In today’s briefing:
- PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
- FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change
- HDFC AMC: Abrdn’s Potential Placement & Index Implications
- Xingda Int’l (1899 HK): Kicking The Tyres
- HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- TOPIX Inclusions: Who Is Ready (Dec 2022)
- Yearend Dividend Play on Korean Stocks with High Yield/Borrow Rate
- STAR50 Index Rebalance Preview: Another Five Potential Changes in March
- Xingda (1899 HK)’s Partial Offer from Management to Seize Statutory Control
- Good Morning Japan | Directionless Equities; As China Normalizes; Carvana Bankruptcy Imminent
PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
- From December 2022, the minimum free float requirement to be a part of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) increases from 15% to 20%.
- We see a high probability of DMCI Holdings (DMC PM) replacing Emperador (EMP PM) in the index at the upcoming rebalance.
- There are a few other potential changes to the index and the passive flow on the stocks will be material.
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.
HDFC AMC: Abrdn’s Potential Placement & Index Implications
- Abrdn PLC (ABDN LN) is looking to sell its entire 10.21% stake in HDFC Asset Management (HDFCAMC IN) following which it will no longer be a sponsor of HDFC MF.
- Depending on who the stake is sold to, there could be an immediate increase in the investability weight in the FTSE All-World Index.
- More importantly, the increased free float will result in an increase in the FIF for the MSCI Standard Index and index inclusion could take place in February.
Xingda Int’l (1899 HK): Kicking The Tyres
- Xingda International (1899 HK) is currently suspended “pursuant to The Hong Kong Code on Takeovers and Mergers“.
- The controlling shareholders – more commonly known as the Five Parties – hold 45.6% of shares out.
- Two years ago, Xingda sought to spin-off its key operating vehicle. Perhaps the Five Parties are privatising Xingda, then IPOing Xingda Steel Tyre Cord. Or, cashing out their positions.
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).
TOPIX Inclusions: Who Is Ready (Dec 2022)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- This insight is a follow-up to TOPIX Inclusions: Who Is Ready (Oct 2022)
- At present, there are 60 names that satisfy all of these conditions and there are more names that are close to being in that group.
Yearend Dividend Play on Korean Stocks with High Yield/Borrow Rate
- We’d better pay attention to trading for price gain by building a position 2-3 weeks towards ex-dividend and getting out of it before ex-dividend, which often provides higher returns.
- For this, we should focus on high dividend yield stocks, which also feature a high borrow rate, but on a decreasing trend.
- They are Hyosung TNC (298020), HD Hyundai (267250), BNK Financial (138930), Woori Financial (316140), DL E&C (375500), LX Semicon (108320), KB Financial (105560 KS), and HDC Hyundai Development (294870).
STAR50 Index Rebalance Preview: Another Five Potential Changes in March
- Nearly 85% of the way through the review period, we see 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
- Given the significantly higher market cap of the inclusions using a 6-month minimum listing history, we expect the index committee will continue to use the shorter listing history requirement.
- With 5 changes a side, one-way turnover is estimated at 5.15% and will result in a one-way trade of CNY 3,994m. Impact on some deletions is quite high.
Xingda (1899 HK)’s Partial Offer from Management to Seize Statutory Control
- Xingda International (1899 HK) disclosed a partial offer from management to acquire a maximum of 80.0 million shares at HK$1.88 per share, a 24.50% premium to the undisturbed price.
- The pre-condition is Executive approval. The partial offer is conditional on the offeror hitting 50.01% voting rights and approval by the requisite majority of shareholders on the acceptance form.
- The partial offer is an opportunistic foray to seize statutory control as it would not be sufficiently enticing to overcome FIL’s 9.99% blocking stake in a privatisation scheme.
Good Morning Japan | Directionless Equities; As China Normalizes; Carvana Bankruptcy Imminent
- Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP ABREAST.
- OVERSEAS: SPX holding 100D; Trading in tight range at support; Focus on now recession risks; China continues to normalize around COVID; Microsoft tries to appease regulators; Carvana facing bankruptcy
- JAPAN: NKY futs -0.4% vs cash; USDJPY ¥136.5; Quiet ahead of major SQ; ANA hiring again; KEPCO set to restart Genkai; Hitachi canxl treasury shares; Nintendo strikes deal with MSFT
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
