Event-Driven

Constituent changes to the S&P 500 INDEX and weight changes as a result of the market consultation proposals being adopted will result in a round-trip trade of US$31.5bn.
The largest one-way turnover is expected in the Consumer Staples Select Sector SPDR Fund, Technology Select Sector SPDR, Materials Select Sector SPDR and Communication Services Select Sector SPDR Fund.
The inflows to Apple (AAPL US), Palantir Technologies (PLTR US) and Dell Technologies (DELL US) will add to the buying from the S&P 500 INDEX (SPX INDEX) trackers.

Guotai Junan (2611 HK) & Haitong (6837 HK) Merger Creates China’s Major Player

Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK), two of China’s leading state-backed brokerages, intend to merger via a share swap, subject to regulatory approvals.
Via a Merger by Absorption. GJS will issue new A and H shares to Haitong shareholders. The ratio hasn’t been firmed. Upon completion, the MergeCo creates China’s largest securities entity.
A merger is welcome – possibly mandated – amid challenging capital markets and a tightening regulatory backdrop.

7&I Rejects ACT’s Bid As Too Low, Not Worth Discussing, ACT Whines, 7&I Taps The Sign

Late last week, the Nikkei reported Seven & I Holdings (3382 JP) would send a letter to Couche-Tard saying they reviewed ACT’s Proposal and deemed it “inadequate.” Indeed it was.
7&i then published the Board’s letter, saying 7&i remained open to discussions but ACT’s Offer “grossly undervalued” 7&i’s intrinsic value and lacked in other areas. ACT responded with a “letter.”
But ACT’s “letter” was a press release aimed not at 7&i but the public. 7&i released a terse response today. ACT is the suitor. It needs to act like it.

Midea Group: Quick Overview of HK Offer, Post-Issue Valuations. Attractive.

By Devi Subhakesan

Midea Group Co Ltd A (000333 CH) is offering 492.1 million shares in Hong Kong, priced between HKD52 and HKD54.8 per share.The valuation looks attractive.
Nearly one-third of the Hong Kong share offering has already been subscribed by cornerstone investors.
Midea’s strong market share in home appliances, consistent revenue growth, margin expansion, and appealing return ratios make a compelling investment case.

Hotel Property (HPI AU) Rejects Charter Hall’s A$3.65/Share Offer

Pub play Hotel Property Investments (HPI AU) has announced – and summarily rejected – a A$3.65/share cash Offer from Charter Hall Retail Reit (CQR AU).
Terms are a 14.8% premium to the undisturbed share price on March 28; following which a 14.8% “strategic interest” (@ A$3.35/share) was acquired by CQR and Charter Hall (CHC AU).
The Offer is subject to a 50.1% acceptance hurdle. The Offer should be open for acceptances around the 23 September.

SENSEX Index Rebalance Preview: Trent Could Replace Bajaj Finserv; BUT F&O Adds Could Change That

As things stand, Trent Ltd (TRENT IN) could replace Bajaj Finserv (BJFIN IN) in the S&P BSE SENSEX Index (SENSEX INDEX) at the close on 20 December.
Addition to the F&O list could see Zomato (ZOMATO IN) added to the index instead. That could then result in two changes to the S&P BSE SENSEX Index in December.
Trent Ltd (TRENT IN) is also an inclusion to the NIFTY Index (NIFTY INDEX) later this month and the pool of shares available for active investors is getting smaller.

Shanghai Henlius Biotech (2696.HK) Privatization Update – Some New Information Worth the Attention

Fosun Pharma will make every effort to promote the success of this privatization. The management has disclosed the afterwards arrangements- Henlius and Fosun Pharma will further expand/integrate in the future.
Henlius’ revenue is expected to reach RMB6 billion in 2024 and RMB8-9 billion in next 2-3 years. Even if the privatization fails, things are still manageable due to strong fundamentals.
Fosun Pharma will not stop its capital operation against Henlius, but the plans of re-listing could be based on a new entity. So, the Cash Alternative is a better choice.

Midea Real Estate (3990 HK): Now Trading Ex-In-Specie

Back on the 23 June 2024, property developer Midea Real Estate Holding (3990 HK) announced the in-specie distribution of its core ops, either in unlisted scrip, or HK$5.90/share in cash.
The in-specie involved distributing 97.8% of Midea’s assets (involved in property development and sales); accounting for 95% of revenue and ~91% of profit. All figures as at FY23.
Midea went ex yesterday, closing down just HK$4.87/share. Midea, ex-in-specie, is currently trading at a trailing 0.6x P/B, and 2.3x PER. Pricing looks full.

EQD | The NIFTY Potential Upside From Here

By Nico Rosti

The NIFTY Index closed down last week, but if the rally restarts from here it would be good to analyse the pattern trend, to estimate how high it could go.
The current WEEKLY pattern favors uptrend that last for 2 or 3 weeks up in a row, on average, and up to 5 consecutive weeks up in a row.
Some additional reasoning is necessary to highlight the strongest resistance levels, we will do it in the insight.

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Sep 09

Daily Brief Event-Driven: S&P500/400/600 Index Rebalance: Dell and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

S&P500/400/600 Index Rebalance: Dell, Palantir Make It (Finally!); Apple Upweight
S&P/ASX Index Rebalance (Sep 2024): Two Big Surprises; Positioning Is Mixed
KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company
Midea Group (300 HK): IPO Open Now; Upcoming Index Flows
Haitong Securities (6837 HK): Evaluating the Potential Merger with GTJA (2611 HK)
Merger Arb Mondays (09 Sep) – Shinko, Fuji Soft, Pasco, GA Pack, CPMC, Latin Res, Capitol, PSC, Rex
Quiddity TDIV/50/100 Sep 24 Rebal: 100% Hit Rate; Perfectly Positioned for Our Trade
HK Connect SOUTHBOUND Flows (To 6 Sep 2024); Weak Data
Taiwan Top 50 ETF Rebalance: Rallying PharmaEssentia To Replace Sliding Nanya Tech
A/H Premium Tracker (To 6 Sep 2024): SB Buying of H Underperformance, AH Premia Up

S&P500/400/600 Index Rebalance: Dell, Palantir Make It (Finally!); Apple Upweight

There are 3 changes for the S&P 500 INDEX, 8 changes for the S&P Midcap400 Index and 15 changes for the S&P SmallCap600 Index at the September rebalance.
Dell Technologies (DELL US) and Palantir Technologies (PLTR US) were finally added to the S&P 500 INDEX (SPX INDEX) and there is huge size to trade in the stocks.
There will also be big buying in Apple (AAPL US) following a float increase driven by Berkshire Hathaway Inc Cl A (BRK/A US) selling last quarter.

