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Most Read

Mar 04
0

Most Read: Gazprom PJSC, Vital Healthcare Property Trust, LG Chem Ltd, VanEck Vectors Russia ETF, Taiwan Semiconductor Sp Adr and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Russia: Index Deletion & Impacts
  • FTSE EPRA Nareit Index Rebalance: Four Inclusions for Asia; Some High Impact Names
  • MSCI Announces It Will Exclude Russia from MSCI EM Indices
  • Russia Gets the Boot from Major Indices – Minimal Impact But World’s Largest Small Sidepocket?
  • TSMC (TSM/2330 TT): Position for ADR Premium Expansion

Russia: Index Deletion & Impacts

By Brian Freitas

  • MSCI will move Russia to Standalone market status at the close on 9 March while FTSE will delete Russian securities from its indices at the close on 4 March.
  • There will be zero inflows to other markets in conjunction with Russia’s reclassification/ deletion since the fund managers cannot sell the Russian stock to raise cash.
  • Some delta one desks/ swap providers could make money on the deletion, while there are trades linked to the deletion from the indices.

FTSE EPRA Nareit Index Rebalance: Four Inclusions for Asia; Some High Impact Names

By Brian Freitas

  • There will be four inclusions for Developed Asia in the FTSE EPRA Nareit – One REIT, Takara Leben Real Estate Investment, Vital Healthcare Property Trust and ESR Kendall Square REIT.
  • There will be around US$77m to buy from passive funds across all inclusions. The largest impacts will be on Vital Healthcare Property Trust (VHP) and ESR Kendall Square REIT (365550).
  • The Japan inclusions are a result of the companies publishing reports in English with an independent auditor signing off on them.

MSCI Announces It Will Exclude Russia from MSCI EM Indices

By Douglas Kim

  • MSCI announced this morning (3 March) that it will exclude Russia from MSCI EM indices as of 9 March.
  • As a result of this decision, this will further devastate the Russian stock market but it should benefit other MSCI EM included countries including China, Korea, Taiwan, India, and Brazil. 
  • Some of the Korean stocks which could benefit from the greater passive index capital flowing in include Samsung Electronics Pref,  LG Chem Pref, and Hyundai Motor Pref. 

Russia Gets the Boot from Major Indices – Minimal Impact But World’s Largest Small Sidepocket?

By Travis Lundy

  • Major global indices have decided to relegate Russia to the “standalone” and “unclassified” market status due to sanctions and restrictions on transfer/payment/clearing.
  • Talk of significant flows into major non-Russia EM markets such as China, Taiwan, Korea, etc is misguided. 
  • Russia was a non-negligible weight in global EM a few months ago, but GDRs have fallen dramatically and Russia-listed are effectively now portfolio pocket lint.

TSMC (TSM/2330 TT): Position for ADR Premium Expansion

By Brian Freitas

  • The premium of Taiwan Semiconductor Sp Adr (TSM US) to TSMC (2330 TT) has dropped from 10% to nearly parity in slightly less than a month.
  • There is still no headroom available on the ADR and we expect the premium to move higher once the selling on the ADR is complete.
  • The SGX has recently launched single stock futures on Taiwan Semiconductor Sp Adr (TSM US). There could be market makers willing to provide liquidity which would make trade entry easier.

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Mar 03
0

Most Read: Postal Savings Bank Of Chi-A, LG Energy Solution, Hitachi Metals, Vital Healthcare Property Trust, XPeng and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE China A50 Index Rebalance: One Set of Surprises & Large Turnover
  • KRX New Deal Index Rebalance: No Surprises as LG Chem Not Deleted from Battery Index
  • Hitachi Metals (5486) – Where IS Undisturbed?
  • FTSE EPRA Nareit Index Rebalance: Four Inclusions for Asia; Some High Impact Names
  • FTSE China 50 Index Rebalance: Three Changes as Index Turnover Soars

FTSE China A50 Index Rebalance: One Set of Surprises & Large Turnover

By Brian Freitas

  • There are three sets of changes for the FTSE China A50 index at the March rebalance with implementation on 18 March. Two changes were expected while one is a surprise.
  • The March rebalance will also see the Foreign Ownership Limits applied to the stocks. Estimated one-way index turnover is 17.39% and will result in a one-way trade of CNY 9,360m.
  • As the surprises, we’d keep an eye on China State Construction A (601668 CH) and China Life Insurance (601628 CH) over the next few days.

