In today’s briefing:
- Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.
- Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer
- Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene
- S&P/ASX Index Rebalance Preview: Lots of Change; Could Be More with Sigma/CWG Merger
- GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
- HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
- EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades
- Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
- Insignia Financial (IFL AU): CC Capital’s Non-Binding Offer Could Spark a Bidding War
- EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity
Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.
- In December 2019, an article in slightly odd Japanese business magazine Sentaku (選択) suggested Fujitsu Ltd (6702 JP) would imminently seek to address dual listings of subs.
- Some subs went early. The auction for Fujitsu General (6755 JP) started spring 2023, failed, started again, failed again, and the shares languished.
- Two years later we have a deal. Large privately-held company Paloma-Rheem Holdings is the buyer in a split-price deal which comes at a decent but not exorbitant premium.
Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer
- Fujitsu General (6755 JP) announced a preconditional tender offer from Paloma Rheem Holdings Co at JPY2,808 per share, a 23.5% premium to the last close.
- The offer, which is preconditional on regulatory approvals and will open in early July, is attractive compared to historical trading ranges and peer multiples.
- The process is lacking as Fujitsu declined to conduct an auction. The offer is below the midpoint of the IFA DCF valuation range, and the Board requested price.
Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene
- KRX and FSS confirmed the NSDS is ready and account registration numbers will be issued, confirming short selling will resume on April 1st, despite no official FSC statement yet.
- Today’s buzz is about pre-registration for short selling, with FSS tracking accounts down to individual desks. This could limit short-selling flexibility, despite addressing the overseas lending issue.
- Exposing too much info on short-selling accounts could shrink securities lending participants, causing supply-demand imbalances, spiking borrowing fees, and creating unique trading opportunities early on.
S&P/ASX Index Rebalance Preview: Lots of Change; Could Be More with Sigma/CWG Merger
- Nearing the end of the review period, there could be 36 adds/deletes across the S&P/ASX family of indices in March.
- Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
- Completion of the merger with Chemist Warehouse in February will set off huge passive buying in Sigma Healthcare (SIG AU) over the February to June period.
GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
- China Mengniu Dairy Co (2319 HK), Greatview Aseptic Packaging (468 HK)‘s largest customer, has ceased to be a substantial shareholder. Mengniu opposes the Shandong Xinjufeng offer.
- This development suggests that Mengniu has low confidence in a management competing offer and will likely shift its business away from GA Pack.
- The stake sale will help the Shandong Xinjufeng Technology Packaging (301296 CH) offer turn unconditional as it will nudge minorities to tender, partly due to GA Pack’s uncertain outlook.
HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
- We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
- There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades
- This Insight analyses Meituan (3690 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
- The vast majority of traders opt for bearish strategies, but there are examples of contrarian trades.
- Although one-month implied volatility is historically low in its 7th percentile, it is above realized volatility. With an implied just below 40%, option premiums are significant in absolute terms.
Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
- We expect one change for the HSTECH index in March 2025 and combined with capping flows currently see US$475mn one-way flows.
Insignia Financial (IFL AU): CC Capital’s Non-Binding Offer Could Spark a Bidding War
- Insignia Financial (IFL AU) disclosed a non-binding privatisation offer from CC Capital at A$4.30, a 7.5% premium to the rejected Bain non-binding proposal of A$4.00.
- While the offer is attractive compared to historical trading ranges, it is light compared to peer and precedent transaction multiples.
- The presence of several substantial shareholders necessitates an attractive takeover premium. To facilitate better terms, the board should provide due diligence access.
EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity
- This Insight analyzes Tencent (700 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
- Historically low implied volatility favors bullish or bearish long volatility strategies.
- Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.
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