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>Privatisations could lead to two/three <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> constituents being delisted in October/November and that means ad hoc inclusions to maintain the number of constituents at 200.</li>
<li>Then there could be one change for the S&amp;P/ASX 20 Index and two changes for the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the regular rebalance in December.</li>
<li>The impact on the potential adds/deletes for the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> is high at between 7.5-23 days of ADV to trade from passive trackers.</li>
</ul>


Privatisations could lead to two/three S&amp;P/ASX 200 (AS51 INDEX) constituents being delisted in October/November and that means ad hoc inclusions to maintain the number of constituents at 200.
Then there could be one change for the S&amp;P/ASX 20 Index and two changes for the S&amp;P/ASX 200 (AS51 INDEX) at the regular rebalance in December.
The impact on the potential adds/deletes for the S&amp;P/ASX 200 (AS51 INDEX) is high at between 7.5-23 days of ADV to trade from passive trackers.


S&P/​​​​​​​​​ASX Index Rebalance Preview: Changes from Now to December

<ul>
<li>We forecast 22 changes across the ASX50 Index, ASX100 Index, <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> and ASX300 Index at the September rebalance.</li>
<li>Some of the changes are high probability while others are close to cutoffs. The impact of passive trading will be pretty large on a lot of stocks.</li>
<li>Short interest on the potential deletes indicates some pre-positioning but there should still be a fair bit more to do.</li>
</ul>


We forecast 22 changes across the ASX50 Index, ASX100 Index, S&amp;P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
Some of the changes are high probability while others are close to cutoffs. The impact of passive trading will be pretty large on a lot of stocks.
Short interest on the potential deletes indicates some pre-positioning but there should still be a fair bit more to do.


S&P/​​​​​​​​ASX Index Rebalance Preview: Potential Changes in September

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cromwell-property-group" target="_blank" data-smartkarma-citation="entities:2780:1" rel="noopener">Cromwell Property (CMW AU)</a> is a deletion from the MVIS Australia A-REITS Index at the close on 16 December.</li>
<li>Passive trackers will need to sell 13.9m shares (5 days ADV) of <a href="https://www.smartkarma.com/entities/cromwell-property-group" target="_blank" data-smartkarma-citation="entities:2780:1" rel="noopener">Cromwell Property (CMW AU)</a> and there appears to be little to no pre-positioning on the stock.</li>
<li>There are a few other stocks that will have over 0.5 days of ADV to buy from passive trackers.</li>
</ul>



Cromwell Property (CMW AU) is a deletion from the MVIS Australia A-REITS Index at the close on 16 December.
Passive trackers will need to sell 13.9m shares (5 days ADV) of Cromwell Property (CMW AU) and there appears to be little to no pre-positioning on the stock.
There are a few other stocks that will have over 0.5 days of ADV to buy from passive trackers.


MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion

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/irongate-group" target="_blank" data-smartkarma-citation="entities:30897:1" rel="noopener">Irongate Group (IAP AU)</a> has entered into an SIA with Charter Hall and PGGM. The offer of A$1.90 and maximum FY22 distribution of 4.67 cents implies a total of A$1.9467.   </li>
<li>The scheme booklet will be dispatched in May with an implementation date in late July. The offer price is attractive in terms of multiples and security prices. </li>
<li>At the last close and for the July-end implementation date, the gross and annualised spread of the total offer is 1.4% and 4.2%, respectively.   </li>
</ul>



Irongate Group (IAP AU) has entered into an SIA with Charter Hall and PGGM. The offer of A$1.90 and maximum FY22 distribution of 4.67 cents implies a total of A$1.9467.   
The scheme booklet will be dispatched in May with an implementation date in late July. The offer price is attractive in terms of multiples and security prices. 
At the last close and for the July-end implementation date, the gross and annualised spread of the total offer is 1.4% and 4.2%, respectively.   


