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

Event-Driven

<ul>
<li>From December 2022, the minimum free float requirement to be a part of the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> increases from 15% to 20%.</li>
<li>This could result in three deletions from the index which will result in three stocks being added to the index. Passive trackers selling the deletes will push the stocks lower.</li>
<li>The three current constituents could remain in the index if they sell stock to increase the free float. That would in turn put downward pressure on the stocks.</li>
</ul>


From December 2022, the minimum free float requirement to be a part of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) increases from 15% to 20%.
This could result in three deletions from the index which will result in three stocks being added to the index. Passive trackers selling the deletes will push the stocks lower.
The three current constituents could remain in the index if they sell stock to increase the free float. That would in turn put downward pressure on the stocks.


PCOMP Index Rebalance Preview Feb 23: Updated Methodology to Drive Changes

Semirara Mining And Power Corp / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/semirara-mining-and-power-corporation" target="_blank" data-smartkarma-citation="entities:18925:1" rel="noopener">Semirara Mining And Power Corp (SCC PM)</a> will replace <a href="https://www.smartkarma.com/entities/security-bank-corp" target="_blank" data-smartkarma-citation="entities:3929:1" rel="noopener">Security Bank (SECB PM)</a> in the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> at the close of trading on 5 August.</li>
<li>Passive trackers will need to buy 5.5 days of ADV on <a href="https://www.smartkarma.com/entities/semirara-mining-and-power-corporation" target="_blank" data-smartkarma-citation="entities:18925:1" rel="noopener">Semirara Mining And Power Corp (SCC PM)</a> and sell nearly 30 days of ADV on <a href="https://www.smartkarma.com/entities/security-bank-corp" target="_blank" data-smartkarma-citation="entities:3929:1" rel="noopener">Security Bank (SECB PM)</a>.</li>
<li>Historically, the adds have outperformed the deletes and there has been a pop/drop in the adds/deletes the day after announcement. Square off existing pre-positions by mid week.</li>
</ul>



Semirara Mining And Power Corp (SCC PM) will replace Security Bank (SECB PM) in the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the close of trading on 5 August.
Passive trackers will need to buy 5.5 days of ADV on Semirara Mining And Power Corp (SCC PM) and sell nearly 30 days of ADV on Security Bank (SECB PM).
Historically, the adds have outperformed the deletes and there has been a pop/drop in the adds/deletes the day after announcement. Square off existing pre-positions by mid week.


PCOMP Index Rebalance: Semirara Mining (SCC) Replaces Security Bank (SECB)

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.

Metro Pacific Investments Co / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/metro-pacific-investments-co" target="_blank" data-smartkarma-citation="entities:1054:1" rel="noopener">Metro Pacific Investments Co (MPI PM)</a>'s voluntary delisting tender offer from a consortium at PHP5.20 (net price of PHP5.1677 per share) will run from 9 August to 7 September.</li>
<li>The delisting proposal was approved on 8 August. Excluding the consortium’s votes, only 37.4% of minorities (representing 13.73% of outstanding shares) voted YES for the delisting proposal.</li>
<li>A key risk is satisfying the 95% delisting threshold, which would require a minorities acceptance rate of 86.4%. The risk/reward is unattractive at the current spread of 4.4% (net 3.8%). </li>
</ul>



Metro Pacific Investments Co (MPI PM)'s voluntary delisting tender offer from a consortium at PHP5.20 (net price of PHP5.1677 per share) will run from 9 August to 7 September.
The delisting proposal was approved on 8 August. Excluding the consortium’s votes, only 37.4% of minorities (representing 13.73% of outstanding shares) voted YES for the delisting proposal.
A key risk is satisfying the 95% delisting threshold, which would require a minorities acceptance rate of 86.4%. The risk/reward is unattractive at the current spread of 4.4% (net 3.8%). 


Metro Pacific Investments (MPI PM): Risk/Reward as Uncertainty Hangs on the Delisting Threshold

<ul>
<li>
<a href="https://www.smartkarma.com/entities/metro-pacific-investments-co" target="_blank" data-smartkarma-citation="entities:1054:1" rel="noopener">Metro Pacific Investments Co (MPI PM)</a> disclosed a revised voluntary delisting tender offer from a consortium at PHP5.20 per share (PHP5.24 per share including a potential 1H23 dividend).</li>
<li>The revised offer remains conditional on meeting the threshold for voluntary delisting (95% of outstanding shares) or obtaining an exemptive relief from the PSE.  The IFA valued MPI at PHP3.37-5.10.  </li>
<li>The offer was revised to increase the chance of meeting the high delisting threshold, which requires an 86% acceptance rate. At the last close, the gross spread is 8.6%. </li>
</ul>



