Daily BriefsEvent-Driven

Event-Driven: GS Retail, Swire Pacific (A), Samsung Electronics Pref Shares, SK IE Technology and more

In today’s briefing:

  • GS Retail Merger Swap Arb Trade Begins This Monday
  • Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream
  • Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount
  • Index Rebalance & ETF Flow Recap: MSCI, KOSPI200, KOSDAQ150, Sensex, SIMSCI, PCOMP, CSI300

GS Retail Merger Swap Arb Trade Begins This Monday

By Sanghyun Park

GS Retail merger swap with GS Home Shopping is still in progress. It is a stock swap. The GS Home Shopping shareholders will get 4.22368 GS Retail shares for each GS Home Shopping share.

Overview (₩B)
TypeStock swap
AcquirerGS Retail Co Ltd (007070)
Target companyGS Home Shopping Inc. (028150)
Swap price for GS Retail₩33,800
Swap price for GS Home Shopping₩142,762
Swap ratio4.2236834
Source: DART

May 28 is the big day to ger shareholder approval for the merger. Stock repurchase right exercise will proceed on May 28 to June 17.

Of course, it is only for those who purchased the shares before November 11 last year. But stock swap arb trade? Everyone can do it any time from now until the trade suspension begins June 29.

Dissenting opinion notice5. 13 ~ 27
EGM5. 28
Stock purchase right exercise5. 28 ~ 6. 17
Trade suspension (GS Home Shopping)6. 29 ~ 7. 15
Listing7. 16
Source: DART

Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

By David Blennerhassett

Last Week in Event SPACE …

  • Plus, other events, CCASS movements, and Mood Spins.

(This insight covers specific insights & comments involving Stubs, Pairs, Arbitrage, share Classifications, and Events – or SPACE – in the past week)


Hitachi Metals (5486 JP)  (Mkt Cap: $8.3bn; Liquidity: $29mn)

Hitachi took in bids earlier this spring after running an auction process and three weeks ago an article in the FT hit the tape saying “Bain nears $8bn deal to buy Hitachi Metals.” That was around current market price give or take net debt so people were thinking there might not be a premium. Now we have a deal announcement. Indeed, Bain is paying near US$8bn, but it is structured in such a way that Bain pays ¥1675/share to Hitachi and ¥2181/share to minorities, which produces a combined price just over ¥1900/share. This approximates a decent result for everyone involved.  

  • This is long-dated. The Tender Offer is expected to start in November 2022 after all clearances are received. Expect clearances will be received. This has probably been vetted pretty well in Japan and Travis Lundy cannot imagine other countries putting up that much of a fuss.
  • This should trade up to the ¥2140 area. There are probably 8+ months til settlement and given the fact there is no easy or near-term fallback position here if it were to get blocked, it should probably trade in the low single digits in terms of annualised return. There are probably 100 million shares of float which won’t feel obliged to hold at ¥2140 or above because the return profile won’t be what they are looking for. I expect that this will mean it will trade wide at first, then slightly tighter, then wider as arbs “fill up”. This isn’t as overwhelming a supply as was the case for NTT Docomo which traded wide.
  • There is a small possibility of a bump. If markets were to fly between now and then, or profits were to surprise to the upside materially in H1, there could be room for a re-rate, but it would be limited. This is, to Travis, a full price. He would not count on a bump. Bain has already told everyone that they don’t want to pay ¥2181 for the whole thing, which is why they have arranged what they have arranged with Hitachi.
  • This is a buy for arbs at the ¥2120 area or lower. Travis expects it will settle higher. Different arbs have different target rates of return, and different funding levels.

Bingo Industries (BIN AU)  (Mkt Cap: $1.7bn; Liquidity: $11mn)

Bingo announced it has entered into Scheme with MIRA in a A$2.3bn (US$1.7bn) deal. Shareholders have the option to receive either A$3.45/share in cash for each share held, or a mix of cash and unlisted stock. Bingo also intends to declare a fully franked special dividend of up to A$0.117/share, to be paid on or before the implementation of the Scheme. The consideration under the Scheme will be net of this dividend. This looks done and trading tight to terms.