Irongate Enters into an SIA with Charter Hall and PGGM

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
After ARA Asset Management <a href="https://www.asx.com.au/asxpdf/20180308/pdf/43s8dgxs8plthf.pdf" target="_blank" rel="noopener">acquired</a> a 19.5% stake in <a href="https://www.smartkarma.com/entities/cromwell-property-group" target="_blank" data-smartkarma-citation="entities:2780:1" rel="noopener">Cromwell Property (CMW AU)</a> on the 7 March 2018, the relationship between the two became increasingly acrimonious. This was discussed in <a href="https://skr.ma/x55u7" target="_blank" rel="noopener">Cromwell/ARA: A Festering Relationship</a>.
ARA finally <a href="https://www.asx.com.au/asxpdf/20200623/pdf/44jw1gy2d3dqg4.pdf" target="_blank" rel="noopener">announced</a> a proportional off-market takeover bid to acquire 29% of shares out in CMW, not already owned, which subsequently turned <a href="https://www.asx.com.au/asxpdf/20200824/pdf/44lsvxks2gjc60.pdf" target="_blank" rel="noopener">unconditional</a>, and ARA proceeded to appoint its own people to the board - appointments that had previously been blocked by Cromwell.
On the 4 August, <a href="https://www.smartkarma.com/entities/esr-cayman-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Cayman (1821 HK)</a> <a href="https://links.sgx.com/FileOpen/202108_01%20Major%20and%20Connected%20Transaction%20in%20Relation%20to%20the%20Proposed%20Acquisition%20of%20ARA%20Asset%20Managament%20Limited.ashx?App=Announcement&amp;FileID=677405" target="_blank" rel="noopener">announced</a> it was acquiring unlisted ARA Asset Management for US$5.2bn, the completion of which will result in the world's third-largest real estate management company with total assets under management of ~US$129bn. (<a href="https://skr.ma/fJECF" target="_blank" rel="noopener">ESR Cayman (1821 HK) Takes Out ARA Asset Management</a>)
On the 14 October, <a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934:1" rel="noopener">ESR-REIT (EREIT SP)</a> and <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937:1" rel="noopener">ARA LOGOS (ALLT SP)</a> (ALOG) <a href="https://links.sgx.com/FileOpen/ALOG%20-%20Joint%20Announcement%20-%20Proposed%20Merger%20with%20ESR-REIT%20by%20way%20of%20a%20Trust%20Scheme%20of%20Arrangement.ashx?App=Announcement&amp;FileID=686935" target="_blank" rel="noopener">proposed</a> a S$1.4bn merger, where ESR-Reit will acquire all of ALOG's units in a cash &amp; scrip transaction by way of a Scheme - see <a href="https://skr.ma/wqrQU" target="_blank" rel="noopener">ARA Logos (ALLT SP) To Merge with ESR-REIT (EREIT SP)</a>. ALOG is managed by ARA LOGOS Logistics Trust Management Limited, a wholly-owned subsidiary of LOGOS. ARA Asset Management Limited is a majority shareholder of LOGOS, which operates as ARA’s logistics real estate platform. ESR Funds Management Limited, the manager of ESR-Reit, is owned by ESR Cayman Limited (67.3%).
On Irongate
Back on the 28 January of this year, <a href="https://www.smartkarma.com/entities/360-capital-reit" target="_blank" data-smartkarma-citation="entities:29046:1" rel="noopener">360 Capital REIT (TOT AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02335484-2A1277317?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">acquired</a> a 9.18% stake in <a href="https://www.smartkarma.com/entities/irongate-group" target="_blank" data-smartkarma-citation="entities:30897:1" rel="noopener">Irongate Group (IAP AU)</a> for $78.6mn, or ~A$1.40/security.  Together with <a href="https://www.smartkarma.com/entities/360-capital-group-ltd" target="_blank" data-smartkarma-citation="entities:11865:1" rel="noopener">360 Capital (TGP AU)</a>, that stake was bumped to 15.08% on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02361516-2A1291600?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">8 April</a>, 16.26% on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02380390-2A1301075?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">28 May</a>, 17.34% on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384090-2A1303268?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">9 June</a>, &amp; 19.11% on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02398322-2A1311372?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">20 July</a>. This was split 12.84% &amp; 6.27% between TOT &amp; TGP. 
IAP also placed out 34mn shares at A$1.47/security on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02384942-2A1303629?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">16 June</a>. 
An AGM notice was issued on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02401181-2A1312628?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">30 July</a>, in which it detailed 360 Capital's nomination of Tony Pitt and James Storey to the board. The board recommended shareholders vote against these two board nominations. 360 Capital attempted to withdraw its nominations on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02413122-2A1318981?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">26 August</a>, but IAP said it was too late. At the AGM on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02415982-2A1320409?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">31 August</a>, those two appointments were voted down. 
The New News
IAP <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02436879-2A1331471?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> this morning it has it received an unsolicited, highly conditional, and indicative non-binding proposal from 360 Capital REIT and <a href="https://www.smartkarma.com/entities/360-capital-group-ltd" target="_blank" data-smartkarma-citation="entities:11865:1" rel="noopener">360 Capital (TGP AU)</a>, the REIT's largest shareholder, by way of a Scheme.
The consideration price is A$1.6047/security, in cash, or a headline price of A$1.65 less the anticipated distribution of A$0.0453/security for the half-year ended 30 September 2021.
360 Capital currently holds 128.97mn securities or 19.99%. 
The indicative proposal is also conditional on "one or more of ESR Real Estate (Australia) Pty Ltd or its affiliate’s managed funds (together, ESR Australia) entering into an agreement with 360 Capital to purchase an undisclosed number of selected assets from IAP’s portfolio on terms yet to be agreed".
Hardly a clean approach. This is leaning towards a Hostile Offer. 
</div>
<div>
More below the fold.
</div>


