Most Read

We see a potential increase in the FIF for Kuaishou Technology (1024 HK), JD Health (6618 HK) and Akeso Biopharma Inc (9926 HK) at the MSCI May SAIR.
The increase in FIF will require passive funds to buy 79.45m shares of Kuaishou (1024 HK), 57.35m shares of JD Health (6618 HK) and 15.32m shares of Akeso (9926 HK).
Short interest has started to inch higher on Kuaishou, while short interest is rising sharply on JD Health and Akeso.

Tencent (700 HK): 4Q21, Weak Revenue and Significant “Other Gains”, 30% Downside

By Ming Lu

Tencent’s revenue growth continued to slow down to 8% YoY in 4Q21.
The company used more extraordinary income to bolster EPS in recent years.
We believe the stock has a downside of 28% within 2022.

Lendlease Global Offering to Buy the Rest of JEM – Big Deal, Cheap, Cheaper Than Peers

In mid-February, Lendlease Global Commercial REIT (LREIT SP) which owned 31.8% of the Jurong East MRT Station “Jem” complex announced it would buy the rest.
They announced they would issue new equity to pay for some of it. Predictably, the units fell, and fell vs Office/Retail Mixed-Use SREIT peers.
Now you can buy units of Singapore asset quality, acceptable leverage, high divi and something well cheap of peer-measured fair.

Samsung Family’s Inheritance Tax Situation & Future Block Deals

By Sanghyun Park

The family is done with selling stakes in Samsung Life Insurance and Samsung SDS. What remains now is the sale of a 0.33% stake in Samsung Electronics by Hong Ra-hee.
Hong Ra-hee’s 0.33% stake in Samsung Electronics is highly likely to appear soon. The deadline is April 25th. It will likely cause an impact of 1.5x ADTV.
Additional stake sales are likely. SDS for sure, and probably more Life. But more SamE? This remains unclear due to the substantially lower controlling stake percentage.

StubWorld: Buoyant Henderson As Hong Kong Eases Covid Rules

Henderson Land Development (12 HK)‘s shares bounced late last week after the Hong Kong government indicated it would ease strict Covid measures. FY21 results were also released yesterday.
Preceding my comments on Henderson, 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%.

Before it’s here, it’s on Smartkarma

Mar 23

Most Read: Toyo Construction, KakaoBank, Lendlease Global Commercial REIT, Nomura Research Institute Ltd, Singapore Press Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Infroneer (5076 JP) Tender Offer for Toyo Construction (1890 JP) Could Get Funky
Krafton & KakaoBank: Potential MSCI Upweights in May
Lendlease Global REIT Placement – Very Well Flagged but Still Quite a Large One to Digest
Nomura Research Placement – Has Sold Before, Deal Might Be More Reflective on the Parent’s Results
SPH Shareholders Agree to SPH EGM & DIS – Deal Done So Now It’s Arb+Option

Infroneer (5076 JP) Tender Offer for Toyo Construction (1890 JP) Could Get Funky

INFRONEER Holdings (5076 JP) is the new name of the holding company which was comprised of Maeda Corporation, Maeda Road Construction, and Maeda Seisakusho.
Infroneer owns a 20% stake in smaller construction company Toyo Construction (1890 JP) through subsidiary Maeda Construction. It has launched a Tender Offer for the rest at a 28.5% premium.
This could get complicated. If you own, I would not sell at terms.

Krafton & KakaoBank: Potential MSCI Upweights in May

KakaoBank (323410 KS) is currently included in the MSCI Korea Index at a FIF of 20%. That could increase to 35% at the May SAIR.
Krafton Inc (259960 KS) is currently included in the MSCI Korea Index at a FIF of 45%. That could increase to 55% at the May SAIR.
We estimate passive MSCI trackers will need to buy US$222m of KakaoBank (323410 KS) and US$83m of Krafton Inc (259960 KS) at the close on 31 May.

