In today’s briefing:
- S&P/ASX Index Rebalance Preview: A Busy March (Maybe January and February Too)
- PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
- HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
- MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes
- Index Rebalance & ETF Flow Recap: ASX, HSTECH, TWDiv+, EPRA Nareit, HSCEI, PCOMP, STAR50, REMX, GDXJ
- MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion
- SET50 Index Rebalance: CENTEL, COM7, DELTA, RATCH Added; BLA, IRPC, KCE, SAWAD Out
- Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT
- Not Sure if Activist Investor’s Agenda Will Be Approved, but JSF’s Value May Be Higher than Expected
S&P/ASX Index Rebalance Preview: A Busy March (Maybe January and February Too)
- We currently see one change each for the ASX20 and ASX100 indices, 4 changes for the S&P/ASX 200 and 10 adds/ 6 deletes for the ASX300 Index in March.
- There could be an addition to the S&P/ASX 200 (AS51 INDEX) in January following Pendal Group (PDL AU)‘s acquisition by Perpetual Ltd (PPT AU).
- PEXA Group (PXA AU) is a potential inclusion to the S&P/ASX 200 (AS51 INDEX) if Link Administration (LNK AU)‘s in-specie distribution of PEXA shares to its shareholders is approved.
PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
- From December 2022, the minimum free float requirement to be a part of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) increases from 15% to 20%.
- We see a high probability of DMCI Holdings (DMC PM) replacing Emperador (EMP PM) in the index at the upcoming rebalance.
- There are a few other potential changes to the index and the passive flow on the stocks will be material.
HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- Tongcheng-Elong Holdings Ltd (780 HK) could replace Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
- One way turnover is estimated at 2.1% resulting in a one-way trade of HK$1.7bn. Passive trackers will need to buy nearly 10x ADV on Tongcheng-Elong Holdings Ltd (780 HK).
- After being deleted from the MSCI China Index at the November SAIR, this could be the next major index deletion for Ming Yuan Cloud Group (909 HK).
MVIS Global Junior Gold Miners Index Rebalance: Two Adds, Four Deletes, Float Changes
- Filo Mining (FIL CN) and Tietto Minerals (TIE AU) are adds while Fresnillo (FRES LN), Galiano Gold (GAU US), Jaguar Mining (JAG CN) and Novo Resources (NVO CN) are deletes.
- One way turnover is estimated at 4.3% resulting in a one-way trade of US$163m. There is over 1 day of ADV to trade on 24 stocks.
- Largest inflows are on Filo Mining (FIL CN) and Tietto Minerals Ltd (TIE AU) while largest outflows are on Fresnillo PLC (FRES LN) and Centerra Gold (CG CN).
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Float & Capping Changes
- As expected, there are no adds or deletes for the MVIS Global Rare Earth/Strategic Metals Index at the December rebalance.
- There are free float and capping changes that will be implemented at the close on 16 December.
- One way turnover is estimated at 4.26% and will result in a one-way trade of US$31.5m.
Index Rebalance & ETF Flow Recap: ASX, HSTECH, TWDiv+, EPRA Nareit, HSCEI, PCOMP, STAR50, REMX, GDXJ
- The rebalance implementation of the KOSPI2, KOSDQ150, CSI 300, CSI 500, STAR50 and other indices took place on 8/9 December. Plus MSCI/FTSE deletes due to Northbound Stock Connect changes.
- Friday will see the implementation of the FTSE All-World/All-Cap, EPRA Nareit, S&P/ASX, KLCI, FTSE China and Sensex indices. The FTSE Taiwan Dividend+ Index will have the largest flows.
- Big weekly redemptions from the Mirae Asset Tiger Top 10 ETF (292150 KS), ChinaAMC China 50 ETF (510050 CH) and IShares Core MSCI Asia Ex Japan ETF (3010 HK).
MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion
- Cromwell Property (CMW AU) is a deletion from the MVIS Australia A-REITS Index at the close on 16 December.
- Passive trackers will need to sell 13.9m shares (5 days ADV) of Cromwell Property (CMW AU) and there appears to be little to no pre-positioning on the stock.
- There are a few other stocks that will have over 0.5 days of ADV to buy from passive trackers.
SET50 Index Rebalance: CENTEL, COM7, DELTA, RATCH Added; BLA, IRPC, KCE, SAWAD Out
- Central Plaza Hotel, Com7 PCL, Delta Electronics Thai and Ratch Group will replace Bangkok Life Assurance, IRPC PCL, KCE Electronics PCL and Srisawad Power in the SET 50 Index.
- Passive trackers will need to buy between 2-4 days of ADV on the adds while selling between 0.6-3 days of ADV on the deletes.
- The adds have significantly outperformed the deletes over the last few months. We’d use any big moves over the next couple of days to trim positions.
Index Rebalance & ETF Flow Recap: S&P/ASX, HSCEI, HSTECH, Haidilao/Super Hi, CSI REIT
- It was a busy Friday with the implementation of the December rebalance for multiple indices. The Yuanta/P-shares Taiwan Dividend Plus ETF will continue to rebalance over the next 4 days.
- The coming week should be relatively quiet with the announcement of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) changes expected.
- There were large inflows to ETFs focused on China, Korea, Japan, Taiwan. There were inflows to Hang Seng H Share Index ETF and outflows from Tracker Fund of Hong Kong.
Not Sure if Activist Investor’s Agenda Will Be Approved, but JSF’s Value May Be Higher than Expected
- Companies wouldn’t accept shareholder proposals, interpreting that they need’t disclose individual executive compensation if it’s below certain amount and that they can continue holding policy-shares if the policy is defined.
- Even if JSF claims to have enhanced corporate governance practices, it is reasonable for shareholders to demand a review of its management strategy for a company with below average ROE.
- The company, which doesn’t require very large capital expenditures, plays a role in the infrastructure of the capital market, and has an oligopoly on the market, may be worth more.
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