MSCI Equity Quantitative Analysis From HSBC (November 2013)

8 October 2013
Equity Quantitative Analysis Index Analysis - Global
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Global Research
MSCI November 2013 Index Preview

70 index constituent changes forecast for MSCI ACWI
In our analysis we expect the largest changes to occur in Emerging Markets: 24 additions and 19 deletes compared to Developed Markets: 13 additions and 14 deletes In term of regions: EM Asia is expected to see the largest number of changes at 27, followed by EM EMEA expecting 14 changes MSCI will announce the results of its index review on 7 November 2013 and changes will become effective after the close of business on 26 November 2013
MSCI rebalances its global equities indices on a regular basis in February, May, August and November. The Semi-Annual Index Reviews (SAIRs) which take place in May and November are comprehensive index reviews. During each index review, MSCI refreshes its universe of stocks covered, updates the free float factors and number of issued shares, updates liquidity criteria, finalises the market cap size cut-offs for different markets from which it determines potential index changes. In order to predict potential index changes, we aim to replicate MSCIs index review process. Our index prediction model is for the MSCI All Country World Index (ACWI) and for large cap and mid cap stocks from 45 developed and emerging markets.
Table 1: Projected changes to MSCI ACWI for November 2013 index review Region Developed Markets North America Europe + Israel DM Asia Pacific Emerging Markets EM Asia EM EMEA EM LATAM MSCI ACWI Total Potential Changes 27 7 12 8 43 27 14 2 70 Potential Additions 13 6 5 2 24 12 11 1 37 Potential Deletes 14 1 7 6 19 15 3 1 33
Vijay Sumon* Analyst HSBC Bank plc +44 20 7991 6839 vijay.sumon@hsbcib.com Joaquim de Lima* Analyst HSBC Bank plc +44 20 7991 6836 joaquim.delima@hsbcib.com Freddie Siu* Analyst The Hongkong and Shanghai Banking Corporation Limited (HK) +852 2996 6558 freddiesiu@hsbc.com.hk View HSBC Global Research at: http://www.research.hsbc.com *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations Issuer of report: HSBC Bank plc
Disclaimer & Disclosures This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it
Source: HSBC Our analysis is based on data as of 4 October 2013 on based on the MSCI Standard Indices
Equity Quantitative Analysis Index Analysis - Global 8 October 2013
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Summary of MSCI potential additions, deletions & money flow

Table 2. MSCI DEVELOPED MARKETS Country / Region NORTH AMERICA Canada USA EUROPE & ISRAEL Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Israel DM ASIA PACIFIC Australia Hong Kong Japan New Zealand Singapore DM Additions 6 1 5 5 0 0 0 0 2 2 0 0 0 0 0 0 0 0 0 1 0 2 0 0 2 0 0 13 Deletions 1 0 1 7 2 0 0 1 0 0 2 1 0 0 0 0 1 0 0 0 0 6 1 1 3 0 1 14 Inflow (USD m) 383 47 336 1,304 0 0 0 0 720 318 0 0 0 0 0 0 0 0 0 265 0 240 0 0 240 0 0 1927 Outflow (USD m) (323) (19) (304) (1,150) (164) (9) (8) (97) (74) (66) (259) (78) (17) (20) (6) (1) (94) (24) (67) (162) (2) (455) (76) (69) (228) (1) (81) (1927) Net Flow (USD m) 61 28 32 154 (164) (9) (8) (97) 646 252 (259) (78) (17) (20) (6) (1) (94) (24) (67) 104 (2) (215) (76) (69) 12 (1) (81) 0
Source: Bloomberg, MSCI, HSBC estimates. Flows include announced corporate actions expected at the MSCI November 2013 index review. Data as of 4 October 2013.
Table 3. MSCI EMERGING MARKETS Country EM ASIA China India Indonesia Korea Malaysia Philippines Taiwan Thailand EM EMEA Czech Republic Egypt Greece Hungary Morocco Poland Russia South Africa Turkey EM LATAM Brazil Chile Colombia Mexico Peru EM Additions 12 4 3 1 1 0 0 2 1 11 0 0 9 1 0 0 0 1 0 1 0 0 0 1 0 24 Deletions 15 6 5 2 1 0 1 0 0 3 0 0 0 0 3 0 0 0 0 1 1 0 0 0 0 19 Inflow (USD m) 908 339 214 50 81 0 0 158 66 1,042 0 0 827 153 0 0 0 64 0 70 0 0 0 70 0 2,023 Outflow (USD m) (1,299) (493) (170) (97) (253) (51) (45) (156) (33) (416) (3) (2) 0 (3) (178) (23) (83) (100) (24) (305) (191) (23) (16) (69) (6) (2,023) Net Flow (USD m) (391) (154) 43 (47) (172) (51) (45) 2 33 625 (3) (2) 827 150 (178) (23) (83) (36) (24) (235) (191) (23) (16) 1 (6) (0)
Source: Bloomberg, MSCI, HSBC estimates. Flows include announced corporate actions expected at the MSCI November 2013 index review. Data as of 4 October 2013.
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Projected changes for MSCIs November 2013 index review

In the following tables we highlight our projected index changes together with a probability of change. Additionally, we will continue to monitor the price-action of these stocks and their potential status.
Developed Markets - Additions & Deletions

