Category

Event-Driven

Daily Brief Event-Driven: TOPIX “Big April Basket” 2024 Expectations: More High-Conviction Names; Better Trade Ideas and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • TOPIX “Big April Basket” 2024 Expectations: More High-Conviction Names; Better Trade Ideas
  • Clearing up Confusion About Bringing Back Short Selling in Korea
  • Sankei Real Estate (2972) Sponsor Buy Now On And It Isn’t Small (Even if the REIT Is)
  • FXI Rebalance: Three Buys. Three Sells
  • Block Deal Sale of 1.7% Stake of Woori Financial by IMM Private Equity
  • End of Mandatory Lock-Up Periods for 51 Companies in Korea in March 2024
  • (Mostly) Asia M&A, Feb 2024: Lawson, Altium, CSR, TCM, Boral, APM, Roland DG, Ssangyong Cement


TOPIX “Big April Basket” 2024 Expectations: More High-Conviction Names; Better Trade Ideas

By Janaghan Jeyakumar, CFA

  • The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
  • For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
  • Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2024.

Clearing up Confusion About Bringing Back Short Selling in Korea

By Sanghyun Park

  • Government sees foreign investors as key for Corporate Value-Up success, considering reinstating short selling.
  • Planning to expand short selling beyond 350 stocks, but anticipating pushback from retail investors, likely capping additional stocks around 100.
  • The head of the Financial Supervisory Service will formally disclose these plans during the upcoming short selling conference scheduled for March 13th.

Sankei Real Estate (2972) Sponsor Buy Now On And It Isn’t Small (Even if the REIT Is)

By Travis Lundy

  • Last October, I wrote about the plan the sponsor of Sankei Real Estate (2972 JP) had to exchange buildings with the REIT to clean it up, then buy more units.
  • Today they announced the completion of the Portfolio Rebalancing Plan started in March 2023. And the plan to buy more units. The assets transferred out were gone at end Jan-2024.
  • Now that’s done, and there are units to buy. Maximum 46,652 units over maximum 220 days.

FXI Rebalance: Three Buys. Three Sells

By Brian Freitas


Block Deal Sale of 1.7% Stake of Woori Financial by IMM Private Equity

By Douglas Kim

  • IMM Private Equity announced that it is selling a 1.7% stake in Woori Financial Group (316140 KS) in a block deal sale. 
  • The number of shares subject to sale is 12.56 million, or 177.7 billion won to 181.5 billion won.
  • Block deal sale discount range is reasonable, valuation multiples are low, and we expect continued positive capital inflow into stocks related to Corporate Value Up in the next 12 months. 

End of Mandatory Lock-Up Periods for 51 Companies in Korea in March 2024

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 51 stocks in Korea in March 2024, among which 5 are in KOSPI and 46 are in KOSDAQ.
  • These 51 stocks on average could be subject to further selling pressures in March and could underperform relative to the market.
  • The top five market cap stocks including those of which at least 1% of outstanding shares could be sold include APR, WCP, DS Dansuk, GI Innovation, and Geolit Energy.

(Mostly) Asia M&A, Feb 2024: Lawson, Altium, CSR, TCM, Boral, APM, Roland DG, Ssangyong Cement

By David Blennerhassett

  • For the month of February 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$20bn.
  • The average premium for the new transactions announced (or first discussed) in February was ~33%.
  • This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

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Daily Brief Event-Driven: Hong Kong To Scrap All “Spicy Measures” (Property Cooling Measures) and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Hong Kong To Scrap All “Spicy Measures” (Property Cooling Measures)
  • Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]
  • Confirmed: Conditions & Schedule of Block Deals Pre-Disclosure Rules in Korea
  • Hong Kong: Stamp Duties Axed; Mortgage Rules Relaxed
  • JAPAN ACTIVISM:  Is Murakami-San Going To Do A PacMetals Rug Pull on Aozora? Or Is This For Real?
  • Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder
  • APM Human Services (APM AU): CVC’s 141% Offer Premium
  • BAT’s Possible US$2.5bn ITC Selldown – Will Be Well Flagged but Still Won’t Be an Easy One to Digest
  • Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan
  • Goodman Group (GMG AU): Positioned for Outperformance


Hong Kong To Scrap All “Spicy Measures” (Property Cooling Measures)

By Travis Lundy

  • RTHK just reporting that HK Finance Secretary Paul Chan has said in his budget speech that HK will remove all property cooling measures in place, with immediate effect. 
  • That would be That is Special Stamp Duty, Buyer’s Stamp Duty, New Residential Stamp Duty. “Measures no longer necessary given the current economic and market conditions.”
  • This should cause people to get excited short-term about property developers.

Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

By Travis Lundy

  • The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.
  • Today post-close we got the deal. I was a little surprised it came this fast, but it’s now mostly done it appears – largely as predicted in the last piece.
  • There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry. 

Confirmed: Conditions & Schedule of Block Deals Pre-Disclosure Rules in Korea

By Sanghyun Park

  • Insiders must disclose transaction details, complete deals within 30 days, limit deviations to 30%, and submit disclosures 30 days before transactions.
  • Financial investors, including institutional ones, are exempt. This encompasses local pension funds (including NPS) and foreign financial investors. Deals under 1% of total shares and less than ₩5B are exempt.
  • Confirmation of the timeline indicates many block deals before July. We should hunt potential deals for proactive setups. Also, we should monitor basis widening in futures due to short-selling ban.

