In today’s briefing:
- Genting Malaysia (GENM MK): Genting (GENT MK)’s Curious Offer
- HSTECH Index Rebalance Preview: Can Leapmotor Leap into the Index?
- India: Potential Free Float Changes & Passive Flows in November
- [Japan Activism] DeNA Attracts Murakami Group – Potentially Squeezable With Reason
- STAR50/STAR100 Index Rebalance Preview: 14 Outright Changes Across the Indices
- Toyota Industries (6201 JP): Market Movements Support the Case of a Higher Offer
- BoE: Hawkish Surprise Set For November
- StubWorld: Sumitomo Chemical/Sumitomo Pharma, Hyundai Motor/ Kia Corp, Ecopro Co/Ecopro BM
- [Japan Activism] Mandom (4917 JP) – Murakami at 20% and Mandom Offers A Sweet Poison Pill
- Reading the Latest Flow Patterns to Time a SK Square NAV Squeeze Trade
Genting Malaysia (GENM MK): Genting (GENT MK)’s Curious Offer
- Genting Malaysia (GENM MK), the owner of Resort World Genting, has announced a conditional offer from controlling parent Genting Bhd (GENT MK).
- GENT is offering RM2.35/share, an uninspiring 9.81% premium to last close, for the 50.64% of shares out not held. The Offer has a 50% acceptance threshold.
- GENT already consolidates GENM (AFAIK). At this price, compulsory acquisition won’t be afforded (you’d think). GENT should have launched the Offer back in April when the share price was floundering.
HSTECH Index Rebalance Preview: Can Leapmotor Leap into the Index?
- There could be 1 change for the Hang Seng TECH Index (HSTECH INDEX) in December. Announcement is on 21 November with implementation at the close on 5 December.
- Depending on the stocks included in the universe, ASM Pacific Technology (522 HK) could be deleted and that could lead to Zhejiang Leapmotor Technologie (9863 HK)‘s inclusion.
- If the add and deletes are as forecast, one-way turnover will be 4.25% and will result in a round-trip trade of HK$25.3bn (US$3.22bn).
India: Potential Free Float Changes & Passive Flows in November
- Companies in India have disclosed their shareholding pattern as of end-September in October. There are companies with significant float changes from end-June and/or end-March.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in flow from passive trackers.
- Depending on the date that the shareholding was published, there could be 20 stocks with passive inflows from global trackers while 6 could have passive outflows in November.
[Japan Activism] DeNA Attracts Murakami Group – Potentially Squeezable With Reason
- Last week, “Murakami Group” (a group of investors who jointly file large shareholder filings) announced a 5+% stake in DeNA (2432 JP). The stock popped. Then they filed again.
- This was not surprising. It has long been known as a “value” name (and has the requisite short balance to prove it). The question is how much value IS there
- The question is how much value IS there. And to whom? It’s an interesting question which deserves a look, so we take a look.
STAR50/STAR100 Index Rebalance Preview: 14 Outright Changes Across the Indices
- With the review period complete, we forecast 2 changes for the SSE STAR50 (STAR50 INDEX) and 7 changes for the STAR100 Index in December.
- We estimate turnover of 4.3% for the SSE STAR50 (STAR50 INDEX) and 6.7% for the STAR100 Index. The estimated round-trip trade is CNY 17.9bn (US$2.5bn).
- The forecast adds to the SSE STAR50 (STAR50 INDEX) have outperformed the forecast deletes with most of the outperformance coming in August. Been a volatile trade since then.
Toyota Industries (6201 JP): Market Movements Support the Case of a Higher Offer
- Last month, nearly two dozen global asset managers, through ACGA, submitted a joint letter to the boards of Toyota Industries (6201 JP) and Toyota Motor regarding the tender offer.
- The letter outlined five issues, which distilled down to concerns about a low-balled offer. Their cause is increasingly supported by market movements, which support the case for the bump.
- Recent activism against several low-balled tenders signals that TICO, despite its size, is not immune. My SoTP valuation is JPY19,607, which is 20.3% above the offer price.
BoE: Hawkish Surprise Set For November
- Markets have erroneously repriced a BoE rate cut as potentially imminent and repeated. Policymakers are tending to surprise hawkishly in the UK and elsewhere recently.
- Downside news on excess inflation is mild, while the activity data have, if anything, exceeded BoE forecasts. Pay growth signals remain strong, not disappointing the BoE.
- Six MPC members have favoured slower easing, inconsistent with a November cut. Fiscal consolidation is unlikely to frontload a shock large enough for the MPC to accommodate.
StubWorld: Sumitomo Chemical/Sumitomo Pharma, Hyundai Motor/ Kia Corp, Ecopro Co/Ecopro BM
- For a change of pace, this insight briefly canvasses a clutch of Holdco’s trading at extreme levels, in both “set-up” and “unwind” territory.
- Preceding the chart/table-heavy insight are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
[Japan Activism] Mandom (4917 JP) – Murakami at 20% and Mandom Offers A Sweet Poison Pill
- Mandom Corp (4917 JP) yesterday decided to launch a question-response effort for the Murakami-san Group ownership of Mandom shares up to and above 20%. This is a Poison Pill precursor.
- There’s a drawn out set of questions, answers, etc, at the end of which, the Independent Committee will decide that Murakami is a Bad Person and the Poison Pill proceeds.
- Murakami Group is apparently now over 20%. That’s a little tricky. But this looks like a Good Poison Pill.
Reading the Latest Flow Patterns to Time a SK Square NAV Squeeze Trade
- Retail flow drove the ratio: selling pushed it higher, buying dragged it lower. Pre‑Sept they dip‑bought and flipped; since late Sept they’ve chased longs, fueling Hynix’s rally.
- Instos joined retail chasing Hynix, juicing momentum; KRX’s investment‑alert acts as a speed bump, likely cooling hot‑money flows and tilting the ratio in Square’s favor.
- But retail still drives Hynix; until they cool off, Square NAV squeeze is early. A sector‑wide AI pivot cooling retail frenzy is the real catalyst, bigger than KRX’s alert.
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