In today’s briefing:
- Nippon Paint (4612 JP): Secondary Offering & Index Implications
- Last Week in Event SPACE: Mapletree Merger, China Mobile, LG Chem, China Logistics
- Index Rebalance & ETF Flow Recap: MSCI, FTSE, HSCEI, KS200, KQ150, ASX200, STAR50, PCOMP, JDH, Sea
- Asia-Pac Weekly Risk Arb Summary: ARA LOGOS, Katakura Industries, China Logistics, Yorkey Optical
Nippon Paint (4612 JP): Secondary Offering & Index Implications
- Nippon Paint Holdings (4612 JP) will offer up to 140.133m shares in a secondary offering. Six financial institutions will sell shares aimed at lowering ‘strategic holdings’ and improving stock liquidity.
- There will also be an over-allotment option for 17.63m shares. In total, the offering size could reach JPY 198bn. There will be an increase in the stock free float.
- We expect MSCI/FTSE to implement the changes at the time of the event. TOPIX is a wild card since they may not see a 5-6% increase in FFW as significant.
Last Week in Event SPACE: Mapletree Merger, China Mobile, LG Chem, China Logistics
- China Mobile (941 HK) announced it would start executing on its buyback mandate (10% of H-shares out (2.047bn shares). This is potentially enormous. And absolutely praise-worthy.
- The Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) prospective merger means a lot of flow. Lots and lots of flow.
- The market was assigning ₩18bn (₩232,000/share) less for LG Chem (051910 KS) stub ops since December 2020, when the battery business division (LG Energy Solution (LGENERGY KS)) was carved out.
Index Rebalance & ETF Flow Recap: MSCI, FTSE, HSCEI, KS200, KQ150, ASX200, STAR50, PCOMP, JDH, Sea
- The review period for the HSI, HSCEI, HSTECH, HSCI, PCOMP and the FTSE All-World/All-Cap indices ended on 31 December. The changes will be announced in the next few weeks.
- We expect an upweight for JD Health (6618 HK) at the MSCI Feb QIR, while there will be buying in Sea Ltd (SE US) due to the tranched inclusion.
- Inflows continue into the Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) even as the markets head lower.
Asia-Pac Weekly Risk Arb Summary: ARA LOGOS, Katakura Industries, China Logistics, Yorkey Optical
- There are currently 45 – mostly firm – transactions currently being discussed and analysed on Smartkarma
- For a change of pace, there were no new deals this week discussed on Smartkarma.
- There were updates for Katakura Industries (3001 JP), China Logistics Property Holdings (1589 HK), ESR-REIT (EREIT SP)/ARA LOGOS (ALLT SP), and Yorkey Optical International Cayman (2788 HK).
Before it’s here, it’s on Smartkarma
