Most Read

SenseTime Group (20 HK), Li Auto (2015 HK) and XPeng (9868 HK) replace Autohome (2518 HK), Weimob Inc. (2013 HK) and Tongcheng-Elong Holdings Ltd (780 HK) in the HSTECH INDEX.
A few changes have been made from the way stocks are treated to ensure the inclusion of Li Auto (2015 HK) and XPeng (9868 HK) in the index.
SenseTime Group (20 HK) has been included at a much higher float than what it should be and this could take the stock higher in the next couple of weeks.

ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)

Aventus Group (AVN AU) received the ATO tax ruling on 18 February. This creates some uncertainty around the timing of the HomeCo Daily Needs REIT inclusion in the ASX200 Index.
Given the ‘latest available shares in issue’ are used, we think there is a better than even chance of the stock being included in the index at the March rebalance.
If HomeCo Daily Needs REIT (HDN AU) is not included in March, then it could replace Crown Resorts in May. Else, the stock will be added at the June rebalance.

StubWorld: SK Square And LG Chem’s Unjustified NAV Discounts

SK Square (402340 KS) was inexpensive after its November listing. Now it’s even cheaper.
Preceding my comments on SK Square – and LG Chem Ltd (051910 KS) – 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%.

FTSE GEIS March 2022 SAIR: Share/Float Changes

FTSE announced the changes to the All-World/All-Cap indices post market close on Friday. There were changes to the number of shares and free floats for quite a few stocks too.
There are a few stocks where the passive flow and impact is large and quite a few of these stocks have moved today. They could move more till implementation.
At the close on 4 March, HSI trackers will sell CK Infrastructure Holdings (1038 HK) due to a float reduction. Then the FTSE trackers will sell on 18 March.

FTSE China A50 Index Rebalance Preview (March 2022): Big Impact of FOL Changes

Todays closing prices will be used to determine the inclusions and exclusions at the March rebalance. We see PSBC and Bank of Ningbo replacing EVE Energy and Aier Eye.
There will also be changes to the investability weight of the stocks following the Ground Rule change that will cap stocks at their Foreign Ownership Limits.
Change to the index constituents and FOL changes will result in a one-way turnover estimated at 16.64% and will result in a one-way trade of CNY 9,322m.

Before it’s here, it’s on Smartkarma

Feb 21

Most Read: SenseTime Group, Emtek, Orient Overseas International, Nongfu Spring, HomeCo Daily Needs REIT and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
FTSE GEIS March 2022 SAIR: Changes, Switches & Same-Way Index Flow
HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect
Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown
ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)

Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover

SenseTime Group (20 HK), Li Auto (2015 HK) and XPeng (9868 HK) replace Autohome (2518 HK), Weimob Inc. (2013 HK) and Tongcheng-Elong Holdings Ltd (780 HK) in the HSTECH INDEX.
A few changes have been made from the way stocks are treated to ensure the inclusion of Li Auto (2015 HK) and XPeng (9868 HK) in the index.
SenseTime Group (20 HK) has been included at a much higher float than what it should be and this could take the stock higher in the next couple of weeks.

FTSE GEIS March 2022 SAIR: Changes, Switches & Same-Way Index Flow

FTSE announced the results of the March SAIR for the FTSE All-World/All-Cap indices on Friday. There are 337 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
Nongfu Spring (9633 HK) will have the largest inflows and is a high probability inclusion to the FTSE China 50 index. Its inclusion in the HSI INDEX was announced Friday.
FTSE will switch index membership from the US ADRs to the HK listings for ZTO Express, GDS Holdings, Baidu and Bilibili. This should result in larger CCASS holdings.

HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect

There are 29 inclusions and 12 deletions for the HSCI at the March rebalance. 26 of the inclusions will be added to Connect while all deletes will leave Stock Connect.
Some of the Stock Connect deletions have a lot of mainland holdings and there could unwinding of some of the positions ahead of becoming sell-only on the link.
Orient Overseas International, United Energy, Cloud Village and Gcl Poly Energy Holdings Limited could also move higher over the next couple of weeks before the stocks enter Stock Connect.

