In today’s briefing:
- Thoughts On An Ingenia (INA AU) / Lifestyle (LIC AU) Merger
- China A50 ETFs Rebalance Preview: Three Changes in March
- FXI Rebalance Preview: GTJA, ZTE In; CTG, China Coal Out
- NIFTY MIDCAP150 Index Rebalance Preview: 15 Potential Changes in March
- Banco BPM’s Sweetened Takeover Offer for Anima Holding
- EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market
Thoughts On An Ingenia (INA AU) / Lifestyle (LIC AU) Merger
- Reportedly, Ingenia Communities (INA AU) and Lifestyle Communities (LIC AU) – companies which provide low-cost housing needs for working, semi-retired, and/or retired people – are mulling a merger.
- Part of the rumourmill pivots off of the fact Lifestyle will release its 1H25E results after market on the 24th Feb, shortly ahead of Ingenia’s own release the following morning.
- Lifestyle’s share price remain 25% adrift of levels shortly ahead of a July 2024 ABC report alleging excessive exit fees.
China A50 ETFs Rebalance Preview: Three Changes in March
- With just over a week left to review cutoff, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in March.
- Guotai Junan Securities, Cambricon Technologies and SAIC Motor could replace CGN Power, Luzhou Laojiao and Inner Mongolia Yili Industrial Group.
- Guotai Junan Securities (2611 HK) is expected to be added to the iShares China Large-Cap (FXI) (FXI US) in March, so there should be inflows for the A-shares and H-shares.
FXI Rebalance Preview: GTJA, ZTE In; CTG, China Coal Out
- Nearing the end of the review period, we expect two changes for the iShares China Large-Cap (FXI) (FXI US) ETF in March.
- Guotai Junan Securities (2611 HK) is a high probability add while China Tourism Group Duty Free (1880 HK) is a high probability delete.
- ZTE Corp H (763 HK) is a potential inclusion currently and could replace China Coal Energy Co H (1898 HK) as long as it stays in inclusion zone.
NIFTY MIDCAP150 Index Rebalance Preview: 15 Potential Changes in March
- With the review period now complete, there could be 15 changes for the NIFTY Midcap 150 Index at the March rebalance.
- Estimated one-way turnover is 8.3% resulting in a one-way trade of INR 7.65bn (US$88m). With over US$40bn tracking the index actively, the impact on the stocks will be much larger.
- The outright adds have outperformed the forecast deletes over the last 6 months, but there has been underperformance this calendar year.
Banco BPM’s Sweetened Takeover Offer for Anima Holding
- Banco BPM raises offer for Anima to €7.00 per share, securing over 43% shareholder support. Shareholders will vote on February 28, with deal completion expected in mid-2025, pending regulatory approvals.
- Strategic acquisition boosts Banco BPM’s non-interest income to 50% of total revenues and strengthens its wealth management and insurance business, reinforcing its defense against UniCredit’s €10 billion takeover attempt.
- Market assigns a 92% probability of deal completion. Shareholders are advised to accept, as failure to tender may result in lower liquidity.
EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market
- The global auto industry faces significant tariff exposure. Option implied volatility offers a forward-looking assessment of risk.
- Chinese car makers started to increase in implied volatility more than the other markets at the beginning of February. They now show the highest risk.
- Recent implied volatility trends, asymmetric pricing (skew), and the term structure all seem to indicate that the Indian auto sector is the least exposed to international trade relations.
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