Daily BriefsEvent-Driven

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB and more

In today’s briefing:

  • HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB, Again on Tech
  • A/H Premium Tracker (To 24 Jan 2025):  AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs… Again
  • Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer
  • Last Week in Event SPACE: Shinko Elec, Tsuruha/Welcia, Macromill, Sun Corp/Cellebrite, MicroStrategy
  • (Mostly) Asia-Pac M&A:Millennium & Copthorne, Insignia, AVJennings, Henlius, Canvest, Makino Milling


HK Connect SOUTHBOUND Flows (To 24 Jan 2025); Again Big Net Buying by SB, Again on Tech

By Travis Lundy

  • SOUTHBOUND gross trading activity was again not stronger per day than the previous several weeks, but SB Net Buying was again BIG. Given the change in Tencent, remarkable even.
  • The story was follow-through, but SMIC and Xiaomi were also big buys. This is shaping up to be a “let’s buy what US Persons cannot” moment.
  • No sectors saw net selling through CCASS data five days to Weds. Top 10 activity was quite concentrated this week. Very few stray names.

A/H Premium Tracker (To 24 Jan 2025):  AH Premia Fall Yet Again, Lowest Avg Premium in 5yrs… Again

By Travis Lundy

  • AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on telcos, banks, brokers, insurers, tech, and airlines.
  • The average AH Premium across all pairs is now the lowest it has been in five years.
  • INFO TECH and FINANCIALS saw significant H outperformance vs As this week. Most others (other than perhaps MATERIALS) were limited in their volatility. No bias by premium tranche seen.  

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

By Arun George

  • Japfa Ltd (JAP SP) disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.
  • While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.
  • The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  

Last Week in Event SPACE: Shinko Elec, Tsuruha/Welcia, Macromill, Sun Corp/Cellebrite, MicroStrategy

By David Blennerhassett

  • JIC announced a “mid-February” start date for Shinko Electric (6967 JP)‘s Tender Offer. That’s a trifle disappointing based on when SAMR approved, but there are lots of people involved here.
  • What has been the long-term trend and the trend of the last two years is different. Be long Tsuruha (3391 JP), short Welcia (3141 JP) until above 4.5x, maybe 4.8x.
  • Macromill, Inc (3978 JP)‘s reward/risk ratio over the next year of buying at ¥1,250 and seeing what happens is quite good, especially if the deal breaks.


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