Index Rebalance & ETF Flow Recap: HSI, HSCEI, HSTECH, HSCI, S&P/ASX, SET50, LIC, SBI Sumishin, Crown

Hang Seng announced the results of the March rebalance post market close Friday. Two adds for the HSI, one set of changes for HSCEI, three sets for HSTECH.
An ad hoc rebalance was announced for the KOSDAQ150 following Osstem being designated an ‘Administrative Issue’. In IPO world, we have LIC in India and SBI Sumishin NetBank coming up.
Friday was the review cutoff date for the March rebalance of the ASX200 Index. The ATO has provided Aventus with the tax ruling and that creates a timing issue.

ASX200 Index Rebalance: HDN AU Inclusion Is a Matter of Time (Or Timing)

Aventus Group (AVN AU) received the ATO tax ruling on 18 February. This creates some uncertainty around the timing of the HomeCo Daily Needs REIT inclusion in the ASX200 Index.
Given the ‘latest available shares in issue’ are used, we think there is a better than even chance of the stock being included in the index at the March rebalance.
If HomeCo Daily Needs REIT (HDN AU) is not included in March, then it could replace Crown Resorts in May. Else, the stock will be added at the June rebalance.

Before it’s here, it’s on Smartkarma

Feb 20

Most Read: SenseTime Group, Orient Overseas International, Nongfu Spring, Osstem Implant, Xinyi Solar Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect
HSI Index Rebalance: Nongfu Spring & Lenovo IN; Still Tiptoeing Towards 80 Index Members
KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN
HSCEI Index Rebalance: Another Evergrande Stock Is Deleted; Xinyi Solar IN

Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover

SenseTime Group (20 HK), Li Auto (2015 HK) and XPeng (9868 HK) replace Autohome (2518 HK), Weimob Inc. (2013 HK) and Tongcheng-Elong Holdings Ltd (780 HK) in the HSTECH INDEX.
A few changes have been made from the way stocks are treated to ensure the inclusion of Li Auto (2015 HK) and XPeng (9868 HK) in the index.
SenseTime Group (20 HK) has been included at a much higher float than what it should be and this could take the stock higher in the next couple of weeks.

HSCI Index Rebalance: 29 Adds, 12 Deletes & Changes to Stock Connect

There are 29 inclusions and 12 deletions for the HSCI at the March rebalance. 26 of the inclusions will be added to Connect while all deletes will leave Stock Connect.
Some of the Stock Connect deletions have a lot of mainland holdings and there could unwinding of some of the positions ahead of becoming sell-only on the link.
Orient Overseas International, United Energy, Cloud Village and Gcl Poly Energy Holdings Limited could also move higher over the next couple of weeks before the stocks enter Stock Connect.

HSI Index Rebalance: Nongfu Spring & Lenovo IN; Still Tiptoeing Towards 80 Index Members

The Hang Seng Index was meant to have 80 constituents by mid-2022 before moving to 100 members. At 66 constituents post the March review, we are not gonna make it.
Nongfu Spring (9633 HK) and Lenovo (992 HK) will be added to the index. Nongfu’s inclusion was expected while Lenovo is a relative surprise.
Nongfu Spring (9633 HK) will also be added to the FTSE AW Index at the March SAIR at the close on 18 March. The stock should move higher.

KOSDAQ150 Ad Hoc Index Rebalance: Osstem Implant OUT; Caregen IN

Osstem Implant (048260 KS) has been suspended from trading this year following embezzlement that has nearly wiped out its equity capital.
The stock was named an Administrative Issue on Friday and will be deleted from the KOSDAQ 150 Index (KOSDQ150 INDEX). Caregen Co Ltd (214370 KS) is the replacement.
Passive funds will need to sell around KRW 60bn of Osstem Implant (048260 KS) if they can, and buy KRW 7bn of Caregen Co Ltd (214370 KS).

HSCEI Index Rebalance: Another Evergrande Stock Is Deleted; Xinyi Solar IN

As expected, Xinyi Solar Holdings (968 HK) replaces Evergrande Property Services (6666 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 4 March.
Using prices from the close on 18 February to cap the stocks, estimated one-way turnover at the rebalance is 4.37% and will result in a one-way trade of HK$3,350m.
Short interest on Xinyi Solar Holdings (968 HK) is 13 days of ADV to cover. While the inclusion was expected, short covering could take the stock higher.