S&P/ASX Index Rebalance (Sep 2024): Two Big Surprises; Positioning Is Mixed

There are 2 changes for the S&P/ASX100 Index, 3 changes for the S&P/ASX 200 (AS51 INDEX) and 16 adds/ 8 deletes for the S&P/ASX300 Index.
The two big surprises are the inclusion of Guzman Y Gomez (GYG AU) and Yancoal Australia (YAL AU) in the S&P/ASX 200 (AS51 INDEX) and S&P/ASX300 Index.
The adds to the indices have outperformed the deletes over the last few months and there could be profit-taking in the next few days.

KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company

Hankook & Company is unexpectedly entering Autos, the only large-cap inclusion, likely getting a significant weight and facing a massive flow impact.
Like BBIG, this single-day flow event driven by one or two ETFs means smaller front-running impact, but names like Hankook & Company could see early positioning due to massive flows.
I’ll position in big impact names two days before the ETF rebalance trading. I’ll then go long on a basket of those with over 0.5x ADTV at Wednesday’s close.

Midea Group (300 HK): IPO Open Now; Upcoming Index Flows

The Midea Group (300 HK) IPO is being offered at a price range of HK$52-54.8/share, a discount of 20.9%-25% to Midea Group. That will raise US$3.28bn-US$3.46bn for the company.
Midea Group (300 HK) will not get Fast Entry to the HSCI but will be added to Southbound Stock Connect on 14 October once the price stabilisation period has ended.
Midea Group (300 HK) should get Fast Entry to one global index and that could lead to inclusion in the iShares China Large-Cap (FXI) (FXI US) too.

Haitong Securities (6837 HK): Evaluating the Potential Merger with GTJA (2611 HK)

On 6 September, Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) entered a legally binding agreement to merge through absorption and share exchange.
The high-profile merger aligns with the Chinese government’s ambition to reform the brokerage sector and create world-class investment banks. The merger would result in the largest China broker by assets.
In this note, we evaluate the potential share exchange ratio and the risks to satisfying the conditions for implementing the potential merger.

Merger Arb Mondays (09 Sep) – Shinko, Fuji Soft, Pasco, GA Pack, CPMC, Latin Res, Capitol, PSC, Rex

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Canvest Environmental Protection Group (1381 HK), Shinko Electric Industries (6967 JP), Malaysia Airports Holdings (MAHB MK), Greatview Aseptic Packaging (468 HK).
Lowest spreads: Fuji Soft Inc (9749 JP), Tohokushinsha Film (2329 JP), Second Chance Properties (SCE SP), Fancl Corp (4921 JP), Descente Ltd (8114 JP), C.I. TAKIRON Corporation (4215 JP).

Quiddity TDIV/50/100 Sep 24 Rebal: 100% Hit Rate; Perfectly Positioned for Our Trade

By Janaghan Jeyakumar, CFA

The ADDs/DELs for the TDIV, T50, and T100 indices for the September 2024 index rebal event was confirmed after market close on Friday 6th September 2024.
There will be one change for the T50 index and four separate changes for the T100 index. One of the T100 changes will also trigger a TDIV index deletion.
In this insight, we have presented our final estimates for the index flows for ADDs/DELs and capping flows for the TDIV index.

HK Connect SOUTHBOUND Flows (To 6 Sep 2024); Weak Data

SOUTHBOUND was a net buyer this week, again, after a small net sell week broke the 28-week buying streak. This week, over four days, it was +HK$9.3bn.
ETFs were a net buy this week; CCB, ICBC, Meituan, China Mobile, as well as BYD, Nonfu Spring, and ANTA Sports stand out among net buys. Sells were small.
This week sees Alibaba Group Holding (9988 HK) eligible for SOUTHBOUND buying. And what was supposed to be the HSI/HSCEI/HSTECH rebals Friday are pushed to Monday (link here).

Taiwan Top 50 ETF Rebalance: Rallying PharmaEssentia To Replace Sliding Nanya Tech

Pharmaessentia Corp (6446 TT) will replace Nanya Technology (2408 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the close of trading on 20 September.
Shorts have been covering positions in Pharmaessentia Corp (6446 TT) while there has been a surge in new short positions in Nanya Technology (2408 TT).
Cumulative excess volume in Pharmaessentia Corp (6446 TT) has flattened out as momentum has stalled while there has been a surge in cumulative excess volume for Nanya Technology (2408 TT).

A/H Premium Tracker (To 6 Sep 2024): SB Buying of H Underperformance, AH Premia Up

Repeat of last week: Miserable economic data continues. Trade geopol is mixed. Territorial geopol getting more serious. SOUTHBOUND gross volumes and net back up, but not high.
AH Premia rose slightly as HK-listed shares underperformed mainland share indices. Hs underperform their As consistently compared to relative index performance.
It is not clear what impetus there might be for better H performance.

