In today’s briefing:
- FTSE China A50 Index Rebalance: One Set of Surprises & Large Turnover
- KRX New Deal Index Rebalance: No Surprises as LG Chem Not Deleted from Battery Index
- Hitachi Metals (5486) – Where IS Undisturbed?
- FTSE EPRA Nareit Index Rebalance: Four Inclusions for Asia; Some High Impact Names
- FTSE China 50 Index Rebalance: Three Changes as Index Turnover Soars
FTSE China A50 Index Rebalance: One Set of Surprises & Large Turnover
- There are three sets of changes for the FTSE China A50 index at the March rebalance with implementation on 18 March. Two changes were expected while one is a surprise.
- The March rebalance will also see the Foreign Ownership Limits applied to the stocks. Estimated one-way index turnover is 17.39% and will result in a one-way trade of CNY 9,360m.
- As the surprises, we’d keep an eye on China State Construction A (601668 CH) and China Life Insurance (601628 CH) over the next few days.
KRX New Deal Index Rebalance: No Surprises as LG Chem Not Deleted from Battery Index
- The announced changes are exactly in line with our forecasts with one change each for the Secondary Battery, Bio and Game Index. There are three changes to the Internet Index.
- There are two changes to the BBIG Index with LG Energy Solution (373220 KS) replacing LG Chem Ltd (051910 KS) and AfreecaTV (067160 KS) replacing Douzone Bizon (012510 KS).
- The largest buying impact will be on AfreecaTV (067160 KS) while the largest selling impact will be on Douzone Bizon (012510 KS), Soulbrain (357780) and LG Chem Ltd (051910 KS).
Hitachi Metals (5486) – Where IS Undisturbed?
- Hitachi Metals (5486 JP) is currently awaiting regulatory approval for its takeover by a consortium led by Bain Capital, announced in late April 2021.
- The deal was originally expected to see a Tender Offer launched in November 2021, but that was delayed because the bidders lacked some necessary regulatory approvals.
- Since then, the stock has sold off. Today it sold off a LOT. Deal break? Market ructions? Someone getting a tap on the shoulder? How far down is the gap?
FTSE EPRA Nareit Index Rebalance: Four Inclusions for Asia; Some High Impact Names
- There will be four inclusions for Developed Asia in the FTSE EPRA Nareit – One REIT, Takara Leben Real Estate Investment, Vital Healthcare Property Trust and ESR Kendall Square REIT.
- There will be around US$77m to buy from passive funds across all inclusions. The largest impacts will be on Vital Healthcare Property Trust (VHP) and ESR Kendall Square REIT (365550).
- The Japan inclusions are a result of the companies publishing reports in English with an independent auditor signing off on them.
FTSE China 50 Index Rebalance: Three Changes as Index Turnover Soars
- As expected, Nongfu Spring (9633), China Overseas Land & Investment (688) and XPeng (9868) will replace Geely Auto (175), China Tower (788) and JD Health (6618) in the index.
- The adds, deletes and capping changes will result in one-way turnover estimated at 9.14% and will result in a one-way trade of HK$4,576m.
- Shorts in Nongfu Spring (9633 HK), JD Health (6618 HK) and China Tower (788 HK) have over 10 days of ADV to cover.
Before it’s here, it’s on Smartkarma
