In today’s briefing:
- MSCI August 2022 Index Rebalance: The Last QIR Throws Up One Big Surprise
- China Tourism Group A/H Listing – Discount Is Enticing at the Low-End
- Swire A Vs Swire B – Regulatory Nuances REALLY Matter
- Impact of Potential Changes to India F&O Eligibility Criteria
- Index Rebalance & ETF Flow Recap: MSCI, S&P Global Water, TW Div+, FTSE JP, STI, OZ Minerals
- China Tourism Group Duty Free (1880 HK) IPO: Offer Details, Index Inclusion, AH Premium
- ECM Weekly (14th Aug 2022) – China Tourism, A/H Listing, Hongjiu Fruit, Socar, Betagro, ThaiBev, GQG
- A-H Premium Weekly: Tianqi Lithium at New Lost Post H-Share IPO
- S&P/ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises
- Giordano (709 HK): Offer Doc Out. Terms Declared Final
MSCI August 2022 Index Rebalance: The Last QIR Throws Up One Big Surprise
- As announced, there are 8 adds and 3 deletes for the MSCI Standard indices in Asia Pacific. To trade, there are 8 adds and 2 deletes.
- Most of the changes are inline with what we forecast. The non-inclusion of Gcl Poly Energy Holdings Limited (3800 HK) is the big surprise, though that could change.
- All the adds in China are potential inclusions to the FTSE All-World Index in September and that will add to the passive inflows on the stocks.
China Tourism Group A/H Listing – Discount Is Enticing at the Low-End
- China Tourism Group Duty Free Corporation Limited (CDF) aims to raise around US$2.5bn in its H-share listing in Hong Kong.
- As per Frost & Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
- In this note, we talk about the deal pricing and run the deal through our ECM framework.
Swire A Vs Swire B – Regulatory Nuances REALLY Matter
- Yesterday Swire Pacific (A) (19 HK) (and Swire Pacific Ltd-Cl B (87 HK)) announced a buyback of shares according to the 2022 AGM mandates approved in May, limited to HK$4bn.
- A reader question prompted me to look more closely at the rules. There are nuances NOT covered in the announcements. So I work through them.
- The conclusions are surprising, and lead to one clear trading idea.
Impact of Potential Changes to India F&O Eligibility Criteria
- A news report has indicated that SEBI is looking to tighten criteria used for inclusion and continued availability of stocks in the Futures & Options (F&O) segment of the market.
- Our analysis shows 30 stocks could be deleted from the F&O segment while another 12 are close to deletion zone. If applied objectively, 22 stocks could be added to F&O.
- Deletion from the F&O segment could see two stocks dropped from the Nifty Next 50 Index while inclusion in F&O could see two stocks added to the NIFTY Index.
Index Rebalance & ETF Flow Recap: MSCI, S&P Global Water, TW Div+, FTSE JP, STI, OZ Minerals
- MSCI announced the changes to its indices prior to market open on 12 August. Most changes were expected, while the non-inclusion of Gcl Poly Energy (3800 HK) was a surprise.
- There are a bunch of announcement on the coming Friday for the Hang Seng and FTSE indices. Plus the review cutoff for the S&P/ASX family of indices.
- Outflows from KraneShares CSI China Internet ETF (KWEB US) continued for yet another week, while there were inflows to iShares Core MSCI Pacific ETF (IPAC US).
China Tourism Group Duty Free (1880 HK) IPO: Offer Details, Index Inclusion, AH Premium
- CTG Duty Free (1880 HK) is looking to sell up to 118.176m shares to raise up to US$2.5bn. Pricing at HK$143.5-165.5/share is a 38.6%-29.2% discount to CTG Duty Free (601888).
- Between 32-37% of the total offer size is being taken by 9 cornerstone investors and they are locked in for 6 months from listing date (expected 25 August).
- CTG Duty Free (1880 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in March. Southbound Stock Connect could come online on 19 September.
ECM Weekly (14th Aug 2022) – China Tourism, A/H Listing, Hongjiu Fruit, Socar, Betagro, ThaiBev, GQG
- 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, China Tourism launched its US$2.5bn IPO.
- There were no major placements this week and it likely to remain that way in the near future owing to it being earnings season.
A-H Premium Weekly: Tianqi Lithium at New Lost Post H-Share IPO
- We analyse the changes of A/H premium on 142 stocks over the last week. The average A/H premium of 142 A/H stocks are 116.5%, increased by 3.0ppt over last week.
- The average A/H premium changed by 3.0ppt week on week, led by Real Estate, financials, and consumer discretionary sectors.
- We highlight A/H premium changes of Great Wall Motor, Guangzhou Auto, Hisense Home, Tianqi Lithium, Jiangxi Copper, Angang Steel, Maanshan Iron, BBMG, Alcoa, Zoomlion, Cansino, Holly Futures, and ABC.
S&P/ASX Quiddity Leaderboard Sep 2022: Potential Last Minute Surprises
- With the Reference Period for the September 2022 Rebalance nearing its end, we take a final look at the potential index changes for ASX 300, 200, 100, 50, and 20.
- AVZ Minerals (AVZ AU) and Firefinch Ltd (FFX AU) are both members of the ASX Index family and are currently suspended from trading. There could be index consequences here.
- Based on current data, I expect 7 ADDs/DELs for the ASX 200 Index and 22 ADDs and 18 DELs for the ASX 300 Index.
Giordano (709 HK): Offer Doc Out. Terms Declared Final
- On the 23 June, the Cheng family made an underwhelming voluntary conditional Offer of $1.88/share for Giordano International (709 HK).
- The Offer is conditional on the family getting to more than 50% via tendering, and the Cheng’s (and concert parties) control 24.57%.
- The Composite Document is now out with a first close on the 5 September. The Offer Price has now been declared final. That’s a surprise.
💡 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
