In today’s briefing:
- HSCI Index Rebalance and Stock Connect: Plenty of New Listings Should Be Included
- IDX30/LQ45 Index Rebalance: BIG Impact Changes in Limited Time
- LG Energy IPO Trading – Allocations, Index, and Updates
- LG Energy Solution IPO: First Day Trading Strategy Amid Market Turmoil
- LG Chem Passive Outflow Summary
HSCI Index Rebalance and Stock Connect: Plenty of New Listings Should Be Included
- The review period for the March review of the HSCI ended on 31 December. There are a lot of new listings that should be included in the index.
- SenseTime is a high probability inclusion to the index, though it will only be added to Stock Connect in July once it completes 6 months and 20 trading days.
- Xpeng and Li Auto will be added to Stock Connect in Feb/March if they pass the velocity test. We see Li Auto as failing the test, while Xpeng is close.
IDX30/LQ45 Index Rebalance: BIG Impact Changes in Limited Time
- At the January review, there are 2 changes to the IDX30 Index, 5 changes to the LQ45 Index, and 9 changes to the IDX30 Index.
- Largest buying impact will be on Sumber Alfaria Trijaya Tbk Pt, Emtek (EMTK IJ), Waskita Karya (Persero) (WSKT IJ), BFI Finance Indonesia (BFIN IJ) and XL Axiata (EXCL IJ).
- Largest selling impact will be on Ace Hardware Indonesia (ACES IJ), Jasa Marga (JSMR IJ), Pakuwon Jati (PWON IJ) , Bumi Serpong Damai (BSDE IJ) and HM Sampoerna (HMSP IJ).
LG Energy IPO Trading – Allocations, Index, and Updates
- LG Energy Solution (373220 KS) (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of the IPO price range .
- LGES is the EV battery unit of LG Chem and it was spun off in December last year. The company is a major supplier to customers including Tesla and GM.
- LGES will be included into MSCI and KOSPI. But MSCI’s fast entry could likely be scheduled with February’s quarterly review which will be effective only on 1st of March.
LG Energy Solution IPO: First Day Trading Strategy Amid Market Turmoil
- In this insight, we discuss the first day trading strategy of LG Energy Solution amid market turmoil.
- Due to the recent risk-off sentiment, the prudent course of action would be to take a more moderate upside view on how much LG Energy Solution’s stock price could overshoot.
- Our base case valuation for LG Energy Solution (373220 KS) remains 424,093 won per share, which is 41% higher than the IPO price of 300,000 won.
LG Chem Passive Outflow Summary
- The LG Energy listing will likely distort the overall market flow. One is replacement trading with LG Chem in the local battery ETFs.
- One sure thing is that KODEX and TIGER will do this replacement trading. And these ETF operators will reportedly conduct it for three trading days from February 9-11.
- LG Chem has recently undergone a significant share price correction, this amount of passive outflow is highly likely to directly impact share price movement during the 3-day rebalancing trading window.
Before it’s here, it’s on Smartkarma
