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Event-Driven and Index Rebalance

Mar 23
0

Weekly Top Ten Event-Driven and Index Rebalance – Mar 23, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. The Japan March-End Rebal and Dividend Trade

By Travis Lundy, Quiddity Advisors

  • Every year it’s the same trade. But sometimes it is not. This year it is Thursday and Friday. Or not.
  • The month-end and quarter-end bring big flows, or not, depending on how things have gone.
  • Over the past 10 years or so, the two-day return on the March trade is pretty good. This year? Well read on!

2. HKBN (1310 HK): MBK Ups Stake Via VLN Conversion

By David Blennerhassett, Quiddity Advisors

  • China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news. 
  • In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
  • Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .

3. [Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy, Cotton…

By Travis Lundy, Quiddity Advisors

  • Late on the 17th, Proto Corp (4298 JP) released a filing to the TSE saying activist-ish investor and objector to the current MBO, Kaname Capital, had filed an injunction.
  • The injunction suit against two directors says procedures were unfair and the decision violated the duty of due care. They ask the Court to rule the directors halt support and…
  • …that the MBO actor YOKOYAMA Hiroichi not terminate the offer on 21 March 2025. Injunction filings against directors for Tender Offers are rare for a reason.

4. Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion

By Brian Freitas, Periscope Analytics

5. Maynilad Water (MYNLD PM): Index Inclusion Timing for a Large Philippines IPO

By Brian Freitas, Periscope Analytics

  • Maynilad Water Services (MYNLD PH) is looking to raise up to US$860m by selling shares at ₱20/share, valuing the company at US$2.82bn.
  • The market cap and free float will depend on the number of shares sold in the IPO and whether the shares in the upsize option are primary or secondary shares.
  • Global index inclusions should take place in November and December, while Philippines Stock Exchange PSEi Index (PCOMP INDEX) inclusion could take place in August 2026.

6. DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

By Brian Freitas, Periscope Analytics

  • DN Solutions (298440 KS) is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.
  • The highest probability of DN Solutions being added to the KOSPI200 Index is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.
  • Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.

7. Canvest (1381 HK): Get Involved

By David Blennerhassett, Quiddity Advisors

  • After SAFE gave the green light on the 19th Feb, I estimated only a week was required to secure the (strangely) outstanding internal guarantees. It took a frustrating three-and-a-half weeks.
  • Nevertheless, all pre-cons are now done. Canvest Environmental (1381 HK)‘s Scheme Document is expected to be dispatched or before the 25th April. 
  • Assuming the Scheme gets up – and it will – expect payment around the 20th June. This is done.

8. ENN Energy (2688 HK): ENN Natural Gas to Launch a Privatisation Offer?

By Arun George, Global Equity Research Ltd

  • ENN Energy (2688 HK) is in a trading halt “pending the issuance of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers containing inside information of the Company.” 
  • ENN Natural Gas (600803 CH), also in a trading halt, is likely seeking to privatise ENN through a Cayman scheme. A high AGM minority participation necessitates an attractive offer.
  • I use several methods to triangulate the likely offer price, which suggests a price range of HK$66.50-85.01, with an average of HK$76.04, a 28% premium to the last close.

9. Makino Milling Machine (6135 JP): Proposes Countermeasures

By Arun George, Global Equity Research Ltd

  • The Makino Milling Machine Co (6135 JP) Board has proposed introducing countermeasures to nudge Nidec Corp (6594 JP) to delay the start of the tender to 9 May. 
  • The countermeasure was likely needed to facilitate a competing offer rather than force Nidec to provide the required information and delay the start (Nidec is still evaluating the request).
  • Nidec’s offer at current terms has a low chance of success, necessitating revised terms. The Board claims that there is a sufficient probability of a competing proposal.

