In today’s briefing:
- CES China Semiconductor Chips Index Rebalance: Six Changes in June
- CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Changes Afoot
- Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket
- ChiNext/ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes
- NIFTY NEXT 50 Index Market Consultation: Non-F&O Stocks Could Be Dropped
- Heads Up: Selling Event of a 30% Stake in NXC (Nexon Parent Company) Is Coming Soon
- Alpha Generation Through Share Buybacks in Korea: May 2023
- Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten
- Index Rebalance & ETF Flow Recap: CSI300/500, Chinext, China Semi Chips, Nifty Next50, SET50, REMX
CES China Semiconductor Chips Index Rebalance: Six Changes in June
- There are 6 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 9 June.
- All the inclusions are also additions to the CSI 500 Index and the passive flows will come from multiple trackers.
- The adds have outperformed the deletes over the last couple of weeks and there could be further outperformance over the next two weeks.
CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
- There are 3 changes for the CNI Semiconductor Chips Index that will be implemented at the close on 9 June.
- The inclusions will also be added to other indices over the next couple of weeks and there will be inflows from multiple index trackers.
- The adds have outperformed and with 9 trading days to implementation of the changes and the inclusions also being added to other indices, there could be further outperformance near-term.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Changes Afoot
- The review period for the June rebalance ended on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
- There could be 3 or 4 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the index universe and could result in 2-3 deletions.
- If there are 4 adds and 2 deletes at the June rebalance, estimated one-way turnover at the rebalance will be 13.4% and will result in a one-way trade of US$81m.
Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket
- I am not a tax advisor and I do not play one on TV but it is a subject of interest in Australia, as an AFR article last year shows.
- The general gist of the idea is that retail investors in Australia will take gains on things which run up in price, or get taken over, then look for losses.
- Below I present a study using data from 2012-2022 of how a basket portfolio trade might work.
ChiNext/ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes
- There will be 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 June.
- One-Way turnover for the Chinext Price Index is estimated at 3.17% while the one-way turnover for the ChiNext50 Index is 6.61%. The one-way trade across both indices is CNY 2.72bn.
- The adds have outperformed the deletes by a huge margin over the last 3 months and there could be profit taking into implementation.
NIFTY NEXT 50 Index Market Consultation: Non-F&O Stocks Could Be Dropped
- NSE Indices have started a market consultation on dropping stocks that are not a part of the Futures & Options segment from the Nifty Next 50 Index (NIFTYJR INDEX).
- This will be done in two phases with a weight reduction for non-F&O stocks in June and deletion from the index in September.
- That will result in 11 inclusions to the Nifty Next 50 Index (NIFTYJR INDEX) in September and bring in a lot of flow to the stocks.
Heads Up: Selling Event of a 30% Stake in NXC (Nexon Parent Company) Is Coming Soon
- As reported by a local news outlet (YTN), the Korean government will soon list the NXC stake on Onbid, the government’s online auction system (www.onbid.co.kr).
- If the right buyer acquires the 30% stake in NXC, the family members may also sell their stake, leading to an unexpected price impact for Nexon (3659 JP).
- Timing is critical, and the Korean government must aim to list the stake on Onbid as soon as possible, given its current revenue shortfall issue.
Alpha Generation Through Share Buybacks in Korea: May 2023
- In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in May 2023.
- We provide a list of 25 stocks in the Korean stock market that have announced share buyback programs in May 2023.
- The top five market cap stocks that have announced share repurchases include Hyundai Elevator, DGB Financial, Com2Us, Miwon Commercial, and Jeisys Medical.
Last Week in Event SPACE:Tax-Loss Selling In Australia, China Conch/Anhui Conch, Canon, Rakuten
- Australian tax-loss selling is a thing. Retail investors will take gains on things that run up in price, or get taken over, then look for losses.
- The China Conch Venture Holdings (586 HK) / Anhui Conch Cement (600585 CH) ratio is at an all-time low. The implied stub is re-testing its all-time low.
- Historically, Canon (7751 JP)‘s buybacks are aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles.
Index Rebalance & ETF Flow Recap: CSI300/500, Chinext, China Semi Chips, Nifty Next50, SET50, REMX
- It was a busy week with index rebalance implementations and announcements of index changes.
- The coming week has the KOSPI200 and KOSDAQ150 rebalancing on Thursday and a bunch of onshore China indices rebalancing on Friday.
- There were big inflows to China ETFs during the week while the largest inflows went to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF.
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