Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<div>S&amp;P Dow Jones Indices will announce changes to 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> as part of the March index review on 12 March and the changes will be effective after the close of trading on 19 March.</div><div>
The data cutoff for the March review was 26 February.
We see <a href="https://www.smartkarma.com/entities/nuix-limited" target="_blank" data-smartkarma-citation="entities:31040:1" rel="noopener">Nuix Limited (NXL AU)</a>, <a href="https://www.smartkarma.com/entities/codan-ltd-australia" target="_blank" data-smartkarma-citation="entities:6189:1" rel="noopener">Codan Ltd (CDA AU)</a> and <a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a> as potential inclusions to the index, while we see <a href="https://www.smartkarma.com/entities/service-stream-ltd" target="_blank" data-smartkarma-citation="entities:18493:1" rel="noopener">Service Stream (SSM AU)</a>, <a href="https://www.smartkarma.com/entities/tassal-group-ltd" target="_blank" data-smartkarma-citation="entities:16234:1" rel="noopener">Tassal (TGR AU)</a> and <a href="https://www.smartkarma.com/entities/bravura-solutions-ltd" target="_blank" data-smartkarma-citation="entities:23648:1" rel="noopener">Bravura Solutions (BVS AU)</a> as potential exclusions from the index.
<a href="https://www.smartkarma.com/entities/champion-iron-ltd" target="_blank" data-smartkarma-citation="entities:19734:1" rel="noopener">Champion Iron (CIA AU)</a> and <a href="https://www.smartkarma.com/entities/de-grey-mining-ltd" target="_blank" data-smartkarma-citation="entities:6192:1" rel="noopener">De Grey Mining (DEG AU)</a> are close adds while <a href="https://www.smartkarma.com/entities/gwa-group-ltd" target="_blank" data-smartkarma-citation="entities:663:1" rel="noopener">Gwa Group Ltd (GWA AU)</a> and <a href="https://www.smartkarma.com/entities/smartgroup-corp-ltd" target="_blank" data-smartkarma-citation="entities:19954:1" rel="noopener">Smartgroup Corp (SIQ AU)</a> are close deletes.
Short interest on the potential inclusions has been decreasing and is currently near the lows while short interest on the potential deletions has been steadily increasing and is at the highs.
Since the last index review in December, <a href="https://www.smartkarma.com/entities/pointsbet-holdings-pty-ltd" target="_blank" data-smartkarma-citation="entities:29102:1" rel="noopener">PointsBet Holdings Pty Ltd (PBH AU)</a> was included in the index replacing <a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a> following its merger of equals with <a href="https://www.smartkarma.com/entities/northern-star-resources-ltd" target="_blank" data-smartkarma-citation="entities:4243:1" rel="noopener">Northern Star Resources (NST AU)</a>.
</div>

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 200 (AS51 INDEX) as part of the March index review on 12 March and the changes will be effective after the close of trading on 19 March.
The data cutoff for the March review was 26 February.
We see Nuix Limited (NXL AU), Codan Ltd (CDA AU) and Pilbara Minerals (PLS AU) as potential inclusions to the index, while we see Service Stream (SSM AU), Tassal (TGR AU) and Bravura Solutions (BVS AU) as potential exclusions from the index.
Champion Iron (CIA AU) and De Grey Mining (DEG AU) are close adds while Gwa Group Ltd (GWA AU) and Smartgroup Corp (SIQ AU) are close deletes.
Short interest on the potential inclusions has been decreasing and is currently near the lows while short interest on the potential deletions has been steadily increasing and is at the highs.
Since the last index review in December, PointsBet Holdings Pty Ltd (PBH AU) was included in the index replacing Saracen Mineral Holdings (SAR AU) following its merger of equals with Northern Star Resources (NST AU).


ASX200 Index Rebalance Preview: Three Potential Changes & Some Close Names

Northern Star Resources / Index Rebalance

Following the merger of equals between <a href="https://www.smartkarma.com/entities/northern-star-resources-ltd" target="_blank" data-smartkarma-citation="entities:4243:1" rel="noopener">Northern Star Resources (NST AU)</a> and <a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a>, Saracen's last trading day will be 3 February.The various index providers will all delete <a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a> at the close of trading on 3 February and increase the number of shares and investability weight for <a href="https://www.smartkarma.com/entities/northern-star-resources-ltd" target="_blank" data-smartkarma-citation="entities:4243:1" rel="noopener">Northern Star Resources (NST AU)</a>. This will result in passive selling on <a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a> and passive buying on <a href="https://www.smartkarma.com/entities/northern-star-resources-ltd" target="_blank" data-smartkarma-citation="entities:4243:1" rel="noopener">Northern Star Resources (NST AU)</a>.<a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a>'s deletion from 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> will create a vacancy that will be filled by <a href="https://www.smartkarma.com/entities/pointsbet-holdings-pty-ltd" target="_blank" data-smartkarma-citation="entities:29102:1" rel="noopener">PointsBet Holdings Pty Ltd (PBH AU)</a>.<a href="https://www.smartkarma.com/entities/pointsbet-holdings-pty-ltd" target="_blank" data-smartkarma-citation="entities:29102:1" rel="noopener">PointsBet Holdings Pty Ltd (PBH AU)</a>'s inclusion in 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> and <a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a>'s deletion will also lead to changes in the names that are expected to be included in/excluded from the index at the March review.

