In today’s briefing:
- Merger Arb Mondays (22 Sep) – Technopro, Soft99, Mandom, Pacific Ind, Dongfeng, Shengjing, Smartpay
- BOK’s Oct Rate Cut Playing Out as a Small/Mid-Cap Re-Rating Narrative in Korea
- Hamee: “Demerger Arbitrage” Setup Remains On Track
- BMPS–Mediobanca: Super-Majority Secured; Final Day Setup
- Weekly Update (3134, Versant, Aumovio)
Merger Arb Mondays (22 Sep) – Technopro, Soft99, Mandom, Pacific Ind, Dongfeng, Shengjing, Smartpay
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Oneconnect Financial Technology (6638 HK), Joy City Property (207 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), PointsBet Holdings (PBH AU), Mandom Corp (4917 JP), Humm Group (HUM AU), Fuji Oil Co Ltd (5017 JP).
BOK’s Oct Rate Cut Playing Out as a Small/Mid-Cap Re-Rating Narrative in Korea
- Korea’s structural value gap favors low-PBR, improving-ROE small/mid-caps; traders front-run early movers into the Oct 23 MPC, then rotate into these smaller names as the rate cut nears.
- BOK’s key MPC meetings are Oct 23 and Nov 27, with markets pricing in a 25bps cut on Oct 23 to close the policy rate gap with the Fed.
- Locals are screening for low-PBR (<0.8), ROE >8%, mid-small caps (KRW 300B–1T); 28 names fit, primed to ride the early rate-cut rally pre-MPC.
Hamee: “Demerger Arbitrage” Setup Remains On Track
- Hamee reported earnings on September 12, and the stock traded down ~6%.
- The headline earnings looked awful but they included many one time and/or non cash expenses.
- To me, the underlying business looks strong. The spin-off is on track for early November, and I expect it to serve as a hard catalyst to drive shares higher.
BMPS–Mediobanca: Super-Majority Secured; Final Day Setup
- BMPS has 70.5% of Mediobanca after re-open progress (Reuters, 19 Sep). Window closes 22 Sep; settlement 29 Sep. Gross spread ~1.03% on 19 Sep close; convergence momentum and governance transition.
- Super-Majority enables extraordinary resolutions; merger remains subject to ECB/SSM, Bank of Italy, and corporate approvals. Expect modest final-day tenders; MB to hug offer formula, with delta ≈2.533 to BMPS.
- Trade: convergence hold into final results/29 Sep settlement; maintain tight 2.533 hedge and pre-set rebalance triggers. Directional BMPS bias constructive on lighter dilution/cash; monitor messaging, basis, and any on-market adds.
Weekly Update (3134, Versant, Aumovio)
Before I get into my regular update, I want to share one fantastic chart that caught my eye.
It shows current earnings multiple of the S&P 500, 400 and 600, respectively.
One takeaway is that large caps (S&P 500) are at the high end of their historical trading range.
💡 Before it’s here, it’s on Smartkarma
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