  • Bingo directors (mainly comprising Daniel Tartak and Ian Malouf) holding 31.57% will vote in favour of the Scheme. Both Tartak and Malouf (holding 31.53%) will opt for the mix and match alternative.
  • $3.45/share is a 26% premium to last close, a 33% premium to the one-month VWAP, and a lifetime high.  A$3.45/share implies an LTM (December 2020) EV/EBITDA of 19.5x and 15.1x FY22E. When Cleanaway Waste Management (CWY AU) acquired Tox Free for A$670mn in early 2018, it paid a 27.5% premium to the 10-day VWAP.
  • UPDATE: Capital Group announced it has sold its entire 9.7% stake in Bingo.

(link to my insight: Bingo Industries (BIN AU): Macquarie Cleans Up)

Japan Asia (3751 JP)  (Mkt Cap: $0.2bn; Liquidity: $3mn)

On the 26 April, Japan Asia announced it was cancelling its planned rights issue. Shares traded too ¥946 which was ~4% through the bid Murakami-san had planned. This was then followed by City Index Eleventh announcing that it would launch its planned Tender Offer at ¥910/share (accompanying document link here). So here we are again. Japan Asia Group, for its part, announced it would “consider the Tender Offer and respond with its Opinion Statement in a timely manner.”

  • Travis does recommend chasing this to 6-7% through terms where it closed on the first day of the Tender Offer Period. The fact that Murakami-san has nearly 31% makes it difficult for anyone else to take over the company. 
  • The fact that the Court effectively blocked the rights offering by JAG (it didn’t really, but delaying it sufficiently has similar effects) means JAG needs another response. They may not have one.  But if the stock stays at ¥960+, then Murakami-san won’t get much stock at ¥910. Travis would sell here and buy only below terms. 

Jardine Matheson Holdings (JM SP) (Mkt Cap: $24bn; Liquidity: $23mn)

Any form of shareholder on any class of shares are entitled to take advantage, upon dissenting, of the appraisal rights. Without exception. As such, I’m inclined to ignore Matheson’s veiled dig on “professional dissenting shareholders” or “sophisticated investment funds”.

  • At Jardine Strategic Holdings (JS SP)‘s SGM, I understand 966.563mn shares voted FOR the resolution, 85.549mn AGAINST, and 55.282mn did nothing. So the turnout was 95%.  Turnout ex-Matheson was ~70%. Therefore the maximum dissension was 7.8% of shares out. I’m hearing it may be up to 75% of those shareholders who voted against the amalgamation, have dissented, which roughly works out to be 5.8% of total shares out. Assuming it’s 5% for argument’s sake. and with a final bump of say 30%, that would cost Matheson an additional  ~US$550mn, or ~10% of the initial deal size, or 2.4% of its current NAV.
  • No doubt Matheson was prepared for this contingency. The Keswick family has the patience. Unless the actual quantum of the bump is considerably lower than my arbitrary figure, and Matheson settles here and now, I expect Matheson is content to go to the courts and let a judge decide. As seen in recent Cayman Island appraisal rights cases, the final uplift in “fair value” has been modest, to non-existent.
  • Nevertheless, at a 13% discount to NAV, Matheson is not attractive for a complicated holding company structure. I’d avoid Matheson here – in all likelihood, near-term news may focus on these dissension rights, and Matheson’s potential exposure thereon.

(link to my insight: Jardine Matheson: Lessons in Dissent)

Mainstream Group Holdings Ltd (MAI AU) (Mkt Cap: $0.2bn; Liquidity: $1mn)

On 9th March 2021, Australia-based third-party fund administration services provider MAI announced they had signed a Scheme Implementation Deed to be acquired by Hong Kong-headquartered Vistra in an all-cash deal that valued the company at a market cap of ~A$170mn. The Offer Price was A$1.20/share. In Mainstream Group (MAI AU): Go-Shop Provision Makes It Interesting. Janaghan Jeyakumar said he “would get LONG at or below A$1.23 during the go-shop period”.

