Most Read

JIC gave an official statement yesteday about the expected start of its Shinko Electric Industries (6967 JP) Tender Offer. A later-than-expected start has people asking questions.
It has traded tighter since the SAMR approval news (I warned on 16 Dec it was coming and the next day it closed 6.6% gross).
Below I discuss the language of the Conditions Precedent which would allow a MAC.

FXI ETF: Potential Changes in the Year of the Snake

There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX).
That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.

India: Potential Free Float Changes & Passive Flows in February

Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-June.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 13 stocks with passive inflows from global trackers while 4 could see passive outflows in February.

Osaka Steel (5449) Large Buyback At a Discount Ruins Fun For Activists

Osaka Steel (5449 JP) is 65% owned by Nippon Steel Corporation (5401 JP). They make a relatively simple set of steel products used by shipbuilders, construction companies, and warehouse builders.
Activist Effissimo Capital went over 5% in October 2016 and is still a top holder. Activist Strategic Capital went over 5% in December 2023 and now owns 10+% of votes.
The “hope” had been that Nippon Steel buy out minorities and Osaka Steel would be rescued from mediocre capital returns. That was not to be. Activists are disappointed.

Kyocera (6971) – Changes Policies – Will Sell KDDI Faster and Buy Back Shares

Today, in conjunction with the release of Q3 earnings, Kyocera Corp (6971 JP) announced a change in its Corporate Governance Code doc, a change in Cross-holding Policy, and Buyback Policy.
Full-Year earnings guidance revision was non-salutary. Revs -1%, OP -69%, Net Profit -72% vs previous predictions from 30 October (those were -1.5%, -38.2%, -36.6% vs April guidance at the time).
Based on this disappointment, they announced they would speed up the sale of crossholdings and buy back shares this year and over the following three years.

KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

The review period for the March rebalance ended on 31 January, changes will be announced first week of March and implemented at the close of trading on 13 March.
We forecast two changes for the Bio Index and one change for the Internet Index. Plus there will be capping changes for all indices.
The largest flows will be in Samsung SDI, LG Energy Solution, POSCO Holdings, Alteogen, Naver Corp, Legochem Biosciences, Netmarble and Celltrion Inc.

Lee Jae-Yong’s Appeal Verdict: Unpacking the Drivers Behind Samsung Life’s Big Price Action

Once Samsung F&M burns treasury shares, Samsung Life’s stake hits 16.93%. If they avoid a subsidiary, they’ll need to dump ~817K shares. Today’s ruling makes that move much less likely.
Samsung Life’s value-up announcement could be major, likely dropping around their earnings call on February 20, with solid intel backing this move.
The balance of dividends vs. buybacks, plus Samsung Life’s 10% stake ceiling, will drive volatility for Samsung Electronics. Samsung Life’s value-up release, before Samsung Electronics’, will boost market clarity.

Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk

On 27 December 2024, Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.
Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition.
The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.

Fosun Tourism (1992 HK): No Love For The Scrip Alternative

Back on the 10th December 2024, Fosun Tourism (1992 HK) announced a rare Scheme buyback, with a Cancellation Price of $7.80/share (not declared final), a punchy 95% premium to undisturbed.
A successful Scheme would result in Fosun International (656 HK) and concert parties holding 100% in Fosun Tourism – without having to outlay a cent.
A scrip alternative was afforded IF expressions of interests from 1% of shares out occurred. That didn’t happen. Still a clean deal. Scheme Doc dispatch is the 14th Feb.

KOSPI200 Index Rebalance Preview: 6 Potential Changes in June; LG CNS Listing Could Increase That

Halfway through the review period, there could be 6 changes for the Korea Stock Exchange KOSPI200 (KOSPI2 INDEX) in June. The LG CNS (LGCNSZ KS) listing could increase that number.
The impact on the potential inclusions ranges from 2.1-26 days of ADV while the impact on the potential deletions varies from 5-11 days of ADV.
The forecast adds have outperformed the forecast deletes over the last few months and the performance gap is near its widest point.

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Feb 03

Most Read: Sanyo Special Steel, Osaka Steel, Indusind Bank, Giga Prize, iShares China Large-Cap (FXI), Sigma Healthcare, Legochem Biosciences and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book
Osaka Steel (5449) Large Buyback At a Discount Ruins Fun For Activists
India: Potential Free Float Changes & Passive Flows in February
Freebit (3843) Buys Out Minorities in Giga Prize (3830) – Light, But Tough to Block
Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism
Giga Prize (3830 JP): FreeBit (3843 JP)’s Tender Offer Is a Done Deal
FXI ETF: Potential Changes in the Year of the Snake
Ohayo Japan | Wall Street Falls as New Tariffs Loom
Quiddity Leaderboard ASX Mar 25: LONGs up ~10% Vs SHORTs in a Month; More to Come
KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book

6-7 years ago Sanyo Special Steel (5481 JP) bought out a large foreign specialty steel company, and funded it by getting Nippon Steel to inject capital at below book.
Now Nippon Steel is buying the rest of Sanyo Special Steel in a Tender Offer at 0.66x book, where most of book is Net Receivables, Inventory, WIP, and Materials.
This is the second time in a decade where the Board has decided to sell control of itself at far below book value. They should be ashamed of themselves.

