In today’s briefing:
- Rule Changes in Disclosing the Identities of Foreign Short Sellers in Korea
- TOPIX October 2022 Rebal – Buy/Sell Baskets (May the Flow Be Ever In Your Favour)
- TOPIX October 2022 Rebal – BIG Names with BIG Flows
- TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade
- Index Rebalance & ETF Flow Recap: HSCI, FTSE, HSI, TW Div+, China 50, KOSDAQ150, TOPIX FFW, PEXA
- MSCI India November SAIR: Potential Changes with Big Flow & Impact
- Weekly Deals Digest (09 Oct) – Betagro, Link Admin, Tyro, MACA, Eagle Cement, O2Micro, SMG
- SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact
- ECM Weekly (9th Oct 2022) – CALB, Socionext, Betagro, Country Style, I-Tail, Lionheart, Kakao Pay
- Betagro Pre-IPO Peer Comparison – Margins Historically Weaker than Peers, but Playing Catch Up
Rule Changes in Disclosing the Identities of Foreign Short Sellers in Korea
- Chairman Kim of the FSC mentioned potential rule changes in disclosing the names of short sellers at the state audit last Thursday.
- The first is to reveal the identity of short sellers who traded through a swap contract with a broker, which is currently exempt from the short-selling disclosure obligation.
- The second is to disclose the identity of investors caught in illegal short-selling activities, mostly naked short-selling and wall-crossing.
TOPIX October 2022 Rebal – Buy/Sell Baskets (May the Flow Be Ever In Your Favour)
- As a follow-on to TOPIX October 2022 Rebal – BIG Names with BIG Flows which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.
- In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.
- Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals – might be worthwhile. Otherwise, pick your spots. Use the flow.
TOPIX October 2022 Rebal – BIG Names with BIG Flows
- The TSE announced its first large FFW rebalance under new rules and Market Segmentation. ~1,000 names see FFW drop 5% or more. 100+ rise 5+%. Reverse funding trades are significant.
- Top BUY flow: Toyota, Olympus, Daiichi Sankyo, Tokio Marine, JP Holdings with an average of 4.0 days’ ADV to buy. Softbank/9984, MitCorp, Hitachi, Suzuki, Marubeni average 4.8 days to SELL.
- 493 names start their phased weight reduction out of TOPIX because they do not meet the hurdle for minimum trading value. And… Shinsei is the most impressive SELL name.
TOPIX October Rebalance: BIG One With ¥1.8tn a Side to Trade
- At the October rebalance, there are 970 stocks that will have a lower FFW while 114 stocks will have a higher FFW. 493 stocks will undergo a Phased Weight Reduction.
- Estimated one-way turnover is 2.54% resulting in a one-way trade of ¥1.815tn. 500 stocks have over 4 days ADV to trade, 100 stocks have over 9 days ADV to trade.
- Setting the threshold at +/-US$50m to trade, the stocks with inflows have outperformed the stocks with outflows by 6.5% over the last four months.
Index Rebalance & ETF Flow Recap: HSCI, FTSE, HSI, TW Div+, China 50, KOSDAQ150, TOPIX FFW, PEXA
- We expect a few adds to the HSCI in December followed by a lot more change in March. We could finally reach 80 HSI INDEX constituents in December.
- There will be a handful of adds to the FTSE All-World/All-Cap indices in December. But there will be many changes to the FTSE TWSE Taiwan Dividend+ Index in December.
- There were large inflows to the Yuanta/PShares Taiwan Dividend Plus ETF (0056 TT), Hang Seng H Share Index ETF (2828 HK) and Tracker Fund of Hong Kong Ltd (2800 HK).
MSCI India November SAIR: Potential Changes with Big Flow & Impact
- We see 9 potential adds and 2 potential deletes for the MSCI India Index at the November SAIR. There are a few stocks close to the cutoffs.
- Inclusion in the index will require passive trackers to buy 7-14 days of ADV on the stocks. That increases to 18-55 days of delivery volume.
- There appears to be significant pre-positioning on a lot of the potential adds and the shareholding pattern as of end September should provide a better picture.
Weekly Deals Digest (09 Oct) – Betagro, Link Admin, Tyro, MACA, Eagle Cement, O2Micro, SMG
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – CALB (3931 HK)‘s weak debut. Betagro (BTG TB) will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.
- Event-Driven developments – Link Administration (LNK AU), MACA Ltd (MLD AU), Tyro Payments (TYR AU), Eagle Cement Corp (EAGLE PM), O2Micro International (OIIM US), Singapore Medical (SMG SP).
SENSEX Index Rebalance Preview: Market Consultation on Derivative Linkage & Impact
- AIPL has commenced a market consultation on amending the index universe to only include stocks that are a part of the Futures & Options (F&O) segment of the market.
- This is likely driven by a bunch of Adani-group companies that are at the cusp of index inclusion and are not a part of the F&O market.
- Post implementation of the change, Tata Motors Ltd (TTMT IN) is a likely inclusion to the index in December, though that depends on Dr. Reddy’s Laboratories (DRRD IN) being deleted.
ECM Weekly (9th Oct 2022) – CALB, Socionext, Betagro, Country Style, I-Tail, Lionheart, Kakao Pay
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, HK IPOs continued to struggle with CALB (3931 HK) joining Leapmotor (9863 HK) and Onewo (2602 HK) with its tepid performance.
- Given the mid-week HK holiday and the ongoing golden week, there weren’t any large placements this week.
Betagro Pre-IPO Peer Comparison – Margins Historically Weaker than Peers, but Playing Catch Up
- Betagro (BTG TB) is looking to raise about US$460m in its Thailand IPO.
- Betagro is an integrated agro-industrial and food business in Thailand.
- Betagro identified three Thailand-listed companies which we included in our peer comparison exercise to determine how it has fared against its direct peers.
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