10. EcoNavista (5585 JP) – Takeover By Eisai (4523)

By Travis Lundy, Quiddity Advisors

  • EcoNaviSta (5585 JP) has a couple of interesting product lines and platforms. That makes it attractive, and scalable. Synergies to a big buyer are reasonably obvious.
  • Eisai Co Ltd (4523 JP) is that big buyer, having decided to be interested last summer. I could imagine others could be interested too. The tech has uses.
  • For the moment, it is a high EV/Revenue bid on an interesting small company. The chairman, cross-holders, directors, and a couple of financial institutions own 66+%. But…
Mar 16
0

Weekly Top Ten Event-Driven and Index Rebalance – Mar 16, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. Rio Tinto (RIO AU/RIO LN): Unification Index Flows

By Brian Freitas, Periscope Analytics

  • At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
  • Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
  • If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

2. 7&I (3382) Update – Couche-Tard Responds

By Travis Lundy, Quiddity Advisors

3. 7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now

By Travis Lundy, Quiddity Advisors

  • On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.  
  • It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update. 
  • It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

4. Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification

By David Blennerhassett, Quiddity Advisors

  • Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
  • Palliser’s reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
  • Shareholders will vote on the resolution on 3rd April  for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.

5. Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?

By Travis Lundy, Quiddity Advisors

  • The MBO for Proto Corp (4298 JP) where the founder/chair is buying out from minorities is being done at the wrong price. His reasons are good, but not for minorities.
  • One large foreign shareholder – the second largest shareholder of the firm – has offered substantial pushback in the form of a letter asking for discussions. That went nowhere.
  • So now they have come out harder. The solution here is a really big bump or a broken deal if investors keep the share price above the TOB price.

6. [Activism Japan] Nissan Tokyo Sales (8291) Gets An ‘Outsourced Activist’ but the Value Prop Remains

By Travis Lundy, Quiddity Advisors

  • On 12 March 2025, a minor Twitter account @nanahoshiuk started in January announced a website shiftnissantokyo.com where they point out the value proposition in Nissan Tokyo Sales (8291 JP). 
  • The writeup is by a UK company led by a young man with an equity-investing career, some experience at an activist shop, who now runs a “Shareholder Activism Outsourcing Service.”
  • The content sounds familiar to my piece in December, has a few unpolished edges, but clearly points out the value proposition. The stock deserves a re-visit. My comments are below.

7. CK Hutch (1 HK): Still Trading Cheap

By David Blennerhassett, Quiddity Advisors

  • To avoid a political landmine, on the 4th March CK Hutchison Holdings (1 HK)  announced a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.
  • It’s an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.
  • The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it’s a complex deal, which will take time to work through the system.

8. Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter

By Arun George, Global Equity Research Ltd

  • The Seven & I Holdings (3382 JP) Board has released a public letter to address Artisan Partners’ letter and provide more details on the Alimentation Couche-Tard (ATD CN) constructive engagement. 
  • The letter effectively addresses most of Artisan’s concerns. The Board is engaging with Couche-Tard, particularly by agreeing on a strategy to find a solution to secure antitrust approvals. 
  • However, the statement suggests that the Board retains deep scepticism that the Couche-Tard is viable and is manoeuvring to shift the blame on a failed bid on a flawed proposal. 

9. Properly Interpreting Korea’s Stock Borrow Data for Short Selling

By Sanghyun Park, Clepsydra Capital

  • Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
  • Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
  • Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

10. Baudroie (4413 JP) – Fast Growth, Prime Promotion, and TOPIX Inclusion

By Travis Lundy, Quiddity Advisors

  • In late November of 2024, Baudroie (4413 JP) announced it would try to move to TSE Prime and that day they announced a 2.76mm share secondary offering and a buyback.
  • The buyback was a bit less than a quarter of the offering. Fast forward 3mos and in early March the company announced it would move to Prime. Yesterday it did.
  • That puts the company in line for a TOPIX inclusion in end-April , and likely other index effects later. In the meantime, earnings and guidance are out ~10 April. 
Mar 09
0

Weekly Top Ten Event-Driven and Index Rebalance – Mar 9, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. 7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly

By Travis Lundy, Quiddity Advisors

2. 7&I (3382) Possibility of YUUUUUGE Buyback?

By Travis Lundy, Quiddity Advisors

  • Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
  • That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
  • Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.

3. Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock

By David Blennerhassett, Quiddity Advisors

  • As part of a US$22.8bn transaction, BlackRock, Global Infrastructure Partners and Terminal Investment, have agreed to buy two contentious Panama ports from Li Ka-shing’s CK Hutchison (1 HK) (CKH).
  • The transaction also includes an 80% stake in CKH’s ports subsidiaries, which operate 43 ports comprising 199 berths in 23 countries.
  • CKH expects cash proceeds in excess of US$19bn. CKH’s current market cap was – at the time of deal – also  ~US$19bn. 

4. Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising

By Travis Lundy, Quiddity Advisors

  • Today, Toyota Motor (7203 JP) announced a new Shareholder Benefit Program (株主優待 or kabunushiyutai). Often these programs are designed to give small unknown companies a way to build shareholder awareness/loyalty. 
  • Toyota, needless to say, is not a small, unknown company building awareness. So this is a bribe or inducement to own shares or get people to use higher value product.
  • This is not a great look, and not great for shareholders. It smells of Toyota trying to buy votes as crossholders sell. But below we look at the math.

5. Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl

By Arun George, Global Equity Research Ltd

  • Seven & I Holdings (3382 JP) denied a Yomiuri article that the Board has decided not to accept an Alimentation Couche-Tard (ATD CN) bid in favour of the restructuring plan.
  • Despite the Board’s assertions that it is still having constructive discussions with Couche-Tard, its actions suggest otherwise.
  • Couche-Tard remains interested but faces increasing roadblocks. The valuation is undemanding but the news flow is unlikely to support a rerating in the near-term.

6. Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison

By Sumeet Singh, Aequitas Research

  • Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
  • JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
  • We have looked at the deal dynamics in our previous note. In this note, we talk about the updates since then.

7. A/H Premium Tracker (To 28 Feb 2025):  AH Premia Continue to Fall; Expect Widening

By Travis Lundy, Quiddity Advisors

  • AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best. 
  • Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
  • This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

8. Biggest Gray Area in Korea’s Short-Selling Overhaul: What Should TRS Clients Do?

By Sanghyun Park, Clepsydra Capital

  • If brokers let shorts exceed borrow, TRS end investors risk getting caught in the legal crossfire.
  • Some TRS players are setting up short-book systems and reg numbers proactively, ensuring brokers share borrow data to stay ahead of any compliance risks.
  • With most illegal shorts tied to TRS, and TRS dominating the market, the FSS will likely introduce TRS-specific rules rather than granting exemptions.

9. Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure

By Arun George, Global Equity Research Ltd

  • The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
  • The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback. 
  • The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out. 

10. OneConnect Financial (6638 HK/OCFT US): Ping An’s Fair NBIO

By David Blennerhassett, Quiddity Advisors

  • Dual-Listed OneConnect Financial Technology (6638 HK/OCFT US), a digital retail banking/commercial banking/ digital insurance play, has announced a non-binding proposal from Ping An, OneConnect’s controlling shareholder with 32.12%.
  • Ping An is offering, by way of a Scheme, HK$2.068/share, or US$7.98/ADS, a 72.33% premium to last close, and a 131.66% premium to the 30-day average. The price is final. 
  • What now? Back in OneConnect’s boards’ court whether to engage or not. Which they should. No competing Offer will emerge.
Mar 02
0

Weekly Top Ten Event-Driven and Index Rebalance – Mar 2, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. 7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More

By Travis Lundy, Quiddity Advisors

  • The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
  • 7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
  • The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

2. 7&I (3382) – Bain Gets York Holdings with a Surprising Price, And We Approach Deal Deadlines

By Travis Lundy, Quiddity Advisors

  • Over the weekend, the Nikkei and Jiji reported the 7&i Board met Saturday and decided Bain would have preferred negotiating rights to buy York Holdings. They bid “over ¥700bn.”
  • That’s a trifle lower than the ¥1.2trn Reuters reported (on Christmas Day) Bain bid but details aren’t known. Proper structuring would get the vast majority to 7&i in post-tax cash.
  • For 7&i to decide by the AGM (which could be contentious), they need time to debate. Bids are likely needed in 3wks. In the meantime, “Trump Risk” lurks.

3. Seven & I Holdings (3382 JP): A Potential Derailing of the MBO

By Arun George, Global Equity Research Ltd

4. Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed

By Brian Freitas, Periscope Analytics

5. Korea: Short Selling Is Back in March; Trade Ideas

By Brian Freitas, Periscope Analytics

  • Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. 
  • Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
  • There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.

6. Seven & I Restructures but Discontent Rises Among Franchisees and Customers

By Michael Causton, JapanConsuming

  • York HD is due to take over operation of all group business except Seven Eleven at the end of February and press reports suggest Bain’s bid has been accepted.
  • All of which is fine but this leaves Seven Eleven Japan which is struggling against rivals. Even franchise owners are becoming more critical.
  • A recent survey by Nikkei also suggested that consumers are increasingly favouring Lawson and Familymart and 30% visited Seven Eleven stores less frequently in 2024. This is a big problem.

