In today’s briefing:
- A/H Premium Tracker (To 18 July 2025): “Beautiful Skew” Continues Some More
- Two New Tax Tweaks Set to Shake Up Korea’s Local Stock Market: Trading Tax & CGT Threshold
- The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I
- HK Connect SOUTHBOUND Flows (To 18 July 2025); Volumes Strong, Net Buying Decent, Meituan Hot
- Cromwell Prop (CMW AU): Brookfield’s Stake Foreshadows A Full Takeover
- Insignia Financial (IFL AU) Accepts CC Capital’s Reduced Terms
- Infosys (INFO IN) Q1 Results: What Options Markets Are Pricing In
- BPER–Sondrio Reopens: Short-Duration Arbitrage with Strategic Angle
- Weekly Update (GLIBK, BDX, WAT)
A/H Premium Tracker (To 18 July 2025): “Beautiful Skew” Continues Some More
- AH premia flat again among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It still pays well to be long wide H discounts.
- Weeks ago I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
Two New Tax Tweaks Set to Shake Up Korea’s Local Stock Market: Trading Tax & CGT Threshold
- Trading tax gradually dropped from 0.25% in 2020 to 0.15% in 2025, boosting volatility and short-term trades; a hike to 0.25% could cool momentum but widen arbitrage and basis spreads.
- If the major shareholder tax threshold drops to ₩1B, year-end retail dumps and Jan buybacks will return—but with less wild swings and more measured short-term fade and momentum trades.
- If the tax revamp drops end-July, expect a September Assembly push. Usually effective next January, but like 2023’s cap gains hike, changes might apply immediately in 2025.
The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I
- ACT’s bid for Seven & I has been withdrawn and Seven will be better off long-term because of it – although we detail here how competitors are catching up fast.
- Once York HD has been split off, the company can at last focus on its crucial local CVS operation: Japan makes up 25% of revenues but almost 50% of profits.
- The potential is real and we are bullish on the long-term value but we would have been more bullish if the former CEO Ryuichi Isaka was still on board.
HK Connect SOUTHBOUND Flows (To 18 July 2025); Volumes Strong, Net Buying Decent, Meituan Hot
- Gross SOUTHBOUND volumes again US$17+bn a day this past 5-day week. Net buying strong at +US$550mm a day. Meituan the top buy extending a very strong 12 week run.
- Among the top buys as a percentage of volume, FINANCIALS stood out, dramatically. Again. INFO TECH negative again after two weeks of buying broke a three-month sell streak.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
Cromwell Prop (CMW AU): Brookfield’s Stake Foreshadows A Full Takeover
- As discussed in Cromwell Prop (CMW AU): ESR Exit Post-Privatization?, after ESR (1821 HK) acquired ARA Asset Management in 2021, it said Cromwell Property (CMW AU) was a non-core holding.
- After ESR announced a privatisation by Warburg/Starwood on the 4th December 2024, I mused whether this would accelerate the sale as part of a wider strategic review.
- Two months ago, ESR initiated a block trade for part of its 31% stake in Cromwell. Now Brookfield is seeking ESR’s remaining 19.9% stake @A$0.38/share. Subject to FIRB approval.
Insignia Financial (IFL AU) Accepts CC Capital’s Reduced Terms
- Insignia Financial (IFL AU), a wealth manager and previously known as IOOF, has entered into a Scheme with CC Capital at $A$4.80/share.
- That’s 56.9% premium to undisturbed (11th December 2024), 20% above Bain’s initial indicative tilt last year, but 4% below CC Capital (% Bain’s) A$5.00/share indictive Offer on the 7th March.
- Apart from the Scheme vote, CC Capital’s Offer requires a raft a regulatory approvals. The SID indicates 1H26 completion.
Infosys (INFO IN) Q1 Results: What Options Markets Are Pricing In
- Infosys (INFO IN / INFY US) reports Q1 FY26 results on Wednesday, 23 July 2025 at 15:45 IST; earnings days historically triggered outsized price moves.
- Highlight: Analyzing historical post-earnings price movements, along with forward-looking options-implied volatility, provides valuable insights for event-driven strategies.
- Why Read: Access the data and insights to take advantage of anticipated price moves and volatility crush. Potential option strategies explained.
BPER–Sondrio Reopens: Short-Duration Arbitrage with Strategic Angle
- BPER reopened its offer for Sondrio (21-25 Jul)y, presenting a 2.5% gross spread with settlement due by July 31 — a rare, time-sensitive arbitrage setup for short-term traders.
- With 58.15% already secured, additional tenders could push BPER near the 66.7% threshold required for a merger, bypassing the need for a 95% squeeze-out.
- The accelerated 5-day window signals strategic pressure on hesitant holders, while the offer’s confirmed execution and annualized IRR over 200% provide attractive asymmetry.
Weekly Update (GLIBK, BDX, WAT)
- The big news this week is Liberty’s spin-off GCI Liberty began trading
- On July 14, 2025, Becton Dickinson (BDX) announced a tax-free Reverse Morris Trust (RMT) spin-merger: BD will spin off its Biosciences & Diagnostic Solutions (BDS) business into a new subsidiary (SpinCo) and immediately merge SpinCo with Waters Corporation (WAT).
- Under the deal terms, Waters will pay ~$4.0B cash (funded by new debt) plus stock; BD shareholders receive the $4B cash and ~39.2% of the combined company (Waters shareholders ~60.8%).
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