Table 4: HSBC projected adds to MSCI Standard Indices for the upcoming November 2013 review Name Developed Markets Adds Alcatel-Lucent Evonik Industries Sky Deutschland Kakaku.com Inc. Nippon Paint ASOS Chicago Bridge & Iron NetSuite NXP Semiconductors Pharmacyclics Valeo Groupon Methanex Developed Markets - Deletes Sydney Airport Verbund Telekom Austria Kesko B Hellenic Telecom^ OPAP^ Orient Overseas International Cosmo Oil Ryanair Holdings Furukawa Electric Gree Olam International Acciona Penney (J C) SYD AU Australia VER AV Austria TKA AV Austria KESBV FH Finland Greece HTO GA OPAP GA Greece 316 HK HK 5007 JP Japan RYA ID Ireland 5801 JP Japan 3632 JP Japan OLAM SP Singapore ANA SM Spain JCP US USA Transportation Utilities Telecommunication Services Food & Staples Retailing Telecommunication Services Consumer Services Transportation Energy Transportation Capital Goods Software & Services Food & Staples Retailing Utilities Retailing -1.1 -9.3 -10.1 -12.4 +3.6 +4.8 -7.3 -5.4 -1.1 -4.1 -1.3 -13.1 -3.8 -0.1 -34 -72 -90 -91 35 35 -53 -39 -75 -58 -30 -73 -70 -25 -8.9 -3.2 -10.4 -3.0 3.1 2.8 -9.2 -21.8 -8.8 -26.5 -4.2 -61.5 -1.2 -3.2 Low Mid Low High High High High High Low High High Mid High High ALU FP France EVK GY Germany SKYD GY Germany 2371 JP Japan 4612 JP Japan ASC LN UK CBI US USA N US USA NXPI US USA PCYC US USA FR FP France GRPN US USA MX CN Canada Technology Hardware & Equipment Materials Media Software & Services Materials Retailing Capital Goods Software & Services Semiconductors & Semiconductor Pharmaceuticals, Biotechnology Automobile & Components Retailing Materials 1.4 8.8 7.6 2.7 5.6 6.4 1.2 1.4 1.0 1.0 7.5 0.1 1.2 428 120 198 129 111 265 83 41 90 89 293 33 47 109.3 3.3 20.6 5.8 6.8 3.3 1.2 0.4 2.3 0.6 3.4 2.9 0.9 High High High High High Mid High High High High Low Low Low Ticker Country GICS Industry EDT Value to trade Shares to Probability USD m trade m of change
Source: MSCI, HSBC, Bloomberg, Thomson Reuters Datastream, EDT Equivalent Days Trading, ^ MSCI has announced in provisional list and adjusted for moving to MSCI EM High Conviction Stock which exceeds the estimated market cut-off by more than 10% and passes liquidity criteria and size segments for index inclusion or a stock which is below the estimated market cut-off by more than 10% for index exclusion. Medium Conviction Stock that is between 5-10% higher than the estimated market cut-off criteria for index inclusion. Or a stock which is 5-10% below the estimated market cut-off for index exclusion. Low Conviction Stock which is at or up to 5% off the estimated market cut-off criteria and thus represents a marginal index inclusion/exclusion.
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Emerging Markets - Additions & Deletions

Table 5: HSBC projected adds to MSCI Standard Indices for the upcoming November 2013 review Name Emerging Markets - Adds Biostime International Holdings (P Chip) China Galaxy Securities (H) Chongqing Changan Automobile (B) Sinopec Engineering (H) Alpha Bank A.E. Folli Follie Hellenic Petroleum ^ Hellenic Telecom ^ Jumbo ^ National Bank Of Greece ^ OPAP ^ Bank of Piraeus Public Power Corp ^ Richter NMDC Oracle Financial Services Software Steel Authority of India Tower Bersama Infrastructure Macquarie Korea Infrastructure Fund Elektra* Mm Capitec Bank Holdings Asia Pacific Telecom Inotera Memories TMB BANK Emerging Markets - Deletes Multiplus Bosideng International Holdings (P Chip) China Shanshui Cement Group (P Chip) China Southern Airlines (H) Dah Chong Hong Holdings (Red Chip) Daphne International Holdings (P Chip) Parkson Retail Group Adani Enterprises Bank of Baroda Bank of India Unitech Wockhardt Bumi Resources Indosat Hyundai Securities Attijariwafa Bank^ Douja Promotion Groupe Addoha^ Itissalat Al Maghrib (Maroc Telecom)^ Metropolitan Bank & Trust MPLU3 BZ 3998 HK 691 HK 1055 HK 1828 HK 210 HK 3368 HK ADE IN BOB IN BOI IN UT IN WPL IN BUMI IJ ISAT IJ 003450 KS ATW MC ADH MC IAM MC MBT PM Brazil China China China China China China India India India India India Indonesia Indonesia Korea Morocco Morocco Morocco Philippines Media Consumer Durables & Apparel Materials Transportation Retailing Consumer Durables & Apparel Retailing Capital Goods Banks Banks Real Estate Pharmaceuticals, Biotechnology Energy Telecommunication Services Diversified Financials Banks Real Estate Telecommunication Services Banks -5.5 -11.6 -10.8 -7.4 -15.8 -10.2 -12.8 -2.5 -1.1 -2.5 -2.8 -1.1 -11.9 -53.7 -11.7 -87.6 -81.6 -45.7 -2.9 -34 -41 -44 -39 -41 -38 -31 -16 -21 -20 -21 -12 -35 -30 -40 -65 -43 -56 -33 -2.9 -168.2 -109.8 -109.0 -49.4 -59.4 -75.9 -6.6 -2.5 -7.2 -78.4 -1.6 -872.4 -81.5 -6.6 -1.5 -7.2 -4.5 -16.5 High High High High High Mid High High High High High High Mid Low High High High High High 1112 HK 6881 HK 200625 CH 2386 HK ALPHA GA FFGRP GA ELPE GA HTO GA BELA GA ETE GA OPAP GA TPEIR GA PPC GA RICHT HB NMDC IN OFSS IN SAIL IN TBIG IJ 088980 KS ELEKTRA* MM CPI SJ 3682 TT 3474 TT TMB TB China China China China Greece Greece Greece Greece Greece Greece Greece Greece Greece Hungary India India India Indonesia Korea Mexico South Africa Taiwan Taiwan Thailand Food Beverage & Tobacco Diversified Financials Automobiles & Components Capital Goods Banks Retailing Energy Telecommunication Services Retailing Banks Consumer Services Banks Utilities Pharmaceuticals, Biotechnology Materials Software & Services Materials Telecommunication Services Diversified Financials Retailing Banks Telecommunication Services Semiconductors & Semiconductor Banks 13.1 7.3 13.6 11.6 12.2 24.5 58.9 3.6 24.1 4.8 4.8 6.2 22.5 16.7 14.8 44.0 10.9 39.6 42.0 8.8 47.4 11.9 9.8 1.8 89 69 78 103 73 48 53 35 74 89 35 77 84 153 95 63 55 50 81 70 64 88 70 66 10.8 100.9 51.1 82.8 91.5 1.8 4.6 3.1 5.8 20.1 2.8 42.5 6.9 8.3 47.3 1.3 61.6 100.1 12.8 2.1 3.1 147.9 108.0 780.2 High High High High High High High High High High High High High High High High High High High Mid High High High High Ticker Country GICS Industry EDT Value to trade Shares to Probability USD m trade m of change
Source: MSCI HSBC, Bloomberg, Thomson Reuters Datastream , EDT Equivalent Days Trading, , ^ MSCI has announced in provisional list and adjusted for moving to MSCI EM High Conviction Stock which exceeds the estimated market cut-off by more than 10% and passes liquidity criteria and size segments for index inclusion or a stock which is below the estimated market cut-off by more than 10% for index exclusion. Medium Conviction Stock that is between 5-10% higher than the estimated market cut-off criteria for index inclusion. Or a stock which is 5-10% below the estimated market cut-off for index exclusion. Low Conviction Stock which is at or up to 5% off the estimated market cut-off criteria and thus represents a marginal index inclusion/exclusion.
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Watchlist for MSCIs November 2013 index review