Hong Kong: Stamp Duties Axed; Mortgage Rules Relaxed

By David Blennerhassett

  • Hong Kong residential property prices declined 7% in 2023 and are down >20% from the 2021 peak in 2021. The average price of offices also declined ~7% in 2023.
  • Scrapping property cooling measures, such as the special stamp duty applied to homes resold within 24 months, have been rumoured, to push up housing prices. 
  • In today’s annual budget, we got those. And then some. 

JAPAN ACTIVISM:  Is Murakami-San Going To Do A PacMetals Rug Pull on Aozora? Or Is This For Real?

By Travis Lundy

  • Yesterday after the close, well-known Japanese activist Murakami-san’s preferred entity City Index Eleventh filed a Large Shareholder Report. 
  • The blast across Bloomberg was “*AOZORA 5.4% STAKE REPORTED BY CITY INDEX ELEVENTH.” Sounds exciting after the shares dropped 34% in two days earlier this month after reporting big writedowns. 
  • But there has to be a question here. Why? And Why this way? And what kind of activism would be possible? 

Aozora Bank (8304 JP): Murakami Becomes a Substantial Shareholder

By Arun George

  • Murakami’s entity, City Index Eleventh, reported a 5.42% shareholding in Aozora Bank Ltd (8304 JP). Murakami started buying a day after the disastrous 3QFY23 results.
  • Murakami’s average buy-in price is JPY2,137.88 per share, a 34% discount to the pre-3QFY23 results share price. 
  • Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term trading play replicating the Pacific Metals (5541 JP) playbook.

APM Human Services (APM AU): CVC’s 141% Offer Premium

By David Blennerhassett

  • Back on the 19th Feb, employment and disability services play APM Human Services Internation (APM AU) rejected PE-outfit CVC Asia Pacific’s A$1.60 proposal, a 93% premium to undisturbed.
  • Undeterred, CVC has returned with A$2.00/share indicative Offer, by way of a Scheme, a 141% premium to undisturbed; yet a 44% discount to APM’s November 2021 IPO price of A$3.55/share.
  • APM has determined it will engage and provide CVC with a four-week period of exclusivity. 

BAT’s Possible US$2.5bn ITC Selldown – Will Be Well Flagged but Still Won’t Be an Easy One to Digest

By Sumeet Singh

  • Earlier this month, British American Tobacco (BATS LN)’s management stated that they were reviewing their stake in ITC Ltd (ITC IN) to enhance its balance sheet flexibility.
  • BAT has owned its stake in ITC for over a century and remains its largest shareholder.
  • In this note, we talk about the possible deal structure and dynamics.

Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan

By Arun George

  • Aeon Co Ltd (8267 JP), Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have announced an alliance to establish the largest drugstore alliance in Japan by December 2027.
  • Aeon will carry out several Tsuruha transactions – buy Oasis 13.58% stake at JPY15,500 per share and, on receiving regulatory approval, reach 27.17% of the voting rights.  
  • The agreements involve merging Tsuruha and Welcia through a share exchange offer and Aeon subsequently increasing its Tsuruha voting rights from 27.17% to less than 51%. 

Goodman Group (GMG AU): Positioned for Outperformance

By Brian Freitas

  • Goodman Group (GMG AU) has been moving higher recently and the stock has outperformed its peers handily over the last year.
  • The stock trades marginally expensive compared to its peers and that could be partially attributed to the stock being a part of large indices.
  • There is another index inclusion to come and that could lead to further outperformance in the short term.

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Daily Brief Event-Driven: Final Flows for Hang Seng and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal
  • Rakuten’s New “Bond-Type Share” Issuance – Quite Quirky to Quantulate Rakuten’s Quisquous New Quoz
  • HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)
  • Samsonite (1910 HK): Evaluating a Potential Privatisation
  • Outsourcing (2427) MBO Arrives! Bain Launches Cheeky, Opportunistic, Low(Priced) TOB
  • Samsonite (1910 HK): Leader Of The Pack
  • Ecopro BM KOSPI Transfer Listing Disclosure
  • Block Deal Sale of 5% Stake In SFA Engineering by Samsung Display
  • Outsourcing (2427 JP): Relief as Bain Launches Tender at Unchanged Terms
  • Ecopro BM (247540 KS): Index Impact of KOSDAQ to KOSPI Transfer


Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal

By Travis Lundy

  • The Hang Seng Index, HSCEI, and HS Tech rebals were announced on 16 Feb. Janaghan Jeyakumar, CFA had expected GDS out, Tongcheng Travel in on HSTECH, along with the…
  • …deletion of Zhongsheng Group (881 HK) in HSCEI, with a low conviction replacement of Zijin Mining, which turned out to be an add of China Unicom Hong Kong (762 HK)
  • No changes to the main HSI Index, which means evolution is further delayed. Today was the day to recap the caps. Mar1 Flow estimates are included below for all three.

Rakuten’s New “Bond-Type Share” Issuance – Quite Quirky to Quantulate Rakuten’s Quisquous New Quoz

By Travis Lundy

  • Today, Rakuten Group (4755 JP) announced it would propose an amendment to its Articles at the AGM (28 March) to issue “Bond-Type Class Shares.”   First reaction: You wot, mate?
  • The company states it wants to “strengthen its financial base through reducing interesting-bearing debt by equity-related financings and conduct proactive control of debt maturity schedule, etc.”
  • Now it wants to issue listed bond-type shares. Dividends not interest. The last Japanese issuer of something similar was NEC in 2001. Few will remember, so we study the situation.

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

By Brian Freitas


Samsonite (1910 HK): Evaluating a Potential Privatisation

By Arun George

  • Bloomberg reports that Samsonite (1910 HK) is drawing takeover interest from several PE firms which aim to relist Samsonite in the US to draw a higher valuation. 
  • A standard takeover premium (around 30%) should be sufficient due to the shareholder register. There is no single large shareholder(s) to pose an issue to an offer. 
  • The probability of an offer is medium, with an offer price likely around HK$30.00. Irrespective of a binding offer, the upside remains as Samsonite trades at an undemanding valuation. 

