In today’s briefing:
- A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents
- With Us (9696 JP): NSSK’s JPY3,237 Tender Offer
- Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business
- HK Connect SOUTHBOUND Flows (To 6 June 2025); Volumes Up, Tech Down, ENERGY Bought Big
- Bank of Japan’s June Policy Decision: A Non-Event for Markets?
- HKBN (1310 HK): CA Approval (All But) Done. NDRC & MoC Still Outstanding
- Shinsung Tongsang: A Second Try at Tender Offer and Privatization
- Zegona Communications: M&A Optionality and Strategic Re-Rating
A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents
- AH spreads are slightly narrower. BANKS, INSURERS, BROKERS, INDUSTRIALS, PHARMA and UTILITIES see significant H-share outperformance vs their A pairs. TECH, CONSUMER, ENERGY mixed to worse.
- Ongoing skew on H-vs-A performance this week. Those trading AH Premium <20% saw H outperform sharply but those with H Premia contracted. Quiddity Portfolio alpha trending strongly.
- 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.
With Us (9696 JP): NSSK’s JPY3,237 Tender Offer
- With Us Corp (9696 JP) has recommended a tender offer from Nippon Sangyo Suishin Kiko (NSSK) at JPY3,237, an 18.0% premium to the last close price.
- The offer represents an all-time high and concludes SwissAsia’s activist campaign to spill the Board at the AGM on 26 June.
- SwissAsia and the founding family have provided irrevocables (39.81% ownership ratio), paving the way for deal completion.
Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business
- For each share of Sony Corp (6758 JP), shareholders will receive 1 share of Sony Financial Group. Ex-date for the dividend in-kind is 29 September.
- The Nikkei has started a market consultation on treatment of the spinoff in the Nikkei225 and that means the dividend in-kind will not be included in the Dividend Point Index.
- There will be some selling in SFGI from passive trackers and the company will buy back some stock following listing. Details of the buyback have not been announced yet.
HK Connect SOUTHBOUND Flows (To 6 June 2025); Volumes Up, Tech Down, ENERGY Bought Big
- Gross SOUTHBOUND volumes back above US$13bn a day this past 4-day week. Net buying back below US$500mm/day.
- Among the top buys as a percentage of volume, FINANCIALS, ENERGY, TELECOMS stand out, dramatically. Among top sells, it is INFO TECH again. 8 weeks in a row negative.
- 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.
Bank of Japan’s June Policy Decision: A Non-Event for Markets?
- With Japan’s policy rate at 0.5% and the last hike in January 2025, markets are closely watching the BoJ’s next move on June 17.
- Historical data shows limited market impact from anticipated rate decisions—but rare surprises, like the July 2025 hike, have triggered outsized index reactions.
- While historical data and current option pricing suggest the June BoJ decision is unlikely to move markets significantly, investors should be aware of low-probability tail risk when positioning.
HKBN (1310 HK): CA Approval (All But) Done. NDRC & MoC Still Outstanding
- Six months and counting; yet China Mobile (941 HK) continues to (slowly, but surely) chip away at various pre-conditions.
- In its monthly update, HKBN Ltd (1310 HK) said Mobile has proposed commitments to Hong Kong’s Communication Authority, and that the commitments are sufficient to effectively address the CA’s concerns.
- The CA is seeking industry feedback by the 13th June, but a favourable conclusion appears a lock. Elsewhere, no update on I-Squared’s proposal.
Shinsung Tongsang: A Second Try at Tender Offer and Privatization
- On 9 June, Shinsung Tongsang (005390 KS) announced a second tender offer after a failed attempt last year. Tender offer price is 4,100 won per share.
- The tender offer price this time (second try) is much higher than recent prices, making it much more likely that the tender offer will be successful.
- From 2019 to 2023, Top Ten’s sales nearly tripled whereas Uniqlo Korea’s sales declined by about 33% in the same period.
Zegona Communications: M&A Optionality and Strategic Re-Rating
- Zegona Communications (ZEG LN) owns 100% of Vodafone Spain and is a pure-play turnaround and M&A optionality vehicle in a consolidating European telecom market.
- Telefónica and MasOrange are reportedly considering a bid, with potential upside of 25–83% depending on deal terms and valuation multiples.
- Even without a sale, fibre JV monetization and cost-cutting support a standalone re-rating over the next 12–18 months.
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