Osaka Steel (5449) Large Buyback At a Discount Ruins Fun For Activists

Osaka Steel (5449 JP) is 65% owned by Nippon Steel Corporation (5401 JP). They make a relatively simple set of steel products used by shipbuilders, construction companies, and warehouse builders.
Activist Effissimo Capital went over 5% in October 2016 and is still a top holder. Activist Strategic Capital went over 5% in December 2023 and now owns 10+% of votes.
The “hope” had been that Nippon Steel buy out minorities and Osaka Steel would be rescued from mediocre capital returns. That was not to be. Activists are disappointed.

India: Potential Free Float Changes & Passive Flows in February

Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-June.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 13 stocks with passive inflows from global trackers while 4 could see passive outflows in February.

Freebit (3843) Buys Out Minorities in Giga Prize (3830) – Light, But Tough to Block

Today, Freebit Co Ltd (3843 JP) announced it would launch a Tender Offer next Monday to buy out minorities in 60.9%-owned Giga Prize (3830 JP).
The multiple is not terribly impressive. It could be better. But they only need 5.8% of the 39.1% they do not own to get this over the hump.
Synergies are clear. They are expected. They are not priced in the valuation. This is disappointing. Again.

Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism

Sanyo Special Steel (5481 JP) has recommended Nippon Steel Corporation (5401 JP)’s tender offer at JPY2,750, a 37.4% premium to the last close.
The offer is light, implying a P/B of 0.67x, below the midpoint of the IFA DCF range, below the Board’s requested price, and unattractive compared to peer multiples.
The lack of an irrevocable and unattractive offer suggests that satisfying the minimum acceptance condition is likely challenging. This situation requires activism to force a bump.

Giga Prize (3830 JP): FreeBit (3843 JP)’s Tender Offer Is a Done Deal

Giga Prize (3830 JP) has recommended Freebit Co Ltd (3843 JP)’s tender offer at JPY2,500, a 48.5% premium to the last close.
While the offer is below the midpoint of the target IFA’s DCF valuation range, it represents an all-time high and aligns with the Board’s requested price.
The required minority acceptance rate is modest, and tendering by the third-largest shareholder is enough to close the deal.

FXI ETF: Potential Changes in the Year of the Snake

There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX).
That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.

Ohayo Japan | Wall Street Falls as New Tariffs Loom

By Mark Chadwick

U.S. stocks declined Friday as the White House announced new tariffs on Mexico, Canada, and China taking effect Saturday
Japanese markets ended mixed last week, with NEC leading gains, surging 18.4% on a stock split announcement and upward guidance revision. The broader TOPIX gained 1.4% for the week
Companies reporting strong results included SCREEN Holdings, TDK, Fujitsu, MOL, Sakura Internet, and ZOZO

Quiddity Leaderboard ASX Mar 25: LONGs up ~10% Vs SHORTs in a Month; More to Come

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2025 index rebal event.
We expect two changes for ASX 50, one change for ASX 100, and seven changes for ASX 200. Separately we see 8 ADDs and 6 DELs for ASX 300.
The Sigma Healthcare – Chemist Warehouse merger will be completed soon and there will be major inflows for Sigma Healthcare due to float percentage/share count upgrades.

KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

The review period for the March rebalance ended on 31 January, changes will be announced first week of March and implemented at the close of trading on 13 March.
We forecast two changes for the Bio Index and one change for the Internet Index. Plus there will be capping changes for all indices.
The largest flows will be in Samsung SDI, LG Energy Solution, POSCO Holdings, Alteogen, Naver Corp, Legochem Biosciences, Netmarble and Celltrion Inc.

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✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Feb 02

Most Read: Contemporary Amperex Technology (CATL), Fast Retailing, Guotai Junan Securities , Japfa Comfeed Indonesia, Sigma Healthcare, Indian Renewable Energy Development Agency, Areit (AyalaLand REIT), Sanyo Special Steel, Chuoh Pack Industry, Giga Prize and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CATL (300750 CH): Index Inclusion Post H-Share Listing
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner
IDX30/LQ45/IDX80 Index Rebalance: Big Impact in Some Stocks with 4 Days to Implementation
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
Indian Renewable Energy (IREDA IN) QIP: Index Implications
PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON
Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book
Nikkon Pays 273% Premium for Chuoh Pack (3952 JP) In Takeover
Freebit (3843) Buys Out Minorities in Giga Prize (3830) – Light, But Tough to Block

CATL (300750 CH): Index Inclusion Post H-Share Listing

Contemporary Amperex Technology (CATL) (300750 CH) has announced plans for an H-share listing with media reports indicating a raise of at least US$5bn. Shareholders have approved the issuance.
CATL (300750 CH) was designated as a Chinese Military Company earlier this year by the U.S. Department of Defense but is still not on the NS-CMIC list.
The CATL (300750 CH) H-shares should get Fast Entry to the global indices and iShares China Large-Cap (FXI US) ETF. Inclusion in the HSCEI and HSI will take longer.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.

Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner

Haitong Securities (H) (6837 HK) and Haitong Securities (A) (600837 CH) shares will stop trading after 5 February following the merger with Guotai Junan Securities (2611 HK).
There will be small buying in Guotai Junan Securities (2611 HK) at the close on 5 February and there should be more buying in the A-shares and H-shares in March.
There will also be a stock added to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) to bring the number of index constituents back to 300.

IDX30/LQ45/IDX80 Index Rebalance: Big Impact in Some Stocks with 4 Days to Implementation

There are 2 constituent changes for the IDX30 Index, and 3 changes each for the LQ45 Index and IDX80 Index to be implemented at the close on 31 January.
The largest passive flows are expected in Bank Central Asia, Indosat, Japfa Comfeed Indonesia, Indocement Tunggal Prakarsa, Dayamitra Telekomunikasi, MAP Aktif Adiperkasa, Bank Mandiri Persero, Ciputra Development and XL Axiata.
With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.

Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks

Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.

Indian Renewable Energy (IREDA IN) QIP: Index Implications

IREDA has announced a Qualified Institutional Placement (QIP) of a maximum of INR 50bn as long as the Government of India’s holding does not drop by more than 7%.
There will be passive buying at the time of settlement of the QIP shares while the increase in float will bring the stock closer to inclusion in another global index.
With the stock close to index inclusion level and down 37% from its peak, there could be positioning in the stock for passive inflows.

PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON

As forecast, Areit (AyalaLand REIT) (AREIT PM) and China Banking (CBC PM) will replace Nickel Asia (NIKL PM) and Wilcon Depot (WLCON PM) in the Philippines Stock Exchange PSEi Index.
Passive trackers will need to buy between 14-44 days of ADV in the adds while selling between 17-54 days of ADV in the deletes.
The stocks have already moved a lot over the last few months and positioning has built up over that period. There could still be outperformance ahead of the passives trading.

Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book

6-7 years ago Sanyo Special Steel (5481 JP) bought out a large foreign specialty steel company, and funded it by getting Nippon Steel to inject capital at below book.
Now Nippon Steel is buying the rest of Sanyo Special Steel in a Tender Offer at 0.66x book, where most of book is Net Receivables, Inventory, WIP, and Materials.
This is the second time in a decade where the Board has decided to sell control of itself at far below book value. They should be ashamed of themselves.

Nikkon Pays 273% Premium for Chuoh Pack (3952 JP) In Takeover

Today, Nikkon Holdings (9072 JP) announced it would take over Chuoh Pack Industry (3952 JP) for ¥5,034/share. It closed today at ¥1,349. This is a HUGE win for governance.
The 273% premium is not the big win here. For holders it is, of course, but for Japan Inc shareholders everywhere, the win was the auction process.
This could have come out at 100% premium and that might have been OK. As it is, cross-holders and one big holder together get this deal done. Congrats!

Freebit (3843) Buys Out Minorities in Giga Prize (3830) – Light, But Tough to Block

Today, Freebit Co Ltd (3843 JP) announced it would launch a Tender Offer next Monday to buy out minorities in 60.9%-owned Giga Prize (3830 JP).
The multiple is not terribly impressive. It could be better. But they only need 5.8% of the 39.1% they do not own to get this over the hump.
Synergies are clear. They are expected. They are not priced in the valuation. This is disappointing. Again.

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Feb 01

Most Read: Fast Retailing, Sigma Healthcare, Areit (AyalaLand REIT), Global Food Creators, Takeda Pharmaceutical, Hanwha Ocean , Taiwan Semiconductor (TSMC) – ADR, Sanyo Special Steel, Ascot Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON
Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF
Takeda Pharma (4502) – Strong Results
SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice
Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium
Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book
Ascot Corp (3264 JP): Daito Trust Construction (1878 JP)’s Tender Offer a Done Deal

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?

Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
The setup very near-term could be pretty interesting, and worth watching.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.

Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks

Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.

PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON

As forecast, Areit (AyalaLand REIT) (AREIT PM) and China Banking (CBC PM) will replace Nickel Asia (NIKL PM) and Wilcon Depot (WLCON PM) in the Philippines Stock Exchange PSEi Index.
Passive trackers will need to buy between 14-44 days of ADV in the adds while selling between 17-54 days of ADV in the deletes.
The stocks have already moved a lot over the last few months and positioning has built up over that period. There could still be outperformance ahead of the passives trading.

Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF

Today after the close, Global Food Creators (7559 JP) announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up.
The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans.
The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh.

Takeda Pharma (4502) – Strong Results

Today Takeda Pharmaceutical (4502 JP) announced earnings which will mean last year was the trough, not this year. The pipeline looks OK too.
The company also announced a ¥100bn buyback and a change of CEO. The buyback has a big number, but it isn’t particularly exciting.
All in all, there’s positive news here, but it is all much of a muchness, but as it is a nine-figure buyback in 3mos, we take a look.

SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice

This 20% reversion and 30% cap setup creates solid flow trades. With just 13 holdings, SOL ETF’s weight swings hard—Hanwha Ocean’s already pushing 27% post-rebal.
Constituent changes drive the biggest dislocations—still the main setup. “The other 10” names are FICS-screened by market cap (May/Nov cut), making rotations fairly predictable.
With AUM only ramping recently, this ETF is still in price discovery mode. Pre-positioning ahead of flows has juice, making it a prime target for aggressive flow trading.

Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium

By Vincent Fernando, CFA

PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell
Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?
TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US.

Nippon Steal! Again. Parent Takes Out Sanyo Special Steel (5481) At Well Below Book

6-7 years ago Sanyo Special Steel (5481 JP) bought out a large foreign specialty steel company, and funded it by getting Nippon Steel to inject capital at below book.
Now Nippon Steel is buying the rest of Sanyo Special Steel in a Tender Offer at 0.66x book, where most of book is Net Receivables, Inventory, WIP, and Materials.
This is the second time in a decade where the Board has decided to sell control of itself at far below book value. They should be ashamed of themselves.

Ascot Corp (3264 JP): Daito Trust Construction (1878 JP)’s Tender Offer a Done Deal

Ascot Corp (3264 JP) announced a tender offer from Daito Trust Construct (1878 JP) at JPY260 per share, a 20.4% premium to the last close.
Ascot currently does not meet the 25% tradeable share ratio criterion. The offer is attractive compared to historical trading ranges but below the mid-point of the IFA DCF valuation range.
This is a done deal, as irrevocables represent an 82.78% ownership ratio, well above the minimum acceptance condition (67.86% ownership ratio).

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✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Jan 31

Most Read: Fast Retailing, Sigma Healthcare, Daihatsu Diesel Mfg, Global Food Creators, Takeda Pharmaceutical, Hanwha Ocean , Taiwan Semiconductor (TSMC) – ADR, Namura Shipbuilding, Dropsuite Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control
Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF
Takeda Pharma (4502) – Strong Results
SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice
Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium
Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks
Dropsuite (DSE AU): NinjaOne’s A$5.90/Share Scheme

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?

Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
The setup very near-term could be pretty interesting, and worth watching.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.

Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks

Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.

Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control

Yesterday, Daihatsu Diesel Mfg (6023 JP) announced that it would buy back shares in a Tender Offer and that its controlling “parent” would also sell shares to a private company.
The accretion is significant, and the shareholder structure changes significantly. It is not quite an Exedy-like situation though. The register changes but it doesn’t clear.
But the backdrop is considerably different than the MTMP, and that means this smallcap is worth a closer look.

Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF

Today after the close, Global Food Creators (7559 JP) announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up.
The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans.
The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh.

Takeda Pharma (4502) – Strong Results

Today Takeda Pharmaceutical (4502 JP) announced earnings which will mean last year was the trough, not this year. The pipeline looks OK too.
The company also announced a ¥100bn buyback and a change of CEO. The buyback has a big number, but it isn’t particularly exciting.
All in all, there’s positive news here, but it is all much of a muchness, but as it is a nine-figure buyback in 3mos, we take a look.

SOL Shipbuilding Top 3 ETF Throws off Some Serious Flow Trading Plays with Plenty of Juice

This 20% reversion and 30% cap setup creates solid flow trades. With just 13 holdings, SOL ETF’s weight swings hard—Hanwha Ocean’s already pushing 27% post-rebal.
Constituent changes drive the biggest dislocations—still the main setup. “The other 10” names are FICS-screened by market cap (May/Nov cut), making rotations fairly predictable.
With AUM only ramping recently, this ETF is still in price discovery mode. Pre-positioning ahead of flows has juice, making it a prime target for aggressive flow trading.

Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium

By Vincent Fernando, CFA

PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell
Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?
TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US.

Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks

By Janaghan Jeyakumar, CFA

JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-January 2025.

Dropsuite (DSE AU): NinjaOne’s A$5.90/Share Scheme

Dropsuite (DSE AU), a backup, recovery and protection software company, has entered into a Scheme Implementation Deed with Texas-based IT automation outfit NinjaOne.
NinjaOne is offering A$5.90/share, a 34.1% premium to last close. Apart from Dropsuite’s shareholder approval, the Offer requires FIRB signing off. The Offer has the unanimous backing of both boards.
The Offer also has the backing of Dropsuite’s largest shareholder, Topline Capital (31%). Board & management hold a further 9%. Implementation is expected late May 2025. This is done.

