In today’s briefing:
- ZTO Express (2057 HK): On Track for Double (Maybe Triple) Index Inclusion
- J&T Global Express (1519 HK): Global Index Inclusion Coming Up
- FSS’s Short Selling Guidelines: Breaking Down the Key Violation Cases and What They Mean
- CVC Bumps the Macromill (3978) Price, Declares Final, and That’s That… Or Is It?
- Millennium & Copthorne Hotels (MCK NZ): City Dev’s Privatisation Offer
- Weekly Deals Digest (19 Jan) – Henlius, GA Pack, Lifestyle China, Jamco, Macromill, Insignia, AVJ
- Kalyan Jewellers: Rumour-Driven Stock Slide, F&O Ban—Is There Room for Further Correction?
- NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March
- Merger Arb Mondays (20 Jan) – Canvest, Henlius, Lifestyle China, Vesync, JAMCO, Insignia, AVJennings
- Weekly Update (SNRE, HHH, ANGI, MRP)
ZTO Express (2057 HK): On Track for Double (Maybe Triple) Index Inclusion
- With improved liquidity, ZTO Express Cayman (2057 HK) could be added to the HSCEI INDEX early March and then to a global index a couple of weeks later.
- ZTO Express Cayman (2057 HK) is a lower probability inclusion to the Hang Seng Index (HSI INDEX) given the index committee discretion. Inclusion would further increase the impact.
- The stock has had a big drawdown recently and the potential index inclusion and passive demand provide a low-risk entry point into the stock, especially hedged with its peers.
J&T Global Express (1519 HK): Global Index Inclusion Coming Up
- J&T Global Express (1519 HK) listed in October 2023 and was added to one global index in June 2024 and to the HSCEI INDEX in September 2024.
- J&T Global Express (1519 HK) could be added to a global index in February and there will be a big passive buying impact. The company is also buying back stock.
- J&T Global Express (1519 HK) has underperformed its peers over the past year and the index inclusion could help in closing some of that gap.
FSS’s Short Selling Guidelines: Breaking Down the Key Violation Cases and What They Mean
- The issue with borrowing agreements is that contracts with conditions set later or changeable terms don’t count, creating uncertainty on how this will play out in practice.
- Many borrowing agreements depend on recall timing for ownership recognition, even within the same day, creating confusion in practice.
- Repayment period limits don’t apply to internal desk-to-desk trades within the same firm. Other than those, no new updates today on reporting requirements, T+2 reporting window, or lending limits.
CVC Bumps the Macromill (3978) Price, Declares Final, and That’s That… Or Is It?
- On Friday 17 January, the closing date of the CVC Tender Offer for Macromill, Inc (3978 JP) at ¥1,150/share, the bidder announced an extension of the Tender Offer.
- They also announced a bump to ¥1,250/share, and that included a comment saying they resolved not to raise the price further.
- This happened during market hours, and the price jumped to just below ¥1,250/share. But one should not consider this a done deal. For reasons…
Millennium & Copthorne Hotels (MCK NZ): City Dev’s Privatisation Offer
- Millennium & Copthorne Hotels (MCK NZ) (MCK), a Kiwi hotel chain, has announced that City Developments (CIT SP), its major shareholder, has made an Offer for shares not held.
- City Dev is offering NZ$2.25/share, a 25% premium to last close. City holds 75.86% and the offer is conditional on a 90% holding, including shares currently held.
- Reg approvals include OIA, which should be rubber-stamped. Very illiquid company.
Weekly Deals Digest (19 Jan) – Henlius, GA Pack, Lifestyle China, Jamco, Macromill, Insignia, AVJ
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million through a primary/secondary offering.
- Event-Driven developments: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Jamco Corp (7408 JP), Macromill, Inc (3978 JP), Insignia Financial (IFL AU), Avjennings Ltd (AVJ AU).
Kalyan Jewellers: Rumour-Driven Stock Slide, F&O Ban—Is There Room for Further Correction?
- Kalyan Jewellers (KALYANKJ IN) stock has dropped 36% year-to-date and is now under an F&O ban after open interest hit threshold limits.
- The rumours driving the stock decline lack financial or strategic relevance with no substantial reason for long-term investors to panic.
- The stock correction has realigned Kalyan’s P/E discount to Titan, with current levels likely to stabilise and thus provide a near term support for Kalyan Jeweller’s stock price.
NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March
- With 10 trading days left in the review period, there could be 7 changes (including 2 migrations) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in March.
- Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). All forecast changes, bar one, have over 1.5x ADV to trade from passive trackers.
- All the forecast deletes are F&O members while two adds are not. NSE Indices could revisit the index membership criteria especially given the launch of futures on the index.
Merger Arb Mondays (20 Jan) – Canvest, Henlius, Lifestyle China, Vesync, JAMCO, Insignia, AVJennings
- We 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: Shanghai Henlius Biotech (2696 HK), Smart Share Global (EM US), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK).
- Lowest spreads: Makino Milling Machine Co (6135 JP), Fuji Soft Inc (9749 JP), Avjennings Ltd (AVJ AU), Latin Resources (LRS AU), Pressance Corp (3254 JP).
Weekly Update (SNRE, HHH, ANGI, MRP)
This week, IAC Inc (IAC) provided an update on its Angi Inc (ANGI) spin-off plans.
Previously, IAC had suggested that it would spin off ANGI but hadn’t confirmed it.
IAC will spin-off its entire stake in Angi Inc in the first half of 2025, but no sooner than March 31.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
