In today’s briefing:
- HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues
- ASX200 Index Rebalance: Telix Pharma to Replace Sydney Airport
- Mercari – Margin Miss Not Beat
- S&P/ASX200: Sydney Airport OUT Telix Pharma IN, and Lots of SYD For Sale
- Microstrategy’s Unsurprising Bitcoin Loss
HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues
- The March rebalance should see the slow crawl toward 80 index members continue. We should get up to 68-70 members in March. Reaching 80 by June is unlikely.
- High probability inclusions are Kuaishou Technology (1024 HK), Smoore International (6969 HK), Nongfu Spring (9633 HK), JD Health (6618 HK) and JD Logistics (2618 HK).
- Currently, index turnover due to capping/float changes is low which will allow more stocks to be added to the index. Increase in the turnover will result in fewer changes.
ASX200 Index Rebalance: Telix Pharma to Replace Sydney Airport
- Sydney Airport (SYD AU) will be deleted from the S&P/ASX 200 (AS51 INDEX) after the close of trading on 9 February and Telix Pharmaceuticals (TLX AU) will be included.
- There will be selling on Sydney Airport (SYD AU) from MSCI, FTSE and S&P/ASX trackers and there could be opportunities for arbs to buy below the offer price and tender.
- The recent institutional placement, share purchase plan and promoter selldown could put a lid on Telix Pharmaceuticals (TLX AU)‘s stock price heading into the index inclusion.
Mercari – Margin Miss Not Beat
- We got this wrong, expecting a beat on margins in spite of weak GMV, whereas Mercari actually fell into the red for the first time in six quarters.
- The culprit is extremely aggressive promotional spend which looks to have hit all time highs in both Japan and the US.
- The shift to an investment stance is not in and of itself a bad thing but the growth relative to the spend is disappointing so far.
S&P/ASX200: Sydney Airport OUT Telix Pharma IN, and Lots of SYD For Sale
- The Sydney Airport ASX200 exclusion sets up with Telix Pharma replacing it, and two more likely changes – one each in ASX50 and ASX100.
- Telix as an inclusion is a known known. The others are too.
- Sydney Airport will end up seeing a LOT of stock for sale on 9 Feb at the close.
Microstrategy’s Unsurprising Bitcoin Loss
- Microstrategy Inc(MSTR US) reported a net loss of $90mn or $8.43/share in the fourth quarter, missing consensus estimates for a profit of US$0.89/share.
- The loss is predominantly due to the inclusion of impairment losses of US$146.6mn on its Bitcoin holdings, negating the $110.5mn in gross profit from the software ops.
- MicroStrategy remains a bet on Bitcoin. Yet almost any alternate cryptocurrency security appears a better bet, if that is your bent.
Before it’s here, it’s on Smartkarma