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Jan 30

Most Read: Fast Retailing, NTT UD REIT Investment Corporation, NuScale Power , Vedanta Ltd, Daihatsu Diesel Mfg, Iljin Hysolus, Sigma Healthcare, Infinity Natural Resources and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Sigma Healthcare (SIG AU): Index Inclusions & Upweights Increase Passive Buying to A$2.7bn
Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
3D Launches Partial Tender Offer on NTT UD REIT (8956)
Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete
Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger
Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control
Play the Timing Sweet Spot Between KOSPI 200 Rebal and Short Selling Coming Back into Play
Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
Infinity Natural Resources (INR): Sector Sentiment Sours, Exercise Caution on IPO

Sigma Healthcare (SIG AU): Index Inclusions & Upweights Increase Passive Buying to A$2.7bn

SigmaHealthcare and ChemistWarehouse shareholders meet on 29 January. If the merger resolutions are approved, Second Court Hearing is on 3 February and the merger will be effective on 4 February.
Upward migration in one large global index could take place on 13 February while upweights and upward migrations in the S&P/ASX indices should be at the close on 21 March.
Upward migration in the other global index could take place in March or June. Total passive buying estimate is A$2.76bn. This will be offset by positioning and CWG shareholders selling.

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?

Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
The setup very near-term could be pretty interesting, and worth watching.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.

3D Launches Partial Tender Offer on NTT UD REIT (8956)

Seemingly out of the blue, Singapore-based activist investment fund 3D Investment Partners has launched a partial tender offer at a small premium on NTT UD REIT Investment Corporation (8956 JP).
3DIP currently owns 2.2% and at maximum, will own 15.00% of the REIT units outstanding less treasury units. It intends to own the units for “pure investment purposes.”
“Shareholder” structure is different for J-REITs vs companies. And this J-REIT has an interesting future possibility. But…

Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete

Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There is only 1 delete with implementation at the close on 31 January.
As expected, GoviEx Uranium (GXU CN) will be deleted from the index and there will be a bunch of capping changes, especially for non-pure play stocks.
Estimated one-way turnover is 5.8% resulting in a round-trip trade of US$386m. There are many stocks with multiple days of ADV to trade.

Event Driven: Vedanta Ltd: A Story of Wealth Creation Through Demerger

By Nimish Maheshwari

Vedanta Ltd (VEDL IN) plans a multi-segment demerger to unlock value by separating its aluminum, zinc, oil and gas, steel, and other core operations into standalone entities.
This restructuring aims to eliminate conglomerate discount, foster specialized leadership, and attract fresh capital, potentially enhancing overall valuations and fueling long-term growth across diversified segments.
Despite governance concerns and cyclical commodity risks, pure-play listings could catalyze re-ratings, offering heightened returns but requiring vigilance on execution and corporate transparency.

Daihatsu Diesel’s (6023) Big Buyback and Quasi Change of Control

Yesterday, Daihatsu Diesel Mfg (6023 JP) announced that it would buy back shares in a Tender Offer and that its controlling “parent” would also sell shares to a private company.
The accretion is significant, and the shareholder structure changes significantly. It is not quite an Exedy-like situation though. The register changes but it doesn’t clear.
But the backdrop is considerably different than the MTMP, and that means this smallcap is worth a closer look.

Play the Timing Sweet Spot Between KOSPI 200 Rebal and Short Selling Coming Back into Play

Short selling returns March 31, after 85% of the KOSPI 200’s rebalancing. Stocks set for removal will be prime short targets.
Stocks removed have solid liquidity, tight passive impact gaps between them, and with short selling restarting March 31, we could see intensified volume in the short basket.
With rebalance ahead, price action may start early. Market exposure means aggressive moves could happen before the end of March, so consider building futures positions before short selling resumes.

Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks

Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.

Infinity Natural Resources (INR): Sector Sentiment Sours, Exercise Caution on IPO

By IPO Boutique

While this company is well-positioned in its sector and has a prudent growth strategy and balance-sheet flexibility, the short term “sector winds” are now blowing in a different direction.
Venture Global (VG) debuted last Friday with a major price cut and a more disappointing debut.
Our sources state that the official message regarding the deal is that the offering is multiple-times oversubscribed from long-only and energy-dedicated funds.

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Jan 29

Most Read: Kokusai Electric , Tsuruha Holdings, Fast Retailing, NTT UD REIT Investment Corporation, Indian Renewable Energy Development Agency, Taiwan Semiconductor (TSMC), WH Group, NuScale Power and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding
Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
3D Launches Partial Tender Offer on NTT UD REIT (8956)
Indian Renewable Energy (IREDA IN) QIP: Index Implications
DeepSeek and Market Over-Reaction. Nvidia, Broadcom, Marvell, TSMC, SK Hynix
NTT UD REIT (8956 JP): 3D’s Unsolicited Partial Tender Offer
WH Group (288 HK) Is Stretched As Smithfield Mulls IPO Price Reduction
Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete
Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

The review period for the Nikkei 225 Index March rebalance ends in 3 weeks. There could be one outright change and one or two others driven by sector balance.
Shift Inc (3697 JP) will have a 15:1 stock split next week and that puts the stock in the list of potential inclusions over the next couple of rebalances.
The recent drop in Fast Retailing (9983 JP)‘s stock price will lead to a single step drop in the PAF. That means less passive selling and a smaller funding buy.

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table

In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?

Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
The setup very near-term could be pretty interesting, and worth watching.

