In today’s briefing:
- S&P/ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes
- Index Rebalance & ETF Flow Recap: NKY, CSI300, SSE, REMX, ASX, SET50, CH50/A50, EPRA, Mercari, GOTO
- S&P500 Index Rebalance: One-Way Trade of US$30bn
- Mercari (4385 JP) | Time to Flee
- ECM Weekly (5th June 2022) – Tsingtao, Woodside, Digital Tel, CALB, Scivita
S&P/ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes
- There is one set of changes to the S&P/ASX 50, one deletion for the S&P/ASX 100, and four adds/ five deletes for the S&P/ASX 200 (AS51 INDEX).
- Passive trackers will need to trade between 2-6 days of ADV on nearly all stocks. Short interest spikes in a few names indicate pre-positioning for the passive flow.
- Core Lithium Ltd (CXO AU) is a potential inclusion to the MVIS Global Rare Earth/Strategic Metals Index in June and that could add to the passive inflows on the stock.
Index Rebalance & ETF Flow Recap: NKY, CSI300, SSE, REMX, ASX, SET50, CH50/A50, EPRA, Mercari, GOTO
- Last week was a busy one with the TPX INDEX rebalance, the MSCI rebalance and announcements of changes to the FTSE China A50/50, EPRA, FTSE Taiwan 50 and S&P/ASX indices.
- The coming week has the implementation of KOSPI2 INDEX, KOSDQ150 INDEX, HSI INDEX, HSCEI INDEX, HSTECH INDEX, SHSZ300 INDEX, STAR50 INDEX, SSE50 INDEX rebalances and the announcement of REMX changes.
- There were inflows to Korea, Japan, Hong Kong and Australia focused ETFs during the week, while there were outflows from China and India focused ETFs.
S&P500 Index Rebalance: One-Way Trade of US$30bn
- There are quite a few changes for stocks across the S&P 500 (SPX INDEX), MidCap 400 Index and SmallCap 600 Index that will result in a one-way trade of US$30bn.
- There are adds/deletes that have over 5 days of ADV to trade from passive funds, plus many stocks that have over +/-1 day of ADV from other changes.
- The largest impact of passive buying will be on Keurig Dr Pepper Inc (KDP US), On Semiconductor (ON US) and VICI Properties Inc (VICI US).
Mercari (4385 JP) | Time to Flee
- Topix inclusion could generate some solid domestic passive buying interest, but we think the fundamentals remain Bearish
- Mercari’s GMV growth in Japan is slowing sharply. We see higher promotional costs impacting margins as competition with PayPay Flea market heats up
- We think that street estimates are too high and we don’t see a reason why the stock should be trading at substantial premium to Z Holdings
ECM Weekly (5th June 2022) – Tsingtao, Woodside, Digital Tel, CALB, Scivita
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- IPO volumes remain subdued across the region, although a number of deals are said to be looking to launch soon.
- Placements stole the limelight this week with Tsingtao, Woodside and Digital Tel Infra all managing to do well.
Before it’s here, it’s on Smartkarma