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Sep 08

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A: Seven & I and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

(Mostly) Asia-Pac M&A: Seven & I, Virgin Money, PSC Insurance, Rex Minerals, Namoi, CPMC, China TCM
Quiddity ASX Sep 24 Rebal: Two Big Surprises; Short Interest Trends; Stunning Trade Performance
China Healthcare Weekly (Sep.8) – Fosun Pharma, Medical Device Outlook, Biotech Investment Criteria
Last Week in Event SPACE: Fuji Soft, Jardine Matheson, Exedy, Henderson

(Mostly) Asia-Pac M&A: Seven & I, Virgin Money, PSC Insurance, Rex Minerals, Namoi, CPMC, China TCM

I tally 40 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals were discussed this week: Offers for Virgin Money UK Plc (VUK AU) and PSC Insurance (PSI AU).
Key updates took place on Rex Minerals (RXM AU), Namoi Cotton (NAM AU), CPMC (906 HK), China TCM (570 HK), Seven & I (3382 JP), and Fuji Soft (9749 JP) .

Quiddity ASX Sep 24 Rebal: Two Big Surprises; Short Interest Trends; Stunning Trade Performance

By Janaghan Jeyakumar, CFA

The ADDs/DELs for the ASX index family for the September 2024 index rebal event were announced after market close on Friday 6th September 2024.
In this insight, we take a final look at the flow expectations for each of these index changes.
We have also highlighted certain names with noticeable movements in short interest.

China Healthcare Weekly (Sep.8) – Fosun Pharma, Medical Device Outlook, Biotech Investment Criteria

The past “infrastructure-driven demand model” in medical devices has become “an updated model”. The future reasonable demand for medical devices may fall back to a quarter of pre anti-corruption levels.
Top innovative pharmaceutical companies worth investing in need to meet certain conditions. Currently, there is still a gap between Chinese pharmaceutical companies and companies like Regeneron in various aspects.
Henlius is of great strategic significance for Fosun Pharma, which actually increases the privatization success rate. Valuation logic of Fosun Pharma should be based on PE/VC firms not traditional pharma.

Last Week in Event SPACE: Fuji Soft, Jardine Matheson, Exedy, Henderson

Buy dips on the possibility that 3DIP would not agree to Bain. Otherwise, at ¥9,000 Fuji Soft (9749 JP) is a buy, and at ¥9,500, it’s probably a sell near-term.
Drilling down into its balance sheet uncovers additional value for Jardine Matheson Holdings (JM SP); but not enough to move the needle
Exedy Corp (7278 JP) completed its buyback. Murakami Group bought more. The stock (pro-forma) is at 0.62x book, 0.54x book for the non-cash portion. There’s LOTS of cash left.

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Sep 07

Daily Brief Event-Driven: Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV
Key Flow Trading Opportunities After KRX Suddenly Added POSCO Holdings to the BBIG Battery Mix
EQD | KOSPI 200 OVERSOLD, It Could Bounce This Week

Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV

After publishing my insight (Jardine Matheson (JM SP): Trading “Cheap”) last week, my NAV calcs were called into question by some readers, when compared to street estimates.
Which is cool. I’m big enough to admit mistakes, where needed. So I’ve done some digging, including a back and forth with Jardine Matheson Holdings (JM SP).
The upshot? I have not lead you astray. You’ve been coming to the right place.

Key Flow Trading Opportunities After KRX Suddenly Added POSCO Holdings to the BBIG Battery Mix

Got surprised by KRX adding POSCO Holdings to the Battery Index. Normally predictable rebalancing went off-script with this unexpected move.
POSCO Holdings, not Posco Future M, replaced Ecopro BM. Plus, Alteogen Inc is replacing SK Biopharmaceuticals in the BBIG, driving notable flow.
Consider a day trading long POSCO Holdings and short Ecopro BM. Also, a long-short futures basket could be worth exploring for names with big passive flows.

EQD | KOSPI 200 OVERSOLD, It Could Bounce This Week

By Nico Rosti

The KOSPI 200 has corrected for 3 weeks in a row, reaching a low at 340.08 last week. It is WEEKLY OVERSOLD, according to our models.
In a previous insight we theorized the index could go higher (but only for 1 week), however the rally never materialized. From there it went downhill, now it can bounce.
The support area between the last Close and 320 offers strong support, according to our WEEKLY pattern models.

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Sep 06

Daily Brief Event-Driven: Fuji Soft (9749) – KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Fuji Soft (9749) – KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind
Quiddity Leaderboard S&P 500 Sep 24 Rebal (Final): 2 Changes Possible
KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains
Xingda Int’l (1899 HK): Another Partial?
S&P MidCap 400 September 2024 Forecasts: Highest Score to the HOOD, CVNA, LPLA, ENTG, ENSG and MLI
Pasco (9232 JP): Secom (9735 JP) And Itochu (8001 JP) Tender Offer a Done Deal
Xingda (1899 HK): Management to Reload with a Partial Offer?

Fuji Soft (9749) – KKR Launches Early to Stymy Bain Who Has a Founding Family Tailwind

KKR has launched its deal early to make life difficult for Bain, who has Founding Family support, due diligence, and another hearing with the company to make a Binding Bid.
The combination of Bain’s PR on 3 September and the new documents out late last night from KKR and Fuji Soft show a picture of KKR/3D somehow acting coercively.
This is something of a mess. It should become a case study for lawyers/advisors of what NOT to do when a large PE firm approaches you. Expect a bun fight.

Quiddity Leaderboard S&P 500 Sep 24 Rebal (Final): 2 Changes Possible

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
The rankings used for the September 2024 index rebal event will be based on yesterday’s (4th September 2024) opening prices.
In this insight, we take a final look at the potential ADDs and DELs leading the rankings for the upcoming review.

KOSPI Size Index Reshuffle Results Out Late Today: Early Positioning Delivered Big Gains

For this September reshuffle, fewer factors affected price impact, so outlier chances were low. Biggest price moves typically occur 30 days before the effective date, especially during LARGE↔MID transitions.
Early positioning for this reshuffle paid off. Past trends suggest price action fades before the effective date, so consider exiting positions by tomorrow or early next week.
Small→Mid migrants historically show weak price impacts, with no clear correlation observed in this September reshuffle either. I’m avoiding those plays targeting the effective date for now.

