In today’s briefing:
- Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
- Samsung’s 10T KRW Buyback Phase 2: The Timing of the Drop and How the Structure Is Looking
- HK Connect SOUTHBOUND Flows (To 14 Feb 2025); HUGE Jump in Value Traded, Consumer Names Get a Bid
- A/H Premium Tracker (To 14 Feb 2025): AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks
- (Mostly) Asia-Pac M&A: Paragon REIT, Kaonavi, Arcadium Lithium, Sun Art Retail, HKBN, and Seven & I
- Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer
- Last Week in Event SPACE: Trend Micro, Furukawa, Melco, Ingenia/Lifestyle
- Eqd | S&P/ASX 200 (AS51 INDEX) – RBA Decision: Will the Anticipated Rate Cut Drive the Market?
Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
- On Friday after the close, Japan Eyewear Holdings (5889 JP) made a short announcement that it would cancel its equity offering and TSE Prime application announced 10 Feb, discussed here.
- I had suggested that the offering price, or a large dip would be a buy. I rescind that recommendation immediately.
- The reason for the cancellation? “Matters that need to be confirmed in relation to our internal control system have been discovered and that will take time.”
Samsung’s 10T KRW Buyback Phase 2: The Timing of the Drop and How the Structure Is Looking
- The 2nd phase of the buyback, around 3T KRW with a 3-month window, could drop this week, likely by mid- or end-week.
- The market’s worried Samsung might not retire the shares this time and could handle them differently.
- The latest talk is that Samsung will retire the shares immediately, like Phase 1. This could be an inflection point for solid short-term price action—time to set up positions.
HK Connect SOUTHBOUND Flows (To 14 Feb 2025); HUGE Jump in Value Traded, Consumer Names Get a Bid
- There was a HUGE jump in value traded this week – HK$655bn vs ~$300bn for 5-days of trading the last several weeks.
- Alibaba Group Holding (9988 HK) was the big buy with net buying 7 of 8 days post-CNY and a huge end of week. Tencent was sold.
- There appears to be a flight to Chinese equities by foreigners and SB are taking part with risk-on style trading. Watch Hang Seng rebal news this week!
A/H Premium Tracker (To 14 Feb 2025): AH Premia Fall but Foreigners Buying Non-H/A Pair HK Stocks
- AH Premia are lower again (new 5yr low) in the first full week after the CNY holiday. HK stocks up BIG vs A-shares. H/A discounts slightly narrower on average.
- That tells you that the big winners in HK the past two weeks are those stocks without A-shares. This past week Healthcare sector pairs saw the best relative H-share performance.
- Foreigners returning to HK markets but less to the H in H/A pairs. They are buying HK/China “foreign-investor beta” not China breadth. Feels spivvy, and short-term.
(Mostly) Asia-Pac M&A: Paragon REIT, Kaonavi, Arcadium Lithium, Sun Art Retail, HKBN, and Seven & I
- I tally 59 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
- Two new deals discussed this week: Paragon REIT (PGNREIT SP) and Kaonavi Inc (4435 JP).
- Key updates/news took place on: Arcadium Lithium (LTM AU), Sun Art Retail (6808 HK), HKBN Ltd (1310 HK), and Seven & I Holdings (3382 JP).
Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer
- Zenhoren (5845 JP) announced a partial tender offer and capital and business agreement from Mitsubishi UFJ Financial (MUFG) (8306 JP). MUFG aims to make Zenhoren a consolidated subsidiary.
- The offer is for a minimum of 11.7m shares (44.36% ownership ratio) and a maximum of 13.0m shares (49.55% ownership ratio) at JPY1,000, a 31.9% premium to the last close.
- Due to the irrevocable, the minimum acceptance condition requires a minority acceptance rate of 16.6%. This threshold is achievable, as the offer is reasonable.
Last Week in Event SPACE: Trend Micro, Furukawa, Melco, Ingenia/Lifestyle
- Reportedly buyout firms are “vying for” Trend Micro Inc (4704 JP). The stock went limit up today. Again. The stock is now getting to the expensive side.
- Furukawa (5715 JP) has changed their capital allocation policy for the third time. The company is a cyclical, and will likely always suffer the indignity of a cyclical multiple.
- While it often pays to follows where the family invests when assessing holdco structures, Melco International (200 HK)‘s NAV discount is simply too narrow for a simple holding company structure.
Eqd | S&P/ASX 200 (AS51 INDEX) – RBA Decision: Will the Anticipated Rate Cut Drive the Market?
- The Reserve Bank of Australia is set to announce its Monetary Policy on 18 February. The current RBA rate stands at 4.35% with no change since 2024.
- The market is expecting a 0.25% rate cut. Options expiring on 20 February provide an instrument to trade this event.
- Option pricing is in-line with historical S&P/ASX 200 (AS51 INDEX) moves on days after expected rate changes. Contrarians expecting no change might find value in put options.
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