On 29 August 2013, MSCI proposed to align the liquidity requirements across all its size-segments (large, mid and small) for its Global Investable Market Indices (GIMI). This could mean the removal of the additional minimum liquidity requirements such that there will be no difference in liquidity requirements for the MSCI Global Standard Indices and the MSCI Global Small Cap Indices. Clarification of this is expected at or before the November review. The current screens applied for determining eligibility of securities are the: Market-Relative 12-month Annualized Traded Value Ratio (ATVR), 3-month ATVR and 3-month frequency of trading requirements. The removal of the additional minimum liquidity requirements for the MSCI Global Standard Indices may result in the addition of securities at the November review. These are detailed below and appear in our watchlist: Moscow Exchange, Nestle India, New World China Land, Pharmstandard GDR, Richter Gedeon and REA Group. In the table below, we highlight stocks which fall into our watch list on the basis they are close to breaching their respective market capitalisation thresholds.
Table 6. Watchlist for MSCI November 2013 index review Name Developed Markets REA Group Symrise AG Campari Mediaset Incyte Snap-On Inc Add Add Add Add Add Add REA AU SY1 GY CPR IM MS IM INCY US SNA US BNP CN RATOB SS BMPS IM DNB US Australia Germany Italy Italy USA USA Canada Sweden Italy USA Consumer Discretionary Materials Consumer Staples Consumer Discretionary Health Care Industrials Energy Financials Financials Industrials n.a. 8.9% 7.3% 6.9% 14.3% 9.4% -7.8% -8.2% -4.0% -12.2% 1.4 2.3 1.1 0.4 0.6 1.9 -1.4 -1.9 -0.3 -0.9 14 34 18 22 39 41 -16 -12 -13 -29 0.4 0.8 2.0 5.0 1.0 0.4 -1.3 -1.3 -45.0 -0.3 Expected Ticker Change Country GICS Sector % move required to breach threshold# EDT Value to trade USD m Shares to trade m
Bonavista Energy Delete Ratos B Delete Banca Monte Paschi Siena Delete Dun & Bradstreet Corp Delete Emerging Markets Equatorial Energia Ord Minth Group New World China Grand Korea Leisure Lotte Chilsung Beverage Dialog Group Nestle India Moscow Exchange Pharmstandard AVI Feng Tay Enterprise HannStar Display Wowprime Ulker Biskuvi Wockhardt TMK GDR Reg S LSR Group Add Add Add Add Add Add Add Add Add Add Add Add Add Add Delete Delete Delete
EQTL3 BZ 425 HK 917 HK 114090 KS 005300 KS DLG MK NEST IN MOEX RM PHST LI AVI SJ 9910 TT 6116 TT 2727 TT ULKER TI WPL IN TMKS LI LSRG LI
Brazil China China Korea Korea Malaysia India Russia Russia South Africa Taiwan Taiwan Taiwan Turkey India Russia Russia
Utilities Consumer Discretionary Financials Consumer Discretionary Consumer Staples Industrials Consumer Staples Financials Health Care Consumer Staples Consumer Discretionary Information Technology Consumer Discretionary Consumer Staples Health Care Energy Financials
0.0% 1.0% n.a. 7.8% 3.1% 12.9% n.a. n.a. n.a. 13.8% 9.1% 1.0% 0.6% n.a. -7.5% -4.9% -4.3%
14.1 30.9 46.0 7.0 18.8 31.6 36.1 29.3 59.5 21.6 10.6 4.5 8.2 2.2 -1.0 -25.1 -26.8
94 72 70 64 57 84 105 120 47 105 41 61 48 61 -12 -47 -46
9.5 39.0 142.9 1.9 0.0 101.6 1.3 58.9 3.3 17.5 16.7 149.0 2.9 8.2 -1.6 -3.5 -10.8
Source: HSBC, Bloomberg, Datastream, MSCI. EDT Equivalent Days Trading. # Data as of 4 October 2013.
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Expected reporting date for Additions & Deletions