  • On 12th April 2021, MAI announced that they had received a superior bid from US-based financial technology company Ss&C Technologies (SSNC US) at an Offer Price of A$2.00/share which was 66.7% higher than Vistra’s original bid of A$1.20. Janaghan continued to be Bullish on the situation as he saw this as a “low-cost Bump option”. MAI shares were at A$1.975 and he wrote “I would be long at or below the current trading price”. Then on the 27 April, MAI announced that SS&C has bumped the Offer to A$2.25/share valuing the company at a market cap of ~U$250mn.  Finally, SS&C has revised Terms upwards again to A$2.35/share. 
  • Janaghan remains bullish as he sees a high likelihood of this Deal completing as-is or with a Bump.  

Link to Janaghan’s insight:
Mainstream (MAI AU): More Competition Forces SS&C to Bump
Mainstream (MAI AU): Three-In-A-Row! Bullseye!

Fuji Kosan Company (5009 JP) (Mkt Cap: $0.1bn; Liquidity: $1mn)

Singapore-based fund Aslead Capital Pte announced that it would launch a Tender Offer on fuji Kosan to take at least a 40% stake and possibly full control after ownership and approaches did not lead to “satisfactory” measures to improve corporate value. The shareholder had been acquiring shares since last year. It first went above 5% in August 2020 and until yesterday had most recently reported a 14.83% stake on 4 February.  The stock has an interesting set of investors, and was for many years in the early to mid-2010s a poster child for tiny cap deep value investment targets.  As of the announcement, Aslead states that it owns 16.8% which means to get to 40.0%, it needs only 23.2% of shares out – of the 83.2% it does not own. 

  • This looks opportunistic. It is not super cheap, but not “full price” either.  It kind of looks like an attention-getting exercise (and for that, it is a good one – it got your attention didn’t it?). 
  • If this deal does not go through, the shareholder list has 11% passive, 30% crossholders, 16% Aslead, 8% SHIGETA Mitsutoki, and a bunch of people who probably bought stock through terms. One has to have a very good reason to get other investors to side with you to vote out directors. This is not a total no-brainer. 
  • The Trade: There could be a bump or a White Knight. At 3-4% through, it may make sense as a trade. If this does not go through, one could be stuck for a while. At 1-2% through terms, Travis thinks it is worth buying. 

HKC Holdings (190 HK)‘s Scheme Document was despatched on the 31 March. The IFA said “fair & reasonable”. At the Scheme Meeting on the 23 April, disinterested shareholders overwhelmingly approved (99.36%) the Scheme. Done & dusted, it would seem. But HKC said in an HKEx announcement that it failed the quorum test. Search the Scheme Doc and there is no mention of a quorum. Nor in HKC’s Memorandum of Association.  So where is this directive coming from as it is not a statutory requirement, but one apparently imposed by the judge?  Did the FA make an executive decision to simply ignore the direction for the sake of the Scheme Doc? Was the SFC aware of the directions order? My own view in HKC Holdings (190 HK): Quorum Quibbles is the FA is culpable here for the lack of transparency. Let’s hope it doesn’t come down to pointing fingers, and the judge simply waives the quorum.

Mphasis Ltd (MPHL IN) (Mkt Cap: $4.5bn; Liquidity: $1mn)

In 2016, a Blackstone fund purchased 60.5% of India-based IT Solutions Provider Mphasis from Hewlett Packard at Rs 430/share, then conducted an Open Offer to buy more shares at Rs 457 and change. Last year Blackstone was weighing the possibility of selling its 56.16% stake, possibly Carlyle. But Blackstone is selling to Blackstone. 

