In today’s briefing:
- MSCI May 2022 Index Rebalance: In-Line With a Few Surprises
- Link Net (LINK IJ): Axiata To Vote On The 26 May. Timeline Intact
- MicroStrategy (MSTR US): Money From Nothing Is Worth?
- Tabcorp’s Demerger Approved Paving the Way to Unlock Value
- MSCI Korea Standard: May SAIR Results
MSCI May 2022 Index Rebalance: In-Line With a Few Surprises
- For Asia Pacific, there are 48 adds/76 deletes across markets with the most changes in China and the highest net changes in Japan. We got 94% of the names right.
- Surprise names are MR D.I.Y. Group, AU Small Finance Bank, Guangzhou Automobile Group, Yunnan Botanee Bio-Technology, Westports Holdings, Indocement Tunggal Prakarsa, DiDi Global and Yantai Eddie Precision Mac-A.
- As expected, there are listing switches for Baidu (BIDU US), Bilibili Inc (BILI US), New Oriental Education (EDU US) and GDS Holdings (ADR) (GDS US).
Link Net (LINK IJ): Axiata To Vote On The 26 May. Timeline Intact
- Axiata Group (AXIATA MK) has convened an EGM on the 26 May to vote on its proposed acquisition of Indonesian broadband play Link Net (LINK IJ).
- The vote, which for all intent and purposes is a rubber stamp, is one of the SPA conditions to acquire 66.03% of LINK.
- Trading at a gross/annualised spread of 7.1%/22.3%. Get involved here.
MicroStrategy (MSTR US): Money From Nothing Is Worth?
- MicroStrategy Inc Cl A (MSTR US) is now trading at a ~26% discount to NAV as the bitcoin barbeque continues.
- Bitcoin is down ~40% YTD. If it falls another 24%, this will trigger a margin call on one of its loans.
- Should bitcoin decline to US$17.5k, MSTR’s crypto bet falls short of its debt obligation; debt that its software ops are not sufficiently profitable enough to service.
Tabcorp’s Demerger Approved Paving the Way to Unlock Value
- Tabcorp Ltd (TAH AU)’s demerger to create two standalone companies listed on the ASX, The Lottery Corporation and New Tabcorp, was approved today.
- Subject to the scheme approved by the Court, the Lottery Corporation will trade on a deferred settlement basis on 24 May and a normal settlement basis on 2 June.
- Peer derating due to the market sell-off results in a lower SoTP valuation of A$5.62 per share, which is still a 13% upside to the last close.
MSCI Korea Standard: May SAIR Results
- As expected, we have one addition, which is Hyundai Heavy Industries. But deletions are a bit surprising. The MSCI said that Korea has no deletion this time.
- The MSCI decided to keep SK Telecom. However, even before the next IR, the possibility of special deletion due to foreign room exhaustion cannot be excluded.
- The number of constituents in this SAIR increased by one more than the last IR, so Seegene and Green Cross got to stay in the Index.
Before it’s here, it’s on Smartkarma