Table 7. Expected reporting dates for forecast additions & deletions Addition/Deletion Name Forecast changes Deletion Addition Deletion Addition Addition Addition Addition Deletion Deletion Addition Deletion Addition Deletion Deletion Addition Deletion Deletion Addition Addition Addition Deletion Addition Addition Deletion Deletion Addition Addition Addition Addition Addition Deletion Deletion Deletion Addition Deletion Deletion Deletion Deletion Deletion Deletion Deletion Addition Addition Deletion Addition Addition Addition Addition Addition Douja Promotion TMB BANK Bank of Baroda ASOS NXP Semiconductors Chicago Bridge & Iron Inotera Memories Indosat Kesko B NetSuite Adani Enterprises Elektra China Southern Airlines (H) Verbund Chongqing Changan Automobile (B) Bank of India Bumi Resources Tower Bersama Infrastructure Alcatel-Lucent Pharmacyclics Furukawa Electric Oracle Financial Services Software Evonik Industries Metropolitan Bank & Trust Cosmo Oil Nippon Paint Sky Deutschland Richter Kakaku.com Inc. NMDC Hellenic Telecom Multiplus Penney (J C) Steel Authority of India Unitech Acciona Wockhardt Gree Olam International Hyundai Securities Parkson Retail Group Jumbo Hellenic Petroleum OPAP Public Power Corp Folli Follie Piraeus Bank Alpha Bank A.E. National Bank of Greece Ticker ADH MC TMB TB BOB IN ASC LN NXPI US CBI US 3474 TT ISAT IJ KESBV FH N US ADE IN ELEKTRA* MM 1055 HK VER AV 200625 CH BOI IN BUMI IJ TBIG IJ ALU FP PCYC US 5801 JP OFSS IN EVK GR MBT PM 5007 JP 4612 JP SKYD GY RICHT HB 2371 JP NMDC IN HTO GA MPLU3 BZ JCP US SAIL IN UT IN ANA SM WPL IN 3632 JP OLAM SP 003450 KS 3368 HK BELA GA ELPE GA OPAP GA PPC GA FFGRP GA TPEIR GA ALPHA GA ETE GA Country MOROCCO THAILAND INDIA Europe USA USA TAIWAN INDONESIA Europe USA INDIA MEXICO CHINA Europe CHINA INDIA INDONESIA INDONESIA Europe USA JAPAN INDIA Europe PHILIPPINES JAPAN JAPAN Europe HUNGARY JAPAN INDIA Europe BRAZIL USA INDIA INDIA Europe INDIA JAPAN SINGAPORE KOREA CHINA GREECE GREECE Europe GREECE GREECE GREECE GREECE GREECE Expected report date Type of report 10-Oct-13 16-Oct-13 22-Oct-13 23-Oct-13 23-Oct-13 23-Oct-13 23-Oct-13 23-Oct-13 24-Oct-13 25-Oct-13 25-Oct-13 25-Oct-13 28-Oct-13 29-Oct-13 29-Oct-13 29-Oct-13 30-Oct-13 30-Oct-13 31-Oct-13 31-Oct-13 1-Nov-13 1-Nov-13 4-Nov-13 5-Nov-13 6-Nov-13 6-Nov-13 6-Nov-13 6-Nov-13 7-Nov-13 7-Nov-13 7-Nov-13 7-Nov-13 8-Nov-13 8-Nov-13 8-Nov-13 13-Nov-13 13-Nov-13 14-Nov-13 14-Nov-13 14-Nov-13 14-Nov-13 20-Nov-13 21-Nov-13 21-Nov-13 27-Nov-13 28-Nov-13 20-Dec-13 20-Dec-13 20-Dec-13 1S14 semi-ann results 3Q13 quarterly results 2Q14 quarterly results 2013 annual results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 2Q14 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 2Q14 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 1S14 semi-ann results 2Q14 quarterly results 3Q13 quarterly results 3Q13 quarterly results 1S14 semi-ann results 1S14 semi-ann results 3Q13 quarterly results 3Q13 quarterly results 1S14 semi-ann results 2Q14 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q14 quarterly results 2Q14 quarterly results 2Q14 quarterly results 3Q13 quarterly results 2Q14 quarterly results 1Q14 quarterly results 1Q14 quarterly results 2Q14 quarterly results 3Q13 quarterly results 1Q14 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results 3Q13 quarterly results
Source: MSCI, Bloomberg, company websites, HSBC. Data as of 4 October 2013.
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Trading activity of potential additions/deletions

Overleaf we plot the daily excess turnover, defined as the daily turnover less the 20-day average turnover, as a percentage of the 20-day average turnover potential index additions and deletions since September 2013.
Trading Activity Charts: Developed Market Additions

Excess Turnover traded as a % of the 20 day average in Alcatel-Lucent Excess Turnover traded as a % of the 20 day average in Evonik Industries
900% 800% 700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
150 145 140 135 130 125 120 115 110 105 100
1600% 1400% 1200% 1000% 800% 600% 400% 200% 0% 2/09 11/09 20/09 1/10
106 104 102 100 98 96 94 92 90
Cumulative excess % (LHS)

Source: Bloomberg, HSBC, Price rebased
Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Sky Deutschland
Excess Turnover traded as a % of the 20 day average in Kakau.com Inc
80% 60% 40% 20% 0% -20% -40% -60% -80% -100% -120% -140% 2/09 11/09 20/09 1/10
110 109 108 107 106 105 104 103 102 101 100
700% 600% 500% 400% 300% 200% 100% 0% -100% -200% 2/09 11/09 24/09 3/10
125 120 115 110 105 100

Rebased Price

Rebased Price
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Excess Turnover traded as a % of the 20 day average in Nippon Paint
Excess Turnover traded as a % of the 20 day average in ASC
900% 800% 700% 600% 500% 400% 300% 200% 100% 0% 2/09 11/09 24/09 3/10
108 106 104 102 100 98 96 94 92 90
1200% 1000% 800% 600% 400% 200% 0% -200% 2/09 11/09 20/09 1/10
120 115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in AAC Chicago Bridge & Iron
Excess Turnover traded as a % of the 20 day average in NetSuite
400% 350% 300% 250% 200% 150% 100% 50% 0% 3/09 12/09 23/09 2/10
120 115 110 105 100 95 90
100% 50% 0% -50% -100% -150% 3/09 12/09 23/09 2/10
115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in AAC NXP Semiconductors
Excess Turnover traded as a % of the 20 day average in Pharmacyclics
400% 350% 300% 250% 200% 150% 100% 50% 0% -50% -100% 3/09 12/09 23/09 2/10
104 102 100 98 96 94 92 90
700% 600% 500% 400% 300% 200% 100% 0% -100% -200% 3/09 12/09 23/09 2/10
125 120 115 110 105 100 95 90