7. JPH Launches “MBO” (LBO with SARs for Family/Execs) For Trucker Tonami Holdings (9070). Too Cheap.

By Travis Lundy, Quiddity Advisors

  • Yesterday, Japan Post Holdings (6178 JP) announced an MBO for Tonami Holdings (9070 JP) whereby the family/execs will stay on. JPH will own 99.97%, the execs/family 0.03%.
  • This deal is yet another in a line of logistics deals dating back the last 2+ years where the premium has been quite big. This time is +74%. 
  • But this is not overly expensive. Makes me go hmmmm… 

8. CICC (3908 HK) & China Galaxy (6881 HK): The Next Mega Brokerage Merger

By David Blennerhassett, Quiddity Advisors

9. Nidec Says It Won’t Raise Price on Makino (6135)

By Travis Lundy, Quiddity Advisors

  • Nidec Corp (6594 JP) released a multi-page document regarding its bid for Makino Milling Machine Co (6135 JP) yesterday. 
  • It talked a bit about the back-and-forth with Makino, and gave Nidec’s side of the story. Makino has been making their side public too. A meeting is due early March.
  • In the document, there was a line suggesting Nidec won’t raise price even against a counteroffer. They didn’t need to say that. The question is what Makino will do.

10. Merger Arb Mondays (24 Feb) – Seven & I, Proto, Tam Jai, Pentamaster, Vesync, Canvest, Domain

By Arun George, Global Equity Research Ltd

Feb 23
0

Weekly Top Ten Event-Driven and Index Rebalance – Feb 23, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering

By Brian Freitas, Periscope Analytics

  • Goodman Group went into a trading halt and then announced results and an underwritten equity placement of A$4bn (US$2.54bn) to pursue growth opportunities across logistics and data center operations.
  • The stock has dropped since CIC’s stake sale in December but still continues to handily outperform peers.
  • There will be some passive buying in the stock at the time of share settlement and more a few days later to mop up around 37% of the offering.

2. Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

By Brian Freitas, Periscope Analytics

  • Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
  • With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
  • The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.

3. Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks

By Brian Freitas, Periscope Analytics

  • Alibaba Group Holding (9988 HK) stock has rallied bigly over the last month and has gained 55% over that period.
  • That has led to Alibaba‘s weight in the HSI INDEX, HSCEI INDEX, HSTECH INDEX and HSIII Index rising above the cap of 8%/12% and passives will sell on 7 March.
  • We estimate passive trackers will need to sell US$1.2bn of stock due to capping. Shorts have been increasing, and quarterly results will be announced on 20 February.

4. India: March Rebalance Announcement Tomorrow; Round-Trip Trade Over US$2.5bn

By Brian Freitas, Periscope Analytics

  • The Index Maintenance Sub-Committee of NSE Indices will meet on 21 February to conduct a semi-annual and quarterly review of stocks in various Nifty equity indices.
  • The changes will be announced after market close tomorrow and will be implemented at the close of trading on 28 March.
  • Based on the forecast index changes and capping changes for a few indices, the round-trip trade will be over US$2.5bn and many stocks will have over 0.5x ADV to trade.

5. [Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.

By Travis Lundy, Quiddity Advisors

6. Tam Jai (2217 HK): Toridoll (3397 JP)’s Scheme Privatisation at HK$1.58

By Arun George, Global Equity Research Ltd

  • Tam Jai International (2217 HK) announced a scheme privatisation offer from TORIDOLL Holdings Corporation (3397 JP) at HK$1.58 per share, a 75.6% premium to the last close price. 
  • The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). No disinterested shareholder holds a blocking stake. 
  • The offer price is final. While 53% below the IPO price, the offer is attractive compared to peer multiples and historical trading ranges. This is a done deal. 

7. MV Australia Equal Weight Index Rebalance Preview: Potential Changes in March; Multiple Overlaps

By Brian Freitas, Periscope Analytics

  • With 6 days left to review cutoff, there are 2 potential adds and 3 potential deletions for the MV Australia Equal Weight Index at the March rebalance.
  • Even if there are no constituent changes, capping changes will lead to one-way turnover of 3% and a round-trip trade of A$159m.
  • The final list of inclusions/exclusions will depend on price movements till next Friday and whether the provider makes any significant changes to the free float of stocks in the universe.

8. Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer

By David Blennerhassett, Quiddity Advisors

9. CVC Extends Macromill (3978) Bid and Invites Two Funds To Reinvest – More Interesting Than You Think

By Travis Lundy, Quiddity Advisors

  • Today, the closing date of the Tender Offer for Macromill, Inc (3978 JP) by CVC saw the tender offer extended by an extra 10 days with new news.
  • Price had been declared final. One very large shareholder had said they would not tender. Two more were negotiating. Those two will now tender and reinvest in the back end.
  • This does not mean the tender offer is a done deal, but it is worth examining.

10. JIC Launches Shinko (6967) Deal At ¥5,920/Share

By Travis Lundy, Quiddity Advisors

  • Today quite late, the JIC Consortium announced the launch of the Shinko Electric Industries (6967 JP) Tender Offer expected “mid-February”. Price is still ¥5,920/share. 
  • This is basically going to be all arbs and passive now. And arbs gonna arb.
  • Congrats if you bought the lows in late November early December. Great trade. Congrats if you bought the last delay dip. Now we can all go home.
Feb 16
0

Weekly Top Ten Event-Driven and Index Rebalance – Feb 16, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. 7&I (3382) – In Limbo, Dipping, But Stories Coming Together

By Travis Lundy, Quiddity Advisors

  • In the past month we have seen Seven & I Holdings (3382 JP) earnings, confirmation of the York Holdings timeline, stories about Apollo, KKR, and CP Group providing MBO financing.
  • We’ve also seen Itochu confirm the financing request from the Ito family, and two American banks tapped to provide LBO financing.
  • York Holdings itself gets created this month, and a buyer decided “in spring” with a Group Buyer/Outcome possibly decided by the May AGM. Looks skewed to me.

2. Japan: Last Look at Potential Passive Selling in February

By Brian Freitas, Periscope Analytics

  • There are 14 Japanese stocks at risk of being deleted from global passive portfolios in February. The number will be smaller depending on the day of the review period chosen.
  • Selling from passive trackers will range from US$176m-354m and the impact ranges from 3.1-18.4 days of ADV. Short interest has increased in nearly all stocks over the last 4 weeks.
  • The forecast deletes have underperformed the TSE Tokyo Price Index TOPIX on average over the last 1-3 months, while there has been marginal outperformance over the last week or two.

3. China/HK: Passive Activity Expected Later This Month

By Brian Freitas, Periscope Analytics

  • There could be up to 10 adds/ 29 deletes for the China global index in February. The actual number of changes will be smaller depending on the review date chosen.
  • The flow on the forecast adds varies from US$17.5m-US$175m (0.05x-15x ADV) while the flow on the forecast deletes varies from US$14.4m-US$100.4m (0.25x-22.75x ADV).
  • Bestechnic Shanghai (688608 CH) is a potential inclusion to multiple indices in June and there will be much larger passive flows to the stock then.

4. Australia: Last Look at Potential Passive Selling in February

By Brian Freitas, Periscope Analytics

  • There are 6 stocks in Australia that could be deleted from global passive portfolios later this month, though the probability of deletion varies across the stocks. 
  • If deleted, passive trackers will need to sell between US$234m-330m in the stocks. Impact is high at between 7-23 days of ADV.
  • The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over nearly every time period from 1 week to 3 months. Shorts have increased on all stocks recently.

5. NIFTY NEXT50 Index Rebalance Preview: Final List of Potential Changes in March

By Brian Freitas, Periscope Analytics

  • With the review period now complete, there could be 7 changes (including 2 migrations) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in March.
  • Bajaj Housing Finance (BHF IN) and Swiggy (SWIGGY IN) are a hair’s breadth apart on market cap and only one of them could be added to the index.
  • With quantitative criteria now being used to add stocks to the F&O segment, it is possible there is no change to the index methodology to limit inclusion to F&O members.

