In today’s briefing:
- NIFTY Bank Index: Big Flows & The Upcoming Methodology Change
- Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Constituent, FAF & Capping Changes
- Hang Seng Biotech Index Rebalance Preview: Methodology Change Leads to 20 Deletions
- Yeouido Views Grow: Hynix’s Contract Risks & Samsung Supply Push Drive Long-Short Play Through 1H26
- [Japan M&A] Taisei Corp To Take Toyo Construction (1890 JP) Private – Governance Torture Ends
- Identifying the SK Square Vs. Hynix Price Ratio Reversion Alpha Setup
- Toyota Motor (7203 JP) Tactical Outlook After $10B Profit Cut on Tariff Impact
- SK Telecom (017670 KS): Increasing Foreign Room & Passive Buying
- Why We’re Eyeing KRX’s Sep 29 KCMC Event for Dividend Momentum Trades
- [Japan M&A] Toyoda Gosei Buys Out Affiliate Ashimori Industry at 1.000x Mar25 Book
NIFTY Bank Index: Big Flows & The Upcoming Methodology Change
- In May, SEBI recommended changes to the minimum number of constituents for non-benchmark indices and the capping for those indices. The recommendations have to be implemented by 3 November.
- There is a high probability that NSE Indices implements the changes for the NSE Nifty Bank Index (NSEBANK INDEX) at the September rebalance. Nothing has been announced yet though.
- If implemented in September, Yes Bank and Union Bank Of India could be added to the index. Estimated one-way turnover is 22.35% and the round-trip trade is INR 149bn (US$1.7bn).
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Constituent, FAF & Capping Changes
- There are 3 potential changes for the HSIII Index in September. There are couple of names that are close to the inclusion/ deletion thresholds.
- The largest inflows will go to Horizon Robotics (9660 HK) following lock-up expiry that increases the Free-Float Adjusted Factor (FAF) by a factor of 7-8x.
- There are large capping changes too and the estimated one-way turnover is 9.8% resulting in a round-trip trade of HK$5.65bn (US$720m).
Hang Seng Biotech Index Rebalance Preview: Methodology Change Leads to 20 Deletions
- A methodology change for the Hang Seng Biotech Index (HSHKBIO Index) will result in 20 deletions at the close of trading on 5 September.
- Estimated one-way turnover at the rebalance is 9.5% resulting in a round-trip trade of HK$1.3bn (US$162m). Passive trackers need to sell between 0.05-1x ADV in the deletes.
- The forecast deletes have underperformed the other index constituents since the start of the year but there has been little movement since the announcement of the methodology change.
Yeouido Views Grow: Hynix’s Contract Risks & Samsung Supply Push Drive Long-Short Play Through 1H26
- Street chatter says Hynix’s HBM4 hike tops ~20%, not covering costs — and Nvidia’s pushing similar cuts on its flagship 12-Hi HBM3E.
- Yeouido’s watching “Blind” posts from Samsung engineers saying 1c 12-Hi HBM4 yields look strong — fueling bets Samsung will cut prices, ramp HBM3E now, and challenge Hynix in HBM4.
- In Yeouido, the Samsung long/Hynix short theme is seen as a structural trade through 1H next year amid Hynix’s contract uncertainty and Samsung’s supply entry potential.
[Japan M&A] Taisei Corp To Take Toyo Construction (1890 JP) Private – Governance Torture Ends
- In March 2022, Infroneer bid ¥770. The Board said “too low” but then accepted. A month later, YFO offered ¥1,000. Too high, bad owner, not accepted.
- Summer 2023 after a year of palm to the face for YFO, the Board was partly spilled. YFO bid ¥1,255/share and the Board said the premium was too low.
- Now, the Board has accepted a bid from Taisei at a roughly similar premium. But the price is ¥1,750/share. Infroneer and YFO have agreed to sell. Minorities win… -ish
Identifying the SK Square Vs. Hynix Price Ratio Reversion Alpha Setup
- Hunting the reversion point for Square-Hynix price ratio amid local buzz: need clear pro-business tax signals and Hynix’s downtrend to continue despite today’s bounce.
- Tax tweak likely turns neutral despite gov’s cautious tone today. Hynix’s bounce faces headwinds from supply ramp and yield issues, so fresh rally odds remain slim.
- Focus on hunting SK Square vs. Hynix price ratio reversion, pairing it with Samsung Long/Hynix Short for a strong short-term trade setup to ride the trend.
Toyota Motor (7203 JP) Tactical Outlook After $10B Profit Cut on Tariff Impact
- Toyota Motor (7203 JP) on Thursday announced it expected a profit hit of nearly $10 billion from US tariffs on cars imported into the USA.
- Toyota cut its full-year profit forecast by 16%, citing rising US tariffs on cars, parts, steel, aluminum, uncertainty in market outlook and supplier impacts.
- Our model does not see an overbought state at the moment and the stock was rallying on Friday, the forecast is: higher prices next week.
SK Telecom (017670 KS): Increasing Foreign Room & Passive Buying
- Foreign room in SK Telecom (017670 KS) is over 21% now and increasing as foreign investors sell stock.
- Further foreign selling could take foreign room past 25% and that will result in passive inflows for the stock. Timing is dependent on when the 25% threshold is crossed.
- SK Telecom has underperformed its peers over the last 3 months and that has shrunk its valuation premium. Watch for a further increase in foreign room for an entry point.
Why We’re Eyeing KRX’s Sep 29 KCMC Event for Dividend Momentum Trades
- KCMC 2025 will likely reveal fresh, unpriced stimulus details, potentially sparking a price rally like last year’s 2% KOSPI 200 jump on the value-up ETF rollout.
- The key wildcard at KCMC 2025 is dividends—shifting from Yoon’s Japan-style ROE grind to a Taiwan-style push for bigger shareholder payouts.
- With Sept 29 approaching, dividend policy buzz may drive price moves—smart to prep dividend momentum trades to front-run this catalyst.
[Japan M&A] Toyoda Gosei Buys Out Affiliate Ashimori Industry at 1.000x Mar25 Book
- Toyota Motor (7203 JP) subsidiary Toyoda Gosei (7282 JP) is buying out its own equity affiliate Ashimori Industry (3526 JP) at a near-all-time high price of ¥4,140/share.
- It’s not a great price, but it is just over 1x book after writedowns this past quarter. It basically requires cross-holders and half a retail to tender.
- But this autoparts business is a strong grower, and has no EV risk. And its non-autoparts business is more interesting. The “fair” multiples are low. But it’ll get done.
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