Before it’s here, it’s on Smartkarma

Feb 19

Most Read: Nongfu Spring, Hock Seng Lee, HomeCo Daily Needs REIT, Western Areas, KB Financial and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues
Hock Seng Lee (HSL MK): Unconditional Offer
S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)
Investors Caught Out As Twiggy Backs IGO’s Offer For Western Areas
Korean Companies Announcing Share Cancellations Are Outperforming the Market

HSI Index Rebalance Preview (March 2022): The Slow Crawl Continues

The March rebalance should see the slow crawl toward 80 index members continue. We should get up to 68-70 members in March. Reaching 80 by June is unlikely.
High probability inclusions are Kuaishou Technology (1024 HK), Smoore International (6969 HK), Nongfu Spring (9633 HK), JD Health (6618 HK) and JD Logistics (2618 HK).
Currently, index turnover due to capping/float changes is low which will allow more stocks to be added to the index. Increase in the turnover will result in fewer changes.

Hock Seng Lee (HSL MK): Unconditional Offer

Hock Seng Lee (HSL MK) has announced an unconditional voluntary take-over offer of RM1.35/share.
The joint ultimate offerors, led by director Yu Chee Hoe, currently hold 84.2%.
HSL is already in non-compliance with Bursa’s 25% free float. The Offeror does not intend to main HSL’s listing

S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)

By Janaghan Jeyakumar, CFA

The S&P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies.
In March 2022, Index rebalance events will take place for the S&P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20.
In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.

Investors Caught Out As Twiggy Backs IGO’s Offer For Western Areas

Andrew Forrest’s Wyloo Consolidated, with 9.8% of shares out, will now support the IGO Ltd (IGO AU) / Western Areas (WSA AU), just three weeks after paying through terms.
That pledge pivots off a newly-inked side agreement between IGO and Wyloo to jointly evaluate opportunities for nickel downstream processing in Australia.
This removes the immediate prospect of a competing Offer from Wyloo, and in turn, IGO’s need to bump terms. Yet BHP Group (BHP AU) still waits in the wings.

Korean Companies Announcing Share Cancellations Are Outperforming the Market

By Douglas Kim

In this insight, we have identified 16 Korean companies that have announced common shares cancellations in 4Q 2021 and 1Q 2022.
There has been a tremendous outperformance of KOSDAQ listed companies that have announced shares cancellations in this period.
Given the continued outperformance of Korean companies that are outperforming the market after announcing treasury shares cancellation, this reflects an alpha generating trend that bears close scrutiny.

Before it’s here, it’s on Smartkarma

Feb 18

Most Read: SBI Sumishin Net Bank, JMT Network Services, Appier Group Inc, LG Chem Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April
SBI Sumishin NetBank (7163 JP) IPO Details, Fundamentals Tearsheet, and Likely Index Treatment
SET50 Index Rebalance Preview (June): Two Changes, Maybe Three
TOPIX Inclusion Pre-Event: Appier Group (4180 JP)
FnGuide & KRX K-New Deal Batteries: Combined Passive Flows Preview on March 10-15

SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April

SBI Sumishin Net Bank (7163 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on 24 March.
News reports indicate a raise of US$1bn (JPY 115.5bn). This translates to an IPO price of JPY 1,920/share, valuing the company at JPY 300bn (US$2.59bn).
The stock should be added to the TPX INDEX at the close on 27 April where trackers will need to buy over 14% of the stock issued in the IPO.

SBI Sumishin NetBank (7163 JP) IPO Details, Fundamentals Tearsheet, and Likely Index Treatment

On 15 February, SBI Holdings (8473 JP) and Sumitomo Mitsui Trust Holdings (8309 JP) announced the likely details/schedule of the IPO of their joint venture online bank.
Pre-Announcement media commentary had suggested an IPO of US$1bn in size and a potential market cap in the range of ¥300-400bn.
The stock is likely to see significant interest because of its growthy business model, and non-negligible index buying at end-March and end-April, especially if it prices at the high end.