Following the merger of equals between Northern Star Resources (NST AU) and Saracen Mineral Holdings (SAR AU), Saracen's last trading day will be 3 February.The various index providers will all delete Saracen Mineral Holdings (SAR AU) at the close of trading on 3 February and increase the number of shares and investability weight for Northern Star Resources (NST AU). This will result in passive selling on Saracen Mineral Holdings (SAR AU) and passive buying on Northern Star Resources (NST AU).Saracen Mineral Holdings (SAR AU)'s deletion from the S&amp;P/ASX 200 (AS51 INDEX) will create a vacancy that will be filled by PointsBet Holdings Pty Ltd (PBH AU).PointsBet Holdings Pty Ltd (PBH AU)'s inclusion in the S&amp;P/ASX 200 (AS51 INDEX) and Saracen Mineral Holdings (SAR AU)'s deletion will also lead to changes in the names that are expected to be included in/excluded from the index at the March review.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> has covered the pertinent details of Saracen Mineral Holdings’ and Northern Star Resources’ merger-of-(almost)equals <a href="https://www.smartkarma.com/insights/northern-star-saracen-merger-of-equals" target="_blank" rel="noopener">here</a>. We had been advocating a positive stance on Saracen prior to that and still like the name. In fact, we like the combined entity even more and discuss some of the fundamental considerations below.

David Blennerhassett has covered the pertinent details of Saracen Mineral Holdings’ and Northern Star Resources’ merger-of-(almost)equals here. We had been advocating a positive stance on Saracen prior to that and still like the name. In fact, we like the combined entity even more and discuss some of the fundamental considerations below.

Saracen – Trade the Northern Star Deal and Then Stay Long Northern Star

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<a href="https://www.smartkarma.com/entities/northern-star-resources-ltd" target="_blank" data-smartkarma-citation="entities:4243:1" rel="noopener">Northern Star Resources (NST AU)</a> and <a href="https://www.smartkarma.com/entities/saracen-mineral-holdings-limited" target="_blank" data-smartkarma-citation="entities:2415:1" rel="noopener">Saracen Mineral Holdings (SAR AU)</a> have <a href="https://www.asx.com.au/asxpdf/20201006/pdf/44ncx7hy38vkm3.pdf" target="_blank" rel="noopener">agree</a>d to a merger-of-equals via a Scheme of Arrangement under which NST will acquire 100% of SAR.
SAR shareholders will receive 0.3763 new NST shares for each SAR share. SAR will also pay a fully franked dividend of A$0.038/share, conditional on the Scheme becoming effective.
Subsequent to a successful Scheme, NST shareholders will hold 64% of the combined entity (with roughly a A$16bn market cap), and SAR shareholders 36%. 
Pre-tax synergies are estimated to be worth A$1.5bn-A$2bn over the next 10 years. 
Standard Scheme conditions apply: SAR shareholders approving the Scheme (75%); independent expert concluding the Scheme is in the best interest of SAR shareholders; and no MACs, for either NST and SAR.
The tentative implementation date is February 2021.
As always, more below the fold.

Northern Star Resources (NST AU) and Saracen Mineral Holdings (SAR AU) have agreed to a merger-of-equals via a Scheme of Arrangement under which NST will acquire 100% of SAR.
SAR shareholders will receive 0.3763 new NST shares for each SAR share. SAR will also pay a fully franked dividend of A$0.038/share, conditional on the Scheme becoming effective.
Subsequent to a successful Scheme, NST shareholders will hold 64% of the combined entity (with roughly a A$16bn market cap), and SAR shareholders 36%. 
Pre-tax synergies are estimated to be worth A$1.5bn-A$2bn over the next 10 years. 
Standard Scheme conditions apply: SAR shareholders approving the Scheme (75%); independent expert concluding the Scheme is in the best interest of SAR shareholders; and no MACs, for either NST and SAR.
The tentative implementation date is February 2021.
As always, more below the fold. 

