Daily BriefsMost Read

Most Read: Core Lithium Ltd, SK Telecom, Woodside Petroleum, HKBN Ltd and more

In today’s briefing:

  • S&P/​ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June
  • SK Telecom: MSCI Special Deletion & Immediate Price Spike on Share Recall
  • Woodside Shareholders Approve Deal but Not WPL’s Green Credentials; Now People Talk About Flows
  • SK Telecom (017670 KS): Implications of Zero Foreign Room
  • HKBN (1310 HK): KKR & PAG’s Pipe Dreams

S&P/​ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June

By Brian Freitas

  • The Crown Resorts Scheme Meeting is scheduled for 20 May and the last trading day could be 24 May, while The Lottery Corp is expected to start trading 24 May.
  • The changes for the S&P/ASX 50 Index and S&P/ASX 100 Index will depend on the market cap of The Lottery Corp (TLC AU) and new Tabcorp Ltd (TAH AU).
  • The potential adds have outperformed the potential deletes over the last week and couple of months so there will be some pre-positions in there already.

SK Telecom: MSCI Special Deletion & Immediate Price Spike on Share Recall

By Sanghyun Park

  • Looking at these past similar cases, the MSCI will likely announce SKT’s special deletion within 2-3 days of reaching zero foreign room and rebalancing within 2-3 days after the announcement.
  • We will see a passive outflow of about 2M shares or about ₩115B, equivalent to 2.7x ADTV, which will likely lead to an immediate price spike.
  • ETF funds tracking the MSCI have a large proportion of loaning SKT shares. So, when an MSCI down-weight occurs to SKT, an immediate recall will push up the price.

Woodside Shareholders Approve Deal but Not WPL’s Green Credentials; Now People Talk About Flows

By Travis Lundy

  • The EGM of Woodside Petroleum (WPL AU) today approved the BHP Petroleum merger in overwhelming fashion. 98.66% FOR. 
  • They did not approve of the Climate Report the board submitted to vetting by shareholders for the first time. That got 51% “support.”
  • But now that’s done, people will talk about flows. So far the trade has worked but now time to think about how far to stretch it.

SK Telecom (017670 KS): Implications of Zero Foreign Room

By Brian Freitas

  • Foreign investors hold 106.51m shares of SK Telecom (017670 KS) versus a limit of 107.23m shares. There are only 723k more shares (1 day of ADV) available for foreign buying.
  • MSCI will delete SK Telecom (017670 KS) from its indices once the foreign room reaches zero, while FTSE will likely reduce the investability weight in two tranches of 5% each.
  • SK Telecom (017670 KS) could continue underperforming KT Corp (030200 KS) in the short-term due to passive selling and inability of foreign investors to buy the stock.

HKBN (1310 HK): KKR & PAG’s Pipe Dreams

By David Blennerhassett

  • According to Bloomberg, KKR and PAG are considering bids for Hong Kong broadband play HKBN Ltd (1310 HK).
  • Private equity firms, possibly including Stonepeak, are understood to be conducting due diligence on HKBN, which has a current market cap of ~US$1.6bn. 
  • Increased broadband usage became a Covid trend. That looks set to continue. This is a steady business, with an attractive yield. 

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