KRX New Deal Index Rebalance: No Surprises as LG Chem Not Deleted from Battery Index

By Brian Freitas

Hitachi Metals (5486) – Where IS Undisturbed?

By Travis Lundy

  • Hitachi Metals (5486 JP) is currently awaiting regulatory approval for its takeover by a consortium led by Bain Capital, announced in late April 2021. 
  • The deal was originally expected to see a Tender Offer launched in November 2021, but that was delayed because the bidders lacked some necessary regulatory approvals.
  • Since then, the stock has sold off. Today it sold off a LOT. Deal break? Market ructions? Someone getting a tap on the shoulder? How far down is the gap?

FTSE EPRA Nareit Index Rebalance: Four Inclusions for Asia; Some High Impact Names

By Brian Freitas

  • There will be four inclusions for Developed Asia in the FTSE EPRA Nareit – One REIT, Takara Leben Real Estate Investment, Vital Healthcare Property Trust and ESR Kendall Square REIT.
  • There will be around US$77m to buy from passive funds across all inclusions. The largest impacts will be on Vital Healthcare Property Trust (VHP) and ESR Kendall Square REIT (365550).
  • The Japan inclusions are a result of the companies publishing reports in English with an independent auditor signing off on them.

FTSE China 50 Index Rebalance: Three Changes as Index Turnover Soars

By Brian Freitas

  • As expected, Nongfu Spring (9633), China Overseas Land & Investment (688) and XPeng (9868) will replace Geely Auto (175), China Tower (788) and JD Health (6618) in the index.
  • The adds, deletes and capping changes will result in one-way turnover estimated at 9.14% and will result in a one-way trade of HK$4,576m.
  • Shorts in Nongfu Spring (9633 HK), JD Health (6618 HK) and China Tower (788 HK) have over 10 days of ADV to cover.

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Mar 02
0

Most Read: Li Auto, Toshiba Corp, Orix Corp, Nexon and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSI, HSCEI, HSTECH: March Rebalance Flows Post Capping
  • Toshiba – Privatisation Rebuttal and Then a Change in CEO…
  • Nikkei 225 Change – Shinsei (8303) OUT, ORIX (8591) IN
  • Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)
  • Nexon – Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play

HSI, HSCEI, HSTECH: March Rebalance Flows Post Capping

By Brian Freitas

Toshiba – Privatisation Rebuttal and Then a Change in CEO…

By Mio Kato

  • Yesterday Bloomberg published an interview with Toshiba CEO Satoshi Tsunakawa where he effectively said a privatisation was not going to happen. 
  • Today, Toshiba announced that Tsunakawa and his deputy, Mamoru Hatazawa would be resigning effective immediately. 
  • What an interesting coincidence… one which could make shorting Toshiba quite attractive.

Nikkei 225 Change – Shinsei (8303) OUT, ORIX (8591) IN

By Travis Lundy

  • The Nikkei Index team announced changes to the Nikkei 225 Average today after the close. 
  • Shinsei Bank (8303) is OUT and ORIX (8591) is IN based on the new rule changes effective with the new market structure in place at the TSE on 4 April. 
  • There is a special sit on Shinsei, and ORIX has several days to buy. It could be interesting.

Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

By Brian Freitas

Nexon – Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play

By Travis Lundy

  • The founder and former chairman and CEO of Nexon (3659 JP) passed away according to both Nexon and his holding company NXC. Both announced it late afternoon 1 March.
  • NXC – the near-parent  (47+% stake) of Nexon tried to sell Nexon/NXC in H1 2019 to no avail. Since then, profits have rebounded somewhat, and investments have multiplied. 
  • The estate may wish to sell Nexon shares, or its entire stake, at some point near-term.

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Mar 01
0

Most Read: Money Forward, Zip Co Ltd, NIO Inc and more

By | Daily Briefs, Most Read

In today’s briefing:

  • TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)
  • Russia-Ukraine War: Longer Term Implications for China Utilities and Energy
  • Zip to Acquire Sezzle: Buy Now, Pray Later?
  • NIO Secondary Listing (9866 HK): Index Entry & Flow; HSCEI 22/23 Div Steepener Catalyst
  • ZIP Acquisition and Unlinked Placement – Too Many Things at Once

TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)

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 for all TSE1 constituents. This situation opens up interesting opportunities for a basket trade. 

