In today’s briefing:
- SK Telecom / KT Corp: Foreign Room, Passive Flow & Trade Update
- Merger Arb Mondays (20 Jun) – Link Admin, Infomedia, ResApp, Ramsay Health, Frasers Hospitality
- Weekly Deals Digest (19 Jun): Frasers Hospitality, Link Admin, Link Net, Thai Life, GOGOX, ResApp
- Ping An A/H: Position for Premium Contraction
- TIGER Theme ETF “Tour Leisure” Rebalancing Projections: Hanatour, Asiana, Kangwon Land, & T’way Air
- TIGER Theme ETF “Secondary Cell” Rebalancing Projections: SKIET, Ecopro BM, SKI, SKC, & Ecopro
- FTSE TWSE Taiwan Indices: Quiddity Primer
- WISE Theme Index “Media Contents” Rebalancing Projections: HYBE, CJ ENM, & Studio Dragon
- FTSE TWSE Quiddity Leaderboard Sep 2022: Sinopac Financial and Pegatron Leading the Race
- Infomedia (IFM AU): Now A Three-Way Hunt
SK Telecom / KT Corp: Foreign Room, Passive Flow & Trade Update
- On 20 May, we recommended selling SK Telecom (017670 KS) and buying KT Corp (030200 KS). That trade is up 12% over the last month.
- Foreign investors have sold 2.5m shares of SK Telecom (017670 KS) in the last month while buying 2.8m shares of KT Corp (030200 KS).
- With the price ratio trading at a 4 year low, we feel is is time to start unwinding the trade and waiting for a little bit before reversing it.
Merger Arb Mondays (20 Jun) – Link Admin, Infomedia, ResApp, Ramsay Health, Frasers Hospitality
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
- The highest spreads are Sezzle Inc (SZL AU), Link Administration (LNK AU), 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Resapp Health (RAP AU).
- The lowest gross spreads are Irongate Group (IAP AU), AKM Industrial (1639 HK), Beijing Enterprises Urban Resources (3718 HK), Hwa Hong Corp (HWAH SP), Uniti Group Ltd (UWL AU).
Weekly Deals Digest (19 Jun): Frasers Hospitality, Link Admin, Link Net, Thai Life, GOGOX, ResApp
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
- On the ECM front, Thai Life Insurance (124744Z TB) and aCommerce Group (ACOM TB) are premarketing US$1bn and US$200m IPOs. Tianqi Lithium has passed the HKEx listing hearing for US$1-1.5bn raise.
- On the Event-Driven front, developments at Link Administration (LNK AU), Frasers Hospitality Trust (FHT SP), Link Net (LINK IJ), Resapp Health (RAP AU), Beijing Enterprises Urban Resources (3718 HK).
Ping An A/H: Position for Premium Contraction
- The Ping An AH premium has traded around 10% over the last few days – this is near its historical highs and close to where reversals take place from.
- The AH premium of the broader market is below its highs, while the AH premium on large cap financials has been trending lower over the last few months.
- Northbound Stock Connect holdings on the A-shares have been decreasing, while Southbound Stock Connect holdings on the H-shares have been increasing over the last few months.
TIGER Theme ETF “Tour Leisure” Rebalancing Projections: Hanatour, Asiana, Kangwon Land, & T’way Air
- This ETF’s AUM has decreased by 17% over the past three months to ₩200B. It has 18 constituents, and it is unlikely that there will be any addition/deletion.
- The first thing to note is Hana Tour because the increase in the number of shares through an offering will be reflected its the market cap right before the rebalancing.
- Among the top stocks by market cap, Asiana Airlines (020560 KS) (+0,.20x ADTV) and Kangwon Land (035250 KS) (-0.21x ADTV) will likely have a significant passive impact.
TIGER Theme ETF “Secondary Cell” Rebalancing Projections: SKIET, Ecopro BM, SKI, SKC, & Ecopro
- This ETF’s AUM has stayed flat over the past three months, sitting at ₩1.3T. It has 28 constituents, and it is unlikely that there will be any addition/deletion.
- SKIET is expected to have the most inflow relative to ADTV. Then, we have Ecopro BM, which will increase the number of shares through a rights offering.
- On the other hand, among the top-tier stocks, SK Innovation, SKC, and Ecopro Co Ltd deserve our attention for shorting.
FTSE TWSE Taiwan Indices: Quiddity Primer
- The FTSE TWSE Index family covers the 150 largest stocks listed in the Taiwan Stock Exchange Corporation (TWSE).
- In this index family, Quiddity will primarily focus on the FTSE TWSE Taiwan 50 Index and FTSE TWSE Taiwan Mid-Cap 100 index.
- In this insight, we will have a look at the selection criteria and the historical price performance of past Rebalance Events.
WISE Theme Index “Media Contents” Rebalancing Projections: HYBE, CJ ENM, & Studio Dragon
- This ETF’s AUM has decreased by 20% over the past three months, remaining at ₩120B. It has 22 constituents, and there won’t be any addition/deletion at the upcoming rebalancing.
- As HYBE’s recent share price plunged, we can expect a fairly interesting passive impact from this rebalancing, because its 10% cap reversion is certain to occur despite the price plunge.
- CJ ENM (-0.19x ADTV) and Studio Dragon (+0.25x ADTV) are also expected to have a significant passive impact.
FTSE TWSE Quiddity Leaderboard Sep 2022: Sinopac Financial and Pegatron Leading the Race
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the Taiwan 50 and Taiwan Mid-Cap 100 Indices for the September 2022 Rebalance.
- Currently, there are no names satisfying the requirement to be ADDs/DELs for the Taiwan 50 Index. SinoPac Holdings (2890 TT) and Pegatron Corp (4938 TT) are the highest ranked non-constituents.
- For the Taiwan Mid-Cap 100 Index, there could be one ADD and one DEL in September 2022 based on current standings.
Infomedia (IFM AU): Now A Three-Way Hunt
- Online auto parts and service provider Infomedia Ltd (IFM AU) has received a third non-binding proposal; this time from U.S.-based software company Solera Holdings.
- The Offer price is A$1.70/share, in line with TA Associates-led consortium’s bid, but below Battery Ventures’ A$1.75/share offer.
- As with TA and Battery, Solera has been granted limited due diligence. TA holds a 19.4% stake.
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