Lendlease Global REIT Placement – Very Well Flagged but Still Quite a Large One to Digest

Lendlease REIT is looking to raise up to US$427m via a private placement and a preferential offering.
The deal is very well flagged as the acquisition was announced in Feb 2022 and the EGM approval for the same was received earlier this month.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

Nomura Research Placement – Has Sold Before, Deal Might Be More Reflective on the Parent’s Results

Nomura Holdings is looking to raise around US$486m via selling 2.5% of Nomura Research.
This is not the first sale by Nomura and hence, might not come as a complete surprise.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

SPH Shareholders Agree to SPH EGM & DIS – Deal Done So Now It’s Arb+Option

Topday, Singapore Press Holdings (SPH SP) shareholders met in an EGM and a Scheme Meeting to approve the takeover of SPH and distribution of SPH REIT (SPHREIT SP) units.
Shareholders passed resolutions at both meetings, meaning the Cuscaden Peak Pte acquisition is approved.
This means we move to next steps, which is choosing the Consideration, and possible MGO Chain Offer on SPH REIT (SPHREIT SP).

Before it’s here, it’s on Smartkarma

Mar 22

Most Read: JD.com Inc., Core Lithium Ltd, Mapletree Commercial Trust, Mapletree North Asia Commercial Trust, Toshiba Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Tencent’s BIG In-Specie Dividend of JD.com Shares – The Likely Flows & Timing
S&P/ASX Index Rebalance Preview (June): Potential Changes from Now to June
Mapletree Revise Scheme – Give MNACT Holders Cash for NAV and a Free Option
Mapletree Merger: All-Cash Option; Current Prices Mean No Passive Flows
Toshiba – The New CEO And The Company Culture

Tencent’s BIG In-Specie Dividend of JD.com Shares – The Likely Flows & Timing

Tencent (700 HK) will deliver shares of JD.com Inc. (9618 HK) this week in its in-specie distribution of 14.7% of the shares out of JD.com.
Some people will NEED to hold. Some will NEED to sell. On a net basis, it is a short-term sell and a longer-term overhang.
The timing and execution are going to be quite interesting. There will be short-term opportunity.

S&P/ASX Index Rebalance Preview (June): Potential Changes from Now to June

The privatisation of Crown Resorts and CIMIC Group could lead to one change to the S&P/ASX100 and two changes to the S&P/ASX 200 (AS51 INDEX) prior to the regular rebalance.
There will be more changes at the regular rebalance – one close change in the S&P/ASX50, one close change in the S&P/ASX100 and a few for the S&P/ASX 200.
The potential inclusions have outperformed the potential deletions by a wide margin. Couple of the potential inclusions were added to the S&P/ASX300 and FTSE All-Cap indices on 18 March.

Mapletree Revise Scheme – Give MNACT Holders Cash for NAV and a Free Option

Quarz and MNACT holders “win” to get a Cash-Only Consideration bump to 1.0x Price/Sep2021 NAV at S$1.1949/unit. This gets them out at NAV.
However there is a catch they want to stay invested in the assets, they have to buy MCT in the market or accept that the scrip ratio was correct.
To fund the Cash-Only Consideration option, there will be a Preferential Offering at S$2.0039/unit, and MIPL has offered to underwrite the entire deal. MNACT holders get a free option now.

Mapletree Merger: All-Cash Option; Current Prices Mean No Passive Flows

Mapletree Commercial Trust (MCT SP) have added a cash-only option for Mapletree North Asia Commercial Trust (MAGIC SP) unitholders in addition to the scrip-only and cash-and-scrip options.
At current prices, Mapletree North Asia Commercial Trust (MAGIC SP) unitholders will take the cash-only option. That means no passive flows following the implementation of the scheme.
At current prices, the entire preferential offering is likely to be taken up by MIPL. The increase in shares will be offset by a lower FIF/investability weight – no inflows.