Russia-Ukraine War: Longer Term Implications for China Utilities and Energy

By Osbert Tang, CFA

Zip to Acquire Sezzle: Buy Now, Pray Later?

By Brian Freitas

  • Zip Co Ltd (Z1P AU) has agreed to acquire Sezzle Inc (SZL AU) in an all-scrip deal where Sezzle shareholders will receive 0.98 shares of Z1P per shares of SZL.
  • At last closing prices, the deal values Sezzle Inc (SZL AU) at A$2.1658/share, a 21.7% premium to the last close and a 31.7% premium to 30 day VWAP.
  • Zip Co Ltd (Z1P AU) has also announced a A$148.7m fully underwritten institutional placement and a A$50m non-underwritten share placement plan to strengthen its balance sheet.

NIO Secondary Listing (9866 HK): Index Entry & Flow; HSCEI 22/23 Div Steepener Catalyst

By Brian Freitas

ZIP Acquisition and Unlinked Placement – Too Many Things at Once

By Sumeet Singh

  • ZIP announced that it would acquire Sezzle in an all-stock deal. It also announced its earnings and that it would raise A$149m (A$107m) from a placement.
  • We have also covered the Oct 2020 placements in our earlier note, Zip Placement – Sorry, It’s Not You. It’s Me. 
  • In this note we will talk about the recent developments and run the deal through our ECM framework.

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Feb 28
0

Most Read: Shanghai Medicilon Inc, Bank Of Baroda, SenseTime Group, CIMIC Group Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
  • NIFTY Bank Index Rebalance: BOB to Replace RBL Bank
  • Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia
  • Last Week in Event SPACE: CIMIC, SK Square, AGL Energy, Mapletree, Z Energy, VW/Porsche
  • Russia-Ukraine War: Longer Term Implications for China Utilities and Energy

STAR50 Index Rebalance: Index Committees Just Wanna Have Fun

By Brian Freitas

  • In keeping with tradition, the SSE and CSI have continued to use a 6 month minimum listing history. No one remembers how or why it started, but it carries on.
  • There are only 10 trading days to implementation and passive funds will need to trade multiple days of ADV on the inclusions and exclusions.
  • The adds, deletes and the SSE STAR50 (STAR50 INDEX) have moved in lockstep since November. The CSI500 Index has outperformed over the period opening up a trading opportunity.

NIFTY Bank Index Rebalance: BOB to Replace RBL Bank

By Brian Freitas

Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia

By Brian Freitas

  • Changes to the FTSE All-World/All-Cap were announced over the previous weekend, NIFTY was announced Thursday and STAR50 on Friday. LG Energy’s inclusion to the KOSPI200 was also announced.
  • 21 February was the review cutoff for the March rebalance of the FTSE China 50, FTSE China A50, STI, FTSE TWSE Taiwan 50 and the FTSE EPRA Nareit.
  • On Friday, FTSE announced that two of the previously announced inclusions would not be added, while there would be 10 new additions to the All-World/All-Cap indices.

Last Week in Event SPACE: CIMIC, SK Square, AGL Energy, Mapletree, Z Energy, VW/Porsche

By David Blennerhassett

Russia-Ukraine War: Longer Term Implications for China Utilities and Energy

By Osbert Tang, CFA

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Feb 27
0

Most Read: Shanghai Medicilon Inc, Samsung SDI, SenseTime Group, Japan Lifeline, E Mart Inc and more

By | Daily Briefs, Most Read

In today’s briefing:

  • STAR50 Index Rebalance: Index Committees Just Wanna Have Fun
  • FnGuide Samsung Group Index Rebalancing Preview
  • Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia
  • Japan Lifeline (7575 JP) Throws a Lifeline to Its Share Price
  • Emart Announces A Major Share Buyback Program

STAR50 Index Rebalance: Index Committees Just Wanna Have Fun

By Brian Freitas

  • In keeping with tradition, the SSE and CSI have continued to use a 6 month minimum listing history. No one remembers how or why it started, but it carries on.
  • There are only 10 trading days to implementation and passive funds will need to trade multiple days of ADV on the inclusions and exclusions.
  • The adds, deletes and the SSE STAR50 (STAR50 INDEX) have moved in lockstep since November. The CSI500 Index has outperformed over the period opening up a trading opportunity.