Outsourcing (2427) MBO Arrives! Bain Launches Cheeky, Opportunistic, Low(Priced) TOB

By Travis Lundy

  • After an extension due to a European Foreign Subsidies Review filing, and a small ‘accident’ regarding the earnings release, we have a deal. 
  • The earnings release itself seemed more innocuous than articles and rumour suggested show the causes of impairments and so it seemed like there was little cause to walk/declare MAC.
  • Now it will be done in 20 days. I still think this is cheeky, opportunistic, and low, and it is up to the float to decide what to do.

Samsonite (1910 HK): Leader Of The Pack

By David Blennerhassett

  • Luggage maker Samsonite (1910 HK) is up 11.8% today, as I type, after Bloomberg reported it is working with advisers as it studies possibilities, including going private.
  • With the reopening of China and the ongoing recovery in travel globally, Samsonite’s net sales improved markedly across all regions. 1H23 profit gained 185.3% versus 1H22.
  • FY23 figures should be out in the middle of next month.

Ecopro BM KOSPI Transfer Listing Disclosure

By Sanghyun Park

  • The schedule includes submitting the transfer listing application post-EGM on March 26th. KRX approval expected in 4-6 weeks due to Ecopro BM’s financial soundness. KOSPI listing follows in 2-3 weeks.
  • As for KOSDAQ 150 ad-hoc change, it will be replaced with the top reserved issue. The anticipated timing for this ad-hoc change is around mid or late May.
  • Following Feb 7 disclosure, stock surged over 10% in 2 days. Precedents show rallies pre-shareholder meetings, but KOSPI listing brings corrections. Today’s resolution could boost Ecopro BM short term.

Block Deal Sale of 5% Stake In SFA Engineering by Samsung Display

By Douglas Kim

  • After the market close on 27 February, Samsung Display announced that it will sell its 4.95% stake in Sfa Engineering (056190 KS) in a block deal sale. 
  • We would take the trade. We like the relatively large block deal sale discount as well as the company’s attractive valuations. 
  • SFA Engineering is trading at P/E of 8.3x, EV/EBITDA of 2.7x, and P/B of 0.7x in 2024, which are much lower than historical valuations.

Outsourcing (2427 JP): Relief as Bain Launches Tender at Unchanged Terms

By Arun George

  • Outsourcing Inc (2427 JP) announced that the pre-condition was satisfied, and Bain’s tender offer remains unchanged at JPY1,755 per share, a 52.1% premium to the undisturbed (8 December).
  • Shareholders will breathe a sigh of relief as the weak 4Q and significant impairments have raised concerns that Bain would cut its offer or walk away.
  • The offer attractiveness has increased partly due to lower consensus. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%/22.8%.

Ecopro BM (247540 KS): Index Impact of KOSDAQ to KOSPI Transfer

By Brian Freitas

  • Ecopro BM (247540 KS)‘s Board has approved the delisting of the stock from the KOSDAQ market and to list on the KOSPI market. The shareholder meeting is on 26 March. 
  • Historically, the KRX has taken an average of 64 days from application to approve the listing to transfer from the KOSDAQ market to the KOSPI market.
  • Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index on its last trading day and inclusion in the KOSPI 200 Index could take place in September.

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Daily Brief Event-Driven: Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger? and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger?
  • Rakuten Bank (5838 JP) – Introduces a Yutai Program to Goose the Mar24 Price, Mar25 EPS
  • Alcoa (AA US) Makes an Offer for Alumina (AWC AU)
  • Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth
  • StubWorld: Keisei Electric Appears Stretched Amid Latest Buyback
  • CSR (CSR AU): Saint-Gobain’s Binding Proposal at A$9.00
  • Alumina (AWC AU): Alcoa’s All-Scrip Non-Binding Proposal Seems Opportunistic
  • KOSPI Size Indices – Potential Migrations as Focus Is on Price to Book
  • ABB Targets Superloop After Taking Out Symbio
  • CSR (CSR AU): Saint Gobain Firms $9/Share Bid


Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger?

By Travis Lundy

  • Over the weekend there was an article in the Nikkei saying that Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) were considering a merger. Other media outlets followed.
  • This has been a possible outcome. Aeon Co Ltd (8267 JP) owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.
  • This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for MatsukiyoCocokara (3088 JP). It would be 25% of the market. Questions will be asked about concentration. 

Rakuten Bank (5838 JP) – Introduces a Yutai Program to Goose the Mar24 Price, Mar25 EPS

By Travis Lundy

  • The Rakuten Bank offering in early December was a great time to buy the dip of you sold end-September. It should have been a good time to buy outright.
  • Unfortunately, the stock priced at ¥2,470, then closed that day at ¥2,500. That was the high for the next ten weeks. Two weeks later it was 20% lower. Ouch.
  • But it climbed out of the abyss, gained 35% in 8wks, then Thursday the Bank announced a new Shareholder Benefit program. Today the stock was +7%. Worth looking at details.

Alcoa (AA US) Makes an Offer for Alumina (AWC AU)

By Brian Freitas

  • Alcoa (AA US) has made a non-binding, indicative and conditional proposal to acquire all shares in Alumina (AWC AU). Shareholders will receive 0.02854 shares of Alcoa for each Alumina share. 
  • Alcoa (AA US) has entered into an agreement with Allan Gray Australia that gives them the right to acquire 19.9% of Alumina Ltd (AWC AU) at the same swap ratio.
  • Alumina Ltd (AWC AU) is a potential delete from the ASX100 Index at the March rebalance and that could provide an entry into the stock.