Xingda Int’l (1899 HK): Another Partial?

Back on the 7 Dec 2023, Xingda International (1899 HK) announced a partial Offer from a consortium comprising management at HK$1.88/share.
The consortium, at the time, held 45%, with the objective to hold >50.01% at the close of the Offer. The final % was 50.42%.
The consortium was then free to take their stake up to 75%. However the shareholder structure has materially changed in 2024. Xingda is suspended (again) pursuant to the Takeovers Code.

S&P MidCap 400 September 2024 Forecasts: Highest Score to the HOOD, CVNA, LPLA, ENTG, ENSG and MLI

By Dimitris Ioannidis

S&P MidCap 400 additions by transition require market cap, float cap, sector balance, liquidity and earnings as parameters for inclusion.
The highest combined score from the parameters is given to CVNA, HOOD, LPLA and ENTG which makes them acceptable candidates for addition.
Ensign Group (ENSG US) and Mueller Industries (MLI US) have the highest probability of being added out of the migrations. Market cap of migration candidates is estimated to be insufficient.

Pasco (9232 JP): Secom (9735 JP) And Itochu (8001 JP) Tender Offer a Done Deal

Pasco Corp (9232 JP) has recommended a tender offer from Secom Co Ltd (9735 JP) and Itochu Corp (8001 JP) at JPY2,140, 31.4% premium to the undisturbed price of JPY1,629.
The tender offer runs from 6 September to 22 October (30 business days), with payment commencing on 28 October. It represents a 10-year high.
This a done deal as the offeror represents a 71.66% ownership ratio, higher than the two-thirds of voting rights required to implement a squeeze-out through share consolidation.

Xingda (1899 HK): Management to Reload with a Partial Offer?

Xingda International (1899 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers.
Significant changes in substantial shareholders have occurred since the previous partial offer closed on 10 March 2023, which could be the catalyst for an offer.
Management is likely reloading a partial offer to exercise statutory control and bypass the 2% creeper rule. The partial offer price could be around HK$1.60-1.70 per share.

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Sep 05

Daily Brief Event-Driven: Sep24 Nikkei 225 Review Results: A Slightly Baffling 2 IN and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sep24 Nikkei 225 Review Results: A Slightly Baffling 2 IN, 2 OUT
Nikkei 225 Index Rebalance: NRI, Ryohin Keikaku IN; Nippon Paper, DIC OUT; Fast Retailing Capped
Fuji Soft (9749 JP): KKR’s Cop-Out as It Launches at Unchanged Terms, Next Move Bain
For Long-Term Investors, Seven & I Is the Better Bet
Australia/NZ Real Estate: Stocks With (Large) Passive Flows
Ecopro HN: Rights Offering of 200 Billion Won
Hojeon: Activist Minority Investors Threaten to Sell Their Shares to a Competitor in a Block Deal
FXI Rebalance: China Tower (788 HK) Will Replace CICC (3908 HK)
POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles
Namoi Cotton (NAM AU): Louis Dreyfus Declares Offer Unconditional

Sep24 Nikkei 225 Review Results: A Slightly Baffling 2 IN, 2 OUT

Today, the Nikkei Index Committee decided to delete Nippon Paper (3863) for low liquidity, and DIC (4631) for sector over-representation, and added Nomura Research Institute (4307) and Ryohin Keikaku (7453).
The only auto-delete was Nippon Paper. The DIC delete was “discretionary.” But they could have done a third. Why did they not do a third change? I do not know.
The whole shebang should be ¥350-375bn a side. At current price, Fast Retailing is set for another capping (selling) event in March 2025. And there is one shoo-in then too.

Nikkei 225 Index Rebalance: NRI, Ryohin Keikaku IN; Nippon Paper, DIC OUT; Fast Retailing Capped

Nomura Research Institute (4307 JP) and Ryohin Keikaku (7453 JP) will replace Nippon Paper Industries Co L (3863 JP) and Dic Corp (4631 JP) in the Nikkei 225 (NKY INDEX).
Fast Retailing (9983 JP)‘s CPAF will drop from 3 to 2.7 and there will be further selling in March 2025 as the CPAF drops to 2.4 (or possibly even 2.1!)
Passives will need to buy 7-15x ADV (13-14% of real float) in the adds and sell 2.7-6.5x ADV in the deletes. There is a big reverse funding trade too.

Fuji Soft (9749 JP): KKR’s Cop-Out as It Launches at Unchanged Terms, Next Move Bain

In response to the potential Bain competing offer for Fuji Soft Inc (9749 JP), KKR has waived the precondition and launched its offer at unchanged JPY8,800 per share.
Bain’s due diligence ends on 20 September, and it aims to submit a binding proposal in October. This timeline will thwart KKR’s offer, which closes on 21 October.
KKR’s offer launch at unchanged terms is delaying the inevitable and will have to bump to succeed. A potential bidding war is likely to push the offer price to JPY10,500.

For Long-Term Investors, Seven & I Is the Better Bet

By Michael Causton

The Couche-Tard “friendly bid” raises more questions than it answers: Is it real? What does CT really want? Can it afford it? Will the Japanese government let it through?
We remain sceptical about a bid – if it happens – succeeding. Either way, Seven & Eleven Japan looks to be the much better retailer.
It has been selling 25-40% more than competitors in the world’s toughest CVS market and looks set to extract more value in Japan/overseas than anyone else could so why sell?

Australia/NZ Real Estate: Stocks With (Large) Passive Flows

There will be passive buying in Nextdc Ltd (NXT AU) and Charter Hall (CHC AU) and selling in Vital Healthcare Property Trust (VHP NZ) at the close on 20 September.
Charter Hall (CHC AU)‘s stock price jumped following announcement of results and that was accompanied by big short covering. There should still be more positioning here.
Nextdc Ltd (NXT AU)‘s increase in cumulative excess volume came on a drop in the stock price. There could be some covering here as positioning builds up.