FnGuide Samsung Group Index Rebalancing Preview

By Sanghyun Park

  • FnGuide Samsung Group has the most AUM among locally themed indexes. As of last Friday’s closing price, AUM is ₩1.52T.
  • The share price movements of Samsung Group affiliates basically show high cointegration. Therefore, a small differential impact on the flow significantly affects the short-term price direction of these stocks. 
  • So, we should consider a long/short setup on a swing trading window. Particularly, we need to focus on the first two trading days, when the rebalancing impact is relatively significant.

Index Rebalance & ETF Flow Recap: FTSE AW/AC, FTSE CH50/A50/TW50, KS200, NIFTY, STAR50, Russia

By Brian Freitas

  • Changes to the FTSE All-World/All-Cap were announced over the previous weekend, NIFTY was announced Thursday and STAR50 on Friday. LG Energy’s inclusion to the KOSPI200 was also announced.
  • 21 February was the review cutoff for the March rebalance of the FTSE China 50, FTSE China A50, STI, FTSE TWSE Taiwan 50 and the FTSE EPRA Nareit.
  • On Friday, FTSE announced that two of the previously announced inclusions would not be added, while there would be 10 new additions to the All-World/All-Cap indices.

Japan Lifeline (7575 JP) Throws a Lifeline to Its Share Price

By Travis Lundy

  • Japan Lifeline announced a buyback on Friday after the close.
  • The stock saw a huge growth spurt in the first half of the last decade but slowed down post 2018. So the stock has significantly underperformed the sector. 
  • The buyback parameters and the stock’s trading history suggest that with the stock near a 5-year low, it is worth looking a little deeper.

Emart Announces A Major Share Buyback Program

By Douglas Kim

  • On 25 February, E Mart Inc (139480 KS) announced that it will buy back 1 million shares, representing 3.6% of its outstanding shares. Currently, Emart has 87,464 treasury shares.
  • We believe Emart’s share price is well positioned to continue to outperform the market in the next several months, driven by the large buyback program. 
  • Emart is currently trading at 0.4x P/B (38% lower than the historical valuation multiples). One could argue that Emart is valued at an excessive discount to the historical valuations.

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Feb 26
0

Most Read: Sberbank of Russia PJSC, Apollo Hospitals Enterprise, Toshiba Corp, Shanghai Medicilon Inc and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Russia: MSCI/FTSE Flows in Case of Deletion
  • NIFTY50 Index Rebalance: Apollo Hospitals to Replace IOC
  • Toshiba – Why Renesas Might Be a Better Option for the Devices Business than an IPO
  • Ukraine Invasion’s Semiconductor Impact
  • STAR50 Index Rebalance: Index Committees Just Wanna Have Fun

Russia: MSCI/FTSE Flows in Case of Deletion

By Brian Freitas

  • Investment related sanctions by the US and UK Governments could lead to the deletion of some or all Russian equities from the MSCI and FTSE indices.
  • Deletion from the FTSE All-World/All-Cap indices would result in an outflow of US$6.67bn, while deletion from the MSCI Standard/Small Cap indices would result in an outflow of US$15.74bn.
  • The most selling will be on Gazprom PJSC (GAZP), LUKOIL (LKOH), Sberbank of Russia PJSC (SBER), MMC Norilsk Nickel PJSC (GMKN), Novatek PJSC (NVTK), Yandex (YNDX) and Tatneft PJSC (TATN).

NIFTY50 Index Rebalance: Apollo Hospitals to Replace IOC

By Brian Freitas

  • As expected, Apollo Hospitals Enterprise (APHS IN) will replace Indian Oil Corp (IOCL IN) in the NIFTY Index (NIFTY INDEX) after the close of trading on 30 March.
  • The index methodology has been changed to make new listings eligible for index inclusion if they complete one month by the review cutoff date, down from three months earlier.
  • Estimated one-way turnover is 0.63% and will result in a one-way trade of around INR 14bn. Passive trackers will have a lot to trade on the stocks.

Toshiba – Why Renesas Might Be a Better Option for the Devices Business than an IPO

By Mio Kato

  • We have made no secret of the fact that we consider Toshiba’s restructuring plans to be unspectacular. 
  • Initially we saw no reason to separate the infrastructure business and saleable assets but with  that issue addressed it is the position of the devices business which concerns us. 
  • This is because we feel it is rather undersized to stand on its own two feet… but we increasingly feel that Renesas could be the ideal home for the unit.

