In today’s briefing:
- Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
- Hang Seng Index Rebalance Preview: A Year Later Than Planned – 80 Members at Last?
- S&P/ASX Adhoc Index Rebalance: SVW in ASX100, BGL in ASX200
- Yuanta/P-Shares Taiwan Dividend Plus ETF: June Rebalance Preview
- Index Rebalance & ETF Flow Recap: HSI, S&P/ASX, KOSDAQ150, TAMSCI, Kotak Mahindra Bank
- KOSDAQ150 Ad Hoc Index Rebalance: Sun Kwang (003100) To Replace SK Oceanplant (100090)
- Update on the Trading Opportunities Post OCI Spin-Off
- Aggressive Shorting on Dongwon Industries, Which Has Not Been Noticed as a K200 Deletion
- Korea Small Cap Gem #21: TS Corp – Addicted to Sugar
- Index Rebalance & ETF Flow Recap: MSCI STD, Yuanta Div+, ZJLD, Anta
Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
- The March rebalances of the NIFTY indices and the Nikkei 225 (NKY INDEX) were implemented last week. Plus some ad hoc rebalances for the KOSPI2 INDEX and KOSDQ150 INDEX.
- A quieter week coming up with multiple market holidays across markets. We also near the start of the review period for the MSCI May QCIR.
- There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and iShares FTSE/Xinhua A50 China (2823 HK) during the week while there were outflows from some Korea ETFs.
Hang Seng Index Rebalance Preview: A Year Later Than Planned – 80 Members at Last?
- With no changes made at the March rebalance, we are still stuck at 76 index constituents. And it’s been a year later than originally planned to reach 80 index constituents.
- We list 10 potential inclusions in June. Adding all 10 stocks will lead to around 5% one-way turnover, so there could be a mix of larger and smaller stocks added.
- There will be at least 1x ADV to trade on nearly all inclusions. Short interest is over 4% of float on some stocks and there has been a recent jump.
S&P/ASX Adhoc Index Rebalance: SVW in ASX100, BGL in ASX200
- Shareholders have approved OZ Minerals Ltd (OZL AU)‘s acquisition by BHP Group Ltd (BHP AU) and OZL is expected to stop trading after the close on 18 April.
- OZ Minerals Ltd (OZL AU) will be replaced by Bellevue Gold (BGL AU) in the S&P/ASX 200 (AS51 INDEX) and by Seven Group Holdings (SVW AU) in the S&P/ASX 100.
- There has been huge short covering on Seven Group Holdings (SVW AU) and Bellevue Gold (BGL AU) over the last few months.
Yuanta/P-Shares Taiwan Dividend Plus ETF: June Rebalance Preview
- Using data from the close on 19 April, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- There will also be capping and funding flows that will lead to a one-way turnover of 13.6% and a one-way trade of US$885m.
- There are 10 stocks with at least 3 days ADV to trade from passive trackers and another 10 stocks that have at least 1 day ADV to trade.
Index Rebalance & ETF Flow Recap: HSI, S&P/ASX, KOSDAQ150, TAMSCI, Kotak Mahindra Bank
- The review period for the MSCI May QCIR starts on Monday. The most
changesinclusions by far are expected to be in China. - There will be an ad hoc change for the S&P/ASX 100 Index, S&P/ASX 200 (AS51 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 18 April.
- After a period of sustained outflows, there were some inflows to the IShares Core MSCI Asia Ex Japan ETF (3010 HK) during the week.
KOSDAQ150 Ad Hoc Index Rebalance: Sun Kwang (003100) To Replace SK Oceanplant (100090)
- Following SK Oceanplant (100090 KS) moving from the KOSDAQ to KOSPI Market, the stock will be deleted from the KOSDAQ 150 Index and replaced with Sun Kwang (003100 KS).
- The change will be implemented at the close on 18 April and passive trackers will need to trade over 1x ADV on both stocks.
- Sun Kwang (003100 KS) was a high probability index inclusion in June, so this brings forward the inclusion by a couple of months.
Update on the Trading Opportunities Post OCI Spin-Off
- The Korea Exchange announced today (20 April) the change in index constituents and major dates for the Oci Co Ltd (010060 KS) spin-off.
- Oci Co Ltd (010060 KS)’s shares will be suspended from trading from 27 April to 26 May 2023.
- After the spin-off and relisting of holdco/opco shares, we believe that there is a greater probability of OCI Co (opco) shares outperforming OCI Holdings (holdco).
Aggressive Shorting on Dongwon Industries, Which Has Not Been Noticed as a K200 Deletion
- Dongwon Industries’ float rate is less than 10% (1 – 63.15% – 27.65% = 9.20%), which makes it ineligible for KOSPI 200. KRX will reflect this in the June review.
- The passive outflow size due to K200 deletion is expected to be about 50 billion won, which will cause an impact of about 28x ADTV.
- Considering this deletion has not been sufficiently exposed in the market, the actual price impact may be even more significant and preemptive.
Korea Small Cap Gem #21: TS Corp – Addicted to Sugar
- Ts Corporation (001790 KS) is the 21st company in our Korea Small Cap Gems series.
- TS Corp is one of the largest sugar refining companies in Korea. Rising raw sugar prices generally have a positive impact on TS Corp’s sales and profits.
- TS Corp owns very valuable real estate assets that are much larger than its current market cap (299 billion won).
Index Rebalance & ETF Flow Recap: MSCI STD, Yuanta Div+, ZJLD, Anta
- The review period for the MSCI May QCIR started last week and there were ad hoc changes to the S&P/ASX family and the KOSDAQ 150 Index (KOSDQ150 INDEX).
- The end of the coming week will mark the end of the review period for the upcoming rebalances for a bunch of indices with implementation scheduled in May and June.
- There was inflow to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF for another week.
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