Rebased Price

Rebased Price
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Excess Turnover traded as a % of the 20 day average in Valeo
Excess Turnover traded as a % of the 20 day average in Groupon
250% 200% 150% 100% 50% 0% -50% 2/09 11/09 20/09 1/10
Rebased Price
112 110 108 106 104 102 100
800% 700% 600% 500% 400% 300% 200% 100% 0% -100% -200% 3/09 12/09 23/09 2/10
Rebased Price
130 125 120 115 110 105 100


Excess Turnover traded as a % of the 20 day average in Methanex Corp
800% 700% 600% 500% 400% 300% 200% 100% 0% 3/09 12/09 23/09 2/10
Rebased Price
108 106 104 102 100 98 96 94 92 90

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Trading Activity Charts: Developed Market Deletions

Excess Turnover traded as a % of the 20 day average in Verbund Excess Turnover traded as a % of the 20 day average in Kesko B
1200% 1000% 800% 600% 400% 200% 0% -200% 2/09 11/09 20/09 1/10
120 118 116 114 112 110 108 106 104 102 100
250% 200% 150% 100% 50% 0% -50% -100% 2/09 11/09 20/09 1/10
104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Hellenic Telecom
Excess Turnover traded as a % of the 20 day average in OPAP
700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
125 120 115 110 105 100
900% 800% 700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
130 125 120 115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Orient Overseas International
Excess Turnover traded as a % of the 20 day average in Cosmo Oil
250% 200% 150% 100% 50% 0% -50% -100% -150% 2/09 11/09 23/09 3/10
112 110 108 106 104 102 100
800% 600% 400% 200% 0% -200% -400% 2/09 11/09 24/09 3/10
105 100 95 90 85 80

Rebased Price

Rebased Price
10
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Excess Turnover traded as a % of the 20 day average in Furukawa Electric
Excess Turnover traded as a % of the 20 day average in Gree
150% 100% 50% 0% -50% -100% -150% 2/09 11/09 24/09 3/10
116 114 112 110 108 106 104 102 100
0% -100% -200% -300% -400% -500% -600% -700% -800% -900% -1000% 2/09 11/09 24/09 3/10
106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Olam International
Excess Turnover traded as a % of the 20 day average in Acciona
0% -100% -200% -300% -400% -500% -600% -700% -800% 2/09 11/09 20/09 1/10
106 104 102 100 98 96 94 92 90
300% 250% 200% 150% 100% 50% 0% -50% 2/09 11/09 20/09 1/10
120 115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Penney (J C)
600% 500% 400% 300% 200% 100% 0% -100% -200% -300% -400% -500% 3/09 12/09 23/09 2/10
120 110 100 90 80 70 60

Rebased Price
11
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Excess Turnover traded as a % of the 20 day average in Telekom Austria
Excess Turnover traded as a % of the 20 day average in Verbund
1000% 800% 600% 400% 200% 0% -200% -400% 2/09 11/09 20/09 1/10
Rebased Price
120 115 110 105 100 95 90
1200% 1000% 800% 600% 400% 200% 0% -200% 2/09 11/09 20/09 1/10
Rebased Price
120 118 116 114 112 110 108 106 104 102 100


Excess Turnover traded as a % of the 20 day average in Ryanair Holdings
700% 600% 500% 400% 300% 200% 100% 0% -100% -200% 2/09 11/09 20/09 1/10
Rebased Price
105 100 95 90 85 80

12
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Trading Activity Charts: Emerging Market Additions

Excess Turnover traded as a % of the 20 day average in Biostime International Holding Excess Turnover traded as a % of the 20 day average in China Galaxy Securities
500% 400% 300% 200% 100% 0% -100% -200% 2/09 11/09 23/09 3/10
145 140 135 130 125 120 115 110 105 100
1000% 800% 600% 400% 200% 0% -200% -400% 2/09 11/09 23/09 3/10
116 114 112 110 108 106 104 102 100

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Chongqing Changan Automobile
Excess Turnover traded as a % of the 20 day average in Sinopec Engineering (Group)
700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 24/09
120 118 116 114 112 110 108 106 104 102 100
800% 600% 400% 200% 0% -200% -400% -600% 2/09 11/09 23/09 3/10
102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Alpha Bank
Excess Turnover traded as a % of the 20 day average in New Folli Follie
600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
120 115 110 105 100 95 90
1200% 1000% 800% 600% 400% 200% 0% -200% -400% 2/09 11/09 20/09 1/10
120 118 116 114 112 110 108 106 104 102 100

Rebased Price

Rebased Price
13
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Excess Turnover traded as a % of the 20 day average in Hellenic Petroleum
Excess Turnover traded as a % of the 20 day average in Hellenic Telecom
800% 700% 600% 500% 400% 300% 200% 100% 0% -100% -200% -300% 2/09 11/09 20/09 1/10
130 125 120 115 110 105 100
700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
125 120 115 110 105 100

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Jumbo
Excess Turnover traded as a % of the 20 day average in National Bank of Greece
1600% 1400% 1200% 1000% 800% 600% 400% 200% 0% -200% -400% 2/09 11/09 20/09 1/10
125 120 115 110 105 100
250% 200% 150% 100% 50% 0% -50% -100% -150% -200% -250% 2/09 11/09 20/09 1/10
125 120 115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in OPAP
Excess Turnover traded as a % of the 20 day average in Piraeus Bank
900% 800% 700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
130 125 120 115 110 105 100 95 90
800% 700% 600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
130 125 120 115 110 105 100