6. Kaonavi (4435 JP) – Small HR Software Co Gets 121% Premium LBO from Carlyle

By Travis Lundy, Quiddity Advisors

  • Another Japanese smallcap takeover at a huge premium. Must be a day ending in “y.” It is a thing recently. 
  • Interestingly, this is NOT an MBO. It is an LBO. Carlyle is buying out Kaonavi Inc (4435 JP) at ¥4,380/share which is 19x book and 89x EBIT. Nice price.
  • I expect this gets done easily because the co-CEO with 28.7% and Recruit with 20.6% are putting in. There’s another easy 9.7%. One more holder and this is done.

7. S&P/NZX Index Rebalance Preview: Couple of Changes in March

By Brian Freitas, Periscope Analytics

  • There could be one constituent change each for the NZX10 Index and the NZX50 Index/ NZX50 Portfolio Index in March.
  • The flows are limited but the impacts are huge, and the stocks could move ahead of the announcement of the changes.
  • A2 Milk Co Ltd (ATM NZ) is a potential inclusion to the NZX10 Index, but the inflows will be completely overshadowed by the potential deletion from a global index.

8. Taiwan Top 50 ETF Rebalance Preview: Eva Air (2618 TT) Winging Its Way In

By Brian Freitas, Periscope Analytics

9. SBI Sumishin NetBank (7163) – Oops! NTT Docomo May Not Be There As a Buyer

By Travis Lundy, Quiddity Advisors

  • On Friday, SBI Sumishin Net Bank (7163 JP) fell 12.5% in the last 90 minutes of trading. This was not due to their Q3 earnings release (out 30 January).
  • It seemed due to investor disappointment in the content of the NTT earnings call. As discussed in the forked insight, there had been speculation NTT would buy SBI Sumishin.
  • Investors had thought NTT would pay more than 28x earnings and a ¥600bn premium to book to buy the business. At 23.7x Mar25e EPS and 4.1x book, it’s still expensive.

10. Nifty IT Index Rebalance Preview: Oracle Financial Services Could Replace L&T Tech

By Brian Freitas, Periscope Analytics

Feb 09
0

Weekly Top Ten Event-Driven and Index Rebalance – Feb 9, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. India: Potential Free Float Changes & Passive Flows in February

By Brian Freitas, Periscope Analytics

  • 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.

2. FXI ETF: Potential Changes in the Year of the Snake

By Brian Freitas, Periscope Analytics

3. Taiwan’s Yageo (2327 TT) Announces Hostile Tender on Shibaura Electronics (6957 JP) – I Have 🍿🍿

By Travis Lundy, Quiddity Advisors

  • Today, Taiwanese passive components maker Yageo Corporation (2327 TT) announced its Board had approved the launching of a Tender on Shibaura Electronics (6957 JP). 
  • It turns out YAGEO approached them in October, Shibaura stonewalled for 3mos, required an NDA to meet, and refused to budge. METI Corporate Takeover Guidelines were likely ignored.
  • This could set off a flurry of activity including competition, an auction, promises of dividends, and who knows what. It will be exciting but it’s not C&F.

4. Barito Renewables Energy (BREN IJ): Global Index Inclusion Likely This Month

By Brian Freitas, Periscope Analytics

  • Barito Renewables Energy (BREN IJ) stock has gone through a series of gyrations as index inclusion was announced and then retracted due to the concentrated holding of the stock.
  • With pre-IPO PE/VC investors selling some stock, the increase in float could result in the inclusion of Barito Renewables Energy (BREN IJ) in a global index later this month.
  • The inclusion of the stock in the index will require passive trackers to buy just over 400m shares of the stock. That is over 14x ADV and will be impactful.

5. STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍

By Brian Freitas, Periscope Analytics

  • With the review period complete, we forecast 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index. There are a few migrations between the indices.
  • We estimate turnover of 3.8% for the SSE STAR50 (STAR50 INDEX) and 9.9% for the STAR100 Index. The estimated net round-trip trade is CNY 13bn (US$1.8bn).
  • The forecast adds to the STAR50 INDEX have underperformed the forecast deletes. For the STAR100 Index outright changes, the forecast adds have outperformed the forecast deletes by a lot.

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

By Travis Lundy, Quiddity Advisors

  • 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.

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

By Brian Freitas, Periscope Analytics

  • 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.

8. KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

By Brian Freitas, Periscope Analytics

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

By Travis Lundy, Quiddity Advisors

  • 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. 