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

By Michael Causton

  • The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.
  • But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.
  • This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.

StubWorld: Keisei Electric Appears Stretched Amid Latest Buyback

By David Blennerhassett

  • Keisei Electric (9009 JP) has been an outperformer since activist fund Palliser Capital called on the company sell some Oriental Land (4661 JP) shares. It has now announced another buyback.
  • Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

CSR (CSR AU): Saint-Gobain’s Binding Proposal at A$9.00

By Arun George

  • CSR Ltd (CSR AU) has entered a scheme implementation deed with Cie De Saint-Gobain (SGO FP) at A$9.00 per share, a 32.9% premium to the undisturbed price (20 February).
  • The offer has a ticking fee of A$0.02 per month (accrued daily) if the scheme’s effective date is delayed beyond 26 June. The offer requires FIRB approval. 
  • The offer is attractive and represents a 15-year high. At the last close and for a mid-June payment, the gross/annualised spread is 7.4%/28.8%.

Alumina (AWC AU): Alcoa’s All-Scrip Non-Binding Proposal Seems Opportunistic

By Arun George

  • Alumina Ltd (AWC AU)‘s non-binding proposal from Alcoa (AA US) is 0.02854 Alcoa shares per Alumina share, implying a value of A$1.15, a 13.1% premium to the undisturbed price.
  • Alcoa has been granted a 20-business day exclusivity period. The Board intends to recommend a binding proposal. Allan Gray, the largest shareholder, is supportive. 
  • While strategically sensible, the offer is not a knockout bid. The headcount test is a risk as retail forums suggest a majority view forming against the offer. 

KOSPI Size Indices – Potential Migrations as Focus Is on Price to Book

By Brian Freitas

  • The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
  • We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
  • On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.

ABB Targets Superloop After Taking Out Symbio

By David Blennerhassett

  • The hunter becomes the hunted. After Superloop (SLC AU) failed to clinch Symbio Holdings (SYM AU) last year, Aussie Broadband (ABB AU) has now made an Offer for Superloop.
  • ABB’s indicative Offer provides Superloop shareholders with 0.21 new ABB shares for each Superloop share held, or an indicative Offer price of A$0.95/share, a 33.2% premium to the three-month VWAP.
  • ABB has picked up 19.9% in Superloop, also at A$0.95/share. Superloop has yet to respond.  

CSR (CSR AU): Saint Gobain Firms $9/Share Bid

By David Blennerhassett

  • On the 21st Feb, Saint-Gobain (SGO FP) made an indicative Offer to CSR Ltd (CSR AU) shareholders of A$9/share by way of a Scheme, a 34% premium to last close. 
  • Saint-Gobain and CSR have now entered into a definitive agreement, also at $9/share. The business combination has been unanimously approved by the boards of both companies. 
  • Conditions include CSR’s shareholder approval and FIRB signing off. No specific mention of ACCC. The transaction is expected to close in the second half of this year.

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Daily Brief Event-Driven: ESR Group (1821 HK): Evaluating a Potential Privatisation and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • ESR Group (1821 HK): Evaluating a Potential Privatisation
  • Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3
  • STAR100 Index Rebalance: Ten Changes a Side; Adds Outperforming as Expected
  • Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications
  • Aussie Broadband’s Non-Binding Indicative Offer for Superloop
  • Walgreens Boots Alliance (WBA US) – How Do Dow Jones Deletes Do Historically?
  • Details of Korea Value-Up Initiatives & Index, Announced This Morning
  • Merger Arb Mondays (26 Feb) – China TCM, Azure, A2B, Boral, CSR, Outsourcing, Snow Peak, Genetron
  • Alumina (AWC AU) Agrees To Alcoa’s Offer
  • T G S/P G S: Delayed by Competition Review, Spread


ESR Group (1821 HK): Evaluating a Potential Privatisation

By Arun George

  • On 21 February, Bloomberg reported that due to the steep share price declines, major ESR Group (1821 HK) shareholders are considering options for their stakes, including ESR’s privatisation.
  • The reports also noted buyer interest in ESR’s significant assets. Past share dealings suggest that Warburg Pincus and the co-founders are the likely consortium to lead a potential privatisation. 
  • The offer probability is low as a scheme would likely require a HK$16.00 offer, posing a funding challenge. Nevertheless, the upside remains as ESR trades at an undemanding valuation. 

Keisei Electric Rail (9009) – A BUYBACK! But It’s Likely To Be Crossholders Selling in ToSTNeT-3

By Travis Lundy

  • Keisei Electric Railway Co (9009 JP) has long been the target of activist-ish-y holders who seek to have the company monetise its 20+% stake in Oriental Land (4661 JP)
  • Last autumn (17-Oct-2023), Keisei was the subject of a presentation by activist-ish-y fund Palliser Capital who called the stock 43% undervalued. They want Keisei to sell some OLC shares.
  • Palliser wanted Keisei to use resulting monies for growth capex+shareholder return, improve IR/governance, shrink board, adopt KPIs, etc. Thursday we got an announcement of a 2.9% stock buyback. 

STAR100 Index Rebalance: Ten Changes a Side; Adds Outperforming as Expected

By Brian Freitas

  • There are 10 changes for the STAR100 Index in March. We correctly forecast all 10 deletes and got 8 of the 10 adds right.
  • Estimated one-way turnover is 6.8% and that results in a one-way trade of CNY 1.79bn. Nearly all constituent changes have more than 1 day of ADV to trade.
  • The adds have started to outperform the deletes and the index over the last couple of weeks and there could be more outperformance in the next two weeks.

Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications

By Brian Freitas

  • Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
  • The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
  • The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.

Aussie Broadband’s Non-Binding Indicative Offer for Superloop

By Brian Freitas


Walgreens Boots Alliance (WBA US) – How Do Dow Jones Deletes Do Historically?

By Travis Lundy

  • On 31 January, Walmart (WMT US) announced a 3:1 stock split. For cognoscenti, that meant a Dow Jones Industrial Avg might be in the offing.
  • The last change to the index was in Aug-2020, spurred by the 4:1 split for Apple (AAPL US). This time, the likely deletion candidate was Walgreens Boots Alliance (WBA US)
  • Indeed, last week, the Index Keepers announced Amazon.com Inc (AMZN US) would replace Walgreens Boots Alliance on 26 Feb (i.e. WBA would be booted on the close of 23 Feb).

Details of Korea Value-Up Initiatives & Index, Announced This Morning

By Sanghyun Park

  • The rollout of the Korea Value-Up Index has encountered a minor delay. Completion of the index is slated for 3Q, with ETFs scheduled for release in 4Q.
  • The government will encourage the National Pension Service to utilize it as a benchmark.
  • Dividend payout ratio, dividend yield, PER, and cash flow will be included as screening factors for this index, in addition to the already known factors of PBR and ROE.

Merger Arb Mondays (26 Feb) – China TCM, Azure, A2B, Boral, CSR, Outsourcing, Snow Peak, Genetron

By Arun George


Alumina (AWC AU) Agrees To Alcoa’s Offer

By David Blennerhassett

  • Pittsburgh-Based Alcoa (AA US) is offering 0.02854 of its own shares for each Alumina Ltd (AWC AU) share, a 13% premium to last close. Alumina recommends the Offer to shareholders.
  • Alumina owns a 40% stake in Alcoa World Alumina & Chemicals, a JV with Alcoa that operates bauxite mining, alumina refining, and aluminium smelting operations. Alcoa owns the remaining 60%.
  • Separately, Alcoa announced it has entered into an agreement with Allan Gray Australia that gives it the right to acquire up to 19.9% of Alumina. CITIC also holds 18.9%.

T G S/P G S: Delayed by Competition Review, Spread

By Jesus Rodriguez Aguilar

  • TGS is seizing an opportunity by acquiring a competitor at a low valuation, in an all-share deal 0.06829 TGS NO x 1 PGS NO, departing from its traditional asset-light approach.
  • The Merger is subject to ongoing review by UK and Norwegian competition authorities. I believe the deal will be cleared, but might be delayed until Q4.
  • The dividend-adjusted gross spread is 6.7%. Regulatory approval concerns seem overblown. I would set up the spread.

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Daily Brief Event-Driven: Index Rebalance & ETF Flow Recap: HSCEI and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide
  • A/H Premium Tracker (To 23 Feb 2024):  Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time
  • HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Boral, CSR, Ansarada, TCM, Snow Peak, Azure Min, Genetron
  • Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells
  • A2B Australia (A2B AU): Scheme Vote on 25 March
  • Weekly Deals Digest (25 Feb) – Azure, A2B, Boral, CSR, China TCM, Outsourcing, Payroll, Snow Peak
  • Hyosung Corp Split: Potential Mirror of December 2021 LX-LG Block Deal
  • Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights
  • STAR50 Index Rebalance: Three Changes a Side; One Surprise Change


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, HSTECH, HSIII, STTF, Top50, Div+, FXI, FnGuide

By Brian Freitas

  • The changes for the SSE STAR50 (STAR50 INDEX) and STAR100 Index were announced post market close on Friday.
  • The coming week is a full one with capping cutoffs, review cutoffs, announcements and implementations apart from futures expiries.
  • With China open after Lunar New Year, the National Team is back pouring money into ETFs with the largest inflows to the CSI 300, CSI 500, ChiNext and STAR50 indices.

A/H Premium Tracker (To 23 Feb 2024):  Liquid AH Premia See Sharpest Fall in a LOONG (He-He) Time

By Travis Lundy

  • The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
  • SOUTHBOUND and NORTHBOUND flows net positive. AH premia on average fell so Hs OUTperformed As by 2.1%. Liquid Hs saw their H outperform the A by 3.1% on average.
  • Last week was the sharpest one-week fall in AH premium in a very long time.  SOUTHBOUND Flows Monitor here. NORTHBOUND Flows Monitor here.

HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs

By Travis Lundy

  • A great week for HK and Chinese shares, especially the larger caps. Mainland indices were up 8 days in a row to Friday, helping HK shares stay bid.
  • Net SOUTHBOUND buying was HK$20.0bn in the first post-holiday week. LOTS of SOEs on the net buying side.
  • Remarkable this past week, was a new tendency to net sell names which were up a lot and net buy names which haven’t performed as well. 

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Boral, CSR, Ansarada, TCM, Snow Peak, Azure Min, Genetron

By David Blennerhassett


Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net BUY RMB 10.7bn of A-shares on strong average activity after RMB +16.1bn, +9.9bn and +12.1bn the three weeks before. More National Team buying this week.
  • Five of the top ten buys among liquid NORTHBOUND stocks were finance. Again. Info Tech saw net selling. Again. People trading long gamma now instead of short gamma.