Rebased Price

Rebased Price
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Excess Turnover traded as a % of the 20 day average in Public Power Corp
Excess Turnover traded as a % of the 20 day average in Richter
600% 500% 400% 300% 200% 100% 0% -100% 2/09 11/09 20/09 1/10
130 125 120 115 110 105 100
300% 250% 200% 150% 100% 50% 0% -50% -100% -150% -200% 2/09 11/09 20/09 1/10
115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in NMDC
Excess Turnover traded as a % of the 20 day average in Oracle Financial Services Software
0% -100% -200% -300% -400% -500% -600% 2/09 12/09 23/09 3/10
106 104 102 100 98 96 94 92 90
0% -100% -200% -300% -400% -500% -600% -700% 2/09 12/09 23/09 3/10
110 108 106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Steel Authority of India
Excess Turnover traded as a % of the 20 day average in Tower Bersama Infrastructure
100% 50% 0% -50% -100% -150% -200% -250% 2/09 12/09 23/09 3/10
125 120 115 110 105 100 95 90
200% 0% -200% -400% -600% -800% -1000% 2/09 11/09 20/09 1/10
115 110 105 100 95 90

Rebased Price

Rebased Price
15
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Excess Turnover traded as a % of the 20 day average in Macquaire Korea Infrastructure Fund
Excess Turnover traded as a % of the 20 day average in Elektra
500% 400% 300% 200% 100% 0% -100% 2/09 11/09 25/09 7/10
102 100 98 96 94 92 90
350% 300% 250% 200% 150% 100% 50% 0% -50% -100% -150% 2/09 11/09 23/09 2/10
106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Capitec Bank Holdings
Excess Turnover traded as a % of the 20 day average in Asia Pacific Telecom
0% -50% -100% -150% -200% -250% -300% -350% 2/09 11/09 20/09 2/10
116 114 112 110 108 106 104 102 100
300% 200% 100% 0% -100% -200% -300% -400% 2/09 11/09 23/09 2/10
108 106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Inotera Memories
Excess Turnover traded as a % of the 20 day average in TMB Bank
1400% 1200% 1000% 800% 600% 400% 200% 0% -200% 2/09 11/09 23/09 2/10
160 150 140 130 120 110 100
200% 100% 0% -100% -200% -300% -400% -500% 2/09 11/09 20/09 1/10
115 110 105 100 95 90

Rebased Price

Rebased Price
16
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Trading Activity Charts: Emerging Market Deletions

Excess Turnover traded as a % of the 20 day average in Multiplus Excess Turnover traded as a % of the 20 day average in Bosideng International Holding
0% -50% -100% -150% -200% -250% -300% -350% 2/09 11/09 20/09 1/10
110 108 106 104 102 100 98 96 94 92 90
600% 500% 400% 300% 200% 100% 0% -100% -200% -300% 2/09 11/09 23/09 3/10
125 120 115 110 105 100

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in China Shanshui Cement Group
Excess Turnover traded as a % of the 20 day average in China Shanshui Cement Group
60% 40% 20% 0% -20% -40% -60% -80% -100% -120% 2/09 11/09 23/09 3/10
106 104 102 100 98 96 94 92 90
300% 250% 200% 150% 100% 50% 0% -50% -100% -150% -200% 2/09 11/09 23/09 3/10
116 114 112 110 108 106 104 102 100

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Dah Chong Hong Holdings
Excess Turnover traded as a % of the 20 day average in Daphne International Holding
1200% 1000% 800% 600% 400% 200% 0% -200% -400% 2/09 11/09 23/09 3/10
115 110 105 100 95 90
500% 400% 300% 200% 100% 0% -100% -200% -300% 2/09 11/09 23/09 3/10
110 108 106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
17
abc
Excess Turnover traded as a % of the 20 day average in Parkson Retail Group
Excess Turnover traded as a % of the 20 day average in Adani Enterprises
500% 400% 300% 200% 100% 0% -100% -200% -300% 2/09 11/09 23/09 3/10
115 110 105 100 95 90
250% 200% 150% 100% 50% 0% -50% -100% -150% -200% 2/09 12/09 23/09 3/10
110 108 106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Bank of Baroda
Excess Turnover traded as a % of the 20 day average in Bank of India
500% 400% 300% 200% 100% 0% -100% 2/09 12/09 23/09 3/10
125 120 115 110 105 100 95 90
300% 250% 200% 150% 100% 50% 0% -50% -100% -150% 2/09 12/09 23/09 3/10
135 130 125 120 115 110 105 100 95 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Unitech
Excess Turnover traded as a % of the 20 day average in Wockhardt
100% 50% 0% -50% -100% -150% -200% -250% 2/09 12/09 23/09 3/10
108 106 104 102 100 98 96 94 92 90
1000% 800% 600% 400% 200% 0% -200% -400% 2/09 12/09 23/09 3/10
160 150 140 130 120 110 100 90

Rebased Price

Rebased Price
18
abc
Excess Turnover traded as a % of the 20 day average in Bumi Resources
Excess Turnover traded as a % of the 20 day average in Indosat
1200% 1000% 800% 600% 400% 200% 0% -200% 2/09 11/09 20/09 1/10
135 130 125 120 115 110 105 100
1000% 800% 600% 400% 200% 0% -200% -400% 2/09 11/09 20/09 1/10
110 108 106 104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Hyundai Securities
Excess Turnover traded as a % of the 20 day average in Attijariwafa Bank
600% 500% 400% 300% 200% 100% 0% -100% -200% 2/09 11/09 25/09 7/10
130 125 120 115 110 105 100
700% 600% 500% 400% 300% 200% 100% 0% -100% -200% -300% 2/09 11/09 20/09 1/10
104 102 100 98 96 94 92 90

Rebased Price

Rebased Price
Excess Turnover traded as a % of the 20 day average in Douja Promotion Groupe Addoh
Excess Turnover traded as a % of the 20 day average in Itissalat Al Maghrib (Maroc Telecom)
2500% 2000% 1500% 1000% 500% 0% -500% 2/09 11/09 20/09 1/10
120 115 110 105 100 95 90
0% -100% -200% -300% -400% -500% -600% -700% -800% -900% -1000% 2/09 11/09 20/09 1/10
105 104.5 104 103.5 103 102.5 102 101.5 101 100.5 100

Rebased Price

Rebased Price
19
abc
Excess Turnover traded as a % of the 20 day average in Metropolitan Bank & Trust
0% -50% -100% -150% -200% -250% -300% -350% -400% -450% 2/09 11/09 20/09 1/10
115 110 105 100 95 90