10. Korea: 11 Potential Index Deletions in February

By Brian Freitas, Periscope Analytics

  • There are 11 stocks (maybe 12) in Korea that could be deleted from a global index in February and that will result in large selling from passive trackers.
  • With announcement in a week and implementation in just over 3 weeks, there is positioning in a lot of the names.
  • With short selling still banned, positioning will not be as high as the passive selling and the stocks could still drop over the next few weeks.
Feb 02
0

Weekly Top Ten Event-Driven and Index Rebalance – Feb 2, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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

By Travis Lundy, Quiddity Advisors

  • 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.

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

By Brian Freitas, Periscope Analytics

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

By Brian Freitas, Periscope Analytics

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

By Brian Freitas, Periscope Analytics

  • 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.

5. 3D Launches Partial Tender Offer on NTT UD REIT (8956)

By Travis Lundy, Quiddity Advisors

  • 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…

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

By Brian Freitas, Periscope Analytics

  • 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.

7. Indian Renewable Energy (IREDA IN) QIP: Index Implications

By Brian Freitas, Periscope Analytics

  • 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.

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

By Brian Freitas, Periscope Analytics

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

By Travis Lundy, Quiddity Advisors

  • 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. 

10. EQD | DeepSeek’s New AI: Price Supports and Broader Implications for META, NVDA, S&P 500, Nasdaq 100

By Nico Rosti, MRM Research

  • News that DeepSeek’s latest AI release appears to be superior to latest OpenAI’s ChatGPT in  most (if not all) of the benchmark tasks have apparently shaken markets today.
  • DeepSeek may be able to beat its competitors (including other AI developed by other US companies like Meta Platforms (META US) ), using lower cost chips and less data.
  • Tech companies like NVIDIA Corp (NVDA US) are falling hard (like -12%) in pre-market, and so are the US Indices. Let’s see where support for reversal rallies can be found.
Jan 26
0

Weekly Top Ten Event-Driven and Index Rebalance – Jan 26, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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1. ZTO Express (2057 HK): On Track for Double (Maybe Triple) Index Inclusion

By Brian Freitas, Periscope Analytics

  • With improved liquidity, ZTO Express Cayman (2057 HK) could be added to the HSCEI INDEX early March and then to a global index a couple of weeks later.
  • ZTO Express Cayman (2057 HK) is a lower probability inclusion to the Hang Seng Index (HSI INDEX) given the index committee discretion. Inclusion would further increase the impact.
  • The stock has had a big drawdown recently and the potential index inclusion and passive demand provide a low-risk entry point into the stock, especially hedged with its peers.

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

By Brian Freitas, Periscope Analytics

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

By Brian Freitas, Periscope Analytics

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

By Brian Freitas, Periscope Analytics

  • 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.

5. Shinko Electric (6967) – All Approvals In, JIC Says “Mid-Feb” So Cash Is 19-21 March?

By Travis Lundy, Quiddity Advisors

  • 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. 

6. J&T Global Express (1519 HK): Global Index Inclusion Coming Up

By Brian Freitas, Periscope Analytics

7. NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March

By Brian Freitas, Periscope Analytics

  • With 10 trading days left in the review period, there could be 7 changes (including 2 migrations) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in March.
  • Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). All forecast changes, bar one, have over 1.5x ADV to trade from passive trackers.
  • All the forecast deletes are F&O members while two adds are not. NSE Indices could revisit the index membership criteria especially given the launch of futures on the index.

8. Taiwan: Potential Global Index Changes; Last Review Day Today

By Brian Freitas, Periscope Analytics

  • 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.

9. Henlius (2696)’s Fail Sets (Another) Bad Precedent

By David Blennerhassett, Quiddity Advisors

  • The question was asked in Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal? Well, now we have one as LVC inexplicably blocked.
  • It didn’t appear to make economic rationale for LVC to crash the party – knowing they would do so, and not bother to reduce their position accordingly.
  • In tandem with the TCM (570 HK) debacle, it sets another bad precedent for future/existing Hong Kong  events. Expect spreads for HK arbs to widen. And Henlius to crater.

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

By Travis Lundy, Quiddity Advisors

  • 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.
Jan 19
0

Weekly Top Ten Event-Driven and Index Rebalance – Jan 19, 2025

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

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

By Brian Freitas, Periscope Analytics

  • 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.

