Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of ASX Stocks as of Jul 19th (reported today) which has an aggregated short interest worth USD20.2bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Fortescue, Bluescope Steel, Brambles.</li>
</ul>


We analyzed the changes in short interest of ASX Stocks as of Jul 19th (reported today) which has an aggregated short interest worth USD20.2bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Fortescue, Bluescope Steel, Brambles.


ASX Short Interest Weekly (Jul 19th): Fortescue, Bluescope Steel, Brambles

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On the 8th April, <a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure Minerals (AZS AU)</a> shareholders overwhelmingly <a href="https://announcements.asx.com.au/asxpdf/20240408/pdf/06297mn340tk8x.pdf" target="_blank" rel="noopener">approved</a> the <a href="https://www.smartkarma.com/entities/sociedad-quimica-y-minera-de-chile-sa" target="_blank" data-smartkarma-citation="entities:27977:1" rel="noopener">Sociedad Quimica y Minera (SQM US)</a>/Gina Rhinehart's Hancock transaction. Shares promptly closed down 7% on regulatory approval fears.</li>
<li>Those fears are unwarranted. China’s Tianqi Lithium would indirectly own just ~11% in Azure post-deal.  China has recently lifted anti-dumping tariffs on a range of Aussie products. FIRB won’t block.</li>
<li>An expected approval may have spurred Gina to buy more shares in <a href="https://www.smartkarma.com/entities/lynas-corp-ltd" target="_blank" data-smartkarma-citation="entities:20374:1" rel="noopener">Lynas (LYC AU)</a>. Why buy now if FIRB dings Azure; that outcome would push the whole sector lower.</li>
</ul>


On the 8th April, Azure Minerals (AZS AU) shareholders overwhelmingly approved the Sociedad Quimica y Minera (SQM US)/Gina Rhinehart's Hancock transaction. Shares promptly closed down 7% on regulatory approval fears.
Those fears are unwarranted. China’s Tianqi Lithium would indirectly own just ~11% in Azure post-deal.  China has recently lifted anti-dumping tariffs on a range of Aussie products. FIRB won’t block.
An expected approval may have spurred Gina to buy more shares in Lynas (LYC AU). Why buy now if FIRB dings Azure; that outcome would push the whole sector lower.


Azure Min's (AZS AU)'s "Boost" As Gina Ups Stake in Lynas

<ul>
<li>Back on the 19th Dec, <a href="https://www.smartkarma.com/entities/sociedad-quimica-y-minera-de-c" target="_blank" data-smartkarma-citation="entities:24555:1" rel="noopener">Sociedad Quimica y Minera (SQM/B CI)</a>/Hancock offered <a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure Minerals (AZS AU)</a> shareholders A$3.70/share by way of a Scheme, a ~52% premium to the undisturbed price.</li>
<li>Creasy Group (12.64%) and Delphi Group (10.15%) gave irrevocables. <a href="https://www.smartkarma.com/entities/mineral-resources-ltd" target="_blank" data-smartkarma-citation="entities:15103:1" rel="noopener">Mineral Resources (MIN AU)</a>'s 14.5% stake was unclear; but they exited on the 21 Feb. "Arbitrageurs should arb. Corporations should Corp".</li>
<li>The Transaction Booklet is now out with a Scheme Meeting on the 8th April. The IE says fair. Expected implementation on the 18 April.</li>
</ul>


Back on the 19th Dec, Sociedad Quimica y Minera (SQM/B CI)/Hancock offered Azure Minerals (AZS AU) shareholders A$3.70/share by way of a Scheme, a ~52% premium to the undisturbed price.
Creasy Group (12.64%) and Delphi Group (10.15%) gave irrevocables. Mineral Resources (MIN AU)'s 14.5% stake was unclear; but they exited on the 21 Feb. "Arbitrageurs should arb. Corporations should Corp".
The Transaction Booklet is now out with a Scheme Meeting on the 8th April. The IE says fair. Expected implementation on the 18 April.


Azure Min (AZS AU): Trading Wide Ahead Of 8th April Vote

<ul>
<li>For the month of March 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn.</li>
<li>The average premium for the new transactions announced (or first discussed) in March was ~55%. The average premium YTD is ~39%.</li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of March 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$4bn.
The average premium for the new transactions announced (or first discussed) in March was ~55%. The average premium YTD is ~39%.
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Mar 2024: Chilled & Frozen, TDCX, MMA Offshore, JSR, Roland DG, SciClone

Singapore Telecommunications / Event-Driven

<ul>
<li>Even if you were an activist, or a trader with an activism tilt, be long <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> vs. <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>.</li>
<li>Reportedly, <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. </li>
<li>
<a href="https://www.smartkarma.com/entities/alumina-ltd" target="_blank" data-smartkarma-citation="entities:939:1" rel="noopener">Alumina Ltd (AWC AU)</a> and <a href="https://www.smartkarma.com/entities/alcoa-corp" target="_blank" data-smartkarma-citation="entities:6510:1" rel="noopener">Alcoa (AA US)</a> enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?</li>
</ul>


Even if you were an activist, or a trader with an activism tilt, be long Keisei Electric Railway Co (9009 JP) vs. Oriental Land (4661 JP).
Reportedly, Singtel (ST SP) is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. 

Alumina Ltd (AWC AU) and Alcoa (AA US) enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?


Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

Australia

Aussie Broadband Pty. Ltd. provides communication services. The Company offers internet, mobile data, and other telephony services. Aussie Broadband serves customers in Australia.

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Aussie Broadband (ABB AU)

ASX Short Interest Weekly (Jul 19th): Fortescue, Bluescope Steel, Brambles

We analyzed ASX short interest report for the past week and highlight short interest changes in Fortescue, Bluescope Steel, Brambles.

Ke Yan, CFA, FRM

Azure Min's (AZS AU)'s "Boost" As Gina Ups Stake in Lynas

Trading wide at a gross spread of 7.5%. This is a BUY. Is the market really thinking FIRB would block a Rinehart/Chilean JV to prevent a Chinese...

David Blennerhassett

Azure Min (AZS AU): Trading Wide Ahead Of 8th April Vote

On the day shareholders approved the SQM/Hancock transaction, Azure’s shares closed down 7%. The FIRB delay was flagged last week. China’s Tianqi...

David Blennerhassett

(Mostly) Asia M&A, Mar 2024: Chilled & Frozen, TDCX, MMA Offshore, JSR, Roland DG, SciClone

For the month of March, 8 new deals were discussed on Smartkarma with an overall deal size of ~US$4bn. The average premium for the new deals...

David Blennerhassett

Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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