In today’s briefing:
- Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
- HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect
- HSI Index Rebalance: Nongfu Spring & Lenovo IN; Still Tiptoeing Towards 80 Index Members
- KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN
- HSCEI Index Rebalance: Another Evergrande Stock Is Deleted; Xinyi Solar IN
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.
HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect
- There are 29 inclusions and 12 deletions for the HSCI at the March rebalance. 26 of the inclusions will be added to Connect while all deletes will leave Stock Connect.
- Some of the Stock Connect deletions have a lot of mainland holdings and there could unwinding of some of the positions ahead of becoming sell-only on the link.
- Orient Overseas International, United Energy, Cloud Village and Gcl Poly Energy Holdings Limited could also move higher over the next couple of weeks before the stocks enter Stock Connect.
HSI Index Rebalance: Nongfu Spring & Lenovo IN; Still Tiptoeing Towards 80 Index Members
- The Hang Seng Index was meant to have 80 constituents by mid-2022 before moving to 100 members. At 66 constituents post the March review, we are not gonna make it.
- Nongfu Spring (9633 HK) and Lenovo (992 HK) will be added to the index. Nongfu’s inclusion was expected while Lenovo is a relative surprise.
- Nongfu Spring (9633 HK) will also be added to the FTSE AW Index at the March SAIR at the close on 18 March. The stock should move higher.
KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN
- Osstem Implant (048260 KS) has been suspended from trading this year following embezzlement that has nearly wiped out its equity capital.
- The stock was named an Administrative Issue on Friday and will be deleted from the KOSDAQ 150 Index (KOSDQ150 INDEX). Caregen Co Ltd (214370 KS) is the replacement.
- Passive funds will need to sell around KRW 60bn of Osstem Implant (048260 KS) if they can, and buy KRW 7bn of Caregen Co Ltd (214370 KS).
HSCEI Index Rebalance: Another Evergrande Stock Is Deleted; Xinyi Solar IN
- As expected, Xinyi Solar Holdings (968 HK) replaces Evergrande Property Services (6666 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 4 March.
- Using prices from the close on 18 February to cap the stocks, estimated one-way turnover at the rebalance is 4.37% and will result in a one-way trade of HK$3,350m.
- Short interest on Xinyi Solar Holdings (968 HK) is 13 days of ADV to cover. While the inclusion was expected, short covering could take the stock higher.
Before it’s here, it’s on Smartkarma