  • Investors have been granted a 9-12 week put option on their shares, struck 1-3% below the current price for 60% of their shares. That put is monetisable. 
  • For those who are seriously interested in the arbitrage, it would probably make sense to buy the stock and sell futures for a certain amount to generate synthetic stock borrow. Doing so would allow one to expand the size of the put option one owned.
  • If one were to buy a lot of stock at terms of Rs 1700, and a Rs 35/share dividend were to be paid prior to shareholders of record before the end of the Open Offer, and one sold the June or July Rs 1700 put option (depending on when the Offer closed), one would take away Rs 12/share plus the put premium per share x 0.6 at a minimum.  If the shares go up, that is a high-quality problem. 

(link to Travis’ insight: Blackstone Sells Mphasis Stake To…. Blackstone and Investors Get a CHEAP Option)

Beijing Digital Telecom (6188 HK)‘s Composite Document has now been despatched and the Offer is open for acceptances. The IFA says fair and reasonable. The MGO has a 50% tendering condition – attached to ALL voting rights of Beijing Capital. Will this get up? In Beijing Digital (6188 HK): Offer Now Open. IFA Says Fair, I believe so. The disinterested domestic shareholders hold 8.12% of total shares out. My guess is they will all tender. This will give Zhuhai Huafa 46.11%. Of the remaining 53.89% of shares out – all of which are H shares – Digital China (000034 CH) holds 21.62%, JD.com (HK) (9618 HK) 8.98%, and Dawn Galaxy 5.73%. All are in the money.  Even stripping out Digital China, JD, and Dawn Galaxy, the remaining 18% of shares out have seen a significant increase in the share price, not just YTD, but off the COVID low. Plus shares were on a steady downward trajectory heading into the pandemic. 

The approval from the Mongolian Central Bank conveyed via Khan Bank to Sawada Holdings (8699 JP) on the 19th of April and announced on 20 April allowed for one or more Qualifying Shareholder(s) to sell via market routes, and gave permission to that/those one or more Qualifying Shareholder(s) to sell. The selldown may be over. Or it may not. In Sawada Selldown May Be Done – Now On To Earnings, Travis remains bullish on the value of an exit and monetisation vs current price. It may be that Sawada finds buyers for 40% of Khan Bank. Whichever happens, Travis expects a large influx of cash to shareholders or to Sawada which will then be available to shareholders. 

Back on the 25 March, Mcpherson’s Ltd (MCP AU) announced an unconditional, on-market cash Offer of $1.34/share from the Kin Group, via Gallin P/L. I suggested going long,  even when it was 4% through terms. MCP issued a Target Statement on the 8 April recommending shareholders reject the Offer. MCP has now announced the receipt of a non-binding, indicative proposal from pharmaceutical giant Arrotex Australia, by way of a Scheme, for A$1.60/share. Despite what appears to be Arrotex’s good intentions to proceed to a firm proposal, I would not chase shares here. DD may uncover further deterioration than what has been disclosed. I’d be taking profit for investors who bought in after Kin’s initial tilt. In McPherson (MCP AU): Arrotex Derails Kin’s Offer, if shares drift back down to around $1.47/share, I’d get involved, given the risk/reward.

Japara Healthcare (JHC AU)  announced it had received an unsolicited, indicative, conditional, and non-binding Offer from Little Company of Mary Health Care – otherwise known as Calvary – by way of a Scheme, at A$1.04/share. My initial reaction in Japara Healthcare (JHC AU): Here Comes The Calvary is that this is an opportunistic bid. This is the third Offer in this beaten-up space in the last year. Metlifecare Ltd (MET NZ) was eventually taken private.  Regis Healthcare (REG AU) fielded an Offer from its co-founder and Washington H. Soul Pattinson And Co. (SOL AU) in September last year, which was subsequently withdrawn, despite a bump in terms. Regis has outperformed the market since. Indicative bids can prove to be a tricky investment in Australia. But for what is likely an industry in recovery mode, one in which the Royal Commission overhang is largely removed, and a comprehensive reform package to be implemented, I think Japara will reject this initial approach.

