In today’s briefing:
- India: Potential Free Float Changes & Passive Flows in November
- HSCEI Index Rebalance Preview: 3 Changes as Adds Go Up, Up & Away
- Matheson’s Motive For Avoiding MAND’s Dissentient Shareholders
- Hitachi Construction Machinery Block – US$450m Selldown by Hitachi
- KOSDAQ150 Index Rebalance Preview: Large Number of Changes Likely in December; Huge Outperformance
- [Japan Activism] DeNA Attracts Murakami Group – Potentially Squeezable With Reason
- Quiddity Leaderboard CSI 1000 Dec25: Final Expectations; ~US$2.9bn One-Way
- STAR50/STAR100 Index Rebalance Preview: 14 Outright Changes Across the Indices
- Mandom (4917 JP): Countermeasures Ostensibly to Buy Time for a Higher Offer
- HSTECH Index Rebalance Preview: Can Leapmotor Leap into the Index?
India: Potential Free Float Changes & Passive Flows in November
- Companies in India have disclosed their shareholding pattern as of end-September in October. There are companies with significant float changes from end-June and/or end-March.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in flow from passive trackers.
- Depending on the date that the shareholding was published, there could be 20 stocks with passive inflows from global trackers while 6 could have passive outflows in November.
HSCEI Index Rebalance Preview: 3 Changes as Adds Go Up, Up & Away
- There could be 3 changes for the Hang Seng China Enterprises Index (HSCEI INDEX) in December. Announcement is on 21 November with implementation at the close on 5 December.
- The forecast adds have moved higher over the last few months and handily outperformed the forecast deletes and the Hang Seng China Enterprises Index (HSCEI INDEX).
- There has been aggressive short covering in the forecast adds and there could be more in stocks where short interest is still a high percentage of float.
Matheson’s Motive For Avoiding MAND’s Dissentient Shareholders
- Back in 2021, Jardine Matheson (JM SP) took 84.89%-held Jardine Strategic (JS SP) private by way of an Amalgamation. As Matheson was permitted to vote, the outcome was assured.
- Less clear are “fair value” appraisal rights afforded Strategic’s dissentient shareholders, the outcome of which navigates the Bermuda/UK courts. To date, dissenters have mostly had their way.
- Which may have precipitated Matheson opting for a (full value) Scheme for Mandarin Oriental International (MAND SP), in which appraisal rights are not afforded.
Hitachi Construction Machinery Block – US$450m Selldown by Hitachi
- Hitachi Ltd (6501 JP) aims to raise around US$452m via a 6.97% stake sale in Hitachi Construction Machinery Co. Post the selldown, Hitachi’s stake will reduce to 18.4%.
- Hitachi Construction Machinery Co (HCMC) is a Japanese company that designs, manufactures, sells, and services construction and mining equipment.
- In this note we talk about the deal dynamics and run the deal through our ECM framework.
KOSDAQ150 Index Rebalance Preview: Large Number of Changes Likely in December; Huge Outperformance
- With the review period for the December rebalance complete, we highlight 17 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX).
- The estimated impact on the potential inclusions ranges from 0.1-3.2 days of ADV while the impact on the potential deletions varies from 0.7-11.2 days of ADV.
- The forecast adds have outperformed the forecast deletes over the last 6 months with a big move higher in the last couple of months. Trim positions into strength.
[Japan Activism] DeNA Attracts Murakami Group – Potentially Squeezable With Reason
- Last week, “Murakami Group” (a group of investors who jointly file large shareholder filings) announced a 5+% stake in DeNA (2432 JP). The stock popped. Then they filed again.
- This was not surprising. It has long been known as a “value” name (and has the requisite short balance to prove it). The question is how much value IS there
- The question is how much value IS there. And to whom? It’s an interesting question which deserves a look, so we take a look.
Quiddity Leaderboard CSI 1000 Dec25: Final Expectations; ~US$2.9bn One-Way
- CSI 1000 represents the next 1000 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges after CSI 800.
- In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual index rebal event in December 2025.
- We expect 100 ADDs/DELs for the CSI 1000 index during this index review based on the latest available data.
STAR50/STAR100 Index Rebalance Preview: 14 Outright Changes Across the Indices
- With the review period complete, we forecast 2 changes for the SSE STAR50 (STAR50 INDEX) and 7 changes for the STAR100 Index in December.
- We estimate turnover of 4.3% for the SSE STAR50 (STAR50 INDEX) and 6.7% for the STAR100 Index. The estimated round-trip trade is CNY 17.9bn (US$2.5bn).
- The forecast adds to the SSE STAR50 (STAR50 INDEX) have outperformed the forecast deletes with most of the outperformance coming in August. Been a volatile trade since then.
Mandom (4917 JP): Countermeasures Ostensibly to Buy Time for a Higher Offer
- Mandom Corp (4917 JP) has proposed countermeasures in response to Murakami’s 18.87% voting stake and to ostensibly secure time for an alternative, viable (higher) offer.
- The read-across from the proposal is that CVC’s offer at current terms will fail, CVC is unwilling to match Murakami/Hibiki’s expectations, and there could be genuine interest from third-party bidders.
- Nevertheless, countermeasures are unnecessary as the share price and presence of activists provide the time needed for the Board’s purported aim to secure a higher offer.
HSTECH Index Rebalance Preview: Can Leapmotor Leap into the Index?
- There could be 1 change for the Hang Seng TECH Index (HSTECH INDEX) in December. Announcement is on 21 November with implementation at the close on 5 December.
- Depending on the stocks included in the universe, ASM Pacific Technology (522 HK) could be deleted and that could lead to Zhejiang Leapmotor Technologie (9863 HK)‘s inclusion.
- If the add and deletes are as forecast, one-way turnover will be 4.25% and will result in a round-trip trade of HK$25.3bn (US$3.22bn).
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