In today’s briefing:
- Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- [Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL? Kokusai a Question, but 2 Ad Hoc Events Coming
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September 2025
- [Japan Event] Potentially Interesting Dynamics of Post-Tender NTT Data (9613) Trading. $8bn+ One Way
- [Japan Activism] Mitsui Matsushima (1518) Ups Buyback Tender to 35.8%, Murakami-San Group To Sell
- Quiddity Leaderboard STAR 50/100 Sep25: Some High-Impact Names; New Sector-Neutral Pair Trade Ideas
- [Japan Event] Seven Bank (8410) To Buy Back Up to 17.0% of Shares Out Tomorrow
- Quiddity Leaderboard CSI 300/500 Dec25: US$5bn+ One Way Flows; Emphasis Should Be on NET Flows
- BoE Still Seeking Evidence
- China Rare Earth (769 HK)’s Wild Price Movement. An Offer In The Wings?
Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- Foshan Haitian Flavouring & Food (603288 CH)‘s global offering opens today and the raise could reach up to US$1.5bn if the offer-size adjustment option and the overallotment option are exercised.
- There is a large allocation to cornerstone investors. The discount of around 22% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
- The H-shares could be added to a global index and the FXI ETF in December. Inclusion in the HSCI should be in September and Southbound Stock Connect in July.
[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL? Kokusai a Question, but 2 Ad Hoc Events Coming
- The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
- For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
- For now, Fast Retailing (9983 JP) capping is off, but there’s an ad hoc coming in late Q3 or early Q4 and the Sony Financial spinoff to look forward to.
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September 2025
- We see 21 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.
- There have been some big listings in the last couple of months and those stocks should be added to the index in September. That increases the number of potential deletions.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
[Japan Event] Potentially Interesting Dynamics of Post-Tender NTT Data (9613) Trading. $8bn+ One Way
- The NTT Data Corp (9613 JP) Tender Offer closed today. Results will come out tomorrow. I expect it will have been successful.
- That will mean some US$8bn+ of passive tracking flows to sell and $8bn+ to buy related to this event alone in the next 3 months.
- And there are some very interesting dynamics to consider in the meantime.
[Japan Activism] Mitsui Matsushima (1518) Ups Buyback Tender to 35.8%, Murakami-San Group To Sell
- Today after the close, Mitsui Matsushima (1518 JP) announced it would increase its buyback from 3.5mm shares to 4.0mm shares (31.3% to 35.8%). It also announced a Tender Offer Buyback.
- The tender offer starts tomorrow and goes til mid-July, paid 8 August. Murakami Group will tender a minimum of 3.3mm shares (more likely 4.2mm).
- This is not a huge immediate win, but it’s OK. And it changes the structure of the company’s balance sheet, ROE, effective ROE, and possibly its dividend.
Quiddity Leaderboard STAR 50/100 Sep25: Some High-Impact Names; New Sector-Neutral Pair Trade Ideas
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
- In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the September 2025 index rebal event.
[Japan Event] Seven Bank (8410) To Buy Back Up to 17.0% of Shares Out Tomorrow
- Today after the close, Seven Bank Ltd (8410 JP) announced a MASSIVE ToSTNeT-3 transaction to buy back up to 200,000,000 shares (17.0% of shares out) for ¥52.4bn. Tomorrow AM.
- There is a complex iterative calculation on the part of Seven Eleven Japan to figure out how many shares they should put into the buyback.
- I see a minimum buyback of 10.8%. 17% would be great. But there is a potential issue on the back end of which investors should be aware.
Quiddity Leaderboard CSI 300/500 Dec25: US$5bn+ One Way Flows; Emphasis Should Be on NET Flows
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2025.
- Currently, we see 9 ADDs/DELs for the CSI 300 index and 41 ADDs/DELs for the CSI 500 index.
BoE Still Seeking Evidence
- Guidance around an unsurprisingly unchanged BoE rate preserved the necessary uncertainty about when it might ease again, albeit with a broad bias to do more later.
- Dave Ramsden joined the dovish dissent, taking it to three for a 25bp cut, but none of them are in the MPC majority revealed in May as leaning towards a slower pace of cuts.
- We believe the August decision remains finely balanced for the majority. Ongoing data resilience, discouraging the Fed and ECB from easing, should also keep the BoE on hold.
China Rare Earth (769 HK)’s Wild Price Movement. An Offer In The Wings?
- China Rare Earth Holdings (769 HK), a processor and trader of rare earth oxides/metals, is suspended for reasons unknown.
- But not before gaining 79% month to date. On huge volume. And that gain is after giving back 23% from a recent high close.
- As discussed in Know Your Rare Earth Elements As China Restricts Exports, China recently escalated restrictions on the export of rare earths; although there has been some partial easing.
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