Ukraine Invasion’s Semiconductor Impact

By Jim Handy

  • The SIA commented today on the impact to US semiconductor makers of sanctions against Russia
  • Russia accounts for negligible consumption of technology products, so embargos should not materially impact chip sales
  • The SIA believes that there are sufficient alternate sources of supply that the absence of Russian raw materials should not pose an immediate risk

STAR50 Index Rebalance: Index Committees Just Wanna Have Fun

By Brian Freitas

  • In keeping with tradition, the SSE and CSI have continued to use a 6 month minimum listing history. No one remembers how or why it started, but it carries on.
  • There are only 10 trading days to implementation and passive funds will need to trade multiple days of ADV on the inclusions and exclusions.
  • The adds, deletes and the SSE STAR50 (STAR50 INDEX) have moved in lockstep since November. The CSI500 Index has outperformed over the period opening up a trading opportunity.

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Feb 25
0

Most Read: Mapletree Commercial Trust, Sberbank of Russia PJSC, Hang Seng China Enterprises Index, IDP Education and more

By | Daily Briefs, Most Read

In today’s briefing:

  • War: What to Do?
  • Mapletree (MCT & MNACT) Response to SIAS
  • Russia: MSCI/FTSE Flows in Case of Deletion
  • HSCEI Dividend Futures: Stay Short the 2022/23 Steepener
  • IDP Education Placement – Time for Round 2 (US$700m Worth) Of the Selldown

War: What to Do?

By Henry Soediarko

  • Ukraine – Russia war has started and markets imploded today. 
  • Rotation from growth to value will continue and stay invested.
  • Inverse ETF and Vix should help to manage volatility in this turbulent time.

Mapletree (MCT & MNACT) Response to SIAS

By Travis Lundy

  • SIAS posed questions to both Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) (a.k.a. “MNACT”) about how the ratio was decided and deal appropriateness.
  • SIAS also asked about whether the deal was absolutely necessary and whether MCT would change its mandate. 
  • MCT and MNACT responded with lengthy explanations, some of which didn’t answer the questions. That’s what we get til the end-March Circular. And that’s OK. The trade is the same.

Russia: MSCI/FTSE Flows in Case of Deletion

By Brian Freitas

  • Investment related sanctions by the US and UK Governments could lead to the deletion of some or all Russian equities from the MSCI and FTSE indices.
  • Deletion from the FTSE All-World/All-Cap indices would result in an outflow of US$6.67bn, while deletion from the MSCI Standard/Small Cap indices would result in an outflow of US$15.74bn.
  • The most selling will be on Gazprom PJSC (GAZP), LUKOIL (LKOH), Sberbank of Russia PJSC (SBER), MMC Norilsk Nickel PJSC (GMKN), Novatek PJSC (NVTK), Yandex (YNDX) and Tatneft PJSC (TATN).

HSCEI Dividend Futures: Stay Short the 2022/23 Steepener

By Brian Freitas

  • The HSCEI 2022 dividend futures are trading around our fair value. Larger than expected special dividends from oil and telecom companies could provide some upside.
  • The HSCEI 2022/23 div steepener has dropped from -5 to -15 since our last Insight. We see further downside here and would look to add to shorts in the spread.
  • With rising interest rates, higher inflation, higher oil prices, a slowdown could lead to a rapid repricing of dividends and there will be opportunities to buy back the spread lower.

IDP Education Placement – Time for Round 2 (US$700m Worth) Of the Selldown

By Sumeet Singh

  • Education Australia, the largest shareholder of IDP Education, last raised around US$858m (A$1.1bn) via selling 15% of IDP Education in Aug 2021.
  • The lock-up from that deal is set to expire later this month, which will result in an additional 12.5% of the company’s shares, worth US$670m (A$927m) being unlocked. 
  • In this note we will talk about the recent results and the upcoming lockup expiry.

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Feb 24
0

Most Read: Noritsu Koki, Japan Post Bank, CIMIC Group Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Noritsu Koki (7744) – PAAAAYDAAAAY!
  • Japan Post Bank – A Double on Spread Expansion and More on a Buyback?
  • CIMIC (CIM AU) Takeover Offer: Should Get Done; Index Implications
  • Hochtief’s Unconditional Offer For CIMIC
  • CIMIC (CIM AU) Replacement in ASX200

Noritsu Koki (7744) – PAAAAYDAAAAY!