3D Launches Partial Tender Offer on NTT UD REIT (8956)

Seemingly out of the blue, Singapore-based activist investment fund 3D Investment Partners has launched a partial tender offer at a small premium on NTT UD REIT Investment Corporation (8956 JP).
3DIP currently owns 2.2% and at maximum, will own 15.00% of the REIT units outstanding less treasury units. It intends to own the units for “pure investment purposes.”
“Shareholder” structure is different for J-REITs vs companies. And this J-REIT has an interesting future possibility. But…

Indian Renewable Energy (IREDA IN) QIP: Index Implications

IREDA has announced a Qualified Institutional Placement (QIP) of a maximum of INR 50bn as long as the Government of India’s holding does not drop by more than 7%.
There will be passive buying at the time of settlement of the QIP shares while the increase in float will bring the stock closer to inclusion in another global index.
With the stock close to index inclusion level and down 37% from its peak, there could be positioning in the stock for passive inflows.

DeepSeek and Market Over-Reaction. Nvidia, Broadcom, Marvell, TSMC, SK Hynix

By Nicolas Baratte

This reports addresses the alarmist wrong conclusions over DeepSeek, especially over GPU usage and costs
This said, DeepSeek shows that Foundational models are commoditizing. Applications will be more resilient and profitable, ie customized with attached services
We are just at the beginning of the AI revolution with language models. Physical models are next and massive Application deployment.

NTT UD REIT (8956 JP): 3D’s Unsolicited Partial Tender Offer

3D has announced an unsolicited partial tender offer for NTT UD REIT Investment Corporation (8956 JP) at JPY131,890 per unit, a 10.0% premium to the undisturbed price.
The minimum number of units to be purchased is 115,279 (7.80% ownership ratio), and the maximum number of units to be purchased is 189,128 (12.80% ownership ratio).
The modest premium and an implied P/NAV <1x suggest a lightish offer. 3D will have to rethink terms as shares are trading through terms.

WH Group (288 HK) Is Stretched As Smithfield Mulls IPO Price Reduction

On the 21st January 2025, WH Group (288 HK), the world’s largest pork producer, announced Smithfield had made a public filing of the “Preliminary Prospectus” with the SEC.
A US$23-US$27/share indicative price range backed out a possible market cap for Smithfield of US$9.0bn-US$10.6bn, at the high end of my estimate, and more than twice its 2013 privatisation value.
Reportedly, WHG are now guiding that Smithfield is likely to be priced at $20/share. Expect WHG to sell off here.

Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete

Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There is only 1 delete with implementation at the close on 31 January.
As expected, GoviEx Uranium (GXU CN) will be deleted from the index and there will be a bunch of capping changes, especially for non-pure play stocks.
Estimated one-way turnover is 5.8% resulting in a round-trip trade of US$386m. There are many stocks with multiple days of ADV to trade.

Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade

With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.

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Jan 28

Most Read: Kokusai Electric , Tsuruha Holdings, Guotai Junan Securities , Fast Retailing, Indian Renewable Energy Development Agency, Tokyo Metro, China National Building Material, Areit (AyalaLand REIT), Air China Ltd (H) and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding
Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner
Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
China National Building Material (3323 HK): H Share Buyback Vote on 19 February
Indian Renewable Energy (IREDA IN) QIP: Index Implications
TOPIX Index Upweights: An Early Preview Of “The Big April Basket” 2025
CNBM (3323 HK): This Is An “Avoid” Ahead Of 19th Feb H-Class Shareholder Vote
PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON
Monthly Chinese Tourism Tracker | Dec & Q424 Numbers | Airlines Outperform Trip.com (January 2025)

Nikkei 225 Index Rebalance Preview (Mar 2025): SHIFT Splits; Updated Ranking, Capping & Funding

The review period for the Nikkei 225 Index March rebalance ends in 3 weeks. There could be one outright change and one or two others driven by sector balance.
Shift Inc (3697 JP) will have a 15:1 stock split next week and that puts the stock in the list of potential inclusions over the next couple of rebalances.
The recent drop in Fast Retailing (9983 JP)‘s stock price will lead to a single step drop in the PAF. That means less passive selling and a smaller funding buy.

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table

In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.

Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner

Haitong Securities (H) (6837 HK) and Haitong Securities (A) (600837 CH) shares will stop trading after 5 February following the merger with Guotai Junan Securities (2611 HK).
There will be small buying in Guotai Junan Securities (2611 HK) at the close on 5 February and there should be more buying in the A-shares and H-shares in March.
There will also be a stock added to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) to bring the number of index constituents back to 300.

Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?

Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
The setup very near-term could be pretty interesting, and worth watching.

China National Building Material (3323 HK): H Share Buyback Vote on 19 February

The IFA opines that the China National Building Material (3323 HK) share buyback, which will acquire a maximum of 841.7 million H Shares at HK$4.03, is fair and reasonable.
The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts.
The fortuitous material derating of peers has helped make the buyback attractive. Therefore, the votes should pass, and the minimum acceptance condition should be met.

Indian Renewable Energy (IREDA IN) QIP: Index Implications

IREDA has announced a Qualified Institutional Placement (QIP) of a maximum of INR 50bn as long as the Government of India’s holding does not drop by more than 7%.
There will be passive buying at the time of settlement of the QIP shares while the increase in float will bring the stock closer to inclusion in another global index.
With the stock close to index inclusion level and down 37% from its peak, there could be positioning in the stock for passive inflows.