SET50 Index Rebalance Preview (June): Two Changes, Maybe Three

The market cap review period for the June rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) starts in a couple of weeks.
Using the last close, we see JMT Network Services (JMT) and Bangkok Life Assurance (BLA) as potential inclusions, replacing Ratch Group PCL (RATCH TB) and KCE Electronics PCL (KCE TB).
Ratch Group PCL is the lowest ranked index constituent and needs to move 15% higher to avoid deletion. Passive trackers will need to sell nearly 4 days of ADV.

TOPIX Inclusion Pre-Event: Appier Group (4180 JP)

By Janaghan Jeyakumar, CFA

Japan-Based AI company Appier Group Inc (4180 JP) announced they had resolved to prepare to apply to change its listing on the Tokyo Stock Exchange to the Prime Market.
Appier has confirmed that it meets the criteria for the TSE Growth Market but if they move to the Prime Market, that would trigger a TOPIX Inclusion Event.
Below is a look at Appier’s potential to satisfy the Section Transfer Requirements and the upside potential of this event.

FnGuide & KRX K-New Deal Batteries: Combined Passive Flows Preview on March 10-15

By Sanghyun Park

FnGuide Battery Index overlaps with the rebalancing of the KRX K-New Deal. K-New Deal is March 11. As for FnGuide Battery, it will be three trading days on March 14-16.
Among the top-cap stocks, Samsung SDI will be the biggest beneficiary, and we need to consider a setup that utilizes Samsung SDI as a long/short partner for LG Chem.
LG Chem’s staying significant distorts mid-caps’ index weight in KRX Battery. The extent of passive outflows would be pretty substantial. So, outright short these mid-caps should deserve our attention.

Before it’s here, it’s on Smartkarma

Feb 17

Most Read: James Hardie Industries Cdi, Kadoya Sesame Mills, SBI Sumishin Net Bank, Gungho Online Entertainment, Champion Microelectronic Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

S&P/ASX Index Rebalance Preview (March 2022): A Busy Rebalance Across Indices
Deciphering the Dynamics of a Tachiaigai Bunbai Offering
SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April
Gungho Is Gungho for Gungho (3765 JP)
Pan Jit Hostile/Unsolicited Partial Offer for Champion Micro (3257 TT)

S&P/ASX Index Rebalance Preview (March 2022): A Busy Rebalance Across Indices

There are just 3 trading days to go in the review period for the March rebalance of the S&P/ASX family of indices. There will be plenty of changes.
We see one change for the ASX20, one change for the ASX50, up to four changes for the ASX200 and up to 15 adds/11 deletes for the ASX300.
There will be a large impact from passive trading on quite a few stocks. There will be same way flow on some stocks from the FTSE AW/AC trackers.

Deciphering the Dynamics of a Tachiaigai Bunbai Offering

In Japan, there is a type of offering called a tachiaigai bunbai offering which is used by companies to conduct small, relatively low-cost, offerings to increase liquidity or shareholder breadth.
These are conducted with a bit over a week of warning, and there are usually very low limits of shares purchasable per applicant.
There are certain dynamics surrounding such tachiaigai bunbai which are worth understanding.

SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April

SBI Sumishin Net Bank (7163 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on 24 March.
News reports indicate a raise of US$1bn (JPY 115.5bn). This translates to an IPO price of JPY 1,920/share, valuing the company at JPY 300bn (US$2.59bn).
The stock should be added to the TPX INDEX at the close on 27 April where trackers will need to buy over 14% of the stock issued in the IPO.

Gungho Is Gungho for Gungho (3765 JP)

Gungho on Monday announced results, with both revenues and earnings up.
They also announced a buyback, which at current price means about 2.8% of shares out.
That doesn’t sound like a lot, but context matters. It may matter a great deal.

Pan Jit Hostile/Unsolicited Partial Offer for Champion Micro (3257 TT)

Pan Jit International (2481 TT) appears to have launched an unsolicited/hostile partial Tender for 5.0-30.0% of the shares out of power management IC maker Champion Microelectronic Corp (3257 TT).
The price is near but not at a medium-term (and all-time) high, and is made “for investment purposes but hoping for more.”
Insiders officially hold ~13.7% of the target. It would seem done, which means a defence effort and/or white knight is not out of the question. We will watch it develop.

