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
- 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
- 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
- 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
- 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
- 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.
Before it’s here, it’s on Smartkarma