Toshiba – The New CEO And The Company Culture

By Mio Kato

The Nikkei had an interesting article today on Toshiba’s new CEO and the company’s underlying culture.
It addresses some inconsistencies we have seen in terms of demonstrated competence at lower levels vs. a certain lack thereof at the top.
Ultimately though we suspect that what it reveals points to a lower chance of a privatisation

Before it’s here, it’s on Smartkarma

Mar 21

Most Read: JD.com Inc., Orient Overseas International, Mapletree Commercial Trust, Poly Real Estate Group Co.,, Core Lithium Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Tencent’s BIG In-Specie Dividend of JD.com Shares – The Likely Flows & Timing
Index Rebalance & ETF Flow Recap: MSCI May, FTSE June, HFCAA/China ADRs, GoTo
Quarz Capital Again Objects to the MNACT/MCT Deal – This Time to MAS
FTSE China A50 Index: FOL Changes Done; 100 Index Members Next?
S&P/ASX Index Rebalance Preview (June): Potential Changes from Now to June

Tencent’s BIG In-Specie Dividend of JD.com Shares – The Likely Flows & Timing

Tencent (700 HK) will deliver shares of JD.com Inc. (9618 HK) this week in its in-specie distribution of 14.7% of the shares out of JD.com.
Some people will NEED to hold. Some will NEED to sell. On a net basis, it is a short-term sell and a longer-term overhang.
The timing and execution are going to be quite interesting. There will be short-term opportunity.

Index Rebalance & ETF Flow Recap: MSCI May, FTSE June, HFCAA/China ADRs, GoTo

It was a busy Friday with a whole lot of rebalance implementations – FTSE AW/AC, EPRA Nareit, China 50, China A50, Taiwan 50, S&P/ASX. This week is quieter.
We take an early look at potential changes to the MSCI Standard Index in May, to the FTSE AW/AC in June, China ADRs that could list in Hong Kong.
There were some big inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) during the week.

Quarz Capital Again Objects to the MNACT/MCT Deal – This Time to MAS

Quarz Capital objects to the proposed Mapletree Commercial Trust (MCT SP) / Mapletree North Asia Commercial Trust (MAGIC SP) as they claim it is damaging to MNACT unitholder interests.
Now they have written a letter to the Monetary Authority of Singapore asking them to Do Something to force MNACT directors to Do Something Different.
I doubt it comes to anything, but activist-ish letter commentary is my bag so…

FTSE China A50 Index: FOL Changes Done; 100 Index Members Next?

With the FOL changes implemented at the March rebalance, the next step could be an increase in the number of FTSE China A50 Index (XIN9I) constituents from 50 to 100.
The June rebalance will also see a change in the index universe from the FTSE China A All Cap Free Index to the FTSE China A All Cap Index.
If the 50 to 100 stock increase is implemented on one-step, one-way turnover will be around 27.6% and result in a one-way trade of over CNY 13bn.

S&P/ASX Index Rebalance Preview (June): Potential Changes from Now to June

The privatisation of Crown Resorts and CIMIC Group could lead to one change to the S&P/ASX100 and two changes to the S&P/ASX 200 (AS51 INDEX) prior to the regular rebalance.
There will be more changes at the regular rebalance – one close change in the S&P/ASX50, one close change in the S&P/ASX100 and a few for the S&P/ASX 200.
The potential inclusions have outperformed the potential deletions by a wide margin. Couple of the potential inclusions were added to the S&P/ASX300 and FTSE All-Cap indices on 18 March.

Before it’s here, it’s on Smartkarma

Mar 20

Most Read: Kawasaki Kisen Kaisha, Mapletree Commercial Trust, Orient Overseas International, Alphabet Inc Cl C, Oneness Biotech and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MSCI May 2022 Index Rebalance Preview: Changes in a Volatile Market
Quarz Capital Again Objects to the MNACT/MCT Deal – This Time to MAS
Index Rebalance & ETF Flow Recap: MSCI May, FTSE June, HFCAA/China ADRs, GoTo
Vulcan Value Partners Q4 And Annual 2021 Letter
Oneness Biotech (4743 TT): Worth of Attention Ahead of Upcoming Key Milestones

MSCI May 2022 Index Rebalance Preview: Changes in a Volatile Market

The review period runs from 18-29 April for the May SAIR, the results will be announced on 13 May (Asia-time) with the changes implemented after the close on 31 May.
Most of the potential changes are in China with few changes spread across the other Asian markets. China loses the most number of index members, followed by Japan.
There are over 4 weeks to the start of the review period and there will be changes over that time as stock prices move around.