After months of Link Administration Holdings (LNK AU) saying to investors it has received various interest in its PEXA stake, indicative bids are now coming in for Link’s 44% stake in the digital property settlements group. Bids are expected to top A$1bn+ for Link’s stake, or $1.86/share – vs. A$1.60/share under PEP/Carlyle’s non-binding proposal. Shortly after,  PEP/Carlyle withdrew its proposal. Link to my insight: Link Admin (LNK AU): PEXA Bidding.


Swire Pacific (A) (19 HK)  / Swire Properties (1972 HK) 

Swire Pac’s discount to NAV of ~34% compares to the one-year average of ~49%. The average NAV discount pre-2019 protests, pre-COVID, is around 20-25%, but it’s questionable how much reliance can be placed on historical data. Going long Swire Pac at the end of October, either outright, or in a set-up stub trade, paid off handsomely. Swire Pac’s P/B of 0.35x compares to 0.2x back in October. Yet, Swire Pac continues to face significant challenges in 2021.

  • Cathay will make a loss in the 1H21, and probably for the full year. If HK intends to keep COVID cases at or near zero, it should implement a travel bubble variant involving no (or limited) testing, no quarantine, and no vaccination requirements, as seen in other travel bubbles. Without such, Hong Kong – and its commercial/retail property + aviation – will remain crippled. I think there are some serious issues in the property sector that may surface if a viable exit strategy for Hong Kong is not tabled in the coming months. 
  • Going long the stub is going long the beverage ops, which is the only meaningful, profitable unlisted segment. I’m not confident of a significant narrowing in the NAV discount from here, and would prefer to set up an unwind if the discount goes below 30%. 
  • A discount of 34% doesn’t appear too demanding for Swire Pac (given its tendency to historically trade in the low-to-mid twenties), so I would prefer to unwind the Holdco at slightly tighter levels. I am not bullish property yet, and I think post-protests and covid, the office property market may set itself a new trading range which might not be great for Swire.

(link to my insight: StubWorld: Swire Pac’s Outperformance

Hanwha Corporation (000880 KS)‘s 37% stake in Hanwha Solutions (009830 KS) represents 60% of Corp’s NAV. In Our NAV Analysis of Hanwha Corp and A Pair Trade with Hanwha Solution, Douglas recommends going long Corp, short Solutions after the short-selling ban is lifted on Monday. 


Softbank Corp (9434 JP)  (Mkt Cap: $bn; Liquidity: $144mn)

Traditionally, telecom companies in mature markets are “easy.”  Infrastructure is basically built, but there is always maintenance and capex to upgrade throughput. Churn is low. Customers occasionally add on new services. They are generally cash machines.  Comparing telcos is often reasonably easy. Mostly it comes down to how aggressively the company prices to customers, how it seeks non-standard revenue off its infrastructure and sales base, or how it returns capital to shareholders. 

  • The issue for Softbank is now is significant enough that one should avoid using EBIT or EBITDA (or EBITDA less capex) as a comparative tool to NTT (Nippon Telegraph & Telephone) (9432 JP) and KDDI Corp (9433 JP) without more clarity. This is detailed – do read Travis’ insight. 
  • And on April 1, 2021, Softbank announced that CEO Junichi Miyakawa, who took over the post this past fiscal year from Miyauchi-san and who held 200,000 shares a year ago, and 475,600 shares at end-March, would buy ¥20bn of shares in the market, and that Softbank Corp would provide him financing to do so. Given this is a full 20% of the company’s buyback from last year, and there is no reasonable way he will be able to pay for it if the stock drops sharply,  it looks like the company is on the hook for materially all of the money.  This all means one should probably consider Softbank Corp differently than the other two for OTHER reasons too. 