A2B Australia (A2B AU): Scheme Vote on 25 March

By Arun George

  • The A2B Australia (A2B AU) IE considers Comfortdelgro Corp (CD SP)’s A$1.45 offer fair and reasonable as it above the midpoint of its A$1.30-1.54 per share valuation range. 
  • The scheme is conditional on ACCC approval, which should be forthcoming as ComfortDelGro is not a significant player in Australia.
  • Several substantial shareholders have sold or exited, lowering the scheme vote risk. At the last close and for the 11 April payment, the gross/annualised spread was 2.5%/22.3%.

Weekly Deals Digest (25 Feb) – Azure, A2B, Boral, CSR, China TCM, Outsourcing, Payroll, Snow Peak

By Arun George


Hyosung Corp Split: Potential Mirror of December 2021 LX-LG Block Deal

By Sanghyun Park

  • Hyosung Corp’s split diverges from usual Korean market splits. No tender offer is expected post-new holding company formation, reducing value accretion opportunities.
  • Sibling separation in Hyosung Corp’s split mandates shares cross-transfers. Hence, block deals among siblings are plausible.
  • This scenario resembles the case in December 2021 when LX Koo Bon-joon disposed of LG Corp shares through a block deal instead of a swap, causing an 8% drop.

Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

By David Blennerhassett

  • There is no suggestion of precondition breach attached to Outsourcing Inc (2427 JP)‘s impairment losses. 
  • Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in Boral (BLD AU), with certain tendering thresholds triggering more cash.
  • Itoki Corp (7972 JP)‘s mega ToSTNeT-3 buyback is now done.

STAR50 Index Rebalance: Three Changes a Side; One Surprise Change

By Brian Freitas

  • There are three constituent changes for the SSE STAR50 (STAR50 INDEX) at the March rebalance. One inclusion and one non-inclusion are surprises.
  • One way turnover is estimated at 2.9% and will result in a one-way trade of CNY 4,075m with over 2.5x ADV to trade on all constituent changes.
  • The adds have outperformed the deletes over the last few months with a jump in the last few trading sessions. There could be more outperformance over the next two weeks.

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Daily Brief Event-Driven: EQD | Where to BUY the KOSPI On The Upcoming Pullback and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • EQD | Where to BUY the KOSPI On The Upcoming Pullback


EQD | Where to BUY the KOSPI On The Upcoming Pullback

By Nico Rosti

  • The KOSPI 200 INDEX has been rallying since January 2022, roughly up +22.5%, the rally can continue, but soon there could be a pullback, possibly this coming week.
  • If the index falls from its current highs, where are the best support levels to go LONG again?
  • The price area between 355 and 345 is where the index could find support and resume the uptrend.

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Daily Brief Event-Driven: The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow
  • CSR (CSR AU): Saint Gobain’s $9/Share NBIO
  • Quiddity Leaderboard S&P 500 Mar 24: Big Index Flows Possible for Workday and KKR
  • FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
  • FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
  • HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing
  • Start of Acceptance Period with Guaranteed Success


The Launch of 1st Corporate Value Up ETF on 27 February – Focus on Low PBR and Cash Flow

By Douglas Kim

  • Samsung Asset Management announced today that it will be launching the first Corporate Value Up ETF on 27 February. It will focus on low PBR and positive cash flow generators.
  • This ETF which will be called KoAct Dividend Growth Active ETF. There are about 45 stocks that are expected to be included in this ETF. 
  • Among the 92 companies in KOSPI 200 that are trading at less than 1x PBR, those that generate positive free cash flow are outperforming significantly. 

CSR (CSR AU): Saint Gobain’s $9/Share NBIO

By David Blennerhassett

  • Cie De Saint-Gobain (SGO FP) is offering CSR (CSR AU) shareholders A$9/share by way of a Scheme, a 34% premium to last close. That’s a knockout price.
  • The Offer is indicative. Confirmatory due diligence is ongoing. CSR board has, not surprisingly “unanimously resolved to pursue the offer at an agreed price of A$9.00“. 
  • A firm offer would be subject to FIRB and shareholder approval. Neither should pose an issue. Assuming a firm Offer is shortly forthcoming, this could be wrapped up late-July

Quiddity Leaderboard S&P 500 Mar 24: Big Index Flows Possible for Workday and KKR

By Travis Lundy

  • 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 index is reviewed quarterly. The next review will be in March 2024 and the evaluation date for the rankings for the constituent selection process is 29th February 2024.
  • In this insight, we take a look at Potential ADDs and Potential DELs for the rebalance. We estimate US$13.1bn one-way flow on 3 ADDs and 3 DELs.

FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds

By Brian Freitas


FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI

By Brian Freitas


HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing

By David Blennerhassett


Start of Acceptance Period with Guaranteed Success

By Jesus Rodriguez Aguilar

  • Spanish renewables group Opdenergy Holdings (OPDE SM) will exit the stock market upon closing of Antin Infrastructure Partners (ANTIN FP)‘s takeover bid. The company is scheduled to delist on 23 April.
  • Minimum acceptance condition is 75%. Antin had 71.2% irrevocables, which together with a letter of intention for 6.09%, should mean the threshold is crossed.
  • Spread is 0.68%/7.54% (gross/annualised, assuming settlement on 26 March). Long and tender.

