In today’s briefing:
- HSTECH Index Rebalance Preview: Universe Expansion Could Lead to One Change
- [Quiddity Index] Van Eck Gold Miners ETF (GDX) – Benchmark Change for Sep Rebal – $2.8bn One Way
- UK CPI Lifts Hawkish Case in June
- Dream International (1126 HK): Riding the Popmart Bubble
- Shibaura Electronics (6957 JP): Drawing Nearer to a Conclusion
- ZEEKR (ZK US): Geely Firms Low-Balled Offer. It Is What It Is
- SBI US$3bn QIP – No Surprises – Not the World’s Best Kept Secret
- Muyuan Foods A/H Listing – Long Term Growth with Short-Term Volatility
- Jardine Matheson (JM SP) On A Roll As The Street Turns (More) Positive
- PointsBet (PBH AU): The Battle of Takeover Offers Commences
HSTECH Index Rebalance Preview: Universe Expansion Could Lead to One Change
- The review period for the September rebalance of the Hang Seng TECH Index ended on 30 June, the changes will be announced on 22 August and implemented on 5 September.
- No constituent changes will result in a one-way turnover of 4.1% and that will mean a round-trip trade of HK$15.2bn (US$1.94bn).
- An expansion of the index universe could lead to one constituent change and that increases the one-way turnover to 6.2% and the round-trip trade to HK$23.1bn (US$2.94bn).
[Quiddity Index] Van Eck Gold Miners ETF (GDX) – Benchmark Change for Sep Rebal – $2.8bn One Way
- The VanEck Gold Miners ETF/USA (GDX US) announced last month it would change its benchmark for the September rebalance, to the Market Vectors Global Gold Miners Index.
- That means name changes based on methodology and universe changes. So we introduce coverage of the index, its rebalances, and the big flow in September.
- We also add in cross flows from the MV Junior Gold Miners Index, offer spreadsheets, flow tables, leaderboards for the GDX index. Lots of data here.
UK CPI Lifts Hawkish Case in June
- UK inflation surged 0.2pp beyond the consensus again in June, with underlying inflation measures broadly inconsistent with the target and headlines moving the wrong way.
- The consensus is failing to learn the lesson of intense underlying pressures. The CPI rate rose 0.6pp since Jan instead of falling 0.4pp and is 1.4pp higher than called a year ago.
- Policymakers seem infected with dovish fear about the labour market ahead of August’s meeting. CPI is 0.9pp higher in our year-ahead forecast, and we were right a year ago.
Dream International (1126 HK): Riding the Popmart Bubble
- We believe that toymakers are experiencing a bubble like rally led by Pop Mart International Group L (9992 HK) and Hasbro Inc (HAS US) which raised forecasts recently.
- Dream International (1126 HK) has returned >200% since liberation day tariffs were declared on April 2nd 2025 and now trades at 12.7x trailing earnings (vs 3.7x when we initiated).
- “Never look a gift horse in the mouth” ! .We would take some money off the table here as toy stocks go through periods of cyclicality due restocking/destocking.
Shibaura Electronics (6957 JP): Drawing Nearer to a Conclusion
- Yageo Corporation (2327 TT) has extended the close of its offer for Shibaura Electronics (6957 JP) from July 15 to August 1, the end of the waiting period for FEFTA approval.
- Yageo remains confident of securing FEFTA approval. Blocking an acquisition of a Type 1 (non-designated business sector) company by a Taiwanese company would set a bad precedent.
- There is a medium to high probability that Yageo secures FEFTA approval. Minebea Mitsumi (6479 JP) is likely to walk as it signalled a limited appetite to match Yageo’s offer.
ZEEKR (ZK US): Geely Firms Low-Balled Offer. It Is What It Is
- Back on the 7th May, Geely Auto (175 HK), China’s second-largest carmaker, made a US$25.66/ADS non-binding proposal for 62.8%-held ZEEKR (ZK US), a premium Chinese electric vehicle manufacturer
- Yesterday, Geely tweaked and firmed terms at US$26.87/ADS, a 4.7% bump to the original NBIO, and ~3.4% below ZEEKR’s last close. ZEEKR promptly gained 2.4% on the news.
- ZEEKR shareholders also have the option to receive Geely scrip. Given Geely’s and Li Shufu’s (10.61%) holdings – neither are required to abstain on voting – this Offer is done.
SBI US$3bn QIP – No Surprises – Not the World’s Best Kept Secret
- State Bank Of India (SBIN IN) plans to raise around US$3bn via a QIP. The deal is very well flagged and we wrote on it last week.
- Although the stock has been running up a bit going into the deal and the previous deal didn’t do well.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Muyuan Foods A/H Listing – Long Term Growth with Short-Term Volatility
- Muyuan Foodstuff Co Ltd A (002714 CH), a leader in the hog farming industry, aims to raise around US$2bn in its H-share listing.
- MF is a leading pork company with over 30 years of expertise in the hog farming industry.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
Jardine Matheson (JM SP) On A Roll As The Street Turns (More) Positive
- Jardine Matheson Holdings (JM SP) is up ~10% this week and ~30% YTD. 53.3%-held Hongkong Land (HKL SP), JMH’s largest holding, is up 41% YTD and 85% over the year.
- HKL has been on a tear since CEO Michael Smith started on the 1st April 2024, as HKL focused on capital allocation and portfolio management – read deleveraging.
- The recent appointment of PAG’s Lincoln Pan at the helm of JMH, has the street upbeat he will bring about similar positive developments. That’s not unreasonable.
PointsBet (PBH AU): The Battle of Takeover Offers Commences
- BETR Entertainment (BBT AU) has despatched the bidder’s statement for PointsBet Holdings (PBH AU) takeover offer. The offer is scheduled to run from July 31 to September 8.
- BBT continues to clutch at straws by claiming its offer is superior to Mixi’s A$1.20 all-cash offer. The Mixi scheme results suggest that BBT has limited support from PBH shareholders.
- BBT will struggle to gain material acceptance, but hints at possible revised terms. Mixi Inc (2121 JP) will also need to reconsider its offer terms to see off BBT.
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