Before it’s here, it’s on Smartkarma

Feb 16

Most Read: Life Insurance Corp of India, James Hardie Industries Cdi, Crown Resorts, Alibaba Group, SMC Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Life Insurance Corp of India (LIC) IPO: Offering Details and Index (Fast) Entry
S&P/ASX Index Rebalance Preview (March 2022): A Busy Rebalance Across Indices
Crown Resorts (CWN AU): And Blackstone (Almost) Has It; Index Implications
Alibaba (BABA): Overly Impacted, Accumulate Before 3Q22 Result
SMC (6273) Buyback – Small Short Sharp

Life Insurance Corp of India (LIC) IPO: Offering Details and Index (Fast) Entry

Life Insurance Corp of India (1248Z IN) filed its Draft Red Herring Prospectus (DRHP) with SEBI yesterday to raise between INR 630bn to INR 750bn selling 316.25m shares.
The stake sale will value the company at between US$161bn-215bn. At the low end, LIC will be the third largest company in India, and the largest at the upper end.
LIC should get Fast Entry to the MSCI India index while FTSE inclusion could take place at the September SAIR. NIFTY Index (NIFTY INDEX) inclusion could take place in September.

S&P/ASX Index Rebalance Preview (March 2022): A Busy Rebalance Across Indices

There are just 3 trading days to go in the review period for the March rebalance of the S&P/ASX family of indices. There will be plenty of changes.
We see one change for the ASX20, one change for the ASX50, up to four changes for the ASX200 and up to 15 adds/11 deletes for the ASX300.
There will be a large impact from passive trading on quite a few stocks. There will be same way flow on some stocks from the FTSE AW/AC trackers.

Crown Resorts (CWN AU): And Blackstone (Almost) Has It; Index Implications

Crown and Blackstone have entered a Scheme Implementation Deed under which Blackstone will acquire all shares in Crown Resorts at a cash price of A$13.1/share.
Crown Resorts closed at A$12.64/share on 14 February. Assuming the cash payment is received by mid June , the return is 3.64% absolute and 10.92% annualised.
Seven Group Holdings (SVW AU) could be added to the S&P/ASX 100 Index in May, while the merged HDN AU/ AVN AU entity could be added to the S&P/ASX 200.

Alibaba (BABA): Overly Impacted, Accumulate Before 3Q22 Result

By Ming Lu

The stock price declined to a very low level before the market fell.
The Chinese e-commerce market is still promising despite of the high comparison base last year.
We believe the stock has an upside of 68% for March 2023.

SMC (6273) Buyback – Small Short Sharp

SMC Corp (6273 JP) announced better Q3 and an upward revision to still-below consensus for this year. Consensus is for up-and-to-the-right the next few years (but implied Q4 looks light).
The company raised its dividend so now it is 1% yield.
And the company announced a small but intriguing buyback. If you own the stock or trade in the space, it is worth understanding

Before it’s here, it’s on Smartkarma

Feb 14

Most Read: China Mobile, LG Energy Solution, Mapletree North Asia Commercial Trust, Huitongda, SK IE Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Last Week in Event SPACE: China Mobile, Suzuki, Mapletree Merger, Bapcor, Toyota Industries/Motor
Index Rebalance & ETF Flow Recap: MSCI STD/SC, SIMSCI, STAR50, Alibaba
Asia-Pac Weekly Risk Arb Summary: Mapletree, Senex, Shinsei Bank, Mesco, Singapore Press Holdings
ECM Weekly (13th Feb 2022) -Krafton, Huitongda, GogoX, Lepu, Adani Wilmar, Vedant, Mitsubishi Estate
MSCI Korea Feb IR Stocks: Flow Estimations & Tracking

Last Week in Event SPACE: China Mobile, Suzuki, Mapletree Merger, Bapcor, Toyota Industries/Motor

The virtuous cycle of shareholder return commences as China Mobile (941 HK) starts buying its H-shares.
Suzuki (7269 JP)‘s implied stub is currently around its all-time low, as is the simple ratio. Maruti Suzuki (MSIL IN) remains steadfast in its support for hybrid vehicles. That’s a liability.
Quarz’s intervention in Mapletree North Asia Commercial (MAGIC SP) is NOT surprising. They have some past experience complaining about Singaporean REIT mergers and other takeovers. But their analysis is surprising.

