In today’s briefing:
- NIFTY Bank Index: Methodology Changes to Result in Big Flows
- Intel on Today’s SK Square Price Action: Rotation Flow Triggered by Hynix’s 10% Fund Cap Removal
- Light & Wonder (LNW AU): Index Implications of NASDAQ Delisting & ASX Primary Listing
- Quiddity Leaderboard STAR 50/100 Dec25: Final Expectations; New Ideas
- KOSPI200 Index Rebalance Preview: 7 Changes a Side for December
- LG Chem: Considering Higher Dividend Payout Using Sale Proceeds from LGES
- SK D&D: Delisting Tender Offer by Hahn & Co Fails – What’s Next?
- Merger Arb Mondays (03 Nov) – ANE, Dongfeng, Mayne, AUB, Digital Holdings, Makino, Soft99, SCSK
- SK Innovation – End of Lockup Period For 33% of Outstanding Shares
- Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (3 Nov)
NIFTY Bank Index: Methodology Changes to Result in Big Flows
- In May, SEBI recommended changes to the minimum number of constituents for non-benchmark indices and the capping for those indices. Then came the market consultation in August.
- SEBI has now confirmed the changes along with the timeline for capping changes to the largest stocks in the index.
- The changes could commence in December and continue till March. The adds will take place in December and weight changes for the largest stocks will take place in 4 tranches.
Intel on Today’s SK Square Price Action: Rotation Flow Triggered by Hynix’s 10% Fund Cap Removal
- KOFIA says Hynix hit 10.89% weight in October vs 8.37% in September, lifting the 10% fund cap — now local funds can size up like Samsung Electronics.
- SK Square might have been dumped today as locals unwound proxy trades; with Hynix freed from the 10% cap, funds rotated directly into Hynix, front‑running the shift.
- Key now is rotation size; SK Square’s beta‑plus trade to Hynix is fading, and near term we should expect relative underperformance as flows migrate.
Light & Wonder (LNW AU): Index Implications of NASDAQ Delisting & ASX Primary Listing
- Light & Wonder (LNW US) will stop trading on the NASDAQ after the close on 12 November and the sole primary listing will move to Light & Wonder (LNW AU).
- Index trackers will need to sell a lot of Light&Wonder (LNW US) at the close on 12 November. The buying in Light&Wonder (LNW AU) is a lot smaller.
- Light & Wonder (LNW AU) trades at a much lower forward PE compared to Aristocrat Leisure (ALL AU) and there could be a re-rating over the medium-term.
Quiddity Leaderboard STAR 50/100 Dec25: Final Expectations; New 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 have presented our final expectations for ADDs and DELs for the upcoming December 2025 index rebal event.
KOSPI200 Index Rebalance Preview: 7 Changes a Side for December
- With the review period complete, there could be 7 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December.
- There may not be any intra-review changes following the Hyundai Heavy Industries/ Hyundai Mipo merger due to timing and also due to Samsung Biologics‘ spinoff being added to the index.
- The forecast adds have outperformed the forecast deletes and the KOSPI2 INDEX over the last few months and in the short-term too.
LG Chem: Considering Higher Dividend Payout Using Sale Proceeds from LGES
- LG Chem is considering on paying higher dividends using sale proceeds from LG Energy Solution.
- This breaks the company’s principle of using only ordinary income from operating activities as a source for dividends.
- If indeed LG Chem goes ahead with this plan, this would be as a result of heightened demands from major activist investors including Palliser Capital.
SK D&D: Delisting Tender Offer by Hahn & Co Fails – What’s Next?
- SK D&D announced the results of the delisting tender offer by Hahn & Co. SK &D mentioned that the subscription reached only 40% of the planned tender offer amount.
- Post failed tender offer for SK D&D by Hahn & Co, we expect this to have a positive impact on SK D&D’s share price.
- The major reason for this is that there are still many investors that believe that SK D&D’s shares are significantly undervalued at P/B of only 0.4x.
Merger Arb Mondays (03 Nov) – ANE, Dongfeng, Mayne, AUB, Digital Holdings, Makino, Soft99, SCSK
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Mayne Pharma (MYX AU), Brainpad Inc (3655 JP), Smart Share Global (EM US), AUB Group Limited (AUB AU), ENN Energy (2688 HK), Dongfeng Motor (489 HK).
- Lowest spreads: Bright Smart Securities (1428 HK), Mandom Corp (4917 JP), Pacific Industrial (7250 JP), Seven West Media (SWM AU), Humm Group (HUM AU), Toyota Industries (6201 JP).
SK Innovation – End of Lockup Period For 33% of Outstanding Shares
- There is an end of a lock-up period for 55.3 million shares (33% of outstanding shares) for SK Innovation (096770 KS) starting 20 November 2025.
- This could potentially result in additional selling by insiders which could negatively impact its share price in the coming weeks.
- SK Innovation is currently trading at relatively high valuation multiples. We remain Bearish on SK Innovation.
Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (3 Nov)
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlights: Currently ten pair trade opportunities across three markets and three sectors persist.
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
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