Daily BriefsEvent-Driven

Event-Driven: Shinsei Bank, Kakao Pay, Jardine Cycle & Carriage, Coocon Corp, SK Bioscience, Shanghai Jin Jiang Capital Company Limited, Chinese Estates Holdings, Toshiba Corp, Electrocomponents PLC and more

In today’s briefing:

  • Shinsei Drops Opposition to SBI TOB; A Fascinating Post-Tender Game of 🐔
  • KOSPI200 Index Rebalance: Mostly Expected, Couple of Surprises
  • StubWorld: Jardine Cycle & Carriage Trading Wide; SingTel’s Steepest Discount Ever?
  • KOSDAQ150 Index Rebalance: Pullback Done; Buy Adds & Sell Deletes
  • KOSPI 200 December Rebalancing: Constituents with a Substantial Free Float Change
  • 7 Adds & 7 Deletes in KOSPI 200 Rebalancing: Passive Impact & Trade Setups
  • Jin Jiang Capital’s Privatisation Offer
  • Chinese Estates (127 HK): Scheme Doc Out. Meeting on 17 December
  • Toshiba – 3D’s Letter Suggests a Lack of Ideas
  • FTSE100/FTSE250 Index Rebalance Preview: Trading Places

Shinsei Drops Opposition to SBI TOB; A Fascinating Post-Tender Game of 🐔

By Travis Lundy

  • On 24 November, Shinsei Bank (8303 JP) cancelled the Poison Pill EGM scheduled for 25 November, and changed its SBI TOB Opinion to Neutral. SBI has agreed to respect Shinsei…
  • …management policy & business strategy as per 12 November DICJ letter, and effect stable transition of management. That it is a partial TOB at a too low price, so…
  • …Shinsei will not support. BUT… the BIGGEST problem comes next. And it is a doozy. There are post-tender complications which require contortions to resolve. 

KOSPI200 Index Rebalance: Mostly Expected, Couple of Surprises

By Brian Freitas


StubWorld: Jardine Cycle & Carriage Trading Wide; SingTel’s Steepest Discount Ever?

By David Blennerhassett

  • Jardine Cycle & Carriage (JCNC SP), relative to Astra International (ASII IJ), is retesting recent lows.
  • Preceding my comments on JCNC – and Singtel (ST SP) – are the weekly setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market cap – >20%.

KOSDAQ150 Index Rebalance: Pullback Done; Buy Adds & Sell Deletes

By Brian Freitas

  • There are 15 inclusions and 15 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 9 December.
  • The inclusions were expected but there are a few surprises among the deletions as the Information Technology sector was spared at the expense of the Health Care sector.
  • Over the last couple of months, the inclusions have given up their early gains versus the deletions. With the announcement made, the inclusions could outperform over the next few weeks.

KOSPI 200 December Rebalancing: Constituents with a Substantial Free Float Change

By Sanghyun Park

  • The upcoming rebalancing should feature a total of 12 constituents having a ±5%p free float change: eight members with +5%p or greater and four members with -5%p or harsher.
  • It seems better to outright trade individual liquidity-rich stocks: SK Bioscience, SKIET, Kakao Bank, and Krafton.
  • Considering that SKIET’s recent share price correction was severe, we may want to take a relatively long trading window for SKIET while taking a tighter approach to the rest.

7 Adds & 7 Deletes in KOSPI 200 Rebalancing: Passive Impact & Trade Setups

By Sanghyun Park

  • KOSPI 200 rebalancing results are out – 7 Additions: 4 (regular) + 2 (Fast Entry) + 1 (split) & 7 Deletions: 6 (regular) + 1 (Fast Entry)
  • The passive impact of all additions is pretty significant. In particular, Meritiz, SL, and Kakao Pay are relatively larger.
  • For the deletes, it is worth considering approaching these stocks as an equal-weighted basket. Since their share prices have not been significantly corrected recently.

Jin Jiang Capital’s Privatisation Offer

By Arun George

  • Shanghai Jin Jiang Capital Company Limited (2006 HK) announced a pre-conditional privatisation offer from Jin Jiang International Holding at HK$3.10 per H Share, a 33.62% premium to the last close. 
  • The key conditions for the delisting will be approval by at least 75% independent H-shareholders (<10% of all independent H-shareholders rejection). There is no minimum acceptance condition.  
  • The offer is attractive in comparison to long-term historical share prices and multiples. We think that the privatisation proposal will likely succeed. 

Chinese Estates (127 HK): Scheme Doc Out. Meeting on 17 December

By David Blennerhassett

  • The Scheme Document for Chinese Estates Holdings (127 HK) has been dispatched. The Scheme Meeting will take place on the 17 December. 
  • Founder, Joseph Lau, and his wife Chan Hoi Wan, who control 74.99% of shares out, are offering HK$4.00/share for Chinese Estates, a leading property developer in Hong Kong.
  • The Independent Financial Adviser (Gram Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is on or before the 19 January 2022.

Toshiba – 3D’s Letter Suggests a Lack of Ideas

By Mio Kato

  • Today 3D Investment Partners addressed Toshiba’s spinoff plan in a letter addressed to the Strategic Review Committee. 
  • Unsurprisingly, they were dissatisfied with the results of the strategic review. 
  • Also unsurprisingly they offered no great alternatives pointing to continued meandering.

FTSE100/FTSE250 Index Rebalance Preview: Trading Places

By Brian Freitas

  • At the December rebalance, Electrocomponents and Dechra Pharma could replace Johnson Matthey and Darktrade in the FTSE 100 Index, while there could be three changes to the FTSE 250 Index.
  • The changes will be based on prices from 30 November, the announcement of the changes will take place on 1 December and implemented at the close on 17 December.
  • There will be a large impact on the inclusions to the indices and on stocks that are migrating upward. The impact on the deletions and downward migrations is much smaller.

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