Ecopro HN: Rights Offering of 200 Billion Won

On 4 September, Ecopro HN announced that it plans to conduct a rights offering capital raise of about 200 billion won.
The company plans to issue 5.67 million new shares and the expected rights offering price is 35,300 won (23% lower than current price).
We would not subscribe to this rights offering mainly due to lofty valuations, declining sales and profit growth, continued negative free cash flow, and concerns about excessive shares dilution.

Hojeon: Activist Minority Investors Threaten to Sell Their Shares to a Competitor in a Block Deal

A group of minority investors started to go activist on Hojeon (111110 KS), demanding that the company increase its treasury share buybacks/cancellations, dividends, and cut CEO’s salary.
This coalition of minority investors has threatened to sell their shares to a competitor (Hansae) if the company does not abide by their demands.
Hojeon has attractive valuations and are trading at low multiples. It had P/E of 5x, EV/EBITDA of 3.4x, and P/B of 0.5x in 2023.

FXI Rebalance: China Tower (788 HK) Will Replace CICC (3908 HK)

China Tower (788 HK) will replace China International Capital Corporation (3908 HK) in the iShares China Large-Cap (FXI) (FXI US) at the close on 20 September.
The appears to be a lot more positioning and short interest in China International Capital Corporation (3908 HK) compared to China Tower (788 HK).
The listing of Midea Group Co Ltd A (000333 CH) H-shares could result in another change for the ETF prior to the next scheduled rebalance in December.

POSCO’s Early EB Payoff and Post-Value-Up Pivot Trading Angles

Key watchpoints: Will POSCO cancel the 3.4% treasury shares in Q4 and how will they replenish cash reserves after paying ₩1.5 trillion? Their moves could set trends.
POSCO might cancel these shares to boost their value-up index weight. This could drive up the stock price, giving them an opening to improve their cash position through equity financing.
Expect a short-term stock pivot with value-up index and ETFs driving inflows and price pops. After this, equity financing may signal stock peaks, with POSCO and others leading the trend.

Namoi Cotton (NAM AU): Louis Dreyfus Declares Offer Unconditional

Louis Dreyfus Company (LDC) and Olam (OLG SP)‘s Olam Agri have been going toe-to-toe over Namoi Cotton (NAM AU) since the 1st February. LDC has now declared its Offer unconditional.
It’s an interesting move. Namoi is trading through LDC’s A$0.67/share Offer terms. But unlike Olam’s Offer, LDC now has FIRB and ACCC under its belt.
Currently trading at Olam’s A$0.70/share terms. All eyes are on ACCC giving Olam the green light. Or not.

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Sep 04

Daily Brief Event-Driven: [JAPAN ACTIVISM] Murakami Group Now 19+% on Exedy (7278) – LOTS of Room Left To Run and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[JAPAN ACTIVISM] Murakami Group Now 19+% on Exedy (7278) – LOTS of Room Left To Run
Select Sector Indices – Updated Flows as Round-Trip Trade Hits US$35bn
Fuji Soft (9749 JP): Bain’s Rumoured Counteroffer
HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Sep 2024)
Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off
Hang Seng, HSCEI, HSTECH Sep24 Rebal Final Capping Flows
Nationwide/Virgin Money (VUK AU): At The Pointy End Of The Offer
MSC Aug 24 Rebalance: Brazil Takes the EM Flow, SA & China Downweighted Again (Tencent)
Potential Sale of SK Specialty and Deleveraging of the SK Group – Impact on SK Inc and NAV Analysis
Samsung C&T: Corporate Value-Up + Reduced Overhang Post Final Lee Family Inheritance Tax in 2025

[JAPAN ACTIVISM] Murakami Group Now 19+% on Exedy (7278) – LOTS of Room Left To Run

In late May, Toyota Group member Aisin (7259 JP) announced it would sell its 37% stake in Exedy Corp (7278 JP) . The market dropped. But that was the opportunity.
On 30 May, I said “Buy the deal, buy in the market. It’s cheap and vulnerable.” It’s up 21.5% since (the day after). Peers are down 15-20%.
The company completed its buyback. Murakami Group bought more. The stock (pro-forma) is at 0.62x book, 0.54x book for the non-cash portion. There’s LOTS of cash left.

Select Sector Indices – Updated Flows as Round-Trip Trade Hits US$35bn

The changes to the S&P 500 INDEX (SPX INDEX), S&P400 Index and S&P600 Index will be announced after market close on Friday.
The conclusions of the market consultation to change the index weighting methodology for the Select Sector Indices to reduce concentration and avoid reverse turnover should also be announced.
Changes in the index weighting methodology will result in a round-trip trade of US$35bn across the Select Sector indices. The largest turnover is in the XLP and XLK.

Fuji Soft (9749 JP): Bain’s Rumoured Counteroffer

Nikkei reports that Bain will launch a competing tender offer for Fuji Soft Inc (9749 JP) around JPY9,200-9,300 per share, around 5% higher than KKR’s offer.
The Board responded that Bain submitted a non-binding proposal on 26 July. The special committee will consider its feasibility if a binding proposal is submitted.
KKR has three options to respond to a higher Bain offer: revise it, launch a hostile offer at unchanged terms, or walk away. The first option is the most likely.

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Sep 2024)

The September rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.
The round-trip trade across all stocks across the four indices is estimated at HK$18.1bn (US$2.3bn).
Kuaishou, ASM Pacific Technology, JD.com, J&T Global, Sunny Optical and New Oriental Education are the largest buys while Alibaba, Tencent, Meituan, Xiaomi and HSBC Holdings are the biggest sells.

Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off

Samsung C&T’s holding company ratio is closing in on 50%, driven by the Biologics rally, which has Samsung on high alert for a forced conversion.
Watch Samsung’s moves to avoid forced holding company status. The old Biologics-for-Electronics swap isn’t viable, so they’ll likely sell Biologics shares to lower the ratio.
Samsung C&T might sell Biologics shares at a ₩80T market cap. They’ve boosted construction to manage assets and the holding ratio, but beyond ₩80T, risks increase.