TOPIX Index Upweights: An Early Preview Of “The Big April Basket” 2025

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 2025.

CNBM (3323 HK): This Is An “Avoid” Ahead Of 19th Feb H-Class Shareholder Vote

On the 6th December, China National Building Material (3323 HK) (CNBM), a leading PRC building materials company, offered to buy back 841,749,304 H-shares at HK$4.03/share, a 15.1% premium to undisturbed.
The thrust of the buyback lifts the stake of CNBM’s parent – the CNBM Parent Concert Group – to 50.01% of total shares from 45.02% currently, necessitating a whitewash waiver.
Pre-Cons were satisfied on the 24th Jan. The independent H-class shareholders vote for the waiver is on the 19th Feb. Minimum pro-ration is 19.24%. Implied back-end price is well down.

PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON

As forecast, Areit (AyalaLand REIT) (AREIT PM) and China Banking (CBC PM) will replace Nickel Asia (NIKL PM) and Wilcon Depot (WLCON PM) in the Philippines Stock Exchange PSEi Index.
Passive trackers will need to buy between 14-44 days of ADV in the adds while selling between 17-54 days of ADV in the deletes.
The stocks have already moved a lot over the last few months and positioning has built up over that period. There could still be outperformance ahead of the passives trading.

Monthly Chinese Tourism Tracker | Dec & Q424 Numbers | Airlines Outperform Trip.com (January 2025)

By Daniel Hellberg

Two years after most Covid restrictions ended, pace of travel recovery has slowed, naturally
Gov’t estimates ahead of LNY travel period seem tepid, actual growth could exceed them
Trip.com has been stellar performer in segment, but in recent months airlines outperformed

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Jan 27

Most Read: Tsuruha Holdings, Guotai Junan Securities , Samsung Electronics, China Longyuan Power, Japfa Ltd, Tencent, Kalyan Jewellers, Seven & I Holdings, China National Building Material, Areit (AyalaLand REIT) and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner
Converting Samsung Life’s Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion
A/H Premium Tracker (To 24 Jan 2025): AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs… Again
Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer
HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB, Again on Tech
Kalyan Jewellers- Grey Areas Surrounding Inventory
Weekly Deals Digest (26 Jan) – Seven & I, Shinko, Canvest, GAPack, Get Nice, Japfa, LG CNS, Guming
China National Building Material (3323 HK): H Share Buyback Vote on 19 February
PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table

In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.

Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner

Haitong Securities (H) (6837 HK) and Haitong Securities (A) (600837 CH) shares will stop trading after 5 February following the merger with Guotai Junan Securities (2611 HK).
There will be small buying in Guotai Junan Securities (2611 HK) at the close on 5 February and there should be more buying in the A-shares and H-shares in March.
There will also be a stock added to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) to bring the number of index constituents back to 300.

Converting Samsung Life’s Samsung Electronics Stake to Long-Term Holdings: Clearing up the Confusion

Samsung Life needs FSC approval for a 10-year holding plan on its Samsung Electronics stake. Without it, the whole plan could fall apart, so it’s all about regulatory green lights.
If FSC approves Samsung Life’s long-term holding, they can’t sell those shares for at least 5 years—no exit strategy for the next half-decade due to regulatory rules.
Samsung Life will convert part of its stake into long-term holdings, signaling how future buybacks and special dividends will balance in Samsung Electronics’ next shareholder return program.

A/H Premium Tracker (To 24 Jan 2025): AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs… Again

AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on telcos, banks, brokers, insurers, tech, and airlines.
The average AH Premium across all pairs is now the lowest it has been in five years.
INFO TECH and FINANCIALS saw significant H outperformance vs As this week. Most others (other than perhaps MATERIALS) were limited in their volatility. No bias by premium tranche seen.

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

Japfa Ltd (JAP SP) disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.
While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.
The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.

HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB, Again on Tech

SOUTHBOUND gross trading activity was again not stronger per day than the previous several weeks, but SB Net Buying was again BIG. Given the change in Tencent, remarkable even.
The story was follow-through, but SMIC and Xiaomi were also big buys. This is shaping up to be a “let’s buy what US Persons cannot” moment.
No sectors saw net selling through CCASS data five days to Weds. Top 10 activity was quite concentrated this week. Very few stray names.

Kalyan Jewellers- Grey Areas Surrounding Inventory

By Nitin Mangal

Kalyan Jewellers (KALYANKJ IN), one of the largest Indian jewellery player, has been under the limelight for various allegations and misconducts, including possibility of inventory overstatement.
In this insight, we try to look at the inventory from the forensic lens and uncover the disparity in accounting.
We also note that operating cash flows are boosted by movement in metal loans while company also has several RPT with promoters, especially on the purchases side.

