In today’s briefing:
- STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
- FnGuide Samsung Group Index Rebalancing Preview
- Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia
- Japan Lifeline (7575 JP) Throws a Lifeline to Its Share Price
- Emart Announces A Major Share Buyback Program
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.
FnGuide Samsung Group Index Rebalancing Preview
- FnGuide Samsung Group has the most AUM among locally themed indexes. As of last Friday’s closing price, AUM is ₩1.52T.
- The share price movements of Samsung Group affiliates basically show high cointegration. Therefore, a small differential impact on the flow significantly affects the short-term price direction of these stocks.
- So, we should consider a long/short setup on a swing trading window. Particularly, we need to focus on the first two trading days, when the rebalancing impact is relatively significant.
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.
Japan Lifeline (7575 JP) Throws a Lifeline to Its Share Price
- Japan Lifeline announced a buyback on Friday after the close.
- The stock saw a huge growth spurt in the first half of the last decade but slowed down post 2018. So the stock has significantly underperformed the sector.
- The buyback parameters and the stock’s trading history suggest that with the stock near a 5-year low, it is worth looking a little deeper.
Emart Announces A Major Share Buyback Program
- On 25 February, E Mart Inc (139480 KS) announced that it will buy back 1 million shares, representing 3.6% of its outstanding shares. Currently, Emart has 87,464 treasury shares.
- We believe Emart’s share price is well positioned to continue to outperform the market in the next several months, driven by the large buyback program.
- Emart is currently trading at 0.4x P/B (38% lower than the historical valuation multiples). One could argue that Emart is valued at an excessive discount to the historical valuations.
Before it’s here, it’s on Smartkarma