(link to Travis’ insight: Softbank Corp – Accounting for The Accounting Is Complicated)

Korean Short Selling

Normal service resumes for short selling in Korea from Monday, 3 May – but will be limited to constituent stocks of the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX)Links to Brian’s insight: Korea Short Selling: Service Resumes Monday.

Shinsei Bank (8303 JP) was Travis’ “High Conviction” idea for 2021 as presented 22 December 2020 in 2021 High Conviction – Shinsei Bank. The stock rose ~50% in just under 3 months, outperforming other banks by 20+%. I warned of a pause on the squeeze in March in 2021 High Conviction Update – Shinsei Bank Float Squeeze to Mitigate Near-Term, and since then the shares are down more than 13% (and ~20% from intraday highs in March) as huge buying flow from the buyback programme ended. The stock has underperformed a basket of 9 bank peers by 13% from the top. Shinsei is still a buy. It is cheap at sub 0.4x book and ~7x. Real World Float is low/limited. Shinsei is likely to launch a buyback in May. It may be as large as last year, but Real World Float is 40% smaller than last year. In Shinsei Bank (8303 JP) Update – The Pause That Refreshed May End Soon, Travis recommends to get Long. Be Long


In TOPIX Index Upweights: The Big April Basket 2021, Janaghan discussed how the Tokyo Stock Exchange reviews this Liquidity Factor every April and highlighted 50 names (the “Big April Basket 2021”) that could potentially have their liquidity factors removed in this April’s review. As discussed in TOPIX Upweights: Big April Basket 2021 Pre-Event Is a WIN! Now the Event-Leg!, 48 out of these 50 names were correct translating to a hit ratio of 96% and an equally-weighted basket of these 50 names outperformed TOPIX by +3.8% in 8 trading days from 30th March to 8th April 2021 (the day after the official results were announced).

In TOPIX Upweights: Big April Basket 2021 Event-Leg Is Also a WIN. Finish Line Is Here!, Janaghan looked at how the basket has performed since then and what that could mean for the remainder of the trade that was originally planned to end on 28th April 2021. 

And in TOPIX Inclusion Trade Summary: April 2021, Janaghan TOPIX Inclusion Trade Summary: April 2021. Read more: https://skr.ma/kSWix.


For the month of April, nine new deals (mostly in Asia) were discussed on Smartkarma with an overall announced deal size of ~US$36bn. The average premium for the new deals announced (or first discussed) in April was ~16%, with a year-to-date average of ~30% (66 deals). This compares to the average premium for all deals in 2020 (158 deals) and 2019 (145 deals) of 31% and 31.5% respectively.


On 24 April, Leonardo SpA (LDO IM) agreed to acquire a 25.1% stake in Hensoldt AG (HAG GR) from KKR for €23 per share. The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E. In Leonardo/Hensoldt: Acquisition of Controlling Stake, Jesus Rodriguez Aguilar recommends going long Hensoldt, TP €24.6, c. 7% upside to the price agreed between KKR and Leonardo.

On 20 April, Credit Agricole Sa (ACA FP) boosted its offer for Credito Valtellinese SpA (CVAL IM) to €12.50/share from €12.20, regardless of any threshold met, 0.8% above Jesus’ target price in CreVal – Crédit Agricole: Grounds for an Improved Offer. Crédit Agricole holds now 91.17% of CreVal. As per the offer document, conditions for the purchase obligation are met. Link to Jesus’ insight: Credit Agricole/CreVal: Purchase Obligation.

On 27 April, Orange SA (ORA FP) published the results of its offer for Orange Belgium SA (MOBB EU). It now holds a 74.68% stake. Orange has decided to re-open the tender for five trading days (28 April to 4 May inclusive, offer price unchanged) with the aim of gaining more acceptances. Link to Jesus’ insight: Orange/Orange Belgium: Offer Re-Opening.