Index Rebalance & ETF Flow Recap: MSCI STD/SC, SIMSCI, STAR50, Alibaba

The changes to the MSCI Standard Index at the February QIR threw up a few surprises, notably the inclusion of Grab (GRAB US) and non-inclusion of Pop Mart (9992 HK).
The coming week will have LG Energy Solution (373220 KS) added to the MSCI Korea. Given some indices have already included the stock, there could be a squeeze higher.
Hang Seng Indexes will announced the changes to its family of indices post market close on Friday, followed by FTSE announcing changes to the GEIS early Saturday morning Asia time.

Asia-Pac Weekly Risk Arb Summary: Mapletree, Senex, Shinsei Bank, Mesco, Singapore Press Holdings

There are currently 46 – mostly firm – transactions currently being discussed and analysed on Smartkarma.
Three new deals this week: Nagoya Railroad (9048 JP) buying Meitetsu Transport (9077 JP); Hakuhodo Dy (2433 JP)‘s Offer for SoldOut (6553 JP), I O Data Device (6916 JP)‘s MBO.
Key updates took place for: Mapletree North Asia Commercial Trust (MAGIC SP), Senex Energy (SXY AU), Shinsei Bank (8303 JP), Mesco Inc (1737 JP), Singapore Press Holdings (SPH SP).

ECM Weekly (13th Feb 2022) -Krafton, Huitongda, GogoX, Lepu, Adani Wilmar, Vedant, Mitsubishi Estate

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
Huitongda (9878 HK) and Lepu Biopharma (LBP HK) got the HK ECM market going post CNY.
There were no major placements this week apart from a few blocks in Korea and India.

MSCI Korea Feb IR Stocks: Flow Estimations & Tracking

By Sanghyun Park

The ones with a high ratio of foreign net trade/passive impact on Feb 7-11 were Meritz Fire, SKIET, and HLB. Among them, SKIET showed a positive correlation with price performance.
Meritz Fire showed an opposite result, probably due to profit-taking flow. HLB has a small passive impact relative to the trading volume, so the correlation with the price is low.
So, SKIET deserves attention. Aside from these, SK Square also seems to be worth paying attention to because the passive impact size is also quite significant as 2.52x ADTV.

Before it’s here, it’s on Smartkarma

Feb 13

Most Read: LG Energy Solution, Mapletree Commercial Trust, Razer Inc, Suzuki Motor and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance & ETF Flow Recap: MSCI, HSI, NIFTY 50/100/BANK, ASX200, PCOMP, KRX New Deal
Activist Quarz Objects to Mapletree Merger Terms – A Commentary
MSCI Feb 2022 Index Rebalance: Small Cap Changes and Flow
Suzuki’s All-Time Low Stub As Maruti Faces Electric Vehicle Crossroad
Index Rebalance & ETF Flow Recap: MSCI STD/SC, SIMSCI, STAR50, Alibaba

Index Rebalance & ETF Flow Recap: MSCI, HSI, NIFTY 50/100/BANK, ASX200, PCOMP, KRX New Deal

The big event in the coming week is the MSCI Feb QIR announcement. Sydney Airport (SYD AU) will be deleted from indices after the close of trading on 9 February.
There are quite a few changes expected across the NIFTY Index (NIFTY INDEX), Nifty Bank Index (NSEBANK INDEX) and NIFTY100 Indices. The PCOMP INDEX rebalances on 11 February.
There were large inflows to Australia focused ETFs during the week, while Japan saw some pretty chunky outflows from a few ETFs.

Activist Quarz Objects to Mapletree Merger Terms – A Commentary

Sometime activist Quarz presented a 10-page “open letter” to Mapletree North Asia Commercial Trust (MAGIC SP) (a.k.a. MNACT) saying it wanted better terms for MNACT holders.
The presentation touches on a lot of points, but needs to be read with care. It makes assumptions some would not make, and doesn’t back them up.
However, the right way to think about this may be “Why Not Both?”

MSCI Feb 2022 Index Rebalance: Small Cap Changes and Flow

AirAsia Group Bhd (AAGB MK) is the only deletion from the MSCI Small Cap Index at the February QIR. However, there are NOS and FIF changes for many stocks.
Razer Inc (1337 HK) will have the largest passive inflow as a result of an increase in its Index Inclusion Factor (IIF) from 0.5 to 1.
Other stocks that will have passive inflows are Hitachi Transport System (9086 JP), Aavas Financiers Ltd, Tube Investments of India (TI IN) and Krishna Institute of Medical Sciences (KIMS IN).

