northbound Stock Connect Buy and Sell list from the close on 9 December.
- Beijing-Shanghai High Speed Railway will be deleted from the SSE180, MSCI and FTSE indices. Plus a deletion from the FTSE China A50 Index (XIN9I INDEX).
- The replacement for Beijing-Shanghai High Speed Railway-A (601816 CH) will be determined at the close of trading today and the announcement will be made post market close.
China Rebalances at the Close Today- BIG Flows
- There are multiple local China indices that rebalance at the close of trading today. Plus MSCI China and FTSE All-World/All-Cap flows due to changes to the Northbound StockConnect Buy-and-Sell list.
- China Pacific Insurance (Group) Co., (601601 CH) replaces Beijing-Shanghai High Speed Railway-A (601816 CH) in the FTSE China A50 Index (XIN9I INDEX).
- The round-trip turnover at the close of trading today should be in excess of US$8bn.
HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- Tongcheng-Elong Holdings Ltd (780 HK) could replace Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
- One way turnover is estimated at 2.1% resulting in a one-way trade of HK$1.7bn. Passive trackers will need to buy nearly 10x ADV on Tongcheng-Elong Holdings Ltd (780 HK).
- After being deleted from the MSCI China Index at the November SAIR, this could be the next major index deletion for Ming Yuan Cloud Group (909 HK).
Infosys (INFY)’s US$1.1bn Buyback
- Infosys Ltd (INFO IN) (Infosys Ltd Sp Adr (INFY US)) on 5-6 December announced an on-market buyback of more than US$1.1bn.
- The company has done buybacks before, and it is worthwhile looking at the details.
- The buy-back looks small, and may be impactful near-term in near-space.
Can Son-San Take Over Softbank Group Through Buybacks?
- On Thursday 8 December, an article showed up in Bloomberg suggesting Son-san had “increased his stake” as the company bought back shares, giving him more rights, “edging towards a buyout.”
- That is a stretch. He went from below one-third to above one-third, giving him an explicit veto on shareholder super-majority resolutions, but it’s minor. He now has 34.2%.
- The suggestion: if he got two-thirds, he could squeeze out minorities without a Tender Offer. Technically true, but not easy. I dig deeper and propose how it could be done.
KODEX Battery Rebalancing Results Out: From Today to Next Tuesday
- As expected, Sungeel Hitech (365340) made it to the index. And C&I System (222080) and Wonik PNE (217820) were added, whereas Ecopro (086520) and Dongwha Enterprise (025900) were deleted.
- Among the existing constituents, Samsung SDI (006400), Ecopro BM (247540), SK Innovation (096770), L&F (066970), and SKC (011790) are expected to have a relatively significant impact.
- Looking at the last rebalancing, the impact/price correlation was most significant on Day 1. So, we should consider aiming for LONG/SHORT today for those with a high relative impact.
VinFast Auto Pre-IPO – The Negatives – … But Starting Low
- VinFast (1905332D VN) is looking to raise up to US$1bn in its upcoming US IPO.
- VinFast is a full-scale mobility platform focused primarily on designing and manufacturing premium EVs, electric scooters and electric buses.
- In this note, we talk about the not-so-positive aspects of the deal.
JCNC Is Still Overstretched Vs. Astra
- Jardine Cycle & Carriage (JCNC SP) is currently trading at a ~12% discount to NAV, just outside its narrowest post-Covid.
- A key catalyst for the recent narrowing was JCNC’s inclusion in the SIMSCI Index at the end of last month.
- JCNC is expensive here – relative to historical values – and from an implied stub perspective.
MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
- Filo Mining (FIL CN) and Tietto Minerals (TIE AU) are adds while Fresnillo (FRES LN), Galiano Gold (GAU US), Jaguar Mining (JAG CN) and Novo Resources (NVO CN) are deletes.
- One way turnover is estimated at 4.3% resulting in a one-way trade of US$163m. There is over 1 day of ADV to trade on 24 stocks.
- Largest inflows are on Filo Mining (FIL CN) and Tietto Minerals Ltd (TIE AU) while largest outflows are on Fresnillo PLC (FRES LN) and Centerra Gold (CG CN).
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes
- As expected, there are no adds or deletes for the MVIS Global Rare Earth/Strategic Metals Index at the December rebalance.
- There are free float and capping changes that will be implemented at the close on 16 December.
- One way turnover is estimated at 4.26% and will result in a one-way trade of US$31.5m.
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