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>The review period for the September rebalance of the S&amp;P/ASX family of indices ends on Friday. There will be a lot of changes across the family.</li>
<li>Hang Seng Indices will announce the changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a> and the HSCI after market close on Friday.</li>
<li>There were HUGE inflows to onshore China focused ETFs during the week with <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>, <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shang" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI 500 Index</a> and <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index</a> ETFs taking in the largest amounts.</li>
</ul>


The review period for the September rebalance of the S&amp;P/ASX family of indices ends on Friday. There will be a lot of changes across the family.
Hang Seng Indices will announce the changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI after market close on Friday.
There were HUGE inflows to onshore China focused ETFs during the week with CSI 300 Index, CSI 500 Index and SSE50 Index ETFs taking in the largest amounts.


Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning - India, Japan, Korea

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nisshin-seifun-group-inc" target="_blank" data-smartkarma-citation="entities:640:1" rel="noopener">Nisshin Seifun Group</a>, <a href="https://www.smartkarma.com/entities/oji-holdings-corp" target="_blank" data-smartkarma-citation="entities:11348:1" rel="noopener">Oji Holdings</a>, <a href="https://www.smartkarma.com/entities/nippon-shinyaku-co-ltd" target="_blank" data-smartkarma-citation="entities:6634:1" rel="noopener">Nippon Shinyaku</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent Inc</a>, <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" data-smartkarma-citation="entities:12580:1" rel="noopener">NGK Insulators</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group</a> and <a href="https://www.smartkarma.com/entities/sharp-corp" target="_blank" data-smartkarma-citation="entities:391:1" rel="noopener">Sharp Corp</a> have all underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> over the last 3-4 months.</li>
<li>The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.</li>
<li>Short interest has started to increase and there could be more pre-positioning yet to come over the next few weeks.</li>
</ul>



Nisshin Seifun Group, Oji Holdings, Nippon Shinyaku, CyberAgent Inc, NGK Insulators, Lixil Group and Sharp Corp have all underperformed the Nikkei 225 (NKY INDEX) over the last 3-4 months.
The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
Short interest has started to increase and there could be more pre-positioning yet to come over the next few weeks.


Japan - Increase in Shorts on Some Interesting Stocks

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.

<ul>
<li>The <a href="https://www.afr.com/street-talk/malteries-soufflet-signs-binding-deal-to-buy-united-malt-at-5-a-share-20230702-p5dl6n" target="_blank" rel="noopener">AFR reports</a> that <a href="https://www.smartkarma.com/entities/united-malt-group-ltd" target="_blank" data-smartkarma-citation="entities:29116:1" rel="noopener">United Malt Group Ltd (UMG AU)</a> has received a binding offer from Malteries Soufflet at A$5.00 per share, a 13.6% premium to the last close price.</li>
<li>The high spread reflected the risk of a no-deal or price cut due to the weak 1HFY23 results and lack of updates since the end of the 10-week due diligence.</li>
<li>The offer is conditional on shareholders and FIRB approval. Shareholders will be supportive and breathe a sigh of relief at receiving a binding offer with unchanged terms. </li>
</ul>


The AFR reports that United Malt Group Ltd (UMG AU) has received a binding offer from Malteries Soufflet at A$5.00 per share, a 13.6% premium to the last close price.
The high spread reflected the risk of a no-deal or price cut due to the weak 1HFY23 results and lack of updates since the end of the 10-week due diligence.
The offer is conditional on shareholders and FIRB approval. Shareholders will be supportive and breathe a sigh of relief at receiving a binding offer with unchanged terms. 


United Malt (UMG AU): Malteries Soufflet’s Binding Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/united-malt-group-ltd" target="_blank" data-smartkarma-citation="entities:29116:1" rel="noopener">United Malt Group Ltd (UMG AU)</a> has offered exclusive due diligence to Malteries Soufflet for its non-binding indicative proposal of A$5.00 per share, a 45.3% premium to the undisturbed price.</li>
<li>The offer follows on from three previous undisclosed proposals. The offer is subject to several conditions such as due diligence, Board recommendation and FIRB approval.</li>
<li>The presence of several substantial shareholders necessitates an attractive premium. The offer is attractive in comparison to historical share prices and peer multiples. </li>
</ul>



United Malt Group Ltd (UMG AU) has offered exclusive due diligence to Malteries Soufflet for its non-binding indicative proposal of A$5.00 per share, a 45.3% premium to the undisturbed price.
The offer follows on from three previous undisclosed proposals. The offer is subject to several conditions such as due diligence, Board recommendation and FIRB approval.
The presence of several substantial shareholders necessitates an attractive premium. The offer is attractive in comparison to historical share prices and peer multiples. 


United Malt (UMG AU): Malteries Soufflet’s Indicative A$5.00 Offer

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-nippon-printing-co-ltd" target="_blank" data-smartkarma-citation="entities:19388:1" rel="noopener">Dai Nippon Printing (7912 JP)</a> is a range trade. The juice is in the speed of the Corporate Buyback and how excited people get.</li>
<li>With the renewal of the gaming concession in the bag and <a href="https://www.smartkarma.com/entities/melco-crown-entertainme-adr" target="_blank" data-smartkarma-citation="entities:810:1" rel="noopener">Melco Resorts (MLCO US)</a> up 128% in the past six months, <a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco (200 HK)</a> has extracted ~HK$2.5bn from MLCO.</li>
<li>
<a href="https://www.smartkarma.com/entities/hosokawa-micron-corp" target="_blank" data-smartkarma-citation="entities:6433:1" rel="noopener">Hosokawa Micron (6277 JP)</a>'s current PER of 9.9x ignores that net cash and securities holdings is about half of market cap. This is a cheap stock.  </li>
</ul>



Dai Nippon Printing (7912 JP) is a range trade. The juice is in the speed of the Corporate Buyback and how excited people get.
With the renewal of the gaming concession in the bag and Melco Resorts (MLCO US) up 128% in the past six months, Melco (200 HK) has extracted ~HK$2.5bn from MLCO.

Hosokawa Micron (6277 JP)'s current PER of 9.9x ignores that net cash and securities holdings is about half of market cap. This is a cheap stock.  


Last Week in Event SPACE: Dai Nippon Printing, Melco, Hosokawa Micron,Tencent/Meituan, Ihara Science

Japan

Nisshin Seifun Group Inc. produces and sells flour, fodder, processed foods, and medicines. The Company offers specialized pasta sauce, frozen foods, and gourmet soup. Nisshin Seifun Group also markets pet foods.

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Nisshin Seifun Group (2002 JP)

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There are a bunch of stocks in Japan that have underperformed the NKY over the last few months and that could lead to a liquidity event due to the...

Brian Freitas

United Malt (UMG AU): Malteries Soufflet’s Binding Offer

AFR reports that Malteries Soufflet has lobbed a binding offer at A$5.00. Shareholders will be supportive and sigh relief at receiving a binding...

Arun George

United Malt (UMG AU): Malteries Soufflet’s Indicative A$5.00 Offer

The offer is attractive in comparison to historical share prices and peer multiples. Due diligence lasts for 10 weeks. At the last close, the gross...

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Last Week in Event SPACE: Dai Nippon Printing, Melco, Hosokawa Micron,Tencent/Meituan, Ihara Science

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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