In today’s briefing:
- S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- LQ45 Index Rebalance: Two Changes in a Few Days
- Index Rebalance & ETF Flow Recap: ASX, SK Telecom, Yuanta ETFs
- KRX New Deal Index Rebalance Preview: Review Period Nearly Complete
- Nomura Real Estate To Buy Nomura RE Master Fund Units
- KOSDAQ150 Ad Hoc Index Rebalance: Hydro Lithium (101670) Could Replace Nice Information (030190)
- Ohayo Japan| AI Bid; Strong GDP->more Hikes? Stocks Drop; NUGGET: Steel Decarb-Advantage Tokyo Steel
- BFI Finance Indonesia (BFIN IJ) – Short-Term Blip Provides Opportunity
- SoftBank Group (9984 JP) – Reasons to Be Careful
- Index Rebalance & ETF Flow Recap: LQ45/IDX30, FXI, New Deal, KOSPI, KQ150, LG Energy, IN Float, TTMT
S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
- The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
- Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.
LQ45 Index Rebalance: Two Changes in a Few Days
- Gudang Garam (GGRM IJ) and Mitra Adiperkasa (MAPI IJ) will replace Timah Persero (TINS IJ) and Japfa Comfeed Indonesia (JPFA IJ) in the LQ45 Index next week.
- There are some large changes to free float plus capping changes for Bank Central Asia (BBCA IJ) and Bank Rakyat Indonesia (BBRI IJ).
- There could be jumps in the stocks of the adds/deletes today, though there should be pre-positioning and a potential reversal later in the week.
Index Rebalance & ETF Flow Recap: ASX, SK Telecom, Yuanta ETFs
- JFSL spun off from Reliance Industries (RIL IN) last week and Ventia (VNT AU) replaced Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX).
- The IDX should announce the changes to the IDX30, LQ45 and IDX80 indices early in the coming week.
- There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) while Taiwan focused ETFs had outflows.
KRX New Deal Index Rebalance Preview: Review Period Nearly Complete
- The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
- There is one change currently for each of the Secondary Battery, Bio and Game indices. Then there are a couple of changes for the Internet and BBIG indices.
- There are four stocks that will have over 2 days of ADV to trade from passive trackers and these stocks could move around announcement of the changes.
Nomura Real Estate To Buy Nomura RE Master Fund Units
- Today, Nomura Real Estate Master Fund, (3462 JP) – the largest REIT in the ‘Diversified REIT’ JREIT space – announced sponsor Nomura Real Estate (3231 JP) would up its stake.
- They would lift their stake from 4.47% by 2.54% to 7.01%. There is a reason for this, just like there was last time with Japan Excellent (8987 JP).
- Understanding the reason is how you understand the trade to do.
KOSDAQ150 Ad Hoc Index Rebalance: Hydro Lithium (101670) Could Replace Nice Information (030190)
- The KRX has approved Nice Information Service Co (030190 KS)‘s transfer from the KOSDAQ Board to the KOSPI Board. The transfer could take place in the next two weeks.
- Hydro Lithium (101670 KS) was the highest ranked non-constituent from the Industrials sector at the June rebalance and could replace Nice Information Service (030190 KS) in the KOSDAQ 150 Index.
- Nice Information Service Co (030190 KS) has no chance of inclusion in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) and will not be short sell eligible post section transfer.
Ohayo Japan| AI Bid; Strong GDP->more Hikes? Stocks Drop; NUGGET: Steel Decarb-Advantage Tokyo Steel
- OVERSEAS. SOX 1.9% bid as Generative AI drives bid for semis/tech hardware; Booming US Economy as GDP prints 2.4% driving yields higher; But USD weaker vs Yen on BOJ.
- JAPAN. NKY Futures -1% vs Cash; USDJPY 139. 5; Really all about the BOJ as the Nikkei broke news on potential YCC tweak; Earnings deluge: -ve Shin-etsu; Fujitsu.
- NUGGET. Tokyo Steel has more advantages than meets the eye. No need for the massive capex in the crucial process that Nippon Steel or JFE needs to put out. Bullish.
BFI Finance Indonesia (BFIN IJ) – Short-Term Blip Provides Opportunity
- BFI Finance Indonesia (BFIN IJ) booked a solid set of 1H2023 results that were marred by an operational blip, with 2Q2023 impacted but this is likely to abate in 2H2023.
- The company continues to stand out for its leading position in collateralized lending backed by 4W, 2W, heavy equipment, shophouses and property, with an accomplished 15-year track record
- BFI Finance Indonesia remains the top pick to play the increasing growth from multi-finance in Indonesia. It trades on 2x FY2023E PBV, forecast to book an ROE over 20%.
SoftBank Group (9984 JP) – Reasons to Be Careful
- The SoftBank share price rally is, in our view, based on optimism around the Arm IPO, the Yen’s relative weakness and recovering share prices of public companies in the portfolio
- Nvidia’s emergence as a potential anchor investor in the Arm IPO has boosted SoftBank shares, yet there is still a big disparity between groups in terms of Arm’s potential valuation
- Aside from a recovery in public tech companies’ shares, Yen weakness has supported SoftBank’s asset values; monetary policy moves now indicate the prospect of a stronger Yen versus the USD
Index Rebalance & ETF Flow Recap: LQ45/IDX30, FXI, New Deal, KOSPI, KQ150, LG Energy, IN Float, TTMT
- The changes to the LQ45/IDX30 were announced last week and will be implemented Monday. The PSE also announced that there would be no changes for the PCOMP INDEX in August.
- There are a bunch of review cutoffs on Monday, most notably for the Nikkei 225 (NKY INDEX), STAR50 INDEX, the NIFTY family of indices and the KRX New Deal indices.
- There were inflows to China focused ETFs and outflows from Taiwan and Korea focused ETFs during the week.
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