By Travis Lundy

  • Noritsu Koki (7744 JP) just sold two-thirds of its stake in subsidiary JMDC Inc (4483 JP) to Omron Corp (6645 JP) for ¥112bn – pretty good for a ¥61bn marketcap.
  • This is the payday for those who have been long NK as a proxy for JMDC and possibly short JMDC against it. Now the shape of the company is different.
  • A closer look at the pro-forma financial profile is warranted. It’s a lot of money. BUT… if you look today and buy today you do NOT get the special div!

Japan Post Bank – A Double on Spread Expansion and More on a Buyback?

By Mio Kato

  • Japan Post Bank is down 15.2% since its earnings results as quarterly profit declined noticeably. 
  • This was driven by falls in income from PE investments and a reduction in gains on forex from maturing investments. 
  • While that is a sharp fall for the name, its overall risk profile, exposure to rising rates and cheap valuations make it extremely attractive in our view.

CIMIC (CIM AU) Takeover Offer: Should Get Done; Index Implications

By Brian Freitas

  • Hochtief AG (HOT GR) holds 78.58% of CIMIC Group Ltd (CIM AU) and has made an offer to acquire the remaining shares at A$22/share.
  • Hochtief will squeeze out the remaining shareholders once it holds more than 90% of the shares in CIMIC Group Ltd (CIM AU). 
  • We think the offer is fair and expect the stock to open close to A$22/share tomorrow. There could be ad hoc inclusion to the ASX200 index in May or June.

Hochtief’s Unconditional Offer For CIMIC

By David Blennerhassett

CIMIC (CIM AU) Replacement in ASX200

By Travis Lundy

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Feb 23
0

Most Read: China Overseas Land & Investment, Mapletree Commercial Trust, Razer Inc, LG Energy Solution, Noritsu Koki and more

By | Daily Briefs, Most Read

In today’s briefing:

  • FTSE China 50 Index Rebalance Preview (March): Nongfu, COLI, XPeng Potential Adds
  • SIAS Also Questions MCT/MNACT Merger, Countering/Supporting Quarz
  • Razer Inc (1337 HK): Pre-Conditions Done
  • KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out
  • Noritsu Koki (7744) – PAAAAYDAAAAY!

FTSE China 50 Index Rebalance Preview (March): Nongfu, COLI, XPeng Potential Adds

By Brian Freitas

  • We expect Nongfu Spring (9633), China Overseas Land & Investment (688) and XPeng (9868) to replace Geely Auto (175), China Tower (788) and JD Health (6618) in the index.
  • There will also be some big capping changes that will result in one-way turnover estimated at 9.2% and in a one-way trade of HK$4,910m.
  • Nongfu Spring (9633 HK) is a triple inclusion – HSI at the close on 4 March, FTSE All-World at the close on 18 March and possibly the FTSE China50 too.

SIAS Also Questions MCT/MNACT Merger, Countering/Supporting Quarz

By Travis Lundy

  • Quarz wrote an open letter questioning the Mapletree North Asia Commercial Trust (MAGIC SP) deal with MCT for MNACT shareholders, discussed here. They wrote another letter last Thursday.
  • Now, Securities Investors Association (Singapore) SIAS has come out with an open letter to MCT management questioning the deal. 
  • There are now activists on both sides questioning this deal. That is not necessarily a bad thing. 

Razer Inc (1337 HK): Pre-Conditions Done

By David Blennerhassett

  • Razer Inc (1337 HK) has announced the remaining pre-conditions have now been fulfilled.
  • The next step is the Scheme vote, which may be held in early May, with possible completion in early June.
  • Despite SAMR approval last month, this transaction continues to trade wide to terms on concerns retail investors will disrupt the headcount test.

KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out

By Brian Freitas

Noritsu Koki (7744) – PAAAAYDAAAAY!

By Travis Lundy

  • Noritsu Koki (7744 JP) just sold two-thirds of its stake in subsidiary JMDC Inc (4483 JP) to Omron Corp (6645 JP) for ¥112bn – pretty good for a ¥61bn marketcap.
  • This is the payday for those who have been long NK as a proxy for JMDC and possibly short JMDC against it. Now the shape of the company is different.
  • A closer look at the pro-forma financial profile is warranted. It’s a lot of money. BUT… if you look today and buy today you do NOT get the special div!

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