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>Changes to the S&amp;P/ASX indices, <a href="https://www.smartkarma.com/entities/vaneck-rare-earth-strategic-me" target="_blank" data-smartkarma-citation="entities:32320:1" rel="noopener">REMX US</a>, <a href="https://www.smartkarma.com/entities/vaneck-vectors-junior-gold-miners-etf" target="_blank" data-smartkarma-citation="entities:32845:1" rel="noopener">GDXJ US</a>, <a href="https://www.smartkarma.com/entities/vaneck-vectors-australian-property-etf" target="_blank" data-smartkarma-citation="entities:30998:1" rel="noopener">MVA AU</a>, <a href="https://www.smartkarma.com/entities/vaneck-vectors-australian-equal-weight-etf" target="_blank" data-smartkarma-citation="entities:24297:1" rel="noopener">MVW AU</a> and other indices will be implemented at the close on Friday.</li>
<li>There is over +/-A$5m to trade or +/-3x ADV to trade on nearly 100 stocks and will be a huge volume day for the stocks at the close.</li>
<li>Use the volume on the buy and sell side to increase/reduce positions especially on the deletes where there will be liquidity to cover shorts on stocks that have dropped significantly.</li>
</ul>


Changes to the S&amp;P/ASX indices, REMX US, GDXJ US, MVA AU, MVW AU and other indices will be implemented at the close on Friday.
There is over +/-A$5m to trade or +/-3x ADV to trade on nearly 100 stocks and will be a huge volume day for the stocks at the close.
Use the volume on the buy and sell side to increase/reduce positions especially on the deletes where there will be liquidity to cover shorts on stocks that have dropped significantly.


Australia: S&P/ASX, REMX, GDXJ, MVA, MVW & Other Index Flows on Friday

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/treasury-group-ltd" target="_blank" data-smartkarma-citation="entities:14625:1" rel="noopener">Pacific Current (PAC AU)</a> has disclosed a non-binding indicative proposal from <a href="https://www.smartkarma.com/entities/regal-partners-limited" target="_blank" data-smartkarma-citation="entities:29119:1" rel="noopener">Regal Partners (RPL AU)</a> at A$7.50 cash per share and 2.2 <a href="https://www.smartkarma.com/entities/gqg-partners-inc" target="_blank" data-smartkarma-citation="entities:34569:1" rel="noopener">GQG Partners (GQG AU)</a> shares per PAC share.</li>
<li>The implied offer price of A$11.12 per share based on GQG's last close price is a juicy 42.6% premium to the undisturbed price of A$7.80 per share (26 July).</li>
<li>The offer is attractive compared to historical ranges and peer multiples. Expect the Board to grant due diligence access to facilitate a binding proposal.</li>
</ul>



Pacific Current (PAC AU) has disclosed a non-binding indicative proposal from Regal Partners (RPL AU) at A$7.50 cash per share and 2.2 GQG Partners (GQG AU) shares per PAC share.
The implied offer price of A$11.12 per share based on GQG's last close price is a juicy 42.6% premium to the undisturbed price of A$7.80 per share (26 July).
The offer is attractive compared to historical ranges and peer multiples. Expect the Board to grant due diligence access to facilitate a binding proposal.


Pacific Current Group (PAC AU): Regal Partners’ Attractive Indicative Offer

<ul>
<li>There are unlikely to be any inclusions to the index in June while there are three stocks that are close to the deletion threshold.</li>
<li>Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of over 4% and a one-way trade of A$78m.</li>
<li>Short interest on <a href="https://www.smartkarma.com/entities/amp-ltd" target="_blank" data-smartkarma-citation="entities:678:1" rel="noopener">AMP Ltd (AMP AU)</a> has been increasing as the stock has dropped and a further decline in the stock could lead to deletion.</li>
</ul>


There are unlikely to be any inclusions to the index in June while there are three stocks that are close to the deletion threshold.
Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of over 4% and a one-way trade of A$78m.
Short interest on AMP Ltd (AMP AU) has been increasing as the stock has dropped and a further decline in the stock could lead to deletion.