After ARA Asset Management acquired a 19.5% stake in Cromwell Property (CMW AU) on the 7 March 2018, the relationship between the two became increasingly acrimonious. This was discussed in Cromwell/ARA: A Festering Relationship.
ARA finally announced a proportional off-market takeover bid to acquire 29% of shares out in CMW, not already owned, which subsequently turned unconditional, and ARA proceeded to appoint its own people to the board - appointments that had previously been blocked by Cromwell.
On the 4 August, ESR Cayman (1821 HK) announced it was acquiring unlisted ARA Asset Management for US$5.2bn, the completion of which will result in the world's third-largest real estate management company with total assets under management of ~US$129bn. (ESR Cayman (1821 HK) Takes Out ARA Asset Management)
On the 14 October, ESR-REIT (EREIT SP) and ARA LOGOS (ALLT SP) (ALOG) proposed a S$1.4bn merger, where ESR-Reit will acquire all of ALOG's units in a cash &amp; scrip transaction by way of a Scheme - see ARA Logos (ALLT SP) To Merge with ESR-REIT (EREIT SP). ALOG is managed by ARA LOGOS Logistics Trust Management Limited, a wholly-owned subsidiary of LOGOS. ARA Asset Management Limited is a majority shareholder of LOGOS, which operates as ARA’s logistics real estate platform. ESR Funds Management Limited, the manager of ESR-Reit, is owned by ESR Cayman Limited (67.3%).
On Irongate
Back on the 28 January of this year, 360 Capital REIT (TOT AU) acquired a 9.18% stake in Irongate Group (IAP AU) for $78.6mn, or ~A$1.40/security.  Together with 360 Capital (TGP AU), that stake was bumped to 15.08% on the 8 April, 16.26% on the 28 May, 17.34% on the 9 June, &amp; 19.11% on the 20 July. This was split 12.84% &amp; 6.27% between TOT &amp; TGP. 
IAP also placed out 34mn shares at A$1.47/security on the 16 June. 
An AGM notice was issued on the 30 July, in which it detailed 360 Capital's nomination of Tony Pitt and James Storey to the board. The board recommended shareholders vote against these two board nominations. 360 Capital attempted to withdraw its nominations on the 26 August, but IAP said it was too late. At the AGM on the 31 August, those two appointments were voted down. 
The New News
IAP announced this morning it has it received an unsolicited, highly conditional, and indicative non-binding proposal from 360 Capital REIT and 360 Capital (TGP AU), the REIT's largest shareholder, by way of a Scheme.
The consideration price is A$1.6047/security, in cash, or a headline price of A$1.65 less the anticipated distribution of A$0.0453/security for the half-year ended 30 September 2021.
360 Capital currently holds 128.97mn securities or 19.99%. 
The indicative proposal is also conditional on "one or more of ESR Real Estate (Australia) Pty Ltd or its affiliate’s managed funds (together, ESR Australia) entering into an agreement with 360 Capital to purchase an undisclosed number of selected assets from IAP’s portfolio on terms yet to be agreed".
Hardly a clean approach. This is leaning towards a Hostile Offer. 