Suzuki’s All-Time Low Stub As Maruti Faces Electric Vehicle Crossroad

Suzuki Motor (7269 JP)‘s implied stub is currently around its all-time low, as is the simple ratio (Suzuki/Maruti Suzuki India (MSIL IN)).
The global transition to electric vehicles is underway, spurred on by environmental concerns, government legislation, and financial incentives.
Maruti remains steadfast in its support for hybrid vehicles. In the long run, that’s a liability.

Index Rebalance & ETF Flow Recap: MSCI STD/SC, SIMSCI, STAR50, Alibaba

The changes to the MSCI Standard Index at the February QIR threw up a few surprises, notably the inclusion of Grab (GRAB US) and non-inclusion of Pop Mart (9992 HK).
The coming week will have LG Energy Solution (373220 KS) added to the MSCI Korea. Given some indices have already included the stock, there could be a squeeze higher.
Hang Seng Indexes will announced the changes to its family of indices post market close on Friday, followed by FTSE announcing changes to the GEIS early Saturday morning Asia time.

Before it’s here, it’s on Smartkarma

Feb 11

Most Read: Grab, Country Garden Services Holdings, Mapletree Commercial Trust, Woori Financial Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

MSCI Feb 2022 Index Rebalance: Day 1 Chosen Again
MSCI Feb 2022 Index Rebalance: Float/Share Changes
MSCI Singapore Index: Diverging from the Straits Times Index
Activist Quarz Objects to Mapletree Merger Terms – A Commentary
Block Deal Sale of Woori Financial Group by KDIC

MSCI Feb 2022 Index Rebalance: Day 1 Chosen Again

There are 17 adds and 8 deletes for the Asia Pacific region. Most of the changes were expected, but there are a few surprises.
China Resources Microelectronics-A (688396 CH), Grab (GRAB US) and Lufax Holdings (LU US) have been added, while Qinghai Salt Lake (000792 CH) and Pop Mart International (9992 HK) have not.
The last tranche of Sea‘s inclusion in the SIMSCI INDEX will take place at the QIR. With the inclusion of GRAB, there will be two foreign listings in the SIMSCI.

MSCI Feb 2022 Index Rebalance: Float/Share Changes

MSCI announced the changes to the Standard Index pre market open in Asia today. There were changes to the number of shares and free floats for stocks too.
The increase in the IIF on Sea Ltd (SE US) was known, while the increase in FIF on SK Square (402340 KS) was expected.
There are quite a few stocks that have over US$10m to trade or over a days ADV to trade from passive funds. These could be interesting to watch.

MSCI Singapore Index: Diverging from the Straits Times Index

The increase in the IIF for Sea Ltd and the inclusion of Grab in the SIMSCI INDEX will result in nearly 24% of the index being traded outside of Singapore trading hours.
The changes will also result in a big drop in the dividend yield of the SIMSCI INDEX. The dividend yield on the STI INDEX will be nearly 80bps higher.
There has been little change on the volumes and open interest for the SIMSCI INDEX futures but it would be good to keep an eye given the recent changes.

Activist Quarz Objects to Mapletree Merger Terms – A Commentary

Sometime activist Quarz presented a 10-page “open letter” to Mapletree North Asia Commercial Trust (MAGIC SP) (a.k.a. MNACT) saying it wanted better terms for MNACT holders.
The presentation touches on a lot of points, but needs to be read with care. It makes assumptions some would not make, and doesn’t back them up.
However, the right way to think about this may be “Why Not Both?”

Block Deal Sale of Woori Financial Group by KDIC

By Douglas Kim

Korea Deposit Insurance Corp (KDIC) is trying to conduct a block deal sale of its stake in Woori Financial Group which could reach as high as 340 billion won.
KDIC plans to sell 7.28 million to 21.84 million shares of Woori Financial Group in a block deal, which represents 1% to 3% of total shares of the company.
The block deal price range offered to the institutional investors is from 15,084 won to 15,550 won. We would take the deal even at little discount.

Before it’s here, it’s on Smartkarma