Quarz Capital Again Objects to the MNACT/MCT Deal – This Time to MAS

Quarz Capital objects to the proposed Mapletree Commercial Trust (MCT SP) / Mapletree North Asia Commercial Trust (MAGIC SP) as they claim it is damaging to MNACT unitholder interests.
Now they have written a letter to the Monetary Authority of Singapore asking them to Do Something to force MNACT directors to Do Something Different.
I doubt it comes to anything, but activist-ish letter commentary is my bag so…

Index Rebalance & ETF Flow Recap: MSCI May, FTSE June, HFCAA/China ADRs, GoTo

It was a busy Friday with a whole lot of rebalance implementations – FTSE AW/AC, EPRA Nareit, China 50, China A50, Taiwan 50, S&P/ASX. This week is quieter.
We take an early look at potential changes to the MSCI Standard Index in May, to the FTSE AW/AC in June, China ADRs that could list in Hong Kong.
There were some big inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) during the week.

Vulcan Value Partners Q4 And Annual 2021 Letter

By Fund Newsletters

We are value investors – business analysts with a long-term time horizon focused on purchasing publicly traded companies that are competitively entrenched at significant discounts to intrinsic worth.
After very strong absolute and relative returns through the first nine months of the year, all of our investment strategies lagged their benchmarks during the fourth quarter.
All of our portfolios are fully invested in world class businesses with stable values trading at a significant discount to intrinsic worth.

Oneness Biotech (4743 TT): Worth of Attention Ahead of Upcoming Key Milestones

By Tina Banerjee

Oneness Biotech (4743 TT)’s approved drug in Taiwan, Fespixon is the world’s first drug to treat diabetic foot ulcers with superiority in complete wound closure to the standard of care.
Fespixon is under review in China, and is under multiple NDA submissions to Asian health authorities. The U.S. phase 3 study is expected to be completed in H1 2023.
Key milestones are expected from two other late-stage pipeline drug candidates, FB825 and FB704A in 2022 and beyond.

Before it’s here, it’s on Smartkarma

Mar 19

Most Read: Toshiba Corp, Meituan, Sea Ltd, China Conch Venture Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Toshiba Board Ructions as Independent Director Goes Rogue
Meituan (3690 HK): Authorities Turned Friendly to Internet Companies, Upgrade to Buy
Toshiba – Zage News
Sea Ltd.’s Money Machine Is Broken, Downside Is Not Fully Priced-In
China Conch Venture (586 HK): Last Day Of Entitlement

Toshiba Board Ructions as Independent Director Goes Rogue

There is a Toshiba Corp (6502 JP) EGM next week for shareholders to vote on the company’s Separation Plan, with a shareholder proposal to re-engage take-private buyers.
Four+ weeks ago, the Board unanimously supported the first, and unanimously opposed the second, and shareholders and major proxy advisors came out against the first.
Now Independent Director Raymond Zage, originally from one of the dissenting shareholders, has written a letter stating he has voted FOR the shareholder proposal the board rejected. OOPS! 🤭

Meituan (3690 HK): Authorities Turned Friendly to Internet Companies, Upgrade to Buy

By Ming Lu

Central Financial Working Committee turned friendly to overseas listed internet Companies.
We believe Meituan will be free from the pressure of anti-monopoly rules.
Meituan stock has fallen significantly and we upgrade it to BUY.

Toshiba – Zage News

By Mio Kato

The announcement from Raymond Zage that he would vote for 3D’s proposal at next week’s EGM is a curious development.
It suggests that pressure on Toshiba’s directors could be ramping up significantly.
Whether that is a good thing or not is a serious question though.