Weekly Deals Digest (26 Jan) – Seven & I, Shinko, Canvest, GAPack, Get Nice, Japfa, LG CNS, Guming

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million, and Guming Holdings (GUM HK) seeks to raise US$300 million.
Event-Driven developments: Seven & I Holdings (3382 JP), Shinko Electric Industries (6967 JP), Fuji Soft Inc (9749 JP), Japfa Ltd (JAP SP), Get Nice Financial Group Ltd (1469 HK).

China National Building Material (3323 HK): H Share Buyback Vote on 19 February

The IFA opines that the China National Building Material (3323 HK) share buyback, which will acquire a maximum of 841.7 million H Shares at HK$4.03, is fair and reasonable.
The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts.
The fortuitous material derating of peers has helped make the buyback attractive. Therefore, the votes should pass, and the minimum acceptance condition should be met.

PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON

As forecast, Areit (AyalaLand REIT) (AREIT PM) and China Banking (CBC PM) will replace Nickel Asia (NIKL PM) and Wilcon Depot (WLCON PM) in the Philippines Stock Exchange PSEi Index.
Passive trackers will need to buy between 14-44 days of ADV in the adds while selling between 17-54 days of ADV in the deletes.
The stocks have already moved a lot over the last few months and positioning has built up over that period. There could still be outperformance ahead of the passives trading.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Analytics and News
✓ Events & Webinars

Jan 26

Most Read: Kokusai Electric , Contemporary Amperex Technology (CATL), Hyundai Motor India , Cameco Corp, Delta Electronics Thailand , Lotes Co, Tsuruha Holdings, Japfa Comfeed Indonesia, MongoDB , Dongbang Medical and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Kokusai Electric (6525 JP): Lock-Up Expiry, Index Deletion, Index Inclusion – It’s All Happening
CATL (300750 CH): Index Inclusion Post H-Share Listing
Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near
Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week
Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases
Taiwan: Potential Global Index Changes; Last Review Day Today
Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
IDX30/LQ45/IDX80 Index Rebalance: Big Impact in Some Stocks with 4 Days to Implementation
Nasdaq100 Dec2025 Forecast (Part 1): MDB & BIIB in Trouble; UAL & ALNY First Replacements
Dongbang Medical IPO Book Building Results Analysis

Kokusai Electric (6525 JP): Lock-Up Expiry, Index Deletion, Index Inclusion – It’s All Happening

The lock-up on KKR HKE ends next week, Kokusai Electric (6525 JP) should be deleted from a global index end-February and could be added to the NKY INDEX in March.
There has been a buildup of shorts in Kokusai Electric (6525 JP) as the stock has underperformed the Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) by a lot.
The global index deletion in February could provide an entry point into a long position ahead of the announcement of the Nikkei 225 (NKY INDEX) changes in March.

CATL (300750 CH): Index Inclusion Post H-Share Listing

Contemporary Amperex Technology (CATL) (300750 CH) has announced plans for an H-share listing with media reports indicating a raise of at least US$5bn. Shareholders have approved the issuance.
CATL (300750 CH) was designated as a Chinese Military Company earlier this year by the U.S. Department of Defense but is still not on the NS-CMIC list.
The CATL (300750 CH) H-shares should get Fast Entry to the global indices and iShares China Large-Cap (FXI US) ETF. Inclusion in the HSCEI and HSI will take longer.

Hyundai Motor (HYUNDAI IN): Anchor Lock-Up Expiry Increases Float; Index Inclusions Near

The lock-up on the second half of the anchor investor allocation for Hyundai Motor India (HYUNDAI IN) ends after market close today and the shares will be available for sale tomorrow.
The lock-up expiry further increases free float for the stock and there will be multiple index inclusions over the next few months.
The largest index inclusion will be in February, followed by smaller inclusions in March and June. In total, passives will mop up around 16% of the float.

Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week

Based on prices and turnover from 22 January, there could be one deletion from the index in January. Plus there will be capping and float changes.
There are four stocks that meet the inclusion criteria, but all are non-pure play companies, and the index is already at the limit of 15 non-pure play companies.
Estimated one-way turnover is 6.8% resulting in a round-trip trade of US$506m. There are many stocks with multiple days of ADV to trade.

Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases

Delta Electronics Thailand (DELTA TB) is trading at a huge valuation premium to Delta Electronics (2308 TT), though that has narrowed over the last couple of months.
Delta Electronics Thailand has already been on the Market Surveillance list for 2 months and inclusion for another 2 months will mean SET 50 Index deletion in June.
A placement by Delta Electronics (2308 TT) is not out of the question and that further increases the downside risk for Delta Electronics Thailand (DELTA TB).

Taiwan: Potential Global Index Changes; Last Review Day Today

There could be 2 adds and 2 deletes for Taiwan in a global index in February. Today is the last trading day ahead of the CNY holidays.
Passive trackers will need to trade between US$76m to US$370m of the stocks and impact will vary between 3.2x-7x ADV to trade.
Shorts are small in the potential adds and there has been short covering recently, while there has been a big increase in shorts for one of the potential deletes.

Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table

In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.

IDX30/LQ45/IDX80 Index Rebalance: Big Impact in Some Stocks with 4 Days to Implementation