Metro Pacific Investments Co (MPI PM) disclosed a revised voluntary delisting tender offer from a consortium at PHP5.20 per share (PHP5.24 per share including a potential 1H23 dividend).
The revised offer remains conditional on meeting the threshold for voluntary delisting (95% of outstanding shares) or obtaining an exemptive relief from the PSE.  The IFA valued MPI at PHP3.37-5.10.  
The offer was revised to increase the chance of meeting the high delisting threshold, which requires an 86% acceptance rate. At the last close, the gross spread is 8.6%. 


Metro Pacific Investments (MPI PM): Revised and Final Offer at PHP5.20

UnionBank of the Philippines / Event-Driven

<ul>
<li>As forecast, <a href="https://www.smartkarma.com/entities/dmci-holdings-inc" target="_blank" data-smartkarma-citation="entities:8026:1" rel="noopener">DMCI Holdings (DMC)</a> and <a href="https://www.smartkarma.com/entities/unionbank-of-the-philippines" target="_blank" data-smartkarma-citation="entities:23192:1" rel="noopener">UnionBank of the Philippines (UBP)</a> will replace <a href="https://www.smartkarma.com/entities/megaworld-corp" target="_blank" data-smartkarma-citation="entities:8746:1" rel="noopener">Megaworld Corp (MEG)</a> and <a href="https://www.smartkarma.com/entities/robinsons-land-corp" target="_blank" data-smartkarma-citation="entities:8831:1" rel="noopener">Robinsons Land Co (RLC)</a> at the close on 3 February.</li>
<li>The PSE is using float higher than 20% for <a href="https://www.smartkarma.com/entities/san-miguel-corporation" target="_blank" data-smartkarma-citation="entities:22728:1" rel="noopener">San Miguel (SMC PM)</a>, <a href="https://www.smartkarma.com/entities/emperador-inc" target="_blank" data-smartkarma-citation="entities:3485:1" rel="noopener">Emperador (EMP PM)</a> and <a href="https://www.smartkarma.com/entities/ac-energy-corp" target="_blank" data-smartkarma-citation="entities:23188:1" rel="noopener">AC Energy Corp (ACEN)</a> - there will be passive buying on the stocks.</li>
<li>Historically, the inclusions have outperformed the exclusions and there has been a big move in the stocks the day after announcement. Square off existing pre-positions by mid-week.</li>
</ul>


As forecast, DMCI Holdings (DMC) and UnionBank of the Philippines (UBP) will replace Megaworld Corp (MEG) and Robinsons Land Co (RLC) at the close on 3 February.
The PSE is using float higher than 20% for San Miguel (SMC PM), Emperador (EMP PM) and AC Energy Corp (ACEN) - there will be passive buying on the stocks.
Historically, the inclusions have outperformed the exclusions and there has been a big move in the stocks the day after announcement. Square off existing pre-positions by mid-week.


PCOMP Index Rebalance: DMC, UBP to Replace MEG, RLC

Philippines

DMCI Holdings Inc., through its subsidiaries, provides general construction and infrastructure construction. DMCI also develops real estate and mines coal. In addition, DMCI manufactures cement and other products.

DMCI Holdings (DMC PM)

PCOMP Index Rebalance Preview Feb 23: Updated Methodology to Drive Changes

A methodology change that increases the minimum free float from 15% to 20% could result in 3 changes to the index. The three constituents will need...

Brian Freitas

PCOMP Index Rebalance: Semirara Mining (SCC) Replaces Security Bank (SECB)

Semirara Mining will replace Security Bank in the PCOMP at the close on 5 August. There are 5 trading days to implementation and passive fund...

Brian Freitas

Metro Pacific Investments (MPI PM): Risk/Reward as Uncertainty Hangs on the Delisting Threshold

Government Service Insurance System (GSIS) has increased its shareholding to 11.98% and will not accept the delisting proposal, i.e., the 95% or a...

Arun George

Metro Pacific Investments (MPI PM): Revised and Final Offer at PHP5.20

The offer was revised to increase the chance of meeting the high delisting threshold (86% minority acceptance rate). A reasonable offer increases...

Arun George

PCOMP Index Rebalance: DMC, UBP to Replace MEG, RLC

As forecast, DMC & UBP will replace MEG & RLC in the PCOMP at the close on 3 February. There are only 5 days to implementation and there is a large...

Brian Freitas