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Daily Brief Event-Driven: Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS
  • Itoki (7972 JP) – Worth Thinking About Post Mega ToSTNeT-3 Buyback
  • Azure Minerals (AZS AU): MinRes Selling Out Paves the Way for the Scheme
  • Union Bank of India (UNBK IN) Placement: Using Index Inclusion Well
  • Azure (AZS AU): MinRes’ Discounted Exit
  • NPS Plans to Select Three Asset Management Companies For “Corporate Value Up” Program
  • China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60
  • TCM (570 HK): Sinopharm’s $4.60/Share Offer
  • CSR Ltd (CSR AU): Saint-Gobain’s A$9/Share Offer
  • CSR (CSR AU): Saint-Gobain’s Non-Binding Proposal at A$9.00


Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS

By Sanghyun Park

  • NPS abruptly joins ‘Corporate Value Up Program’, plans to select three asset managers. Deadline: this month’s 29th; results: March 19th, possibly linked to Korea Premium Index ETF launch in mid-May.
  • The document outlines guidelines, allocating 90-100% to value stocks, with KOSDAQ under 20%. While benchmarked to the internally-built index, it will likely focus on Korea Premium Index and KOSDAQ Global.
  • The fund size is crucial. NPS will disclose details later. But still, there is considerable room to this year’s ceiling for local equity; a significant amount could flow into this.

Itoki (7972 JP) – Worth Thinking About Post Mega ToSTNeT-3 Buyback

By Travis Lundy

  • As discussed in Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump, the company was going to do a mega ToSTNeT-3 buyback between then and end-Feb. That happened this morning.
  • The company bought back 7.966mm shares (13.96%) for ¥15.9bn. That should have cleared out the bulk of the risk of the original warrant holders who bought in 2020. But…
  • The dilution/accretion don’t offset perfectly, and there is a clause suggesting how this might play out from here. But we can infer things from other data we now have.

Azure Minerals (AZS AU): MinRes Selling Out Paves the Way for the Scheme

By Arun George

  • The AFR reports that JPMorgan is selling 14.5% of Azure Minerals (AZS AU) shares at A$3.42. The primary seller is said to be Mineral Resources (MIN AU), seeking to exit.
  • MinRes’ decision to sell out a discount rather than accept the scheme A$3.70 offer reflects the cost of securing a say on Andover and the opportunity cost of capital. 
  • The transaction booklet will be despatched in early March. At the last close and for an early May scheme payment, the gross/annualised spread is 2.5%/13.4%. 

Union Bank of India (UNBK IN) Placement: Using Index Inclusion Well

By Brian Freitas

  • Union Bank Of India (UNBK IN) is looking to raise up to INR 30bn (US$362m) with the floor price set at INR 142.78/share and a maximum discount of 5%.
  • The stock has run up a lot and with index inclusion around the corner, this is as good a time as any to issue stock.
  • Union Bank Of India (UNBK IN) trades cheaper than peers and could continue to outperform over the near-term.

Azure (AZS AU): MinRes’ Discounted Exit

By David Blennerhassett

  • JPMorgan is placing MinRes (MIN AU)‘s 14.5% stake in Azure Minerals (AZS AU) at A$3.42/share, a 5% discount to last close and a 7.6% discount to the A$3.70/share Scheme price. 
  • It was reported last month that MinRes, who paid up to ~A$4.00/share for some of its stake, was looking to exit. But cash now vs. ~8% more in two months?
  • Given the recent rout in lithium and nickel prices, one wonders if a MAC landmine lurks. Or, quite simply, MinRes just needs the cash. Expect Azure to fall tomorrow.

NPS Plans to Select Three Asset Management Companies For “Corporate Value Up” Program

By Douglas Kim

  • On 21 February, NPS announced that it will select three domestic asset management companies to manage funds that will be allocated to the “corporate value up” program. 
  • NPS plans to accept proposals from the local asset management and investment advisory companies from 21 to 29 February. NPS is likely to finalize the selected candidates sometime in March. 
  • We provide a list of 34 companies where the NPS has at least 5% ownership stake, with PBR of 0.5x or less, and included in KOSPI 200.

China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60

By Arun George

  • China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
  • The pre-condition relates to various Chinese regulatory approvals. As SOE entities own the offeror, regulatory approvals will be a formality. The offer price is final. 
  • Ping An Insurance (H) (2318 HK), which holds a blocking stake, will be supportive. The offer is fair when the previously (higher) rumoured offers are adjusted for the market downturn. 

TCM (570 HK): Sinopharm’s $4.60/Share Offer

By David Blennerhassett

  • $4.60/Share. That’s the number – by way of a Scheme – that only matters. Below the recently rumoured $6/share, and $5.10/share a little over three years ago. Terms are final.
  • As widely expected, the Offeror is SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), indirectly owning 32.46% in China Traditional Chinese Medicine (570 HK) (TCM) via Sinopharm Group Hongkong,
  • Optically, the Offer price appears light. But this should still get up. TCM is trading rich to peers. No other competing bidder will emerge. Expect regulatory pre-cons to be fast-tracked.

CSR Ltd (CSR AU): Saint-Gobain’s A$9/Share Offer

By Brian Freitas

  • Cie De Saint-Gobain (SGO FP) has approached CSR Ltd (CSR AU) with a non-binding indicative offer to acquire all of CSR’s shares at A$9/share via a scheme of arrangement.
  • At the last close of CSR (pre-trading halt) the gross spread to the offer price is 13.21%. That will close significantly once the stock resumes trading.
  • Given the large premium to the last close, at a price higher than the highest high, and support from the CSR Board, the deal should go through.

CSR (CSR AU): Saint-Gobain’s Non-Binding Proposal at A$9.00

By Arun George

  • In response to media speculation, Cie De Saint-Gobain (SGO FP) confirmed a non-binding proposal for CSR Ltd (CSR AU) at A$9.00, a 32.9% premium to the undisturbed price.
  • Saint-Gobain is conducting confirmatory due diligence. CSR is at a trading halt concerning receiving a proposal regarding a potential material transaction involving CSR.
  • Shareholders should be supportive as the offer represents a 15-year high. The timing of a binding agreement is the key risk.  

