In today’s briefing:
- CSOP Sammy ETF + Korean Retail Leverage Frenzy = Contango Basis Arb Alert
- (Mostly) Asia-Pac M&A: Webjet, Nippon Road, Nissin Corp, Sumi Mitsui Construction, ESR, Oneconnect
- Classys: Block Deal Sale of 6% By Bain Capital Raises Overhang Concerns
- Last Week in Event SPACE: Tsuruha/Welcia Merger, Mayne Pharma, Canvst, Insignia Financial
- TechnoPro (6028 JP): A Good Privatisation Candidate
CSOP Sammy ETF + Korean Retail Leverage Frenzy = Contango Basis Arb Alert
- CSOP told Korean media this Sammy ETF product targets Korea’s local retail traders wanting leveraged or short KOSPI exposure, especially Sammy, without using Korea’s derivatives market—essentially a cross-border retail play.
- Korean retail’s insanely strong demand for anything leveraged, combined with limited domestic derivatives access, makes significant local inflows very likely—far from a moonshot.
- TRS use doesn’t guarantee 1:1 futures buying—depends on broker hedging. But, with Samsung futures volume surging, heavy retail flows in CSOP ETF could cause contango and a basis arb opportunity.
(Mostly) Asia-Pac M&A: Webjet, Nippon Road, Nissin Corp, Sumi Mitsui Construction, ESR, Oneconnect
- I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Five new deals discussed on Smartkarma this week: Webjet Group (WJL AU), Nippon Road (1884 JP), Nissin Corp (9066 JP), Sumitomo Mitsui Construction (1821 JP), and Frasers Hospitality Trust (FHT SP).
- Key updates/news took place on: Avjennings Ltd (AVJ AU), PointsBet Holdings (PBH AU), ESR Group (1821 HK), and Oneconnect Financial Technology (6638 HK).
Classys: Block Deal Sale of 6% By Bain Capital Raises Overhang Concerns
- After the market close on 16 May, Bain Capital sold about 6% stake in Classys (214150 KS) in a block deal sale.
- Bain Capital sold 3.93 million shares of Classys at 57,915 won per share (this price is 10.9% discount from Classys’ closing price the previous day).
- Bain Capital’s decision to sell a 6% stake in Classys via a discounted block deal, rather than offloading its entire 60.2% controlling stake, indicates a share overhang on future sales.
Last Week in Event SPACE: Tsuruha/Welcia Merger, Mayne Pharma, Canvst, Insignia Financial
- Glass Lewis has now joined ISS in recommending holders vote against the Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP) merger, presumably as it relates to the ratio.
- Mayne Pharma (MYX AU), ASIC AND Cosette have effectively signed off on the Scheme Booklet’s veracity. That should be assuring to investors.
- Canvest Environmental Protection Group (1381 HK)‘s Scheme comfortable got up – despite a last minute hiccup – and poor governance – to adjourn the meeting.
TechnoPro (6028 JP): A Good Privatisation Candidate
- Technopro Holdings (6028 JP) shares were up 20.7% on Friday based on a Mergermarket report that is conducting a privatisation auction with bids due in six weeks.
- Technopro responded that it has been continuously exploring various strategic alternatives, including privatisation, to enhance shareholder value. TechnoPro has the characteristics to make a good privatisation target.
- The precedent is Bain’s privatisation of Outsourcing Inc (2427 JP) at a forward EV/EBITDA multiple of 13.5x. A similar multiple implies a JPY4,400 offer. TechnoPro can justify a higher multiple.
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