Most Read: Swire Pacific (A), Prosus , AEM, Ping An Insurance (H), Appier Group, SenseTime Group, Chow Tai Fook Jewellery, Huitongda, Lenovo, BA Airport Leasehold REIT and more

• Swire Pacific (A) (19 HK)/Swire Pacific Ltd-Cl B (87 HK) has announced a HK$4bn buyback. While that is 6.5% of shares out, it is over 15% of real float.
• Swire Pacific (A) (19 HK) was trading at a 50% discount to NAV and near the widest level over the last few years.
• There will be passive selling once the buyback is complete, but the stocks should run up prior to that.

Pre-open today, a day after the FTSE/JSE announced its expected capping rule for Naspers (NPN SJ) and Prosus NV (PRX SJ) in the September FTSE/JSE index rebalances (the cap at 6% of index for each of the stocks is only valid for the FTSE/JSE Capped SWIX All Share and Capped SWIX Top 40 indices), and a week after the Exchange Offer closed…

…Prosus (PRX NA) has announced a US$5.0bn buyback.

The buyback starts today and goes for a year. 

What kind of impact are we looking at?   It’s interesting.

• AEM reported stellar 1H22 results beating street estimates as well as far outpacing their own guidance. CHIPS act in USA will benefit company in FY23.
• Stock reaction (+6%) muted despite great outlook and management optimism. Despite record results and strong outlook, stock is down YTD. 
• AEM is cheap trading at only +/-10x FY22 EPS, too low given the growth and consistent margins profile. Fair Value remains 8 SGD.

• The Ping An AH premium has moved from 1-2% to near 10% over the last month while the HSAHP Index has stayed around the same level.
• The Ping AH premium is now nearing the level from where reversals take place. Interim results on 23 August could be a trigger for a reversal.
• Northbound Stock Connect holdings on the A-shares have been decreasing, while Southbound Stock Connect holdings on the H-shares have been increasing over the last month.

• In February 2022, I discussed why Appier Group (4180 JP) could be an interesting TOPIX Inclusion Candidate in TOPIX Inclusion Pre-Event: Appier Group (4180 JP) 
• Earlier this month, I reiterated my view in TOPIX Inclusions: Who Is Ready (Aug 2022) identifying Appier Group as the best pick among all current TOPIX Inclusion candidates.
• Since my last insight, the share price has risen sharply and that has important implications for the company’s Prime market ambitions.

• SenseTime Group (20 HK)‘s Free-Float Adjustment Factor (FAF) increases from 3% to 40% following lock-up expiry and the stock will replace China Pacific Insurance (2601 HK) in the HSCEI INDEX. 
• Using prices from the close on 19 August, estimated one-way turnover is 3.82% and will result in a one-way trade of HK$2,751m at the close on 2 September.
• Increase in the FAF on a couple of stocks saves them from index deletion in September but is probably not enough to save them from index deletion in December.

• The inclusion of China Shenhua Energy Co H (1088 HK), Chow Tai Fook Jewellery (1929 HK), Hansoh Pharmaceutical (3692 HK) and Baidu (9888 HK) takes us to 73 index constituents.
• Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 5.09% and will result in a one-way trade of HK$10,562m.
• There are large shorts on Chow Tai Fook Jewellery (1929 HK) and Hansoh Pharmaceutical (3692 HK) and there could be some short covering from now to implementation.

• There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
• 19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
• Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.

• There are no changes to the index names, but FAF and capping changes will lead to a one-way turnover of 4.5% and one-way flow of HK$3,287m.
• An increase in the FAF from 3% to 40% will result in passive inflows of HK$1.18bn for SenseTime Group (20 HK) – that is over 5 days of ADV.
• There are large shorts on some of the stocks that will have passive outflows and some of these positions could be covered on implementation day.

• BA Airport Leasehold REIT (BAREIT TB) (BAREIT) is looking to raise about US$290m in its Thailand IPO. 
• BA Airport Leasehold REIT (BAREIT), sponsored by Bangkok Airways, is Thailand’s first airport REIT.
• It aims to utilise the IPO proceeds, combined with a debt issuance to lease a number of properties located in Samui Airport.