In today’s briefing:
- The BOJ Announces the Start of ETF/JREIT Selldowns – Basically a Nothing-Burger
- HK Connect SOUTHBOUND Flows (To 19 Sep 2025); BIG Single Stock Trading Again, Feels Slightly Toppish
- Pacific Industrial (7250 JP): Limited Upside as Effissimo Continues to Add
- A/H Premium Tracker (To 19 Sep 2025): AH Premia Contract More, Spreads Still Volatile
- Changhong Jiahua (3991 HK): Changhong Group’s Preconditional Scheme at HK$1.223
- HK CEO/Director Dealings (22 Sep 2025): TYK Medicine, Chanjet’s Full Circulation, Bonjour, Shunten
- Kraft Heinz (Nasdaq: KHC) Spin-Off to Create Value; See Upside From Current Levels
- Changhong Jiahua (3991 HK): Sichuan Changhong’s Pre-Con Scheme
- BBVA-Sabadell: All-Stock, All-In — But Not a Done Deal
- STAAR Surgical Acquisition Opposition, OCI Merger Details, and Lifeway Foods Takeover Saga Updates
The BOJ Announces the Start of ETF/JREIT Selldowns – Basically a Nothing-Burger
- In Friday’s Monetary Policy Statement, the BOJ announced it would start selling down its holdings in ETFs and J-REITs at the pace of ¥620bn and ¥5.5bn/year, respectively. BIG NEWS!
- That is US$17mm of ETFs and US$150k of J-REITs per day. The BOJ suggests it is 0.05% of volume per day. That’s close. SMALL EFFECT.
- Given ¥15trln of buybacks and ¥5trln+ of dividend reinvestment + NISA account buys, plus ¥trlns of cross-holding selldowns/year, this is a total nothingburger, even if they up the pace.
HK Connect SOUTHBOUND Flows (To 19 Sep 2025); BIG Single Stock Trading Again, Feels Slightly Toppish
- Gross SOUTHBOUND volumes just over US$22+bn a day this past 5-day week. Biggest week in a while. Net Flows not following gross flows. Feels toppish into GW.
- The recommended name last week was Alibaba (9988 HK) was up 2.2% on the week but only +0.7% from Monday close to Friday.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.
Pacific Industrial (7250 JP): Limited Upside as Effissimo Continues to Add
- Effissimo has steadily increased its Pacific Industrial (7250 JP) stake to 7.0 million shares or a 12.17% ownership ratio. The most recent purchases were at an average price of JPY2,616.08.
- Effissimo is taking contrasting approaches to low-ball MBOs. For Soft99 Corp (4464 JP), Effissimo has launched a hostile offer, while for Pacific, Effissimo has chosen to agitate for better terms.
- The offer closes on 24 September. While a bump is the most likely scenario, the share price is 30% higher than the offer price, suggesting limited upside. Take profits.
A/H Premium Tracker (To 19 Sep 2025): AH Premia Contract More, Spreads Still Volatile
- “Beautiful Skew” nowhere this past week. The meat of the wider parts of the AH premia curve saw Hs underperform even as liquid Hs outperformed As average by 0.6%.
- Last week’s long reco on CNOOC Ltd (883 HK) saw the H-share underperform its A by 6.56%. It was a bad week.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.
Changhong Jiahua (3991 HK): Changhong Group’s Preconditional Scheme at HK$1.223
- Changhong Jiahua Holdings (3991 HK) announced a preconditional privatisation offer from Changhong Group, the controlling shareholder, at HK$1.223, a 32.9% premium to the last close price.
- Key conditions include approval by at least 75% independent shareholders (<10% of independent shareholders’ rejection) and the headcount test. The offer is final.
- Two shareholders hold blocking stakes – one has provided an irrevocable, and the other is SOE-linked. The offer is attractive compared to historical trading ranges. Timing is the key risk.
HK CEO/Director Dealings (22 Sep 2025): TYK Medicine, Chanjet’s Full Circulation, Bonjour, Shunten
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
- These insights also flag those companies where shares have been pledged, both recently and ongoing.
Kraft Heinz (Nasdaq: KHC) Spin-Off to Create Value; See Upside From Current Levels
- Kraft Heinz’s decision to split into Global Taste Elevation Co. and North American Grocery Co. is a strategic move intended to recalibrate the Company amid flattening growth.
- We value Kraft Heinz on a sum-of-the-parts (SOTP) basis. Global Taste Elevation is valued at 10x 2025E adjusted EBITDA, while North America Grocery is valued at 7.8x 2025E adjusted EBITDA.
- We expect the spin-off to unlock value for shareholders as Global Taste Elevation Co will get better multiple post separation.
Changhong Jiahua (3991 HK): Sichuan Changhong’s Pre-Con Scheme
- After Changhong Jiahua (3991 HK) (CJ) was suspended pursuant to the Takeovers Code, I expected SOE-backed Sichuan Changhong (600839 CH) (60.13%) to make an Offer. And that is what unfolded.
- Sichuan Changhong plus provincial bodies, have made a pre-conditional Offer by way of a Scheme, at HK$1.223/share, a 32.93% premium to last close. The Offer Price is final.
- Pre-Cons include the local SASAC & Reform Commission Commerce, plus SAFE. The risk to the deal will be one of timing. The Offer Price is fair.
BBVA-Sabadell: All-Stock, All-In — But Not a Done Deal
- BBVA’s revised all-share offer removes the discount but offers minimal premium, testing institutional appetite amid weak synergies and a fixed acceptance window ending 7 October.
- The absence of cash and refusal to raise terms again leave limited upside optionality, making the risk/reward still favorable for a tactical long SAB / short BBVA trade.
- Key focus now shifts to institutional sentiment, final acceptance levels, and governance risks, as tax neutrality alone may not be enough to ensure majority support.
STAAR Surgical Acquisition Opposition, OCI Merger Details, and Lifeway Foods Takeover Saga Updates
- STAAR Surgical’s largest shareholder opposes Alcon’s $28/share acquisition offer, potentially forcing a higher bid before the October 23 vote.
- OCI N.V. will merge with Orascom Construction, leading to delisting and liquidation, with limited upside from current levels.
- Hearst’s $16.50/share bid for DallasNews likely to win shareholder approval, backed by major shareholder and proxy firms.
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