Sea Ltd.’s Money Machine Is Broken, Downside Is Not Fully Priced-In

By Oshadhi Kumarasiri

Perhaps, misled by the Chinese tech rally due to the change in stance from the Chinese Government, Sea’s shares rose by 33% compared to the broader market’s 8.3%.
With fundamentals deteriorating and the Federal Reserve signalling an aggressive rate hike outlook, Sea Ltd (SE US)’s 33% move seems unwarranted.
Meanwhile, the downside potential is quite significant as Sea trades at a significant FY+2 EV/Sales premium to regional peers whose cyclical bottoms are unknown.

China Conch Venture (586 HK): Last Day Of Entitlement

Today (18 March) is the last day of dealing in China Conch Venture Holdings (586 HK) shares on a cum-entitlement basis for the Conch Environment Protection (CEEP) spin-off.
CEEP is expected to commence trading on the 30 March. The Listing Document is expected to be issued on or around the 22 March.
Separately, I see CCV trading at a 14% premium to its NAV, around its most extreme-ever level.

Before it’s here, it’s on Smartkarma

Mar 18

Most Read: Toshiba Corp, GoTo, Softbank Group, Yashili International Holdings, Mapletree Commercial Trust and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Toshiba Board Ructions as Independent Director Goes Rogue
GoTo Gojek Tokopedia IPO: Offering Details & Index Inclusion
Softbank Group – China Bounce Erases a Week of Losses
Yashili (1230 HK): Possible Mengniu Offer Amid Exchange Rights And Phantom Shares
Mapletree Commercial Vs the World (Or at Least S-REIT World). Still Heads I Win Tails I Win

Toshiba Board Ructions as Independent Director Goes Rogue

There is a Toshiba Corp (6502 JP) EGM next week for shareholders to vote on the company’s Separation Plan, with a shareholder proposal to re-engage take-private buyers.
Four+ weeks ago, the Board unanimously supported the first, and unanimously opposed the second, and shareholders and major proxy advisors came out against the first.
Now Independent Director Raymond Zage, originally from one of the dissenting shareholders, has written a letter stating he has voted FOR the shareholder proposal the board rejected. OOPS! 🤭

GoTo Gojek Tokopedia IPO: Offering Details & Index Inclusion

GoTo (1379371D IJ) is offering 52bn shares in its IPO (plus a greenshoe of 7.8bn shares). The issue is being targeted at domestic investors and should list on 4 April.
GoTo (1379371D IJ) will also look to list on an international exchange within the next two years by selling just over 8% of the company to those investors.
Inclusion in domestic indices could take place in July, while inclusion in the MSCI and FTSE indices is expected in 2023 at the earliest.

Softbank Group – China Bounce Erases a Week of Losses

By Kirk Boodry

Softbank is a $23bn winner on the China bounce as Alibaba (+37% over 2 days, $18bn) and Vision Fund (+$4.8bn) recovered from selling pressure over the last week
Improving sentiment aside the discount remains above 50% and the rebound appears to be more about correcting excess selling than a change in market outlook
We remain wary of Chinese exposure in the near-term on political, regulatory and economic risks although the worst appears to be over for now

Yashili (1230 HK): Possible Mengniu Offer Amid Exchange Rights And Phantom Shares

China Mengniu (2319 HK) is in discussions regarding its holdings in Yashili (1230 HK) which may result in a number of Potential Transactions, and may include a pre-conditional privatisation offer.
The Potential Offer would involve a cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price.
The recent privatisation of key peer Ausnutria Dairy Corp (1717 HK) provides a guideline to the timeline from here.

Mapletree Commercial Vs the World (Or at Least S-REIT World). Still Heads I Win Tails I Win

In the waning hours of 2021, Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) proposed to merge to make a top 10 Asian REIT.
MCT shareholders and “The Market” did not like it and sent MCT units lower. MNACT holder Quarz didn’t like it and complained. I wrote about all this.
But 6+ weeks after looking at new MCT trades as Heads I Win, Tails I Win, I revisit and see no reason to change my mind.

