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Most Read: Matsumotokiyoshi Holdings Co., Ltd., FWD Group Holdings, Ping An Insurance (H), SUMCO Corp, Judo Bank and more

In today’s briefing:

  • MSCI Nov 2021 Index Rebalance Preview: On Your Marks, Get Set…
  • FWD Group: IPO & Index Fast Entry Possibilities
  • Ping An A/​H: Discount Turns to a BIG Premium
  • Sumco Placement Quick Update – A Slightly Wider Discount than 2015
  • Judo Bank IPO – Built a Niche in the Market by Helping SMEs

MSCI Nov 2021 Index Rebalance Preview: On Your Marks, Get Set…

By Brian Freitas

MSCI is scheduled to announce the results of the November 2021 Semi Annual Index Review (SAIR) on 12 November (Asia time) with the changes implemented after the close of trading on 30 November.

The review period for price cut-off will run from 18-29 October, so we have just a week more of trading before we have a better idea of what the changes could be.

Stocks with the largest estimated passive inflows are Mitsui Osk Lines (9104 JP)Taiyo Yuden (6976 JP), Matsumotokiyoshi Holdings Co., Ltd. (3088 JP), Ememory Technology (3529 TT)Godrej Properties (GPL IN), Srf Ltd (SRF IN), Parade Technologies (4966 TT), Open House (3288 JP), IDP Education (IEL AU) and Krafton Inc (259960 KS).

Stocks with the largest estimated passive outflows are United Urban Investment (8960 JP), Nabtesco Corp (6268 JP), Casio Computer (6952 JP), A2 Milk Co Ltd (ATM NZ), Stanley Electric (6923 JP), Tohoku Electric Power Co (9506 JP), Nh Foods Ltd (2282 JP), Toho Gas Co Ltd (9533 JP), Yamada Denki (9831 JP), AGL Energy Ltd (AGL AU), Pigeon Corp (7956 JP) and NSK Ltd (6471 JP).

Stocks that are expected to have the largest impact (in terms of ADV) from passive buying are Voltronic Power Technology (6409 TT), Matsumotokiyoshi Holdings Co., Ltd. (3088 JP), Inari Amertron (INRI MK), CRRC Corp Ltd H (1766 HK), Open House (3288 JP), AC Energy Corp (ACEN PM), IDP Education (IEL AU), Benefit One Inc (2412 JP), Parade Technologies (4966 TT) and Mphasis Ltd (MPHL IN).

Stocks that are expected to have the largest impact (in terms of ADV) from passive selling are MCB Bank Ltd (MCB PA), A2 Milk Co Ltd (ATM NZ), Shenzhen Investment (604 HK), United Urban Investment (8960 JP), Lucky Cement (LUCK PA), Chongqing Rural Commercial Bank (3618 HK), Toho Gas Co Ltd (9533 JP), China Everbright (165 HK), Ipca Laboratories (IPCA IN), China Resources Pharmaceutical (3320 HK) and Habib Bank Ltd (HBL PA).

Recent listings that could be added to the MSCI Standard index are Krafton Inc (259960 KS)Bukalapak (BUKA IJ)Monde Nissin Corp (MONDE PM) and Zomato (ZOMATO IN).


FWD Group: IPO & Index Fast Entry Possibilities

By Brian Freitas

FWD Group Holdings (FWD US) filed its draft registration statement with the SEC on 16 June and followed it up with its latest registration statement on 8 October. While no numbers have been officially disclosed, media reports indicate that the IPO will be completed in the current quarter and will raise between US$2-3bn and value the company between US$12-15bn.

FWD Group Holdings (FWD US) will have a dual-class voting structure. The Class A shares will be listed and carry one vote per share while the Class B shares will carry 10 votes per share. All shares currently held by PCGI Holdings Limited will be converted to Class B shares.

Based on the information currently available officially and through media reports, we do not see the stock getting Fast Entry to the MSCI Standard and FTSE All-World indices. The stock will not meet the full and free float market cap required for inclusion in the MSCI Standard index, while the stock will fail the Minimum Voting Rights test for inclusion in the FTSE All-World Index.

The stock will need to double from its current valuation to meet the free float market cap requirement and be included in the MSCI Standard index at a subsequent review, while the stock will need its voting rights to increase substantially to be eligible for inclusion in the FTSE All-World index at a later stage.


Ping An A/​H: Discount Turns to a BIG Premium

By Brian Freitas

The Ping An A-shares Ping An Insurance Group Co Of China (601318 CH) are trading at a 11% premium to the H-shares Ping An Insurance (H) (2318 HK). This continues the cycle of premiums and discounts going back to 2015.

The last time the A-shares traded at a premium this large to the H-shares was in December last year. By mid to late January, the A-shares were trading near parity versus the H-shares.

With Ping An Insurance Group Co Of China (601318 CH) trading at a 11% premium to Ping An Insurance (H) (2318 HK) the risk/reward is favourable to setting up a premium contraction trade. The current premium lies at the 95th percentile over the last 5 years and the premium has widened faster than that of the HSAHP Index.

Northbound and Southbound Stock Connect holdings of Ping An Insurance Group Co Of China (601318 CH) and Ping An Insurance (H) (2318 HK) have dropped sharply over the last couple of months, though there has been an uptick over the last couple of weeks.

In this Insight, we look at the historical premium for Ping An and compare it to the premium on the AH index and other large caps, and look at some catalysts that could lead to an contraction of the premium.



Judo Bank IPO – Built a Niche in the Market by Helping SMEs

By Zhen Zhou, Toh

Judo Bank (1628888D AU) is looking to raise about US$483m by selling a mix of primary and secondary shares.

Judo Bank (JB) focuses on lending to small and medium-sized enterprises (SMEs) in Australia. It also offers a range of personal term deposit products to consumers.

In this note, we take a brief look at financials, operating metrics, and share our thoughts on valuation.


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