In today’s briefing:
- STAR50/STAR100 Index Rebalance: Changes & Capping Lead to US$3.3bn Trade
- [Japan ECM] Lifedrink (2585) – Fast-Growing Beverage Seller Meets P.E. Firm Selldown
- [Japan ECM] Koei Tecmo (3635 JP) Needs to Sell Shares To Stay in Prime ($280mm Offering)
- HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$7.4bn of Flows Post Capping (Sep 2025)
- Holdco NAV Discount Compression Play on Korea’s Next Policy Narrative: Mandatory Tender Offers
- HKBN (1310 HK): Mobile’s Offer Is Done. Now For The Back End
- Koei Tecmo Placement: Some Non-Fundamental Selling; but Weak Fundamentals
- EA: Defying Disinflationary Narratives
- HEM: Politicised Policy Pricing
- Alipay: Issuing EB Worth 627 Billion Won Backed By Its Shares in Kakao Pay [A Quasi Block Deal Sale]
STAR50/STAR100 Index Rebalance: Changes & Capping Lead to US$3.3bn Trade
- There is 1 constituent change for the STAR50 INDEX and 5 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 12 September.
- We estimate one-way turnover of 6.1% for the SSE STAR50 (STAR50 INDEX) resulting in a round-trip trade of CNY 23.8bn (US$3.3bn).
- There will be huge capping outflows for Cambricon Technologies Lt (688256 CH) following the massive rally in the stock over the last couple of months.
[Japan ECM] Lifedrink (2585) – Fast-Growing Beverage Seller Meets P.E. Firm Selldown
- Today post-close, Lifedrink (2585 JP) announced the Sunrise PE funds which own 22% of the company will sell their stake in a clean-up offering with pricing in 8 days.
- This offering comes 8 trading days after a new post-earnings all-time-high. At 24x ADV, the offering will increase Max Real World Float by 50+%.
- There are some index and buyback supply/demand dynamics to note. It’s a heavy offering, so bullish/bearish may be a matter of horizon.
[Japan ECM] Koei Tecmo (3635 JP) Needs to Sell Shares To Stay in Prime ($280mm Offering)
- In December 2021, Koei Tecmo Holdings (3635 JP) announced a complex but lower-impact move to increase float share count in order to stay listed on TSE Prime.
- Scheme: buyback from two holders plus CB issuance. Unfortunately, shares did not rise enough to convert the CBs so as of March 2025, the tradable share criteria was not met.
- So now the two main holders are selling more shares and the company is diluting holders with new issuance to get float/tradable shares up with a US$280mm offering.
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$7.4bn of Flows Post Capping (Sep 2025)
- The September rebalance of the Hang Seng family of indices will use today’s closing prices to cap the index constituent weights.
- The net round-trip trade across all stocks across the five indices is estimated at HK$57.55bn (US$7.4bn). There is size to trade in a lot of stocks.
- Alibaba (9988 HK) has flipped from a net buy to a net sell following its huge rally yesterday.
Holdco NAV Discount Compression Play on Korea’s Next Policy Narrative: Mandatory Tender Offers
- Korean equities are stalled; macro catalysts are absent. Street focus shifts from treasury share cancellations to next year’s mandatory tender offers, now seen as the top policy driver.
- Pre-MTO trades focus on holding companies with wide NAV discounts or low controlling stakes, front-running policy-driven re-ratings before minority shareholders capture control premiums.
- Focus on 32 Korean holding companies >KRW 500B; those with wide NAV discounts and lighter controlling stakes—SK’s holding companies, Samsung C&T, Hanwha, LG, LS—are prime re-rating plays.
HKBN (1310 HK): Mobile’s Offer Is Done. Now For The Back End
- China Mobile (941 HK)‘s Offer for HKBN Ltd (1310 HK) will be declared unconditional tomorrow (3rd September), the first closing date.
- As I type, 19.03% of shares out have tendered, lifting Mobile’s stake to 48.9%. Additional shares will tip in today and tomorrow, as per your typical last minute flurry.
- It is not Mobile’s intention to delist HKBN. There will be investors playing the backend on the expectation of a higher Offer down the track.
Koei Tecmo Placement: Some Non-Fundamental Selling; but Weak Fundamentals
- Koei Tecmo Holdings (3635 JP) is looking to raise around US$270m from a primary and secondary placement.
- The deal is a large one to digest, representing 37.6 days of the stock’s three month ADV and 6.1% of the shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
EA: Defying Disinflationary Narratives
- Dovish hopes for EA disinflation continue to be disappointed by resilient outcomes. The rise to 2.1% in August amid sticky core pressures is opposite to the dovish narrative.
- Euro appreciation’s disinflationary shock is being offset by domestic resilience, which was most surprising in Northern Europe. Our errors were relatively small and balanced.
- Ongoing upside surprises have defied recent consensus expectations of a drift down to 1.8%. The ECB faces broad upside news that should reassure it against cutting again.
HEM: Politicised Policy Pricing
- Persistent inflationary pressures pared dovish guidance and pricing for the BoE and ECB, but Fed pricing is stuck.
- Blocking a rare resumption of Fed easing looks unlikely, but history suggests cuts would be shallow and reversed.
- Peer pressure is weak during a policy mistake. The BoE faces domestic problems that prevent further easing.
Alipay: Issuing EB Worth 627 Billion Won Backed By Its Shares in Kakao Pay [A Quasi Block Deal Sale]
- Alipay (second largest shareholder of Kakaopay (377300 KS)) is issuing an overseas exchangeable bonds (EB) worth 627 billion won (backed by its shares in Kakao Pay).
- The exchange price of the EB is 54,744 won (4.5% discount to current price). Total amount of EB issue is 627 billion won ($450 million).
- This deal is basically a quasi-block deal. Alipay is trying to unload some of its stake in Kakao Pay to improve its finances.
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