In today’s briefing:
- BHP Unification A Done Deal – Now for the BIG FLOWS
- BHP Unification: Index Changes and Flows
- MSCI Feb 2022 Index Rebalance Preview: Potential Changes from Days 1-4
- FTSE China A50 Index Rebalance Preview (March 2022): Adds, Deletes & FOL Changes
- China Mobile Parent Ups The Ante – Announces Share Increase Plan
BHP Unification A Done Deal – Now for the BIG FLOWS
- The various Shareholder and Scheme Meetings overwhelmingly supported unification of BHP Group and Limited on Thursday. The deal is done. Now for the BIG FLOWS.
- There should be US$40bn (two way) of index-related flows on Friday across the major indices, half in funding/reverse-funding flows. Replacements are mostly decided.
- This insight looks at the expected breakdown of flows per index, the replacements, and provides a spreadsheet for all the flows.
BHP Unification: Index Changes and Flows
- BHP Billiton (BLT LN) will stop trading at the close on 28 January. MSCI, FTSE and S&P will delete BLT and increase the index shares for BHP Group (BHP AU).
- Passive MSCI Standard and FTSE AW/AC trackers will need to sell BHP Billiton (BLT LN) and buy BHP Group (BHP AU) and do a sell GBP/ buy AUD trade.
- There will be a big funding trade on the S&P/ASX 200, while Airtel Africa PLC (AAF LN) is likely to replace BHP Billiton (BLT LN) in the UKX Index.
MSCI Feb 2022 Index Rebalance Preview: Potential Changes from Days 1-4
- With 4 trading days complete in the review period, we see 15 potential inclusions and 8 potential deletions at the February QIR. There are few new names in the list.
- Some stocks will have same way flow from the FTSE AW/AC trackers in June, while others could have same way flows from KOSPI200 or CSI300 trackers in June.
- JD Health (6618 HK) has been moving up over the last couple of weeks, SK Square (402340 KS) has been holding, while Sea Ltd (SE US) has sold off.
FTSE China A50 Index Rebalance Preview (March 2022): Adds, Deletes & FOL Changes
- We see three potential changes at the March rebalance. One is a high probability change while the other two are close to the cutoff ranks.
- Then there will be changes to the investability weight of the stocks following the Ground Rule change that will cap stocks at their Foreign Ownership Limits.
- The combined impact of all changes at the rebalance will result in a one-way turnover estimated at 17.55% and will result in a one-way trade of CNY 9,744m.
China Mobile Parent Ups The Ante – Announces Share Increase Plan
- The parent company of China Mobile (941 HK) has announced a plan to increase its holding. This is not surprising given the contents of the RMB Share Issue Circular.
- If they spend the midpoint of the RMB 3.0-5.0bn plan at a 20+% premium to current price, it is 8% of the RMB Share float.
- The H-share buyback program is eligible to start after 8 Feb deadline for RMB Share greenshoe allocation. The stock is HK$51. Anything under HK$70/share is accretive vs the IPO.
Before it’s here, it’s on Smartkarma