Rebased Price
20
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Appendix
Methodology
The data in this document is based on the assumption that 0.70% of the MSCI World, 2.75% of the MSCI EAFE, 0.50% of the MSCI DM Asia Pacific, 0.15% of the MSCI US, 1.00% of the MSCI Europe, 6.00% of the MSCI EM are held by passive funds. EDT (Equivalent Days Trading) is based on 20 days average turnover. Prices used for calculations are closing prices as of 4 October 2013. Volume and FX rates have been sourced from Reuters, Bloomberg and Thomson Reuters Datastream. All constituent data and weightings have been provided by MSCI
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Disclosure appendix
Analyst Certification
The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Vijay Sumon, Joaquim De Lima and Freddie Siu
Basis for financial analysis
The strategies discussed in this report are based purely on the quantitative valuation screens illustrated and use consensus forecasts. For this reason, they do not necessarily coincide with the ratings of HSBC sector analysts who cover any of the stocks referred to. This report is designed for, and should only be utilised by, institutional investors. HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each research report. In addition, because research reports contain more complete information concerning the analysts' views, investors should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not be used or relied on in isolation as investment advice.
Rating definitions for long-term investment opportunities

Stock ratings
HSBC assigns ratings to its stocks in this sector on the following basis: For each stock we set a required rate of return calculated from the cost of equity for that stocks domestic or, as appropriate, regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the potential return, which equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands are classified as Neutral. Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation of coverage, change of volatility status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review, expected returns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarily triggering a rating change. *A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12 months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However, stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stock's status to change.
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HSBC & Analyst disclosures

Disclosure checklist Company ACCIONA SA ADANI ENTERPRISES ALCATEL LUCENT ALPHA BANK ATTIJARIWAFA BANK BANK OF BARODA BANK OF INDIA BOSIDENG CHANGAN AUTOMOBILES CHINA GALAXY SECURITIES CHINA SHANSHUI CEMENT CHINA SOUTHERN AIRLINES CHONGQING CHANGAN AUTOMOBILE EVONIK FOLLI FOLLIE GROUP FURUKAWA ELECTRIC CO.,LTD GREE HELLENIC PETROLEUM GROUP HYUNDAI SECURITIES CO INDOSAT METHANEX CORP METROPOLITAN BANK & TRUST NMDC LTD NXP SEMICONDUCTOR OLAM INTERNATIONAL ORIENT OVERSEAS INT'L OTE (HELLENIC TLCM) PARKSON PIRAEUS BANK SA PUBLIC POWER CORPORATION RYANAIR SINOPEC ENGINEERING (GROUP) CO STEEL AUTHORITY OF INDIA SYDNEY AIRPORT TMB BANK UNITECH LTD VALEO VERBUND WOCKHARDT
Source: HSBC
Disclosure 2, 5, 6, 7 4 2, 6, 7, 11 1, 5, 6, 7, 11 6, 7 4, 6, 7, 11 1, 5, 6, 7, 11 4 4 1, 5 6 5, 6, 7 4 5, 6, 7, 11 7 7 4 1, 2, 5, 6, 7, 11 6, 7 5, 6, 11 1, 5 6, 7, 11 4 1, 5, 7 1, 2, 5, 6, 7, 11 2, 6, 7 1, 5, 7, 11 7 7, 11 5, 7, 11 4 1, 4, 5 5, 7 6, 7 6, 7 4 4, 5, 6, 7, 11 11 6, 7
1 2 3 4 5 6 7 8 9 10
HSBC has managed or co-managed a public offering of securities for this company within the past 12 months. HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months. At the time of publication of this report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by this company. As of 31 August 2013 HSBC beneficially owned 1% or more of a class of common equity securities of this company. As of 31 August 2013, this company was a client of HSBC or had during the preceding 12 month period been a client of and/or paid compensation to HSBC in respect of investment banking services. As of 31 August 2013, this company was a client of HSBC or had during the preceding 12 month period been a client of and/or paid compensation to HSBC in respect of non-investment banking securities-related services. As of 31 August 2013, this company was a client of HSBC or had during the preceding 12 month period been a client of and/or paid compensation to HSBC in respect of non-securities services. A covering analyst/s has received compensation from this company in the past 12 months. A covering analyst/s or a member of his/her household has a financial interest in the securities of this company, as detailed below. A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of this company, as detailed below.
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11
At the time of publication of this report, HSBC is a non-US Market Maker in securities issued by this company and/or in securities in respect of this company
HSBC and its affiliates will from time to time sell to and buy from customers the securities/instruments (including derivatives) of companies covered in HSBC Research on a principal or agency basis. Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking revenues. For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research.
Additional disclosures
1 2 3 This report is dated as at 08 October 2013. All market data included in this report are dated as at close 04 October 2013, unless otherwise indicated in the report. HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier procedures are in place between the Investment Banking and Research businesses to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.
MSCI Disclaimer
The MSCI sourced information is the exclusive property of Morgan Stanley Capital International Inc. (MSCI). Without prior written permission of MSCI, this information and any other MSCI intellectual property may not be reproduced, redisseminated or used to create any financial products, including any indices. This information is provided on an 'as is' basis. The user assumes the entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing or compiling the information hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of this information. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in, or related to, computing or compiling the information have any liability for any damages of any kind. MSCI, Morgan Stanley Capital International and the MSCI indexes are services marks of MSCI and its affiliates.
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Disclaimer
* Legal entities as at 8 August 2012 Issuer of report UAE HSBC Bank Middle East Limited, Dubai; HK The Hongkong and Shanghai Banking Corporation HSBC Bank plc Limited, Hong Kong; TW HSBC Securities (Taiwan) Corporation Limited; 'CA' HSBC Bank Canada, Toronto; 8 Canada Square HSBC Bank, Paris Branch; HSBC France; DE HSBC Trinkaus & Burkhardt AG, Dsseldorf; 000 HSBC Bank London, E14 5HQ, United Kingdom (RR), Moscow; IN HSBC Securities and Capital Markets (India) Private Limited, Mumbai; JP HSBC Securities (Japan) Limited, Tokyo; EG HSBC Securities Egypt SAE, Cairo; CN HSBC Investment Bank Asia Telephone: +44 20 7991 8888 Limited, Beijing Representative Office; The Hongkong and Shanghai Banking Corporation Limited, Singapore Fax: +44 20 7992 4880 Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch; The Hongkong Website: www.research.hsbc.com and Shanghai Banking Corporation Limited, Seoul Branch; HSBC Securities (South Africa) (Pty) Ltd, Johannesburg; HSBC Bank plc, London, Madrid, Milan, Stockholm, Tel Aviv; US HSBC Securities (USA) Inc, New York; HSBC Yatirim Menkul Degerler AS, Istanbul; HSBC Mxico, SA, Institucin de Banca Mltiple, Grupo Financiero HSBC; HSBC Bank Brasil SA Banco Mltiplo; HSBC Bank Australia Limited; HSBC Bank Argentina SA; HSBC Saudi Arabia Limited; The Hongkong and Shanghai Banking Corporation Limited, New Zealand Branch incorporated in Hong Kong SAR In the UK this document has been issued and approved by HSBC Bank plc (HSBC) for the information of its Clients (as defined in the Rules of FCA) and those of its affiliates only. It is not intended for Retail Clients in the UK. If this research is received by a customer of an affiliate of HSBC, its provision to the recipient is subject to the terms of business in place between the recipient and such affiliate. HSBC Securities (USA) Inc. accepts responsibility for the content of this research report prepared by its non-US foreign affiliate. All U.S. persons receiving and/or accessing this report and wishing to effect transactions in any security discussed herein should do so with HSBC Securities (USA) Inc. in the United States and not with its non-US foreign affiliate, the issuer of this report. In Singapore, this publication is distributed by The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch for the general information of institutional investors or other persons specified in Sections 274 and 304 of the Securities and Futures Act (Chapter 289) (SFA) and accredited investors and other persons in accordance with the conditions specified in Sections 275 and 305 of the SFA. This publication is not a prospectus as defined in the SFA. It may not be further distributed in whole or in part for any purpose. The Hongkong and Shanghai Banking Corporation Limited Singapore Branch is regulated by the Monetary Authority of Singapore. Recipients in Singapore should contact a "Hongkong and Shanghai Banking Corporation Limited, Singapore Branch" representative in respect of any matters arising from, or in connection with this report. In Australia, this publication has been distributed by The Hongkong and Shanghai Banking Corporation Limited (ABN 65 117 925 970, AFSL 301737) for the general information of its wholesale customers (as defined in the Corporations Act 2001). Where distributed to retail customers, this research is distributed by HSBC Bank Australia Limited (AFSL No. 232595). These respective entities make no representations that the products or services mentioned in this document are available to persons in Australia or are necessarily suitable for any particular person or appropriate in accordance with local law. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. This publication has been distributed in Japan by HSBC Securities (Japan) Limited. It may not be further distributed, in whole or in part, for any purpose. 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Global Equity Quantitative Research