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Daily Brief Event-Driven: Snow Peak (7816) – Bain Deal at ¥1 and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Snow Peak (7816) – Bain Deal at ¥1,250 – 46% Premium Is Nice, Not A Home Run
  • Quiddity Leaderboard MV J-Gold Miners Mar 24: One High-Conviction DEL and More Low-Conviction Cases
  • Monitoring LG Display’s Stock Rights Trading
  • CIMC (1839 HK): Justification For Unjust Offer Price?
  • HSCEI Dividend Futures: Shrinking OI; Fair Value Estimates Show Upside
  • Snow Peak (7816 JP): Bain-Backed MBO at JPY1,250
  • JSE Mar ’24 Rebalance: No T40 or T40 SWIX Changes Expected
  • China Traditional Chinese Medicine (570.HK) – New Information on Privatization
  • Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)
  • EQD | NIFTY’s Rally Resistance Targets Approaching: Reversal?


Snow Peak (7816) – Bain Deal at ¥1,250 – 46% Premium Is Nice, Not A Home Run

By Travis Lundy

  • The possibility/likelihood of a “¥50bn MBO” for Snow Peak Inc (7816 JP) was leaked in a Nikkei article last Friday. It went limit up two days in a row. 
  • That TOB price is more than 70% off its three-year high. That will certainly disappoint some. Separately, the price seems a bit low given growth. 
  • The family and friends own ~42% so if someone gets upset, or uppity, there could be a challenge. Just because an MBO exists doesn’t mean people have to tender in.

Quiddity Leaderboard MV J-Gold Miners Mar 24: One High-Conviction DEL and More Low-Conviction Cases

By Travis Lundy

  • The MV J-Gold Miners index represents the performance small-cap gold and silver mining companies listed around the world.
  • This index is reviewed semi-annually in March and September. During these reviews, names can be added or deleted from the index.
  • In this insight, we take a look at the potential ADDs and DELs and our flow expectations for the index rebal event in March 2024. 

Monitoring LG Display’s Stock Rights Trading

By Sanghyun Park

  • LG Display’s tight stock rights trading prompts a need to assess potential trading opportunities. Taihan Electric Wire’s concurrent capital increase warrants close observation.
  • Watch for a potentially wider spread in Taihan Electric Wire’s stock rights trading from the 22nd, given local institutional demand focus on LG Display may create a buying vacuum.
  • Observers speculate on a CJ CGV-like pattern at LG Display. With no current market movements, predicting such a scenario is difficult. Nonetheless, I’ll monitor closely and share any developments.

CIMC (1839 HK): Justification For Unjust Offer Price?

By David Blennerhassett

  • On the 28 November 2023, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a conditional H-share buyback at a $7.00/H-share, a forgettable 8.6% premium to last close.
  • This Voluntary Offer followed by a Merger by Absorption requires shareholder approval and SAFE signing off. The SAFE condition was satisfied on the 26th Jan.
  • Last night, CIMC announced the CBP investigation into the evasion of  U.S. anti-dumping and countervailing duties was extended. There is no mentioned in interim accounts or HKEx of this investigation.

HSCEI Dividend Futures: Shrinking OI; Fair Value Estimates Show Upside

By Brian Freitas

  • The open interest of the HSCEI 2024 dividend futures is less than half that of the HSCEI 2023 and HSCEI 2022 open interest at the same time of the year.
  • Market volatility and the fallout of the losses faced by Korean investors (and the scrutiny of Korean ELS-issuing banks) are among the primary reasons for the low open interest.
  • Our fair value for the HSCEI 2024 dividend futures is higher than the current market but there is a lot of sensitivity to bank dividends and special dividends.

Snow Peak (7816 JP): Bain-Backed MBO at JPY1,250

By Arun George

  • Snow Peak Inc (7816 JP) has recommended a Bain Capital-sponsored MBO tender offer at JPY1,250 per share, a 58.0% premium to the undisturbed price (15 February). 
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 38.13% ownership ratio.
  • Based on the irrevocables, the minimum acceptance condition requires a 52.8% minority acceptance rate. While not a knockout offer, the acceptance condition is achievable.  

JSE Mar ’24 Rebalance: No T40 or T40 SWIX Changes Expected

By Charlotte van Tiddens, CFA

  • Last night the price snapshot was taken for the March 2024 rebalance.
  • We do not expect there to be any changes to the Top 40, Top 40 SWIX, FINI, FINDI or INDI.
  • EXX is expected to enter the RESI with NPH falling out. 

China Traditional Chinese Medicine (570.HK) – New Information on Privatization

By Xinyao (Criss) Wang

  • Since China TCM doesn’t deny the rumors so far after the trading halt, privatization is becoming likely this time.Rumor said formal negotiations may not begin until after the Lantern Festival.
  • CNPGC may not want to pay high prices on privatization.Weak sentiment/share price may help with the negotiations.But the key is to obtain the consent of other shareholders, especially Ping An.
  • There’s underlying logic for Taiji Group to drive this privatization. A price of higher than HKD5.1 is possible. If the price could reach HKD6 (or higher), it has exceeded expectations.

Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)

By Brian Freitas


EQD | NIFTY’s Rally Resistance Targets Approaching: Reversal?

By Nico Rosti

  • The NIFTY Index has been rising for 5 days in a row, this is the second week up (CC=+2), there is a good chance it will pullback soon.
  • The index is going towards the Q3 resistance level at 22354, that would be a good area from where to start to prepare for a pullback.
  • Going SHORT may not be worth it, the right trade is to wait for the pullback and go LONG again at better prices.

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