In today’s briefing:
- S&P/ASX Index Rebalance Preview (Sep 25): Potential Changes if Methodology Is Updated
- Taiwan Top 50 ETF Rebalance Preview: Another Inclusion for King Slide
- Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning
- Last Week In Event SPACE: Sun Corp/Cellebrite, Swire, Shandong Hi-Speed, PRC Rural Bank Delistings
- [Japan M&A] NTT Docomo and Dentsu Squeeze Out Minorities in Carta (3688 JP) Cheap. Tender Starts Now
- Curator’s Cut: Singapore Unlocks Value, India’s Jewellery Caution & Taiwan’s Top ETF’s Rebalance
- Playing Korea’s Hot Secondary Battery Sector Rotation
- Ibiden Q1 FY25: Strong Beat, Upgraded Outlook, Attractive Valuation
- Gold Road (GOR AU): 22th September Vote On Gold Fields’ Offer
- KOSPI Size Indices: Passive Flows for Many Active Changes
S&P/ASX Index Rebalance Preview (Sep 25): Potential Changes if Methodology Is Updated
- S&P DJI have proposed methodology changes to the S&P/ASX family of indices to enhance representativeness and more quickly reflect changing market conditions. The consultation conclusions could be announced next week.
- The updated methodology could lead to 51 changes across the family of indices with implementation on 19 September. There will be a large impact on a number of stocks.
- The forecast adds have outperformed the forecast deletes over the last several months and near-term performance has been spectacular for the S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index changes.
Taiwan Top 50 ETF Rebalance Preview: Another Inclusion for King Slide
- There could be 2 changes for the Yuanta/P-Shares Taiwan Top 50 ETF in September – one is high probability and the other is right at the cusp.
- King Slide Works (2059 TT) is being added to a global index this month, so the ETF inclusion will come hot on the heels of that.
- The impact on the stocks is pretty big with passive trackers needing to buy between 1.3-5.5x ADV in the adds and sell between 3.4-6.4x ADV in the deletes.
Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning
- The changes to the Nikkei 225 (NKY INDEX) as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.
- BayCurrent Consulting‘s PAF will double, Fast Retailing‘s CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from Sony Corp (6758 JP).
- Sanrio (8136 JP)‘s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.
Last Week In Event SPACE: Sun Corp/Cellebrite, Swire, Shandong Hi-Speed, PRC Rural Bank Delistings
- Sun Corp (6736 JP) is a clear value play. But it’s not as cheap to Cellebrite (CLBT US) as it was last month. The trade is a net long position
- As Swire Pacific (A) (19 HK) plumbs new 12-month lows for its NAV discount and implied stub, Swire’s B shares have significantly outperformed the As over the past month.
- Shandong Hi-Speed (412 HK) is a bubble. High shareholder concentration is still likely present, and the stock is getting squeezed. SHP is a short. Once it starts to turn.
[Japan M&A] NTT Docomo and Dentsu Squeeze Out Minorities in Carta (3688 JP) Cheap. Tender Starts Now
- On 16 June 2025, NTT (Nippon Telegraph & Telephone) (9432 JP) sub NTT Docomo and Dentsu Inc (4324 JP) announced Docomo would buy out minorities in Dentsu sub Carta Holdings.
- The price for minorities is OK, not great. The Board talks up synergies not included in fair value considerations, and Dentsu+Docomo are actually buying it 15% cheaper.
- That comes out to a net price below the bottom end of the DCF range. Aaargh. But Dentsu+irrevocables+ large individuals likely gets this over the line cleanly.
Curator’s Cut: Singapore Unlocks Value, India’s Jewellery Caution & Taiwan’s Top ETF’s Rebalance
- Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ Insights published over the past two weeks on Smartkarma
- In this cut, we review value-unlocking moves by Singapore-listed companies, take stock of India’s jewellery retail market, and track how Taiwan’s largest ETF drives flows for its adds and deletes
- Want to dig deeper? Comment or message with the themes you’d like to see highlighted next
Playing Korea’s Hot Secondary Battery Sector Rotation
- Battery-Sector rotation is heating up in Korea as active ETFs sharply boost LG Energy Solution and Samsung SDI, signaling renewed sector focus amid ESS growth and easing valuation pressures.
- Watch for supply-demand dislocations during battery-sector ETF rebalances; top-heavy names may see concentrated flows, amplifying trading intensity and driving larger-than-normal price swings.
- The 25% cap reversion could move LG Energy Solution down and SK Innovation up ~5pp, with flows hitting -0.2x/+0.6x DTV, potentially amplified by aggressive sector inflows.
Ibiden Q1 FY25: Strong Beat, Upgraded Outlook, Attractive Valuation
- Results: Q1 FY25 sales grew +10.5% YoY with OP surging +56%, led by AI/data-center substrate demand and margin gains.
- Earnings Upgrade & Outlook: FY25–27 EPS/EBITDA raised 9–12% on stronger substrates and resilient ceramics, implying ~18–19% CAGR ahead.
- Valuations: Trading at 21× FY25E P/E and 5.9× EV/EBITDA, Ibiden offers structural growth at compressed multiples versus AI peers.
Gold Road (GOR AU): 22th September Vote On Gold Fields’ Offer
- After rejecting an approach on the 24th March, on the 5th May, Gold Road Resources (GOR AU)entered into a Scheme with Gold Fields Ltd (GFI SJ) after terms were bumped.
- GFI offered $2.52/share, cash, plus a variable cash component of ~A$0.88 (now worth ~A$0.77/share) via GOR’s indirect stake in Northern Star Resources (NST AU). This includes any fully franked dividend.
- The Scheme Booklet is now out, with a shareholder vote on the 22nd September. The IE (Deloitte) says fair & reasonable. It is.
KOSPI Size Indices: Passive Flows for Many Active Changes
- The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
- Nearing the end of the review period, we forecast 49 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.
- There are a number of stocks that will have passive flow from global index trackers over the next few weeks, while some are potential changes to the KOSPI2 in December.
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