More below the fold.


Irongate (IAP AU): 360 Capital's Tilt Reminiscent Of ARA/Cromwell Stoush

Australia

Cromwell Property Group is a property and funds manager. The Company, through its subsidiary, provides funds management, property transactions, property and facilities management, finance, compliance, debenture issues, and debt management.

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Cromwell Property (CMW AU)

S&P/ASX Index Rebalance Preview: Changes from Now to December

There could be 1 change for the ASX20 in Dec. There could be 2 ad hoc inclusions for the ASX200 and then 2 changes at the Dec rebalance. Impact on...

Brian Freitas

S&P/ASX Index Rebalance Preview: Potential Changes in September

There could be around 22 changes for the SnP/ASX family of indices in September. The impact of passive trading will be high on a lot of stocks and...

Brian Freitas

MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion

Cromwell Property is a deletion from the MVIS Australia A-REIT Index. Passive trackers need to sell 13.9m shares (5.1x ADV) of CMW but short...

Brian Freitas

Irongate Enters into an SIA with Charter Hall and PGGM

Irongate has entered into an SIA with Charter Hall/PGGM. The offer of A$1.90 and the max dist of 4.67 cents implies a total of A$1.9467. For the...

Arun George

Irongate (IAP AU): 360 Capital's Tilt Reminiscent Of ARA/Cromwell Stoush

$1.65/security appears a fair price - IAP stops short of saying otherwise. But this is not a clean Offer, nor is it friendly. Despite the non...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

S&P/​​​​​​​​​ASX Index Rebalance Preview: Changes from Now to December

There could be 1 change for the ASX20 in Dec. There could be 2 ad hoc inclusions for the ASX200 and then 2 changes at the Dec rebalance. Impact on...

Brian Freitas

S&P/​​​​​​​​ASX Index Rebalance Preview: Potential Changes in September

There could be around 22 changes for the SnP/ASX family of indices in September. The impact of passive trading will be high on a lot of stocks and...

Brian Freitas

MVIS Australia A-REITs Index Rebalance: Cromwell Property (CMW) Is a Deletion

Cromwell Property is a deletion from the MVIS Australia A-REIT Index. Passive trackers need to sell 13.9m shares (5.1x ADV) of CMW but short...

Brian Freitas

Irongate Enters into an SIA with Charter Hall and PGGM

Irongate has entered into an SIA with Charter Hall/PGGM. The offer of A$1.90 and the max dist of 4.67 cents implies a total of A$1.9467. For the...

Arun George

Irongate (IAP AU): 360 Capital's Tilt Reminiscent Of ARA/Cromwell Stoush

$1.65/security appears a fair price - IAP stops short of saying otherwise. But this is not a clean Offer, nor is it friendly. Despite the non...

David Blennerhassett

S&P/ASX Index Rebalance Preview: Changes from Now to December

S&P/ASX Index Rebalance Preview: Potential Changes in September