Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The changes for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI2 INDEX</a>, <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ150 Index</a>, <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI300 Index</a>, <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50 INDEX</a> and a bunch of other onshore China indices were implemented last week.</li>
<li>The coming week has a lot of rebalance implementations on Friday with the S&amp;P/ASX family and the MVIS family, among others.</li>
<li>AUM for the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) has continued to increase with big inflows in the last week.</li>
</ul>


The changes for the KOSPI2 INDEX, KOSDAQ150 Index, CSI300 Index, STAR50 INDEX and a bunch of other onshore China indices were implemented last week.
The coming week has a lot of rebalance implementations on Friday with the S&amp;P/ASX family and the MVIS family, among others.
AUM for the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) has continued to increase with big inflows in the last week.


Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/infratil-ltd" target="_blank" data-smartkarma-citation="entities:596:1" rel="noopener">Infratil Ltd (IFT NZ)</a> is acquiring <a href="https://www.smartkarma.com/entities/brookfield-asset-management-lt" target="_blank" data-smartkarma-citation="entities:23741:1" rel="noopener">Brookfield Asset Management Lt (BAM US)</a>'s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.</li>
<li>There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.</li>
<li>There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.</li>
</ul>



Infratil Ltd (IFT NZ) is acquiring Brookfield Asset Management Lt (BAM US)'s 49.95% stake in One NZ for NZ$1.8bn. This will be partly funded through a NZ$850m placement.
There will be a NZ$750m underwritten placement at NZ$9.2/share (an 8.9% discount to the last close) and a retail offering of NZ$100m.
There will be passive buying from index trackers post the completion of the placement and the settlement of the shares and that will remove some of the overhang.


Infratil (IFT NZ): NZ$850m Placement & Index Implications

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Network International Holdings / Event-Driven

<ul>
<li>Middle East and Africa leading payments processing firm Network International is in play. On 21 April, Brookfield submitted a 400p competing proposal, vs. CVC/Francisco's earlier 387p. Network was trading cheaply.</li>
<li>Exposure to underserved MEA markets should support sustainable longer-term growth. My fair value estimate is 431p. The shares trade 0.75% below Brookfield's proposal, the market awaits a counteroffer from CVC/Francisco.</li>
<li>The fact that Brookfield has raised just 3.4% above CVC/Francisco seems to signal that Brookfield will be cautious in case of an "auction". <strong>Long.</strong>
</li>
</ul>


Middle East and Africa leading payments processing firm Network International is in play. On 21 April, Brookfield submitted a 400p competing proposal, vs. CVC/Francisco's earlier 387p. Network was trading cheaply.
Exposure to underserved MEA markets should support sustainable longer-term growth. My fair value estimate is 431p. The shares trade 0.75% below Brookfield's proposal, the market awaits a counteroffer from CVC/Francisco.
The fact that Brookfield has raised just 3.4% above CVC/Francisco seems to signal that Brookfield will be cautious in case of an "auction". Long.



<ul>
<li>American Tower stated during FY 2022 results presentation that debt reduction is its main priority. The probability of a takeover bid for Cellnex by American Tower and Brookfield is reduced.</li>
<li>Cellnex on 14.7x EV/NTM EBITDAe is trading cheaply vs. AMT on 19.5x and below private equity deals at 25-30x. I believe that Cellnex's fundamentals are solid, and would be long.</li>
<li>Cellnex is the undisputed European leader in telecommunications towers with both high cash flow visibility (growth forecasted at 18% for the period 2021-2025e) and trading at 7.3% 22e FCF yield.</li>
</ul>


American Tower stated during FY 2022 results presentation that debt reduction is its main priority. The probability of a takeover bid for Cellnex by American Tower and Brookfield is reduced.
Cellnex on 14.7x EV/NTM EBITDAe is trading cheaply vs. AMT on 19.5x and below private equity deals at 25-30x. I believe that Cellnex's fundamentals are solid, and would be long.
Cellnex is the undisputed European leader in telecommunications towers with both high cash flow visibility (growth forecasted at 18% for the period 2021-2025e) and trading at 7.3% 22e FCF yield.


<ul>
<li>A Brookfield/MidOcean consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a> at A$9/share in cash.</li>
<li>The offer values <a href="https://www.smartkarma.com/entities/origin-energy-ltd" target="_blank" data-smartkarma-citation="entities:797:1" rel="noopener">Origin Energy (ORG AU)</a>'s equity at A$15.5bn and is a 54.9% premium to the last close. The premium is over 50% even using longer term VWAPs.</li>
<li>There will be changes to the S&amp;P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.</li>
</ul>


A Brookfield/MidOcean consortium has made a conditional, non-binding, indicative proposal to acquire 100% of the shares in Origin Energy (ORG AU) at A$9/share in cash.
The offer values Origin Energy (ORG AU)'s equity at A$15.5bn and is a 54.9% premium to the last close. The premium is over 50% even using longer term VWAPs.
There will be changes to the S&amp;P/ASX family of indices to maintain the number of index members. We will know more once an indicative timeline is published.


Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications

Canada

Brookfield Asset Management Ltd. operates as an investment management firm. The Company focuses on property development, renewable energy, infrastructure, insurance, and private equity. Brookfield Asset Management serves customers worldwide.

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Brookfield Asset Management Lt (BAM US)

Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Infratil (IFT NZ): NZ$850m Placement & Index Implications

Infratil is acquiring Brookfield's 49.95% stake in One NZ for NZ$1.8bn. The underwritten placement of NZ$750m is at NZ$9.2/shr, an 8.9% discount to...

Brian Freitas

Competing Proposals

On 21 April, Network International confirmed that it had received a highly preliminary, non-binding proposal regarding a possible cash offer of...

Jesus Rodriguez Aguilar

AMT/Cellnex: Lower Chances of a Bid

American Tower stated during FY 2022 results presentation that debt reduction is its main priority. The probability of a takeover bid for Cellnex...

Jesus Rodriguez Aguilar

Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications

A Brookfield/MidOcean consortium has made an NBIO for Origin at A$9/share, a 54.9% premium to last. There is a high probability of this going...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Index Rebalance & ETF Flow Recap: HSCI, GDXJ, KRX New Deal, AMFI, Amman Mineral, Infratil

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Infratil (IFT NZ): NZ$850m Placement & Index Implications

Infratil is acquiring Brookfield's 49.95% stake in One NZ for NZ$1.8bn. The underwritten placement of NZ$750m is at NZ$9.2/shr, an 8.9% discount to...

Brian Freitas

Competing Proposals

On 21 April, Network International confirmed that it had received a highly preliminary, non-binding proposal regarding a possible cash offer of...

Jesus Rodriguez Aguilar

AMT/​Cellnex: Lower Chances of a Bid

American Tower stated during FY 2022 results presentation that debt reduction is its main priority. The probability of a takeover bid for Cellnex...

Jesus Rodriguez Aguilar

Origin Energy (ORG AU): Indicative Proposal from Brookfield & MidOcean; Index Implications

A Brookfield/MidOcean consortium has made an NBIO for Origin at A$9/share, a 54.9% premium to last. There is a high probability of this going...

Brian Freitas

AMT/Cellnex: Lower Chances of a Bid