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Most Read: Kum Yang, Youlchon Chemical, Canon Inc, Advantest Corp, AVIC (Chengdu) UAS Co Ltd, Eoflow, Anhui Conch Cement, CRRC Corp Ltd A, China Merchants Energy A and more

In today’s briefing:

  • KOSPI200 Index Rebalance: Two Sets of Changes
  • KOSPI200 Ad Hoc Index Rebalance: Youlchon Chem to Replace Dongkuk Steel Mill
  • Canon Buyback – 18th in a Row at the Same Size, But This Time With a Running Head Start
  • Advantest (6857) | Key Beneficiary of AI Tailwinds
  • STAR50 Index Rebalance: Two Changes in June (As Expected)
  • EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation
  • SSE50 Index Rebalance: 5 Changes as Adds Give Up Recent Gains
  • Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD
  • SSE180 Index Rebalance: Small Impact but Not Widely Tracked
  • CSI300 Index Rebalance: 9 Changes as Discretion Used

KOSPI200 Index Rebalance: Two Sets of Changes

By Brian Freitas


KOSPI200 Ad Hoc Index Rebalance: Youlchon Chem to Replace Dongkuk Steel Mill

By Brian Freitas


Canon Buyback – 18th in a Row at the Same Size, But This Time With a Running Head Start

By Travis Lundy

  • Canon has conducted 18 buybacks in the last 15 years. Every single one has been the same size. And the parameter-setting and how they are executed is… particular.
  • For those with Canon to execute, using the information about patterns may be helpful. 
  • For those interested in a trade, there may be one here.

Advantest (6857) | Key Beneficiary of AI Tailwinds

By Mark Chadwick

  • Advantest is a market leader in semiconductor testing and will be a major beneficiary of a multi-year AI tailwind
  • Catalyst: News flow around new AI applications, increased investment dollars flowing into the space and visible acceleration in Nvidia’s data centre GPU growth
  • Market concern over near-term correction in semiconductor market is giving investors an opportunity to buy Advantest at a 15% discount to its intrinsic value

STAR50 Index Rebalance: Two Changes in June (As Expected)

By Brian Freitas

  • The index committee has used a 6-month minimum listing history and that results in two changes. This is the first rebalance with less than 5 changes at a review.
  • One way turnover is estimated at 1.03% and will result in a one-way trade of CNY 1,025m. Given the adds are new listings, there will be some reverse funding flow.
  • There appears to be little pre-positioning on the adds while there is a bigger buildup on the deletes.

EOFlow Tender Offer: Preconditions for Closure, Cancellation Risk, & Targetable Allocation

By Sanghyun Park

  • The likelihood of the merger review not being approved appears to be low. Additionally, the purchase of only 3.8M additional shares is required, leading to a negligible cancellation risk.
  • It is particularly noteworthy that the offering price of ₩30,000, targeting minority shareholders, may be adjusted upward depending on future share price increases.
  • While there is a potential allocation risk, as Medtronic aims to delist the company, they are unlikely to lower the target quantity in the tender offer to a risky level.

SSE50 Index Rebalance: 5 Changes as Adds Give Up Recent Gains

By Brian Freitas

  • There are 5 changes for the SSE50 Index that will be implemented at the close on 9 June. There is over 1x ADV to sell on a few deletions.
  • We estimate a one-way turnover of 5.3% at the June rebalance leading to a one-way trade of CNY 3.84bn. Index arb activity could add to the impact on the stocks.
  • The adds outperformed the deletes from February to April but have given up a lot of the outperformance over the last month.

Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD

By Mark Chadwick

  • It was a relatively quiet week for the broader index. However, there was a big sector shift towards tech and AI winners.
  • Japanese Heavy Equipment makers have technologies that will be in demand for decades. KHI trades below book. 
  • As we head into AGM season, we take a look at interesting activist campaigns. 

SSE180 Index Rebalance: Small Impact but Not Widely Tracked

By Brian Freitas

  • There are 18 changes for the SSE180 Index that will be implemented at the close of trading on 9 June.
  • The impact on the stocks is small but this is not a widely tracked index, so there could still be opportunities for some high risk/reward basket trades.
  • With Northbound Stock Connect eligibility no longer drawing on the SSE180 Index constituents, the index could lose relevance over time.

CSI300 Index Rebalance: 9 Changes as Discretion Used

By Brian Freitas

  • There are 9 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 9 June.
  • While nearly all the changes are in line with forecasts, there are some stocks that have not been added or deleted as the index committee has used discretion.
  • The Energy sector is the biggest gainer in terms of index spots, while the Consumer Discretionary and Health Care sectors lose two index spots each.

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