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

Budweiser Brewing  APAC  / Index Rebalance

<ul>
<li>The review period for a global index commenced last week and will run through this week as well.</li>
<li>The announcement of the changes for the LQ45 Index should be announced in the coming week and will be implemented at the close on 31 January.</li>
<li>Huge inflows to <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a> trackers during the week while there was a big outflow from <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong (2800 HK)</a>. </li>
</ul>


The review period for a global index commenced last week and will run through this week as well.
The announcement of the changes for the LQ45 Index should be announced in the coming week and will be implemented at the close on 31 January.
Huge inflows to CSI 300 Index trackers during the week while there was a big outflow from Tracker Fund of Hong Kong (2800 HK). 


Index Rebalance & ETF Flow Recap: ASX, KS200, KQ150, HSIII, STTF, L&F, Costa Group, Japan, Bud APAC

<ul>
<li>With over 80% of the review period complete, there could be 26 adds/deletes across the S&amp;P/ASX family of indices in March.</li>
<li>The largest flow will be on <a href="https://www.smartkarma.com/entities/newmont-corp" target="_blank" data-smartkarma-citation="entities:40416:1" rel="noopener">Newmont (NEM AU)</a> due to the potential S&amp;P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.</li>
<li>There will be 1.2-38 days of ADV to buy in the inclusions while the impact on the deletions will range between 1-21 days of ADV.</li>
</ul>


With over 80% of the review period complete, there could be 26 adds/deletes across the S&amp;P/ASX family of indices in March.
The largest flow will be on Newmont (NEM AU) due to the potential S&amp;P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
There will be 1.2-38 days of ADV to buy in the inclusions while the impact on the deletions will range between 1-21 days of ADV.


S&P/​​​​​​​​​ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont

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/silk-laser-australia-ltd" target="_blank" data-smartkarma-citation="entities:33498:1" rel="noopener">Silk Laser Australia (SLA AU)</a>'s binding offer from <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> is at A$3.35 per share which is in line with <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a>’s non-binding proposal.</li>
<li>While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a higher offer. </li>
<li>If EC Healthcare deployed the HK$1.0 billion loan for the acquisition, it would imply a price of A$3.60 per share, 7.6% above Wesfarmers' offer.  </li>
</ul>



Silk Laser Australia (SLA AU)'s binding offer from Wesfarmers Ltd (WES AU) is at A$3.35 per share which is in line with EC Healthcare (2138 HK)’s non-binding proposal.
While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a higher offer. 
If EC Healthcare deployed the HK$1.0 billion loan for the acquisition, it would imply a price of A$3.60 per share, 7.6% above Wesfarmers' offer.  


Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare

<ul>
<li>
<a href="https://www.smartkarma.com/entities/silk-laser-australia-ltd" target="_blank" data-smartkarma-citation="entities:33498:1" rel="noopener">Silk Laser Australia (SLA AU)</a> disclosed a non-binding indicative offer from <a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> at A$3.35 per share, a 6.3% premium to <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a>’s offer of A$3.15.</li>
<li>The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May. </li>
<li>Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.</li>
</ul>



Silk Laser Australia (SLA AU) disclosed a non-binding indicative offer from EC Healthcare (2138 HK) at A$3.35 per share, a 6.3% premium to Wesfarmers Ltd (WES AU)’s offer of A$3.15.
The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May. 
Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.


Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

<ul>
<li>The <a href="https://www.smartkarma.com/entities/virtus-health-ltd" target="_blank" data-smartkarma-citation="entities:14776:1" rel="noopener">Virtus Health (VRT AU)</a> Board changed their recommendation that the BGH takeover offer rather than the CapVest offer is in the best interest of shareholders.</li>
<li>BGH and CapVest represent 22.38% and 1.13% of outstanding shares, respectively. Press reports suggest that it is unlikely that CapVest will increase its offer (scheme: A$8.15, takeover: A$8.10).</li>
<li>The BGH takeover offer of A$8.15 per share remains open until 31 May. At the last close price, the gross spread to the BGH takeover offer is 0.9%.</li>
</ul>


The Virtus Health (VRT AU) Board changed their recommendation that the BGH takeover offer rather than the CapVest offer is in the best interest of shareholders.
BGH and CapVest represent 22.38% and 1.13% of outstanding shares, respectively. Press reports suggest that it is unlikely that CapVest will increase its offer (scheme: A$8.15, takeover: A$8.10).
The BGH takeover offer of A$8.15 per share remains open until 31 May. At the last close price, the gross spread to the BGH takeover offer is 0.9%.


Australia

Monash IVF Group Ltd. is a fertility research and treatment center. The Company researches and develops reproduction supportive medications.

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Monash IVF (MVF AU)

Index Rebalance & ETF Flow Recap: ASX, KS200, KQ150, HSIII, STTF, L&F, Costa Group, Japan, Bud APAC

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

Brian Freitas

S&P/ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont

CGC's privatisation could lead to an adhoc change in Feb. Then there could be 26 changes at the March rebalance. Newmont could be deleted from the...

Brian Freitas

Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare

While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a...

Arun George

Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a...

Arun George

BGH Capital in Pole Position at Virtus

The Board has recommended the BGH takeover offer of A$8.15, which closes on 31 May. At the last close price, the gross spread to the BGH takeover...

Arun George

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Index Rebalance & ETF Flow Recap: ASX, KS200, KQ150, HSIII, STTF, L&F, Costa Group, Japan, Bud APAC

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

Brian Freitas

S&P/​​​​​​​​​ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont

CGC's privatisation could lead to an adhoc change in Feb. Then there could be 26 changes at the March rebalance. Newmont could be deleted from the...

Brian Freitas

Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare

While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a...

Arun George

Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle

Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a...

Arun George

BGH Capital in Pole Position at Virtus

The Board has recommended the BGH takeover offer of A$8.15, which closes on 31 May. At the last close price, the gross spread to the BGH takeover...

Arun George

S&P/ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont