In today’s briefing:
- JD.com Tencent Distribution – All Prosus Stock Worth US$3.5bn Could Be in CCASS Now
- GoTo Gojek Tokopedia: Turning Tide with Index Inclusion?
- PCOMP Index Rebalance Preview Aug 22: One Set of Potential Changes
- Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying
- Yamauchi No.10 Announces Its Offer (If Toyo Accepts)
- Humm’s Rump Diminished Amid Proxy War
- DTAC/True Merger VTO Risk/Reward
- Dongwon Industries Listens to Minority Shareholders and Changes Merger Ratio with Dongwon Enterprise
- STOXX Europe Indices: Quiddity Leaderboard for June 2022 2.0
JD.com Tencent Distribution – All Prosus Stock Worth US$3.5bn Could Be in CCASS Now
- On 23rd Dec 2021, Tencent declared a special dividend in the form of distribution in specie of shares of JD.com, making Prosus the third largest shareholder with a 4.2% stake.
- The actual settlement only happened on 25th Mar. On that day, the bulk of the stock that Tencent distributed moved into CCASS with the exception of shares held by Prosus.
- In this note, we talk about the shareholding pattern and increase in shares held in CCASS.
GoTo Gojek Tokopedia: Turning Tide with Index Inclusion?
- GoTo (GOTO IJ) completes 20 trading days today. Based on the average price over the period and the last close, the stock meets the Fast Entry criteria for IDX30/LQ45/IDX80 inclusion.
- Using a free float of 66%, we estimate passive trackers buying 5.42bn shares (US$74m) of GoTo (GOTO IJ). Announcement could come in a few days with implementation at month-end.
- With the real float close to 4%, passive trackers will need to buy 11.6% of the real float and the stock could move higher in the short-term.
PCOMP Index Rebalance Preview Aug 22: One Set of Potential Changes
- With just over a month to go in the review period for the August rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX), we expect one potential change.
- Security Bank (SECB PM) is a potential deletion. Semirara Mining And Power Corp (SCC PM) has a higher inclusion probability as compared to UnionBank of the Philippines (UBP PM).
- Passive funds will need to trade quite a few days of ADV on the stocks. Historically, the adds have outperformed the deletes in the last leg of the review period.
Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying
- The KDIC sold a 2.33% stake in Woori Financial through an after-hours block sale. From a passive flow perspective, this is quite similar to KSOE’s HHI block deals yesterday.
- Woori is likely to show a similar share price movement as HHI. Expectations for the passive inflow effect must have dissipated, and a short-term share price correction is now inevitable.
- However, the passive inflow sizes are still too substantial. With this in mind, we need to consider a strategy that approaches this price correction as a re-entry opportunity.
Yamauchi No.10 Announces Its Offer (If Toyo Accepts)
- Yamauchi No.10 Family Office and Toyo Construction (1890 JP) have been going back and forth in the last few weeks, with TC trying to figure out if it accepts YFO.
- The Infroneer Tender Offer ends today, and with that – perhaps coincidental timing and perhaps not – YFO has formally announced an intention to launch a Tender Offer.
- That puts the ball back in Toyo Construction’s court. The deal would be at ¥1,000/share and would launch in late June… if TC is ready and willing.
Humm’s Rump Diminished Amid Proxy War
- Humm Group (HUM AU) shareholders will vote on the sale of the HCF business to Latitude Group (LFS AU) on the 23 June.
- If the sale is approved, Humm will retain the commercial business and remain listed. However major shareholder/founder Andrew Abercrombie rejects the deal.
- Since the Latitude transaction was announced on the 28 February, the market is assigning the lowest implied value for the remaining ops, ex-HCF.
DTAC/True Merger VTO Risk/Reward
- At the last close prices, Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB)’s gross spread to the dividend-adjusted VTO price is 5.6% and 11.1%, respectively.
- The merger has received DTAC and True shareholder approvals. The merger hinges on regulatory approval.
- The LONG True and SHORT DTAC trade is attractive, with the current spread of 5.5% trading above the average spread since the merger announcement of 3.4% (ex. transaction costs).
Dongwon Industries Listens to Minority Shareholders and Changes Merger Ratio with Dongwon Enterprise
- In a surprising move, Dongwon Industries announced that it will listen to the demands of the minority shareholders and change the merger ratio with Dongwon Enterprise.
- This is likely to have a positive impact on Dongwon Industries since it boosts the value of Dongwon Industries’ minority shareholders at the expense of controlling shareholders of Dongwon Enterprise.
- The merger price of Dongwon Industries will be raised from 248,961 won to 384,140 won (reflecting net asset value). The merger ratio will be adjusted from 1:3.8385530 to 1:2.7023475.
STOXX Europe Indices: Quiddity Leaderboard for June 2022 2.0
- The STOXX Europe 600 Index is a benchmark index with a fixed number of 600 components representing large, mid and small capitalization companies across 17 countries of the European region.
- The EURO STOXX Index is a subset of the STOXX Europe 600 Index and is also the parent index for the widely-tracked EURO STOXX 50 Index.
- This is a follow-up insight to STOXX Europe Indices: Quiddity Leaderboard for June 2022 Rebalance with an updated look at potential index changes in June 2022.
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