Hang Seng, HSCEI, HSTECH Sep24 Rebal Final Capping Flows

The close of 3 September 2024 was the final price to determine capping for the Hang Seng Index Rebalances which will take place this Friday 6 September 2024 at close.
The numbers are largely unchanged, though price changes in the interim cause more Kuaishou Technology (1024 HK) to be bought, and more Xiaomi Corp (1810 HK) to be sold.
The biggest name in flows is, of course, ASM Pacific Technology (522 HK) which sees 15 days to buy.

Nationwide/Virgin Money (VUK AU): At The Pointy End Of The Offer

Back on the 21st March, Virgin Money UK (VUK AU/VMUK LN), UK’s sixth largest retail bank, entered into a Scheme with Nationwide Building Society, at 220 pence/share, in cash.
The consideration is a solid 38% premium to undisturbed. And shareholders backed terms at the 22nd May Court Meeting. Plus UK’s CMA signed off on the 19th July.
What now? FCA/PRA approvals are the key remaining conditions. These regulatory approvals are imminent.

MSC Aug 24 Rebalance: Brazil Takes the EM Flow, SA & China Downweighted Again (Tencent)

By Charlotte van Tiddens, CFA

South Africa was downweighted in ACW, EM and EM ex China for a second consecutive quarter.
Brazil was the largest upweight in ACW, EM and EM ex China.
Tencent was downweighted in the EM index but upweighted in ACW.

Potential Sale of SK Specialty and Deleveraging of the SK Group – Impact on SK Inc and NAV Analysis

In this insight, we discuss the potential sale of SK Specialty by SK Inc (034730 KS) which owns 100% stake in the company.
If SK Inc could sell SK Specialty at about 3 trillion won to 4 trillion won, this could reduce significantly reduce debt burden of SK Inc.
Our base case NAV value per share for SK Inc is 203,288 won per share, representing 38% upside from current levels.

Samsung C&T: Corporate Value-Up + Reduced Overhang Post Final Lee Family Inheritance Tax in 2025

We provide an updated NAV analysis of Samsung C&T, discuss the reduced overhang post final Lee family inheritance tax payment, and also provide further details of its Corporate Value-Up announcement.
Given 2025 will be the last year of major inheritance tax payment for the Lee family, there is likely to be reduced overhang associated with inheritance tax issue next year.
Our NAV analysis of Samsung C&T suggests NAV of 39.9 trillion won or NAV per share of 224,249 won which is 45% higher from current levels.

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Sep 03

Daily Brief Event-Driven: Sep24 Nikkei 225 Rebal – Last Minute Thoughts and Change in Predictions and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sep24 Nikkei 225 Rebal – Last Minute Thoughts and Change in Predictions
Midea A/H Listing – 1H24 Updates – Strong Growth, Margins Uptick Continues
Today’s Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks
India: Potential Adds/Deletes from F&O Segment
China ETF Inflows & Implications: YTD Inflows Near US$100bn
Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Sep24)
POSCO Group Corporate Value Pre-Announcements: Trading Angle
PSC Insurance (PSI AU): A Done Deal
India: Index Implications of Additions to the F&O Segment
PSC Insurance (PSI AU): 26th Sept Vote On Ardonagh Group’s Offer

Sep24 Nikkei 225 Rebal – Last Minute Thoughts and Change in Predictions

The last two reviews have been announced on the second business day of the month of the review. The one before that on the third business day.
The review could be announced today or tomorrow. Wednesday would seem to be “late.”
There are still questions about implementation – thus “care” in previous insights. Here I explore the possibilities/probabilities/issues around the edges. And a Dark Horse which may be lighter than thought.

Midea A/H Listing – 1H24 Updates – Strong Growth, Margins Uptick Continues

By Sumeet Singh

Midea Group Co Ltd A (000333 CH), recently filed its PHIP as it aims to raise up to US$3bn in its H-share listing, as per media reports.
Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
We have covered the company and deal background in our previous notes. In this note, we talk about the updates from its 1H24 results.

Today’s Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks

Today’s surge in Korean battery stocks stems from sector rotation and improved fundamentals, with SK On’s healthier balance sheet and Samsung SDI’s new U.S. plant fueling optimism.
But with POSCO affiliates showing standout performance relative to their peers., the value-up factor is once again shaking things up and driving those differences in relative performance.
Today’s price action suggests using the value-up factor for long-short strategies, especially with KRX hinting at sector quotas in the value-up index.

India: Potential Adds/Deletes from F&O Segment

Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.
The new framework could lead to mechanical entry and exit of stocks in the F&O segment with minimal intervention from SEBI.
The introduction of some large cap stocks in the F&O segment could lead to their inclusion in the NIFTY Index, SENSEX Index and other local indices.

China ETF Inflows & Implications: YTD Inflows Near US$100bn

Nearly US$100bn has flowed into mainland China listed ETFs year to date and could be driven by the National Team led by Central Huijin supporting the market.
Nearly all the net inflows have been focused on the CSI 300, CSI 1000, CSI 500, SSE50, ChiNext and STAR50 indices. Flows to sector ETFs have been mixed.
Over 70% of the net inflows have gone to the CSI 300 Index with another 18% going to the CSI 500 Index and CSI 1000 Index.

Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Sep24)

June/July/August saw 1,673/825/202 new Corporate Governance Reports filed and 8/5/9 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed, respectively. The TSE’s very simple tool comes in 15 days.
Our tools show every report, links to every document, and now a new diff file tool. input a name, see the difference between the Old/New Reports. We hope it helps.
This tool is designed to be a shelf reference. We update it once a month, and every CorpGovReport and new “Management Conscious” report updated since a CGR update is here.

POSCO Group Corporate Value Pre-Announcements: Trading Angle

On 29 August, the three major POSCO Group companies including POSCO Holdings announced that they plan to provide detailed explanations of their Corporate Value Up plans in 4Q 2024.
In general, the companies that have provided more detailed plans for their Corporate Value Up plans have done better recently.
However, now there are cases such as the three main POSCO Group companies whose share prices are rising just by announcing that they will provide Corporate Value Up plans later.

