In today’s briefing:
- BHP Group – A Tale of Two Rebals? Maybe… But Maybe Not
- Index Rebalance & ETF Flow Recap: MSCI, China A50, HSCI, IDX30/LQ45, HSTECH, URA, LG Energy
- Last Week in Event SPACE: China Mobile, Wilmar, BHP, Link Net, Hollysys, GJ Steel, Guodian Tech, ASX
- Recruit Buyback: An Attempt to Rescue Falling Share Price; Seems Like a Good Short
- NIFTY50 Index Rebalance Preview: Two Potential Changes in March
BHP Group – A Tale of Two Rebals? Maybe… But Maybe Not
- The BHP Group index rebal on the S&P/ASX was bigger than most thought.
- The BHP Group index rebal on the PLC line in the UK on the FTSE UK series, MSCI and FTSE Europe, and Stoxx indices was smaller than most expected.
- But the funding and reverse funding excess volume tells a different story.
Index Rebalance & ETF Flow Recap: MSCI, China A50, HSCI, IDX30/LQ45, HSTECH, URA, LG Energy
- The review period for the MSCI indices and NIFTY Index (NIFTY INDEX) ends on 31 January. The rebalance of the IDX30/ LQ45 indices will be implemented on the same day.
- We look at potential changes to the FTSE China A50, HSTECH and HSCI indices at the March rebalance. Plus the summary of upcoming flows for LG Energy Solution (373220 KS).
- There will be a change to the S&P/ASX 200 (AS51 INDEX) on Friday following the acquisition of Ausnet Services. Likely inclusions are Arena Reit (ARF AU)/ Telix Pharmaceuticals (TLX AU).
Last Week in Event SPACE: China Mobile, Wilmar, BHP, Link Net, Hollysys, GJ Steel, Guodian Tech, ASX
- The parent company of China Mobile (941 HK) has announced a plan to increase its holding. This is better than a poke in the eye with a sharp stick.
- Wilmar International (WIL SP) is inexpensive, even for a cross-border, possibly-difficult-to-short subsidiary, Holdco situation.
- The BHP LN vs BHP AU unification should cause US$40bn of rebalance trading across the major indices. Other indices will simply roll their exposure from PLC to Limited without trading.
Recruit Buyback: An Attempt to Rescue Falling Share Price; Seems Like a Good Short
- Recruit has announced a share buy-back on Friday of 34.0m shares (2.06% of outstanding shares) for JPY155.8bn, implying JPY4,581 per share.
- Recruit’s shares closed at JPY5,090 per share at the end of Thursday’s close, and following the announcement, shares moved up to JPY5,305 a piece, gaining 4.2%.
- We think Recruit’s shares will be a good Short over the next few days.
NIFTY50 Index Rebalance Preview: Two Potential Changes in March
- The review period for the March rebalance of the NIFTY Index (NIFTY INDEX) ends 31 January. We see 2 potential changes at the rebalance which should be announced end February.
- There is a high probability of Apollo Hospitals Enterprise (APHS IN) replacing Indian Oil Corp (IOCL IN), while there is a lower probability of Info Edge India replacing Coal India Ltd.
- The impact on the stocks is between 3-9 days of ADV, while the impact increases to between 9-22 days of delivery volume.
Before it’s here, it’s on Smartkarma