Before it’s here, it’s on Smartkarma

Mar 17

Most Read: Kawasaki Kisen Kaisha, Tencent, SPH REIT, SK Square and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MSCI May 2022 Index Rebalance Preview: Changes in a Volatile Market
Hong Kong: Where Have Shorts Increased & Decreased?
SPH Releases EGM/Scheme “Substantial & Relevant Questions” – Beware Chain Offer Comments
Tencent (700 HK): Layoff and Penalty Before 4Q21 Result
Korea Holding Companies: Stub Tradable Names

MSCI May 2022 Index Rebalance Preview: Changes in a Volatile Market

The review period runs from 18-29 April for the May SAIR, the results will be announced on 13 May (Asia-time) with the changes implemented after the close on 31 May.
Most of the potential changes are in China with few changes spread across the other Asian markets. China loses the most number of index members, followed by Japan.
There are over 4 weeks to the start of the review period and there will be changes over that time as stock prices move around.

Hong Kong: Where Have Shorts Increased & Decreased?

Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.
From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.
Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.

SPH Releases EGM/Scheme “Substantial & Relevant Questions” – Beware Chain Offer Comments

Singapore Press Holdings (SPH SP) has released a set of Q&A for holders as we approach the 22 March EGM/Scheme Meeting.
Approval of both resolutions/votes is necessary to effect the Cuscaden Peak deal.
The comments and answer about the SPH REIT Chain Offer may be misleading. Take care of the details!

Tencent (700 HK): Layoff and Penalty Before 4Q21 Result

By Ming Lu

Layoff rumors are spreading, which shadow two departments and 10% of Tencent’s employees.
China Banking Regulatory Commission (CBRC) will fine Tencent for money laundering.
Short video apps are taking time on site from Tencent’s WeChat app.

Korea Holding Companies: Stub Tradable Names

By Sanghyun Park

Korea has a total of 68 holding companies listed on KOSPI and KOSDAQ. We then have 14 holdcos with a high level of price cointegration with their respective listed subsidiaries.
Three holding companies have sigma below zero on a 20D MA. Hanwha Corp is considered stub tradable as its share price relative to its subsidiaries was relatively flat.
Four holdcos, including SK Square are over 70% NAV discount. Among them, SK Square is of the most interest as the price correlation with SK Hynix has been improving lately.

Before it’s here, it’s on Smartkarma

Mar 16

Most Read: Kawasaki Kisen Kaisha, JD.com Inc., JD.com Inc (ADR), Softbank Group, AVZ Minerals and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MSCI May 2022 Index Rebalance Preview: Changes in a Volatile Market
JD.com Tencent Div Distribution – The US$10bn Overhang – Passives Might Have to Sell
JD.com Tencent Div Distribution – The US$10bn Overhang
Softbank – That ¥4000 Mark Is Getting Close…
S&P/ASX Indices: March 2022 Rebalance Update and Post-Inclusion Outlook

MSCI May 2022 Index Rebalance Preview: Changes in a Volatile Market

The review period runs from 18-29 April for the May SAIR, the results will be announced on 13 May (Asia-time) with the changes implemented after the close on 31 May.
Most of the potential changes are in China with few changes spread across the other Asian markets. China loses the most number of index members, followed by Japan.
There are over 4 weeks to the start of the review period and there will be changes over that time as stock prices move around.

JD.com Tencent Div Distribution – The US$10bn Overhang – Passives Might Have to Sell

On 23rd Dec, Tencent declared a dividend in the form of distribution in specie of 457.326m shares of JD.com, i.e. 1 share of JD.com for every 21 shares of Tencent.
While Tencent went ex-div on 20th Jan 2022, the actual settlement of the distribution is expected to happen on or about 25th Mar 2022.
In this note, we talk about the likely impact of Prosus’ shareholding on passive flows at the time of settlement.

JD.com Tencent Div Distribution – The US$10bn Overhang

On 23rd Dec, Tencent declared a dividend in the form of distribution in specie of 457.326m shares of JD.com, i.e. 1 share of JD.com for every 21 shares of Tencent.
While Tencent went ex-div on 20th Jan 2022, the actual settlement of the distribution is expected to happen on or about 25th Mar 2022.
In this note, we look at Tencent’s shareholding in order to decipher the impact on JD.com’s shares once the distribution is settled to determine who the sellers could be.

