In today’s briefing:
- Index Rebalance & ETF Flow Recap: MSCI, KOSDAQ150, HSCEI, KT Corp, JD.com, Tabcorp
- HSCEI Index Rebalance Preview: Lenovo Could Replace Hansoh Pharma; Great Wall In/Sunac Out?
- New CSRC “Provisions” Take a Step Towards Meeting PCAOB Requirements
- ECM Weekly (3rd Apr 2022)- JD, Tencent, Prosus, One Store, SK Shieldus, FWD, Ferretti, Recbio, Belle
- Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
Index Rebalance & ETF Flow Recap: MSCI, KOSDAQ150, HSCEI, KT Corp, JD.com, Tabcorp
- There are two weeks to the start of the review period for the MSCI May SAIR. There are expected to be many changes to the stocks and their FIFs.
- There will be passive buying in JD.com Inc. (9618 HK) from Hang Seng trackers in June, while KT Corp (030200 KS) is a high probability MSCI inclusion in May.
- There were big inflows to the iShares MSCI Emerging Markets (EEM US) ETF and iShares Core MSCI Emerging Markets ETF (IEMG US) during the week.
HSCEI Index Rebalance Preview: Lenovo Could Replace Hansoh Pharma; Great Wall In/Sunac Out?
- Lenovo (992 HK) could replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance to be implemented on 10 June.
- If Sunac China Holdings (1918 HK) remains suspended, it could be deleted from the index and Great Wall Motor (2333 HK) could be added to the index.
- Passive Hang Seng China Enterprises Index (HSCEI INDEX) trackers will need to buy around 2.45% of Lenovo (992 HK)‘s real float. Short interest is over 17 days of ADV.
New CSRC “Provisions” Take a Step Towards Meeting PCAOB Requirements
- The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.
- On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules.
- Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?
ECM Weekly (3rd Apr 2022)- JD, Tencent, Prosus, One Store, SK Shieldus, FWD, Ferretti, Recbio, Belle
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- Placements continued to flow in, at a slower pace than last week, with Malaysia and ANZ chipping in.
- While the HK IPO scene failed to produce anything noteworthy with its two listing, South Korea appears to be leading the charge, once again.
Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
- NIO Inc (9866 HK) passes the velocity test and could replace ASM Pacific Technology (522 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the June rebalance.
- Given the low trading volumes and the large assets tracking the Hang Seng Tech Index (HSTECH INDEX), passive trackers will need to buy around 10 days of ADV on NIO.
- Passive trackers need to sell around 7 days of ADV on ASM Pacific Technology (522 HK). Given implementation is two months away, sell the stock on rallies.
Before it’s here, it’s on Smartkarma
