In today’s briefing:
- MSCI May 2022 Index Rebalance Preview: Changes as We Start the Review Period
- DIDI Decides To Delist – Now It Gets Messy
- S&P Global Clean Energy Index: Changes for Asia & Impact
- Korea FOL (Foreign Ownership Limit) Stock List: MSCI Flow Trading on KT & SKT
- Japan Post Holdings – Good Play On the BOJ’s Conundrum
MSCI May 2022 Index Rebalance Preview: Changes as We Start the Review Period
- The review period for the MSCI May 2022 SAIR started yesterday. As of the close on 15 April, we see 45 potential adds and 65 potential deletions for Asia.
- At a country level, the most changes are in China, while the largest net change is expected in Japan (16 deletions) and China (10 deletions). Indonesia could have five inclusions.
- The largest potential inclusions are Powerchip Semiconductor Manufacturing Corp, Tata Elxsi Ltd, Orient Overseas International, Pop Mart International Group Limited, Eva Airways, Jindal Steel & Power and China Airlines.
DIDI Decides To Delist – Now It Gets Messy
- The company was told a year ago that it had data problems. It was then told in June it had serious data problems and was given 15 days to fix.
- It did not. It listed itself, against the wishes of the regulators. Then it got in serious hot water. And it has only been getting hotter.
- A hoped-for HK Listing By Introduction was nixed 5 weeks ago. Now the Company is simply going to delist to try to solve its problems behind closed doors before relisting.
S&P Global Clean Energy Index: Changes for Asia & Impact
- There are 12 additions to the S&P Global Clean Energy Index for Asia. The changes were announced on 8 April and will be implemented at the close on 22 April.
- Largest inflows are on Chubu Electric Power, China Yangtze Power, Adani Green Energy, Energy Absolute, LONGi Green Energy Technology, JA Solar Technology, Tianjin Zhonghuan Semiconductor and Sungrow Power Supply.
- The largest outflows are expected on Meridian Energy (MEL NZ), Contact Energy (CEN NZ) and Xinyi Energy Holdings Ltd (3868 HK).
Korea FOL (Foreign Ownership Limit) Stock List: MSCI Flow Trading on KT & SKT
- SKT has a good chance of being deleted with the current level of foreign room. If it gets deleted, it will likely experience a passive outflow of 3.02x ADTV.
- KT Corp will also face the Price Cutoff Date, which should re-test KT’s foreign room status. The chances that it will eventually fail the inclusion also seem pretty high.
- We need to engage in short-term trading aimed at the possibility that they will face a price correction around the MSCI May SAIR result announcement.
Japan Post Holdings – Good Play On the BOJ’s Conundrum
- The BOJ looks increasingly trapped between a rapidly depreciating yen and a stated desire to hold rates low.
- We believe that the BOJ will eventually have to compromise on its 0.25% ceiling for the ten year JGB once inflation data gives them cover to do so.
- However, we believe Japan Post Holdings could potentially benefit from both macro forces and consider it one of the best risk-reward positions in Japan and perhaps globally.
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