In today’s briefing:
- KOSPI200 Ad Hoc Index Rebalance: DGB Financial (139130 KS) To Replace Meritz Sec (008560 KS)
- Index Rebalance & ETF Flow Recap: MSCI KR, S&P/ASX, SSE50, ChiNext, NIFTY, KQ150, AMFI, Rakuten Bank
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Estia Health (EHE AU): Bain Capital’s A$3.00 Offer
- KOSPI 200: Special Changes & Rising Delinquency Ratios of Banks in Korea
- Last Week in Event SPACE: Toshiba, Toyota Industries, Meituan, Kingsoft, Rakuten Bank
- KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Healius, Mincor, Osstem, Golden Energy, S.M.Entertainment
KOSPI200 Ad Hoc Index Rebalance: DGB Financial (139130 KS) To Replace Meritz Sec (008560 KS)
- As expected, DGB Financial Group (139130 KS) replaces Meritz Securities (008560 KS) in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the close on 31 March.
- We estimate passive trackers will need to buy 5.15m shares (KRW 35.5bn; 12.1 days of ADV) of DGB Financial Group (139130 KS) at the close of trading on 31 March.
- DGB Financial Group (139130 KS) trades cheaper than its peers on forward PE and Price to Book. There could be relative outperformance over the next week.
Index Rebalance & ETF Flow Recap: MSCI KR, S&P/ASX, SSE50, ChiNext, NIFTY, KQ150, AMFI, Rakuten Bank
- There are a bunch of implementations in the coming week, the largest being the Nikkei 225 (NKY INDEX) March rebalance.
- There are some ad hoc changes to the KOSPI2 INDEX and KOSDAQ 150 Index following constituent stocks being designated as Administrative Issues and Investment Attention Issues.
- Inflows to the iShares MSCI Emerging Markets ex China ETF (EMXC US) have continued and has taken AUM to a new high.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
Estia Health (EHE AU): Bain Capital’s A$3.00 Offer
- Estia Health (EHE AU) confirmed it has received a non-binding indicative proposal from Bain Capital at A$3.00 per share, a 28.2% premium to the undisturbed price (23 March).
- The offer is attractive in comparison to historical share prices and multiples and implies a premium to Regis Healthcare (REG AU)’s (the key peer) multiples.
- However, the offer is light in comparison to precedent transactions multiples. The largest shareholder has also suggested the terms are light, which suggests a requirement for a bump.
KOSPI 200: Special Changes & Rising Delinquency Ratios of Banks in Korea
- The Korea Exchange announced special changes in KOSPI 200 index.
- Effective 3 April, Meritz Securities (008560 KS) will be excluded from the KOSPI 200 index and DGB Financial Group (139130 KS) will replace it.
- We think that there could be slightly better capital flow into DGB Financial as compared to other regional/smaller banks in Korea including BNK Financial
Last Week in Event SPACE: Toshiba, Toyota Industries, Meituan, Kingsoft, Rakuten Bank
- Toshiba Corp (6502 JP)‘s Board is clearly giving this to shareholders and saying “We did our job. Now it’s up to you.”
- Toyota Industries (6201 JP) admits to falsifying some engine emission tests. But the market dinging the company ~20% is excessive.
- US$16bn of Meituan (3690 HK) shares from Tencent (700 HK) got delivered on 24 March 2023. That’s a lot.
KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
- Following Cellivery Therapeutics (268600 KS) designation as an Administrative Issue and an Investment Attention Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Humasis (205470 KS).
- The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 17 April.
- Humasis (205470 KS) was limit up on Friday following the ex-date of a 1:3 scrip issue. The stock could continue to move higher over the next week.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Healius, Mincor, Osstem, Golden Energy, S.M.Entertainment
- There are 42 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Four new deal was discussed on Smartkarma this past week: Australian Clinical Labs (ACL AU)/Healius (HLS AU), Wyloo/Mincor (MCR AU), JIC/Toshiba Corp (6502 JP), and MBk/ Osstem Implant (048260 KS).
- Key updates took place for Essential Metals (ESS AU), Golden Energy & Resources (GER SP), and S.M.Entertainment Co (041510 KS).
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