PSC Insurance (PSI AU): A Done Deal

On 22 August, the Psc Insurance (PSI AU) IE considered Ardonagh’s A$6.19 offer fair and reasonable as it is within the A$5.69 to A$6.65 valuation range.
The offer is conditional on shareholder approval of the scheme. No disinterested shareholder holds the 25% blocking stake. The scheme meeting is on 26 September.
The offer is attractive and represents an all-time high. At the last close and for the 11 October payment, the gross/annualised spread is 1.3%/12.1%.

India: Index Implications of Additions to the F&O Segment

Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.
The introduction of some stocks in the F&O segment could lead to their inclusion in the NIFTY, SENSEX, Nifty Bank and CNXIT indices and weight changes in the Nifty Next50.
The inclusion of stocks in indices with a fixed number of constituents will result in deletion of some stocks from these indices. There should be methodology changes too.

PSC Insurance (PSI AU): 26th Sept Vote On Ardonagh Group’s Offer

Back on the 8th May, PSC Insurance (PSI AU), a diversified insurance service provider, entered into a Scheme with Ardonagh Group, at A$6.19/share, in cash.
That’s a 27.6% premium to undisturbed, and a lifetime high. Directors and key executives holding ~39.6% of shares out, are supportive.
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 26th September. Expected implementation on the 11 October. The IE says fair & reasonable.

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Sep 02

Daily Brief Event-Driven: Artisan Partners Writes a Letter To the 7&I Board (3382) – Meh… and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Artisan Partners Writes a Letter To the 7&I Board (3382) – Meh…
Quiddity STAR 50/100 Sep 24 Rebalance: 100% Hit Rate; US$1bn+ One-Way Flows
STAR50/STAR100 Index Rebalance: Adds Rally, Deletes Drop as Positioning Builds Up
Merger Arb Mondays (02 Sep) – Canvest, China TCM, GA Pack, CPMC, Shinko, Arvida, SilverLake
Bajaj Housing Finance IPO: Offering Details & Index Inclusion
CPMC Holdings (906.HK) Privatization Update – ORG Is Pushing Baosteel to Raise Its Offer
HK Connect SOUTHBOUND Flows (To 30 Aug 2024); Weak Econ Data, But a Rebound in SB Net Buys
Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (July and August 2024)
A/H Premium Tracker (To 30 Aug 2024): SB/NB Volumes Down, NB Net Now Impossible to Track
EQD / NSE Vol Update / Skew & PCR Indicate Active Use of OTM Puts to Hedge NIFTY50 at All-Time-Highs

Artisan Partners Writes a Letter To the 7&I Board (3382) – Meh…

On 30 August, 7&i shareholder Artisan Partners (holder since 2019, now at 1%) wrote an open letter to the Board of Directors of Seven & I Holdings (3382 JP)
There are several comments in bold. “It is imperative that the board of directors negotiate with ACT immediately to achieve the best possible outcome for shareholders” is one.
The letter is a bit preachy, a bit fluffy, and a bit misleading in parts. But it requests the Company brief shareholders on the negotiations by 19 September 2024.

Quiddity STAR 50/100 Sep 24 Rebalance: 100% Hit Rate; US$1bn+ One-Way Flows

By Janaghan Jeyakumar, CFA

The September 2024 index review results for the STAR 50 and STAR 100 indices were announced after market close on Friday 30th August 2024.
There will be 2 changes for the STAR 50 index and 6 changes for the STAR 100 index.
The STAR 50 and STAR 100 rebalances will collectively trigger one-way flows of more than US$1bn during the September 2024 index rebal event.

STAR50/STAR100 Index Rebalance: Adds Rally, Deletes Drop as Positioning Builds Up

There are 2 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the September rebalance that will be implemented at the close on 13 September.
There are no surprises for the SSE STAR50 (STAR50 INDEX) while there are 3 surprise adds for the STAR100 Index with the profitability criterion being ignored.
The adds to the SSE STAR50 (STAR50 INDEX) have outperformed the deletes over the last month and positioning is larger in some stocks compared to others.

Merger Arb Mondays (02 Sep) – Canvest, China TCM, GA Pack, CPMC, Shinko, Arvida, SilverLake

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Canvest Environmental Protection Group (1381 HK), China Traditional Chinese Medicine (570 HK), Greatview Aseptic Packaging (468 HK), Shanghai Henlius Biotech (2696 HK).
Lowest spreads: Tohokushinsha Film (2329 JP), Fuji Soft Inc (9749 JP), Descente Ltd (8114 JP), Second Chance Properties (SCE SP), Fancl Corp (4921 JP), Alps Logistics (9055 JP).

Bajaj Housing Finance IPO: Offering Details & Index Inclusion

Bajaj Housing Finance (BHF IN) is looking to list on the exchanges by selling INR 65.6bn of stock at a valuation rumoured to be between INR 560-590bn.
The anchor allocations will be completed later this week, and the stock is expected to start trading on 16 September.
Bajaj Housing Finance (BHF IN)‘s maximum float will be around 10% and that will limit inclusion to just one global index in the following 6 months.

CPMC Holdings (906.HK) Privatization Update – ORG Is Pushing Baosteel to Raise Its Offer

Huarui Offer has been approved by SAMR, which marks a solid step forward.Meanwhile, ORG’s management stated that the reduction of Huangshan Novel shares is to raise funds to acquire CPMC.
While Baosteel may want to “test the waters”, the signals ORG is sending is it will make every effort to advance the acquisition of CPMC and is accelerating the process.
The return on Huarui Offer isn’t attractive.We recommend waiting for Baosteel to raise its Offer, or simply choosing to add more positions in China TCM, whose privatization is more lucrative.