2. Henlius (2696 HK): LVC Won’t Block. Buy Here & On Weakness

By David Blennerhassett, Quiddity Advisors

  • Ahead of Shanghai Henlius Biotech (2696 HK)‘s EGM and Court Meeting on the 22 January, the focus has shifted to Loyal Valley Capital (LVC)’s continued buying in the market.
  • After the close of market last Friday, LVC held 7.8295%, above the 7.826% blocking stake. That % was as at 9th January. I assume LVC are still buying.
  • Yet if you analyse how LVC has traded in and out of Henlius, they are not in it to block. They’re in for the back-end scrip option.  

3. Tokyo Metro (9023 JP): Index Inclusions – Light at the End of the Tunnel

By Brian Freitas, Periscope Analytics

  • Tokyo Metro (9023 JP) listed on 23 October and was added to the TSE Tokyo Price Index TOPIX (TPX INDEX) at the close on 28 November.
  • Tokyo Metro (9023 JP) was not expected to be added to one global index (it was not added), while it was expected to be added to the other (and missed).
  • The stock could be added to one global index in February (its close!) and to the other in June (pretty much a sure thing).

4. Kokusai Electric (6525) – Upcoming Lockup Expiry And BIG Index Demand

By Travis Lundy, Quiddity Advisors

  • Kokusai Electric (6525 JP) was IPOed in September 2023. The stock was cheap. It rose sharply, tripling in 9 months. At the ATH, the pre-IPO owners launched a HUGE secondary.
  • It was like a second IPO. The stock dipped, rallied, plummeted into pricing. Stayed there for two days, and in 6 months, the shares have halved. 
  • Lockup expiry is next week, and there is a likely large index event in ~10 weeks.

5. Henlius (2696 HK): Test of Nerves Awaiting LVC’s Next Move

By Arun George, Global Equity Research Ltd

  • The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread ballooned today due to LVC’s amassing a blocking stake.
  • There are valid arguments for LVC to block the vote or to support the offer. LVC’s trading behaviour over the coming days will point to its voting intentions. 
  • I continue to believe that LVC will support the offer. At the current price and for a 15 February payment, the gross/annualised spread is 9.1%/160%.

6. Murata Manufacturing (6981 JP) – No Immediate Passive Buying Could Lead to More Weakness

By Brian Freitas, Periscope Analytics

  • A group of 7 shareholders are looking to sell 61.3m shares in Murata Manufacturing (6981 JP) to raise JPY 143.8bn (US$916m). That is 3.3% of shares outstanding.
  • The shares are being offered at a price range of JPY 2296-2345.5/share, a discount of 5-7% to the last close of the stock.
  • With the offering less than 5% of shares outstanding and less than US$1bn in size, there is no immediate passive buying and there could be further weakness in the stock.

7. Bloks Group (325 HK): Bumper Listing; Index Inclusion Timeline

By Brian Freitas, Periscope Analytics

  • Bloks Group (1850960D CH) was massively oversubscribed, traded 82% higher on Friday and closed its listing day 40% higher than the IPO price.
  • Bloks Group (1850960D CH) now has a full market cap of US$2.7bn. However, lock-ups and cornerstone allocations result in a much lower free float.
  • Index inclusions could take place in August and September, but the passive buying is a fraction of the number of shares that will come off lock-up expiry in early July.

8. Bain To Launch an MBO for Aircraft Maintenance Co JAMCO (7408) ¥1800 Is Too Cheap

By Travis Lundy, Quiddity Advisors

  • Bain is buying out JAMCO (a long time ago called Itochu Aircraft Maintenance) from Itochu, ANA, Bain’s own portfolio company, and the public. It’s an expected deal. A done deal.
  • It is being done too cheaply. The price is 6x next year’s expected EBIT. This year expected ROE is 22%. Next year could be double that.
  • And the company has more in non-operating financial assets than its net equity. And a lot of really old land assets are not marked up. Just a shame.

9. SHIFT (3697) The Next – Potential Big Index Add

By Travis Lundy, Quiddity Advisors

  • Shift Inc (3697 JP) is a high-growth stock in the software services, testing, consulting, development business. They have a big specialist TAM ahead of them. 
  • Revenue is up 50-fold in 10 years. OP is up 85-fold in that period. Revenue is guided +17.5% in the year to Aug 2025. OP is guided +28%.
  • There is an event coming up shortly which could trigger an imminent index inclusion. It’s worth a look.

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

By Brian Freitas, Periscope Analytics

  • 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.