In today’s briefing:
- Mandarin Oriental (MAND SP): Matheson’s Full Offer
- FXI Rebalance Preview: New Listings, Potential Inclusions, H/A Premiums
- Taiwan Top 50 ETF Rebalance Preview: Plenty of Big Overlapping Flows Coming Up
- SENSEX Index Rebalance Preview: Tata Motors OUT; Indigo IN; Grasim – Dark Horse
- China A50 ETFs Rebalance Preview: Three Changes in December
- ChiNext/ChiNext50 Index Rebalance Preview: Maxing Out the Changes
- CSI All Share Real Estate Sector Index Rebalance Preview: Multiple Changes in December
- CNI Semiconductor Chips Index Rebalance Preview: One Set of Changes in December
- SBI Shinsei Bank (8303 JP): Fast-Entry Comeback
- ABL Bio: Equity Investment of 22 Billion Won from Eli Lilly
Mandarin Oriental (MAND SP): Matheson’s Full Offer
- A sale – partial or otherwise – of Mandarin Oriental International (MAND SP)‘s One Causeway Bay (OCB) was always on the cards. But I didn’t see an Offer coming.
- Concurrent with the sale of 13 floors of OCB to Alibaba (9988 HK), Jardine Matheson (JM SP) is seeking to take out MAND’s minorities at US$3.35/share by way of a Scheme.
- That’s a 52.3% premium to undisturbed, and a 53.7% premium to NAV. Unlike the 2021 Jardine Strategic (JS SP) Offer, Matheson is required to abstain from voting on this takeover.
FXI Rebalance Preview: New Listings, Potential Inclusions, H/A Premiums
- There could be 3 constituent changes for the iShares China Large-Cap (FXI) (FXI US) ETF in December. That could easily increase to 4.
- Two of the forecast inclusions will also have inflows from the FGlobal Index at the same time, increasing the impact. The third is a potential HSCEI INDEX add in December.
- The HA premiums for CATL (3750 HK) and Jiangsu Hengrui (1276 HK) have dropped ahead of lock-up expiry and there could be premium expansion closer to index/ETF inclusion.
Taiwan Top 50 ETF Rebalance Preview: Plenty of Big Overlapping Flows Coming Up
- There could be 4 constituent changes for the Yuanta/P-Shares Taiwan Top 50 ETF in December as positioning for buying by one set of index trackers pushes stocks into other indices.
- There will be passive inflows in some of the forecast adds week after next and the flows from these index trackers will come a few weeks later.
- With large AUMs tracking the dividend indices, stocks that have moved up a lot now have low dividend yields and there could be opposite flows from those index trackers.
SENSEX Index Rebalance Preview: Tata Motors OUT; Indigo IN; Grasim – Dark Horse
- With the review period complete, there could be one change for the S&P BSE SENSEX Index (SENSEX INDEX) at the December rebalance.
- Following the demerger of the Commercial Vehicle business, the drop in market cap for Tata Motors (TTMT IN) could result in index deletion.
- InterGlobe Aviation Ltd (INDIGO IN) is a potential inclusion to the index, but there is a small possibility of Grasim Industries (GRASIM IN) being added to the index instead.
China A50 ETFs Rebalance Preview: Three Changes in December
- Nearing the end of the review period for the December rebalance, there could be three changes for the iShares A50 China (2823 HK) / CSOP China A50 (HKD) (2822 HK).
- Sungrow Power Supply, CMOC Group and China CSSC Holdings could replace S.F. Holding, China Everbright Bank and Bank of Jiangsu in the ETF at the close on 19 December.
- The forecast adds have outperformed the forecast deletes over the last 3 months and it is not even close as the gap has kept getting wider
ChiNext/ChiNext50 Index Rebalance Preview: Maxing Out the Changes
- With the review period complete, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
- The largest flows will be in 2 stocks that are forecast adds for both indices. There are 14 stocks with over 0.5x ADV to trade from passive trackers.
- The forecast adds outperformed the forecast deletes from June to August, but there has been significant underperformance since then. Outperformance could resume as positioning kicks in prior to announcement.
CSI All Share Real Estate Sector Index Rebalance Preview: Multiple Changes in December
- There could be up to 7 adds and 4 deletes for the CSI All Share Real Estate Sector Index in December.
- Estimated one-way turnover is 3.8% at the rebalance leading to a round-trip trade of CNY 535m. There are a couple of stocks with over 0.5x ADV to trade.
- The forecast deletes have outperformed the forecast adds over the last 2 months and this is an attractive entry point as we near announcement date.
CNI Semiconductor Chips Index Rebalance Preview: One Set of Changes in December
- There could be one change for the CNI Semiconductor Chips Index with Verisilicon Microelectronics S (688521 CH) replacing Tianshui Huatian Technology Co, Ltd. (002185 CH).
- Passive trackers will need to buy 0.5x ADV in Verisilicon Microelectronics S (688521 CH) and sell 0.4x ADV in Tianshui Huatian Technology Co, Ltd. (002185 CH).
- There will be large selling in Cambricon Technologies Lt (688256 CH) due to capping while there will be smaller inflows for the other index constituents.
SBI Shinsei Bank (8303 JP): Fast-Entry Comeback
- TSE has approved the relisting of SBI Shinsei Bank (8303 JP), which is scheduled to go public on 17 December 2025 with an anticipated market cap of $8.4bn.
- SBI Shinsei Bank (8303 JP) is forecasted to achieve fast-entry in one Global index in December.
- SBI Shinsei Bank (8303 JP) may be included in the other Global index at the next review, subject to float cap risk.
ABL Bio: Equity Investment of 22 Billion Won from Eli Lilly
- On 14 November, ABLBio (298380 KS) announced that it has signed an equity investment agreement with Eli Lilly & Co (LLY US) worth 22 billion won (US$15 million).
- ABL Bio will issue 175,079 new shares at 125,900 won per share (27% lower than current price). Despite the high valuation multiples, we maintain a Positive view on ABL Bio.
- Its recent major technology agreement with Eli Lilly serves as strong validation from a leading global pharmaceutical company, confirming the significant market potential of ABL’s unique platform technology.
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