Back in October last year, <a href="https://www.smartkarma.com/entities/venus-metals-corp-ltd" target="_blank" data-smartkarma-citation="entities:10142:1" rel="noopener">Venus Metals Corp (VMC AU)</a> <a href="https://www.asx.com.au/asxpdf/20191010/pdf/449clpcz1ltjrf.pdf" target="_blank" rel="noopener">commenced proceedings</a> against fellow-gold producer <a href="https://www.smartkarma.com/entities/spectrum-metals-ltd" target="_blank" data-smartkarma-citation="entities:2237:1" rel="noopener">Spectrum Metals (SPX AU)</a>, alleging managing director Paul Adams and former director Davide Bosio exploited information relating to Venus confidentially discussing its intention to acquire the high-grade Penny West gold project in Western Australia. Spectrum acquired Penny West in <a href="https://www.spectrummetals.com.au/projects/penny-west-gold-project/" target="_blank" rel="noopener">December 2018</a>.
Spectrum <a href="https://www.asx.com.au/asxpdf/20191112/pdf/44bhjfcr6j5692.pdf" target="_blank" rel="noopener">countered</a> that they don't accept Penny West was ever mentioned in conversations with Venus.
Today, Spectrum <a href="https://www.asx.com.au/asxpdf/20200210/pdf/44dyq4hd7fnrh6.pdf" target="_blank" rel="noopener">announced</a> it has paid Venus $850,000 settling the claim. Venus has now released Spectrum from “all claims and demands” in connection with the subject matter in the litigation. Spectrum maintains that "VMC's claims against Spectrum ... had no merit whatsoever but considers the settlement of the litigation at this time is in the best interest of Spectrum's shareholders". 
Shortly after the settlement announcement, <a href="https://www.smartkarma.com/entities/ramelius-resources-ltd" target="_blank" data-smartkarma-citation="entities:5968:1" rel="noopener">Ramelius Resources (RMS AU)</a> made a recommended takeover offer for Spectrum, by way of cash and scrip, at A$0.15/share, a 52% premium to last close and a 70% premium to Spectrum’s 30-day VWAP.
Spectrum shareholders will receive one Ramelius share for every 10 Spectrum shares held plus cash of $0.17 for each Spectrum share, in a roughly 89%/11% scrip/cash split.
The Offer has the unanimous backing of Spectrum's board and all Spectrum directors will tender their shares into the Offer. Ramelius also holds 4.9% of shares out. The Offer is conditional on 50.1% acceptances of shareholders.
This looks like a done deal.

Back in October last year, Venus Metals Corp (VMC AU) commenced proceedings against fellow-gold producer Spectrum Metals (SPX AU), alleging managing director Paul Adams and former director Davide Bosio exploited information relating to Venus confidentially discussing its intention to acquire the high-grade Penny West gold project in Western Australia. Spectrum acquired Penny West in December 2018.
Spectrum countered that they don't accept Penny West was ever mentioned in conversations with Venus.
Today, Spectrum announced it has paid Venus $850,000 settling the claim. Venus has now released Spectrum from “all claims and demands” in connection with the subject matter in the litigation. Spectrum maintains that "VMC's claims against Spectrum ... had no merit whatsoever but considers the settlement of the litigation at this time is in the best interest of Spectrum's shareholders". 
Shortly after the settlement announcement, Ramelius Resources (RMS AU) made a recommended takeover offer for Spectrum, by way of cash and scrip, at A$0.15/share, a 52% premium to last close and a 70% premium to Spectrum’s 30-day VWAP.
Spectrum shareholders will receive one Ramelius share for every 10 Spectrum shares held plus cash of $0.17 for each Spectrum share, in a roughly 89%/11% scrip/cash split.
The Offer has the unanimous backing of Spectrum's board and all Spectrum directors will tender their shares into the Offer. Ramelius also holds 4.9% of shares out. The Offer is conditional on 50.1% acceptances of shareholders.
This looks like a done deal.

Spectrum Metals: Inside Ramelius' Wheelhouse

Australia

Northern Star Resources Ltd manufactures precious metals. The Company provides mining and production of gold. Northern Star Resources serves customers in Australia and North America.

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Northern Star Resources (NST AU)

ASX200 Index Rebalance Preview: Three Potential Changes & Some Close Names

We see three potential changes to the ASX200 in the March review while there are another two close adds/deletes. High short interest on the...

Brian Freitas

Saracen/Northern Star Merger: Index Flow

Saracen Minerals will be deleted from all indices at the close on 3 February following its merger with Northern Star. There could be a lot of flow...

Brian Freitas

Saracen – Trade the Northern Star Deal and Then Stay Long Northern Star

David Blennerhassett has covered the pertinent details of Saracen Mineral Holdings’ and Northern Star Resources’ merger-of-(almost)equals here. We...

Mio Kato

Northern Star/Saracen: Merger Of Equals

Northern Star Resources (NST AU) and $sara

David Blennerhassett

Spectrum Metals: Inside Ramelius' Wheelhouse

Back in October last year, Venus Metals Corp (VMC AU) commenced proceedings against fellow-gold producer Spectrum Metals (SPX AU), alleging...

David Blennerhassett

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