The resolution to approve the scheme for the recommended cash acquisition of Aggreko PLC (AGK LN) was passed at the Court Meeting and the special resolution to implement it was passed at the EGM. Still awaiting antitrust clearance and foreign investment clearance. The gross spread is 2%, c. 8% annualised assuming a 3-month completion (although it is expected to become effective at the beginning of Q3). Link to Jesus’ insight: Aggreko: Shareholders’ Meeting, Spread Turned Positive.

M&A – US

In Voodoo SPAConomics: Finding Longs & Shorts Amidst the Deluge of Offerings & Tattooed Chef (TTCF) – Is This Food Burning Up or About to Rise? ,Robert C Prather Jr screened for quality SPACs trading very near or below $10 that have not yet announced a target. Eos Energy Enterprises Inc (EOSE US) has a weak underwriter score, only~$7.25/share in trust, and the target shareholders’ lockup may expire in mid-May. He also spotlights some risks around a single SPAC, Tattooed Chef Inc (TTCF US).


PSEi Index Rebalance Preview. For the August rebalance, Brian sees a possibility of AC Energy Corp (ACEN PM) being included in the index, which would see DMCI Holdings (DMC PM) being excluded. Link to Brian’s insight: PSEi Index Rebalance Preview: Follow-On Offering Could See ACEN Added, DMC Deleted.

MSCI Singapore Index. MSCI is scheduled to announce the results of the May 2021 Semi-Annual Index Review (SAIR) on 11 May with the changes implemented after the close of trading on 28 May. For Singapore, we see a high probability of Sea Ltd (SE US) being included in the index and Suntec REIT (SUN SP) being excluded. This will keep the number of index constituents at 19. Link to Brian’s insight: MSCI Singapore Index – Upcoming Changes.

JPX-Nikkei 400 Rebalance 2021. Potential Removals: This is a list of SHORTs. As of last review, there were 37 names in this list. From that list, Dentsu Inc (4324 JP) and JFE Holdings (5411 JP) will be deleted (have to unwind (i.e. buyback)). JSR Corp (4185 JP) will be added to this list (new SHORT). Potentials Inclusions: This is a list of LONGs. As of last review, there were 39 names in this list. From that list, Sawai Pharmaceutical (4555 JP)Shinoken Group (8909 JP)Erex Co Ltd (9517 JP)Fujitsu General (6755 JP)FUJIFILM Holdings (4901 JP), and Japan Post Insurance (7181 JP) will be deleted (have to unwind from last month). Jafco Co Ltd (8595 JP)Maruwa Unyu Kikan (9090 JP)Mitsui Soko Holdings (9302 JP)Adeka Corp (4401 JP), and Aeon Delight (9787 JP) will be added to this list (new LONGs). Link to Janaghan’s insight: Sensex June21 Index Rebalance Preview: Index Committee Has a Decision to Make.

Sensex June 21 Index Rebalance Preview. Brian sees Oil & Natural Gas Corp (ONGC IN) as a high probability deletion, while Wipro Ltd (WPRO IN) holds the edge over Tata Steel Ltd (TATA IN) as an index inclusion. Link to Brian’s insight: Sensex June21 Index Rebalance Preview: Index Committee Has a Decision to Make.

KOSDAQ150 Index Rebalance Preview. In KOSDAQ150 Index Rebalance Preview: 15 Potential Changes; Big Impact on Deletions, Brian sees see 15 inclusions and 15 exclusions from the index.

MSCI announced that it would delete Cgn Power Co Ltd H (1816 HK)China National Chemical A (601117 CH)China Shipbuilding Industry (601989 CH) and Inspur International (596 HK) from the MSCI China and MSCI ACWI since there was no further guidance from OFAC with effect from the close of trading on 20 May. A further announcement will be made on 17 May to confirm the changes. Links to Brian’s insight: MSCI to Delete Stocks Affected by Executive Order – Having Another Go & Travis’ MSCI Sets Up Deletion of Trump EO 13959 “Closely Match” Names Given Reprieve in Late January.



