In today’s briefing:
- MSCI Feb 2022 Index Rebalance Preview: Busy for a Quarterly Review
- FTSE All-World/All-Cap Index Rebalance Preview: Asia Ex Japan Ex China
- FTSE All-World/All-Cap Index Rebalance Preview: Plenty of Adds for China
- PCOMP Index Rebalance Preview Feb22: Three Potential Changes & Large Impact
- LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)
MSCI Feb 2022 Index Rebalance Preview: Busy for a Quarterly Review
- The review period runs from 18-31 January for the February QIR, the results will be announced on 10 February (Asia-time) with the changes implemented after the close on 28 February.
- There are quite a few potential changes in China and Korea, with a couple in Japan and one in Indonesia. There are a few stocks close to the inclusion/exclusion thresholds.
- Other big changes include a potential increase in the Foreign Inclusion Factor for SK Square (402340 KS) and an increase in the Index Inclusion Factor for Sea Ltd (SE US).
FTSE All-World/All-Cap Index Rebalance Preview: Asia Ex Japan Ex China
- The price review period for the FTSE All-World/All-Cap March 2022 SAIR ended on 31 December. The changes are expected to be announced on 18 February and implemented on 18 March.
- There are a few potential inclusions to the AW Index, a lot of inclusions to the AC Index, and a lot of migrations from the AC to the AW Index.
- There are 20 stocks that have at least US$20m passive buying and over 2 days ADV to buy. That increases to 25 stocks that have at least US$10m to buy.
FTSE All-World/All-Cap Index Rebalance Preview: Plenty of Adds for China
- The price review period for the FTSE All-World/All-Cap March 2022 SAIR ended on 31 December. The changes are expected to be announced on 18 February and implemented on 18 March.
- There are loads of potential inclusions to the index for China – a lot of the changes are a result of stocks being included in Northbound Stock Connect.
- There are stocks that are potential inclusions in other indices and will have additional passive inflows. Nongfu Spring could also be included in the FTSE China 50 and HSI indices.
PCOMP Index Rebalance Preview Feb22: Three Potential Changes & Large Impact
- We see three potential changes to the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the February rebalance. Two are higher probability changes, while one has a lower probability.
- Typically, the inclusions rally and the deletions drop between announcement and implementation with a big jump immediately post announcement. Pre-positioning prior to announcement is important.
- Bloomberry Resorts (BLOOM PM) and Robinsons Retail Holdings (RRHI PM) are reopening plays and investors that are looking to buy the stocks could wait for index deletion to get liquidity.
LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)
- Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.
- If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.
- LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.
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