MVIS Australia Equal Weight Index Rebalance: Potential Deletes & Capping Changes

<ul>
<li>The IE considers <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a>'s cash and scrip offer for <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> to be fair and reasonable as it is within its valuation range of A$4.87-5.71. </li>
<li>Perpetual shareholders are getting the short end of the stick. While possible, <a href="https://www.smartkarma.com/entities/regal-partners-limited" target="_blank" data-smartkarma-citation="entities:29119:1" rel="noopener">Regal Partners (RPL AU)</a>/BPEA EQT riding to the rescue of Perpetual shareholders is low. </li>
<li>Pendal shareholders, who are the net beneficiaries, will be supportive of the offer. At the last close prices, the gross spread to the offer is 11.3%.</li>
</ul>


The IE considers Perpetual Ltd (PPT AU)'s cash and scrip offer for Pendal Group (PDL AU) to be fair and reasonable as it is within its valuation range of A$4.87-5.71. 
Perpetual shareholders are getting the short end of the stick. While possible, Regal Partners (RPL AU)/BPEA EQT riding to the rescue of Perpetual shareholders is low. 
Pendal shareholders, who are the net beneficiaries, will be supportive of the offer. At the last close prices, the gross spread to the offer is 11.3%.


Pendal (PDL AU)/Perpetual (PPT AU) Scheme Meeting on 23 December

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> entered a revised SID with <a href="https://www.smartkarma.com/entities/perpetual-ltd" target="_blank" data-smartkarma-citation="entities:599:1" rel="noopener">Perpetual Ltd (PPT AU)</a>. The revised offer consists of scrip (1 Perpetual share for every 7 Pendal share) and cash (A$1.650).</li>
<li>Separately, the court found that Pendal could seek a range of remedies in addition to the A$23 million break fee should Perpetual terminate the scheme.</li>
<li>While <a href="https://www.smartkarma.com/entities/regal-partners-limited" target="_blank" data-smartkarma-citation="entities:29119:1" rel="noopener">Regal Partners (RPL AU)</a>/BPEA EQT could yet derail the scheme by lobbing another bid for Perpetual, the unprecedented court ruling makes it more challenging and costly. </li>
</ul>



Pendal Group (PDL AU) entered a revised SID with Perpetual Ltd (PPT AU). The revised offer consists of scrip (1 Perpetual share for every 7 Pendal share) and cash (A$1.650).
Separately, the court found that Pendal could seek a range of remedies in addition to the A$23 million break fee should Perpetual terminate the scheme.
While Regal Partners (RPL AU)/BPEA EQT could yet derail the scheme by lobbing another bid for Perpetual, the unprecedented court ruling makes it more challenging and costly. 


Pendal (PDL AU)/Perpetual (PPT AU) Deal Gets a Lifeline from the Court

Australia

Challenger Limited is an investment management firm  The Company offers annuities and other retirement income products as well as manages assets for domestic and international clients.

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Challenger Ltd (CGF AU)

Australia: S&P/ASX, REMX, GDXJ, MVA, MVW & Other Index Flows on Friday

There are a bunch of rebalances that will be implemented in Australia on Friday. Nearly 100 stocks will have over A$5m or more than 3x ADV to...

Brian Freitas

Pacific Current Group (PAC AU): Regal Partners’ Attractive Indicative Offer

The offer is attractive compared to historical ranges and peer multiples. Expect the Board to grant due diligence access to facilitate a binding...

Arun George

MVIS Australia Equal Weight Index Rebalance: Potential Deletes & Capping Changes

There could be 3 deletions for the MVIS Australia Equal Weight Index in June. Capping changes could result in one-way turnover of 4.1% and a one...

Brian Freitas

Pendal (PDL AU)/Perpetual (PPT AU) Scheme Meeting on 23 December

While possible, the probability of Regal/BPEA EQT derailing the deal continues to decline. At the last close prices, the gross spread to the offer...

Arun George

Pendal (PDL AU)/Perpetual (PPT AU) Deal Gets a Lifeline from the Court

While Regal/BPEA EQT could yet derail the scheme, the unprecedented court ruling makes it more challenging and costly. At the last close, the gross...

Arun George

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