In today’s briefing:
- FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: 46% One-Way Turnover and US$5bn Two-Way Trade
- FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER
- FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO
- Meritz Merger Event: Swap Conditions, Spread Arb Trade, & K200 Flow Implementation
- Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month
- AXXZIA (4936 JP) – TOPIX Inclusion Is Likely In February
- FTSE TWSE 50 & 100 Dec 22 Final Expectations: Greatek Is Still the Main Talking Point
- Meritz Financial Group: Comprehensive Stock Swap + Delisting of Meritz Sec. And Meritz F&M Insurance
- Lifestyle (1212 HK)’s Scheme Gets Up
- FTSE China 50 Index Rebalance Preview: JD Health Could Replace Xpeng
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: 46% One-Way Turnover and US$5bn Two-Way Trade
- Today is the review cutoff for dividend data and stock prices that will be used to select the inclusions and exclusions as well as for capping of index weights.
- We see 26 adds and 5 deletes for the index at the December rebalance resulting in one-way turnover of 46% and a one-way trade of TWD 78.1bn (US$2.51bn).
- Passive trackers will need to buy over 5 days of ADV on 15 stocks and sell over 5 days of ADV on 19 stocks and this will present trading opportunities.
FTSE TWSE Dividend+ Dec 22 Quiddity Final Expectations: Crucial Shift in Tracking AUM a GAME CHANGER
- In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
- Considering the combined effect of expected index changes and capping flows, there could be 27 potential inflows names and 28 potential outflow names with total one-way flow size of US$2.45bn.
- There are multiple names on both sides with several days of volume to trade.
FTSE TWSE Taiwan 50 Index Rebalance Preview: Far Eastern Could Replace AUO
- Today is the review cutoff and we expect Far Eastern New Century (1402 TT) to replace AU Optronics (2409 TT) in the FTSE TWSE Taiwan 50 Index in December.
- Passive Taiwan 50 trackers will need to buy nearly 6 days ADV on Far Eastern New Century (1402 TT) and sell 1.6 days of ADV on AU Optronics (2409 TT).
- There will be same way flows from the FTSE TWSE Taiwan Dividend+ Index trackers and will substantially add to the impact on the stocks.
Meritz Merger Event: Swap Conditions, Spread Arb Trade, & K200 Flow Implementation
- The last trading day to secure appraisal rights is today (the 22nd). You must buy stocks by today to make arb trade possible using appraisal rights.
- We should consider LONG FINANCIAL SHORT FIRE/SECURITIES. KSD allows us to maintain borrowed stocks of the target company without redemption procedures if new stocks are listed after the merger.
- K200 trackers will have to buy in for FIRE at the close on January 27, whereas SECURITIES will be on March 31. We should design a setup targeting this preemptively.
Medley (4480) – Move to Prime Means TOPIX Inclusion Next Month
- A year ago, TSE Growth-listed Medley (4480 JP) said they would “make preparations” for a listing on TSE Prime. Last month, Janaghan Jeyakumar, CFA had it at “Almost Ready.”
- Today they announced they would list on TSE Prime on 28 November which means a TOPIX Inclusion at end-December.
- Shareholder structure and stock bias matter a lot in this case. It’s very much worth looking at the details.
AXXZIA (4936 JP) – TOPIX Inclusion Is Likely In February
- Just under two weeks ago, AXXZIA Inc (4936 JP) announced it had on that day (9 November) applied to move to TSE Prime from TSE Growth.
- It’s an interesting one because of the strange differential between “tradable shares” and “float.”
- After some study, I think this could be a TOPIX inclusion at end-Feb 2023, but there are steps to take between now and then.
FTSE TWSE 50 & 100 Dec 22 Final Expectations: Greatek Is Still the Main Talking Point
- The base date for the December 2022 index review FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 for the December 2022 Rebalance is today (21st November 2022).
- In this insight, we take a look at Quiddity’s final predictions for expected ADDs/DELs for the December 2022 index review.
- I expect one change for the Taiwan 50 Index and one change for the Taiwan Mid-Cap 100 index.
Meritz Financial Group: Comprehensive Stock Swap + Delisting of Meritz Sec. And Meritz F&M Insurance
- After the market close today, Meritz Financial Group (MFG) made one of the biggest announcements in the history of the group.
- It announced that Meritz Fire & Marine Insurance and Meritz Securities will become fully owned subsidiaries of Meritz Financial Group. Meritz F&M Insurance and Meritz Securities will also be delisted.
- MFG is making a real positive change through the share swaps among the three companies. This will likely have the biggest positive impact will be on MFG.
Lifestyle (1212 HK)’s Scheme Gets Up
- Independent shareholders of Lifestyle International Holdings (1212 HK) comfortably voted through the Scheme resolution.
- 94.93% of stakeholders present (and via proxy) voted FOR, with 5.07% voting AGAINST.
- The last day of trading is the 6 December with payment expected on or before the 30 December.
FTSE China 50 Index Rebalance Preview: JD Health Could Replace Xpeng
- At the end of the review period for the December rebalance, we see JD Health (6618 HK) replacing XPeng (9868 HK) in the FTSE China 50 Index.
- There is a very slim possibility of Longfor Properties (960) being deleted; it could be replaced with either Yum China Holdings Inc (9987) or PICC Property & Casualty H (2328).
- Short interest has stayed rangebound on JD Health (6618 HK) this year, while shorts have gone parabolic on XPeng (9868 HK) over the last few months.
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