In today’s briefing:
- Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
- ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)
- StubWorld: SK Square And LG Chem’s Unjustified NAV Discounts
- FTSE GEIS March 2022 SAIR: Share/Float Changes
- FTSE China A50 Index Rebalance Preview (March 2022): Big Impact of FOL Changes
Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
- SenseTime Group (20 HK), Li Auto (2015 HK) and XPeng (9868 HK) replace Autohome (2518 HK), Weimob Inc. (2013 HK) and Tongcheng-Elong Holdings Ltd (780 HK) in the HSTECH INDEX.
- A few changes have been made from the way stocks are treated to ensure the inclusion of Li Auto (2015 HK) and XPeng (9868 HK) in the index.
- SenseTime Group (20 HK) has been included at a much higher float than what it should be and this could take the stock higher in the next couple of weeks.
ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)
- Aventus Group (AVN AU) received the ATO tax ruling on 18 February. This creates some uncertainty around the timing of the HomeCo Daily Needs REIT inclusion in the ASX200 Index.
- Given the ‘latest available shares in issue’ are used, we think there is a better than even chance of the stock being included in the index at the March rebalance.
- If HomeCo Daily Needs REIT (HDN AU) is not included in March, then it could replace Crown Resorts in May. Else, the stock will be added at the June rebalance.
StubWorld: SK Square And LG Chem’s Unjustified NAV Discounts
- SK Square (402340 KS) was inexpensive after its November listing. Now it’s even cheaper.
- Preceding my comments on SK Square – and LG Chem Ltd (051910 KS) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
FTSE GEIS March 2022 SAIR: Share/Float Changes
- FTSE announced the changes to the All-World/All-Cap indices post market close on Friday. There were changes to the number of shares and free floats for quite a few stocks too.
- There are a few stocks where the passive flow and impact is large and quite a few of these stocks have moved today. They could move more till implementation.
- At the close on 4 March, HSI trackers will sell CK Infrastructure Holdings (1038 HK) due to a float reduction. Then the FTSE trackers will sell on 18 March.
FTSE China A50 Index Rebalance Preview (March 2022): Big Impact of FOL Changes
- Todays closing prices will be used to determine the inclusions and exclusions at the March rebalance. We see PSBC and Bank of Ningbo replacing EVE Energy and Aier Eye.
- There will also be changes to the investability weight of the stocks following the Ground Rule change that will cap stocks at their Foreign Ownership Limits.
- Change to the index constituents and FOL changes will result in a one-way turnover estimated at 16.64% and will result in a one-way trade of CNY 9,322m.
Before it’s here, it’s on Smartkarma