Softbank – That ¥4000 Mark Is Getting Close…

By Mio Kato

When Softbank announced its strange buyback in November we wondered aloud whether buyback maximums of ¥1trn and 250m meant Softbank foresaw a ¥4,000 share price in its future.
With the stock price now having jauntily sashayed down to ¥4,265 it is a question why they aren’t more aggressive with their buyback.
A question that may be answered by all the cash raising measures that Softbank is engaged in perhaps?

S&P/ASX Indices: March 2022 Rebalance Update and Post-Inclusion Outlook

By Janaghan Jeyakumar, CFA

The March 2022 regular rebalance constituency changes for ASX 300, ASX 200, ASX 50, and ASX 20 were announced on 4th March 2022.
These constituency changes will be implemented at the close of 18th March 2022 (Friday) and will be effective from the open on 21st March 2022 (Monday).
Below is a discussion on the performance of these candidates so far and our expectation for the next few weeks.

Before it’s here, it’s on Smartkarma

Mar 15

Most Read: KraneShares CSI China Internet ETF, Lake Resources Nl, Samsung SDI, Mitratel, Western Areas and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications
MVIS Global Rare Earth/Strategic Metals Index Rebalance: Some Large Capping Ouflows in Australia
KODEX (FnGuide) Battery ETF Rebalancing: Passive Flow Tracking for Two Remaining Days
FTSE All-World/All-Cap Index Rebalance Preview (June): IPO Inclusions Coming Up
Western Areas: IGO Firm On Pricing As Nickel Soars

China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications

China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).
Then DiDi Global dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC’s requirements and work on the HK listing was halted.
With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.

MVIS Global Rare Earth/Strategic Metals Index Rebalance: Some Large Capping Ouflows in Australia

There are no adds/deletes to the MVIS Global Rare Earth/Strategic Metals Index at the March rebalance. However, there are changes to free floats and capping factors.
The largest impacts are on ioneer Ltd (INR AU), AVZ Minerals (AVZ AU), Australian Strategic Materials (ASM AU), Iluka Resources (ILU AU) and Pilbara Minerals (PLS AU).
The non-inclusion of Core Lithium Ltd (CXO AU) and Lake Resources Nl (LKE AU) could lead to a selloff tomorrow. Both stocks are FTSE All-Cap and S&P/ASX300 inclusions on Friday.

KODEX (FnGuide) Battery ETF Rebalancing: Passive Flow Tracking for Two Remaining Days

By Sanghyun Park

KODEX battery ETF does rebalancing four times a year from this March. The rebalancing trading is done for 3-trading days from March 14 to 16, presumably equal daily weight.
Due to the low float rate, LG Energy will fall to third place. Samsung SDI should become the top constituent with a 20% cap, followed by SK Innovation at 15%.
The passive impact sizes of the top four stocks are significant, considering they are in the same sector. So, they should make themselves a suitable target for long/short basket trading.

FTSE All-World/All-Cap Index Rebalance Preview (June): IPO Inclusions Coming Up

We see 20 potential inclusions to the FTSE All-World and All-Cap indices that will be implemented at the close of trading on 17 June. Most are high probability inclusions.
LG Energy Solution (373220 KS), Kakao Pay (377300 KS) and Mitratel (MTEL IJ) are the top 3 stocks with the most passive inflows.
There are a few stocks that will have passive inflows from other index trackers while there are others that have lock-up expiries from now to implementation of the changes.

Western Areas: IGO Firm On Pricing As Nickel Soars

IGO Ltd (IGO AU) said it has no obligation, nor any current intention to increase the consideration for Western Areas (WSA AU) in response to recent short-term events.
The Scheme timetable is, however, expected to face a short delay with implementation in May/June compared to April previously.
Currently trading comfortably through terms, as it has done since shortly after the invasion of Ukraine.

Before it’s here, it’s on Smartkarma