My ongoing series flags large moves (~10%) in CCASS holdings over the past week or so, moves which are often outside normal market transactions.  These may be indicative of share pledges.  Or potential takeovers. Or simply help understand volume swings. 

Often these moves can easily be explained – the placement of new shares, rights issue, movements subsequent to a takeover, lock-up expiry, amongst others. For those mentioned below, I could not find an obvious reason for the CCASS move.   


% chg


Out of

Steering (1826 HK)49.00%GalaxyCMBC
Dragon Rise (6829 HK)23.17%CheerCNI
Jiayuan International (2768 HK) 17.87%HaitongMorton
Ruicheng (1640 HK)49.64%RooferForwin
Graphex (6128 HK) 16.11%Cheong LeeChina Merchant
Prosperous (1259 HK)13.42%Get NiceHSBC
JHBP (Genor) (6998 HK) 11.76%GSSt Chart
Linekong Interactive Group (8267 HK) 18.09%CMBUBS
Source: HKEx

The following large movement(s) concern recently listed companies, and therefore are (likely) lock-up related.


% chg


Out of

Central China New Life (9983 HK) 22.03%BNPCMB
Channel Micron (2115 HK)16.24%MLOutside of CCASS
Source: HKEx

Samsung Family Stake Change Filings: Ramifications for SamE 1P Discount

By Sanghyun Park

We saw a series of filings by Samsung affiliates on the major shareholder stake changes due to the inheritance.

Here are the links to the regulatory filings at DART of the three companies:

Samsung said that the late chairman Lee Kun-hee didn’t leave any will. So, the inheritance went at a 1/3 (spouse) to 2/3/N (each child) ratio, except for Samsung Life Insurance under the family members’ mutual consent.

As for Samsung Life Insurance, the mother, Hong Ra-hee, gave up on her share. Instead, Lee Jae-yong got 1/2, and Lee Bu-jin (elder daughter) received 2/3/2. The youngest one, Lee Seo-hyun, took 1/3/2.

Samsung Electronics Co LtdBeforeAfter
Hong Ra-hee0.91%2.30%
Lee Jae-yong0.70%1.63%
Lee Bu-jin0.00%0.93%
Lee Seo-hyun0.00%0.93%
Source: DART
Samsung C&T CorpBeforeAfter
Hong Ra-hee0.00%0.97%
Lee Jae-yong17.48%18.13%
Lee Bu-jin5.60%6.24%
Lee Seo-hyun5.60%6.24%
Source: DART
Samsung Life Insurance co., LtdBeforeAfter
Lee Jae-yong0.06%10.44%
Lee Bu-jin0.00%6.92%
Lee Seo-hyun0.00%3.46%
Source: DART

As a result, we can safely say that the entire Samsung Group is under Lee Jae-yong’s firm control.

  • He single-handedly controls 18.13% of Samsung C&T, the de facto holding company.
  • He then owns 29.28% of Samsung Life Insurance, including C&T’s 19.34% stake in Life.
  • Lastly, he governs Samsung Electronics with a 15.15% stake, including Life’s 8.51% and C&T’s 5.01%.
Lee Jae-yong’s controlling stake
Samsung C&T Corp18.13%
Samsung Life Insurance co., Ltd29.78%
 – Including the stake owned by Samsung C&T19.34%
Samsung Electronics Co Ltd15.15%
 – Including the stake owned by Samsung C&T8.51%
 – Including the stake owned by Samsung Life Insurance5.01%
Source: DART

Index Rebalance & ETF Flow Recap: MSCI, KOSPI200, KOSDAQ150, Sensex, SIMSCI, PCOMP, CSI300

By Brian Freitas

In this weeks recap, we look at:

Redemptions in iShares MSCI South Korea Index Fund (ETF) (EWY US) continue ahead of the resumption of short selling in Korea.

Event this week

Close of



4 May

Decrease in Vedanta Ltd (VEDL IN)  investability weighting

Before it’s here, it’s on Smartkarma