In today’s briefing:
- STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
- NIFTY Bank Index Rebalance: BOB to Replace RBL Bank
- Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia
- Last Week in Event SPACE: CIMIC, SK Square, AGL Energy, Mapletree, Z Energy, VW/Porsche
- Russia-Ukraine War: Longer Term Implications for China Utilities and Energy
STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
- In keeping with tradition, the SSE and CSI have continued to use a 6 month minimum listing history. No one remembers how or why it started, but it carries on.
- There are only 10 trading days to implementation and passive funds will need to trade multiple days of ADV on the inclusions and exclusions.
- The adds, deletes and the SSE STAR50 (STAR50 INDEX) have moved in lockstep since November. The CSI500 Index has outperformed over the period opening up a trading opportunity.
NIFTY Bank Index Rebalance: BOB to Replace RBL Bank
- Bank Of Baroda (BOB IN) will replace RBL Bank Ltd (RBK IN) in the Nifty Bank Index (NSEBANK INDEX) at the close of trading on 30 March.
- Index trackers will need to buy over 2 days of ADV on BOB while selling over 2 days of ADV on RBL. There will be capping changes too.
- Bank Of Baroda (BOB IN) trades cheaper than its peers on forward PE and price to book and could outperform over the near-term.
Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia
- Changes to the FTSE All-World/All-Cap were announced over the previous weekend, NIFTY was announced Thursday and STAR50 on Friday. LG Energy’s inclusion to the KOSPI200 was also announced.
- 21 February was the review cutoff for the March rebalance of the FTSE China 50, FTSE China A50, STI, FTSE TWSE Taiwan 50 and the FTSE EPRA Nareit.
- On Friday, FTSE announced that two of the previously announced inclusions would not be added, while there would be 10 new additions to the All-World/All-Cap indices.
Last Week in Event SPACE: CIMIC, SK Square, AGL Energy, Mapletree, Z Energy, VW/Porsche
- Hochtief AG (HOT GR) has finally launched an unconditional offer for the rest of CIMIC Group Ltd (CIM AU) (where it already owns 78.58%).
- SK Square (402340 KS) was inexpensive after its November listing. Now it’s even cheaper.
- Canada-Based asset manager Brookfield Asset Management (BAM US) and Australian billionaire Mike Cannon-Brookes have combined to purchase all of AGL Energy Ltd (AGL AU) at A$7.50/share
Russia-Ukraine War: Longer Term Implications for China Utilities and Energy
- Russia-Ukraine war has raised commodity prices which are negative towards commodity users in short term. However, we see silver linings for Chinese utilities and energy companies in the longer term.
- The conflict is expected to accelerate the progress of renewable projects currently under development, lead to a faster diversification away from fossils and increase gas supply from Russia to China.
- Key beneficiaries include Xinjiang Goldwind (2208 HK), Dongfang Electric (1072 HK), China Longyuan Power (916 HK), Energy China (3996 HK), Power China (601669 CH) and the gas utilities.
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