Joaquim de Lima Analyst, Head of Equity Quantitative Research +44 20 7991 6836 joaquim.delima@hsbcib.com Vijay Sumon Director, Head of Indexation +44 20 7991 6839 vijay.sumon@hsbcib.com Xiao Cheng Analyst +44 20 7991 1246 Ely Klepfish Analyst +44 20 7991 6719 Freddie Siu Analyst +852 2996 6558 Winnie Ma Analyst +852 2822 4393 ely.klepfish@hsbcib.com
freddiesiu@hsbc.com.hk
xiao.cheng@hsbcib.com
winniewingmeima@hsbc.com.hk

MSCI Equity Quantitative Analysis From HSBC (November 2013)

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8 October 2013

Equity Quantitative Analysis Index Analysis - Global

MSCI November 2013 Index Preview

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Summary of MSCI potential additions, deletions & money flow

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Projected changes for MSCIs November 2013 index review

Developed Markets - Additions & Deletions

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Emerging Markets - Additions & Deletions

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Watchlist for MSCIs November 2013 index review

94 72 70 64 57 84 105 120 47 105 41 61 48 61 -12 -47 -46

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Expected reporting date for Additions & Deletions

Source: MSCI, Bloomberg, company websites, HSBC. Data as of 4 October 2013.

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Trading activity of potential additions/deletions

Trading Activity Charts: Developed Market Additions

106 104 102 100 98 96 94 92 90

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Excess Turnover traded as a % of the 20 day average in Sky Deutschland

Excess Turnover traded as a % of the 20 day average in Kakau.com Inc

125 120 115 110 105 100

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Excess Turnover traded as a % of the 20 day average in Nippon Paint

Excess Turnover traded as a % of the 20 day average in ASC

108 106 104 102 100 98 96 94 92 90

120 115 110 105 100 95 90

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Excess Turnover traded as a % of the 20 day average in NetSuite

120 115 110 105 100 95 90

100% 50% 0% -50% -100% -150% 3/09 12/09 23/09 2/10

115 110 105 100 95 90

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Excess Turnover traded as a % of the 20 day average in AAC NXP Semiconductors

Excess Turnover traded as a % of the 20 day average in Pharmacyclics

104 102 100 98 96 94 92 90

125 120 115 110 105 100 95 90

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Excess Turnover traded as a % of the 20 day average in Valeo

Excess Turnover traded as a % of the 20 day average in Groupon

112 110 108 106 104 102 100

130 125 120 115 110 105 100

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Excess Turnover traded as a % of the 20 day average in Methanex Corp

108 106 104 102 100 98 96 94 92 90

Cumulative excess % (LHS)

Equity Quantitative Analysis Index Analysis - Global 8 October 2013

Trading Activity Charts: Developed Market Deletions

104 102 100 98 96 94 92 90

Cumulative excess % (LHS)

Cumulative excess % (LHS)

Excess Turnover traded as a % of the 20 day average in Hellenic Telecom

Excess Turnover traded as a % of the 20 day average in OPAP