HK Connect SOUTHBOUND Flows (To 30 Aug 2024); Weak Econ Data, But a Rebound in SB Net Buys

SOUTHBOUND was a net seller the prior week for HK$1.5bn, the first week in 29 where SB was a net seller. It was all ETFs. Stocks were a net buy.
This week, they reverted to net buying. Financials and Utilities were strong net buys. ETFs again a net sell. Total SOUTHBOUND volumes also picked up.
SOEs, SOE Banks, Energy, Utilities, and finally Anta Sports Products (2020 HK) saw net buying after salutary earnings.

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (July and August 2024)

In this insight, we discuss the alpha generation through companies that have been buying back their shares in the Korean stock market in July and August 2024.
On average, the share buyback announcements by 46 companies represented 2% of outstanding shares.
Major companies that have announced share buybacks in Korea in the past two months include KT&G, Mirae Asset Securities, and POSCO Holdings.

A/H Premium Tracker (To 30 Aug 2024): SB/NB Volumes Down, NB Net Now Impossible to Track

Miserable economic data continues. Trade geopol is mixed. Territorial geopol getting more serious. SOUTHBOUND gross volumes up, but not high.
SOUTHBOUND rebounded cutting its weekly net sell streak at one. ETFs again a net sell. NORTHBOUND net data is not not released on a daily/weekly basis; only quarterly.
As expected (with AH 20d Premia returns at multi-year highs 3wks ago), AH Premia fell slightly, narrow premia falling more than wide premia. I continue to expect more H-vs-A gains.

EQD / NSE Vol Update / Skew & PCR Indicate Active Use of OTM Puts to Hedge NIFTY50 at All-Time-Highs

By Sankalp Singh

Recovery in Risk-Premia was short-lived. Pressure from a lack of upcoming event-risk has driven short-dated IVs lower.
Nifty50 at All-Time-Highs – PCR & Skew extend further towards puts. Implying active hedging of core long equity positions using OTM puts.
“High & Down” Vol-state persists. Expect a continued slide lower in IVs. Retain previous week’s tactical stance – allocations to Short Iron Condors & Skew Harvesting structures.

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Sep 01

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A: Seven & I and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

(Mostly) Asia-Pac M&A: Seven & I, Silverlake Axis, Shanghai Henlius, CPMC, Shinko Electric, Arvida
Keep an Eye on Samsung C&T & SK Square as the Next Hot Picks for Value-Up Announcements
Weekly Deals Digest (01 Sep) – ESR, Canvest, China TCM, CPMC, Shinko, Silverlake, Terumo, Midea
Last Week in Event SPACE: Shin Kong/Taishin Financial, Jardine Matheson, Toyota Motors, Huafa Props
China Healthcare Weekly (Sep.1)-Biotech Sell Asset,Pharmaceutical Distribution Company,HEC CJ Pharma
(Mostly) Asia M&A, Aug 2024: Orora, Fuji Soft, J Tower, Seven & I, Taishin/Shin Kong, PropertyGuru

(Mostly) Asia-Pac M&A: Seven & I, Silverlake Axis, Shanghai Henlius, CPMC, Shinko Electric, Arvida

I tally 42 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals were discussed this week: the Taishin Financial Holding (2887 TT) / Shin Kong Financial Holding (2888 TT) merger; and Silverlake Axis (SILV SP)‘s hybrid Offer.
Key updates took place on Huafa Property Services (982 HK), Shanghai Henlius (2696 HK),CPMC (906 HK), Seven & I (3382 JP), Shinko Electric (6967 JP), and Arvida (ARV NZ).

Keep an Eye on Samsung C&T & SK Square as the Next Hot Picks for Value-Up Announcements

Construction and semiconductors are key targets due to their low value-up representation. For shareholder returns, keep an eye on Samsung C&T and SK Square.
Expect announcements before the mid-September value-up index, with early September releases mirroring LG Electronics’ prior notices and detailed plans arriving by Q4.
Even with prior notices, details will leak. Samsung C&T and SK Square are likely to prioritize short-term shareholder returns over long-term growth, potentially leading to a bigger price impact.

Weekly Deals Digest (01 Sep) – ESR, Canvest, China TCM, CPMC, Shinko, Silverlake, Terumo, Midea

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Midea Group Co Ltd A (000333 CH) premarketing its H Share listing, Terumo Corp (4543 JP) placement and 99 Speed Mart Retail Holdings (99SPD MK) US$530 million IPO.
Event-Driven developments: ESR Group (1821 HK), Canvest Environmental Protection Group (1381 HK), China Traditional Chinese Medicine (570 HK), CPMC Holdings (906 HK), Shinko Electric Industries (6967 JP).

Last Week in Event SPACE: Shin Kong/Taishin Financial, Jardine Matheson, Toyota Motors, Huafa Props

CTBC’s (likely) goal is to boost Shin Kong (2888 TT)‘s shares, so as to make the Taishin Financial Holding (2887 TT) merger unpalatable for Shin Kong shareholders. That smells of opportunity.
Jardine Matheson Holdings (JM SP) is trading cheap to NAV and its implied stub. It may well get cheaper.
Toyota Motor (7203 JP)‘s resulting supply/demand profile is mixed, but on balance, expect to see positive demand into the H1 earnings announcement. Watch for another buyback possibly announced then.

China Healthcare Weekly (Sep.1)-Biotech Sell Asset,Pharmaceutical Distribution Company,HEC CJ Pharma

Biotech will continue selling early-stage pipeline in a sluggish market, but this will further lower its valuation as financing won’t improve quickly.
Pharmaceutical distribution companies are facing challenges, driving ongoing consolidation in the industry. However, this trend will ultimately benefit the growth of leading companies in the long run.
If investors truly understand “the essence” of HEC Changjiang Pharma, they will be more calm/rational to look at this absorption merger and the inclusion of Hang Seng family of indexes.

(Mostly) Asia M&A, Aug 2024: Orora, Fuji Soft, J Tower, Seven & I, Taishin/Shin Kong, PropertyGuru