In today’s briefing:
- Revised Rules on Short Selling Restriction in Korea: Effective 3Q This Year
- Shin-Etsu Chemical (4063 JP) Salutary Earnings, Conservative Forecasts, and Another Buyback
- NIFTY Quiddity Leaderboard Sep 2022: Adani Total Gas Could Be a Positive Surprise
- Hwa Hong (HWAH SP): MGO Unconditional
- (Mostly) Asia M&A: July 2022 Roundup
Revised Rules on Short Selling Restriction in Korea: Effective 3Q This Year
- If short-selling accounts for more than 30% of total daily trade volume, it will be newly designated as an overheated short-selling stock, resulting in a one-day short-selling ban.
- If the stock price falls by more than 5% on the day of the short-selling restriction, the restriction period is automatically extended by one more day.
- We should pay attention to a possible increase in the trading volume of single-stock futures (SSF) due to short-selling bans, which can result in a more significant basis distortion.
Shin-Etsu Chemical (4063 JP) Salutary Earnings, Conservative Forecasts, and Another Buyback
- Shin Etsu Chemical (4063 JP) reported Q1 earnings after the close on 27 July, and they blew the lights out. Higher margins and 10-year record high Q1 progression ratios.
- The company also announced guidance which was pretty healthy, but progression ratios suggest it is conservative.
- The company announced its second ¥100bn buyback in three months. This one lasts 6 months so impact will be lower, but it will have some impact.
NIFTY Quiddity Leaderboard Sep 2022: Adani Total Gas Could Be a Positive Surprise
- The six-month reference period for NIFTY September 2022 Rebalance ends tomorrow.
- In this insight, we take a look at the names that could become ADDs/DELs for the NIFTY 50, 100, and 500 Indices in the September 2022 Rebalance.
- In addition, I have discussed some trading opportunities with interesting potential index flow dynamics.
Hwa Hong (HWAH SP): MGO Unconditional
- Sanjuro, the consortium behind Hwa Hong Corp (HWAH SP) proposal, now controls 51.29%. The Offer has turned unconditional in all respects. Ong directors previously holding out, will now tender.
- The Offer will still close on the 1 August – it will not be extended.
- Should Sanjuro fail to acquire less than 90% of disinterested shares, Hwa Hong will continue to remain listed.
(Mostly) Asia M&A: July 2022 Roundup
- For the month of July, only 4 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of just ~US$1bn.
- The average premium for the new deals announced (or first discussed) in July was ~42%, and a year-to-date average of 38%.
- This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.
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