In today’s briefing:
- NIFTY50 Index Rebalance Preview: Forecast Changes, Impact, Positioning
- Sichuan Kelun Biotech (6990 HK): Price Surge & Global Index Inclusion
- [Japan Index] Lifenet Insurance (7157) Super Green TOPIX Inclusion
- Reece (REH AU): Positioning Increases as Global Index Deletion Nears
- Vivendi: Mandatory Buyout in Motion – High-Conviction Risk Arb with 30%+ Upside
- Anthem Biosciences IPO: Lists Today; Index Inclusion Timing
- A/H Premium Tracker (To 18 July 2025): “Beautiful Skew” Continues Some More
- Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker
- Two New Tax Tweaks Set to Shake Up Korea’s Local Stock Market: Trading Tax & CGT Threshold
- The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I
NIFTY50 Index Rebalance Preview: Forecast Changes, Impact, Positioning
- InterGlobe Aviation Ltd (INDIGO IN) and Max Healthcare Institute (MAXHEALT IN) should replace Indusind Bank (IIB IN) and Hero Motocorp (HMCL IN) in the NIFTY Index in September.
- The review period for the September rebalance ends 31 July, the announcement of the changes will take place end August and implemented at the close of trading on 29 September.
- While there has been a steady increase in cumulative excess volume for Max Healthcare Institute (MAXHEALT IN), there could be more room to run in the stock.
Sichuan Kelun Biotech (6990 HK): Price Surge & Global Index Inclusion
- The recent placement and price surge in Sichuan Kelun-Biotech Biopharm (6990 HK) could result in the stock being added to a global index in August.
- Sichuan Kelun-Biotech Biopharm has outperformed its peers as the entire industry has been trading well. There is a small increase in short interest in the stock.
- Positioning has increased steadily over the last month. Momentum in the stock and its peers could lead to further upside before profit taking kicks in.
[Japan Index] Lifenet Insurance (7157) Super Green TOPIX Inclusion
- On Friday after the close, Lifenet Insurance Company (7157 JP) announced that it would move to TSE Prime on 25 July 2025.
- That means it will go into TOPIX on 29 August 2025 at the close. There is a lot to buy. Under the old Quiddity TOPIX Inclusion matrix, it’s super green.
- It also has a very interesting shareholder structure which is worth looking at in detail.
Reece (REH AU): Positioning Increases as Global Index Deletion Nears
- Reece Ltd (REH AU)‘s stock price has dropped a lot over the last year, and the significantly lower market cap could result in global index deletion in August.
- Short interest started to pick up early this year and has accelerated over the last couple of months. There are indications of positioning in the stock.
- Reece Ltd (REH AU) has underperformed its peers but still trades at a higher EV/EBITDA and forward PE compared to most of its peer group.
Vivendi: Mandatory Buyout in Motion – High-Conviction Risk Arb with 30%+ Upside
- Vivendi trades at a 37.7% discount to NAV, with a mandated buyout by Bolloré offering a realistic upside of 22–37% within six months pending French Supreme Court review.
- The AMF has ruled that Bolloré must launch a tender offer. Vivendi’s simplified structure, anchored by UMG, enables clear valuation through a detailed SOTP showing €5.26/share NAV.
- With liquidity exceeding €3bn, Bolloré can finance a buyout of minority shareholders. Even conservative pricing scenarios imply strong returns for arbitrage investors seeking event-driven upside.
Anthem Biosciences IPO: Lists Today; Index Inclusion Timing
- Anthem Biosciences raised INR 34bn (US$394m) in its IPO valuing the company at INR 320bn (US$3.7bn). The stock lists today.
- The grey market premium is INR 132/share, so the stock could list 23.2% higher than the IPO price. That will help in getting larger index flows.
- Anthem Biosciences could be added to one global index in November while the stock price gain will determine whether the stock is added to the other global index in December.
A/H Premium Tracker (To 18 July 2025): “Beautiful Skew” Continues Some More
- AH premia flat again among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It still pays well to be long wide H discounts.
- Weeks ago I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker
- Kawasaki Heavy Industries (7012 JP) stock price has moved higher over the last few months, and the increased market cap should result in global index inclusion in August.
- Kawasaki Heavy Industries (7012 JP) has underperformed its larger peers, and the stock is trading cheaper than the average of its peers on most metrics.
- There will be positioning in the stock that has been built up over the last month and a relative value trade could offer better risk reward here.
Two New Tax Tweaks Set to Shake Up Korea’s Local Stock Market: Trading Tax & CGT Threshold
- Trading tax gradually dropped from 0.25% in 2020 to 0.15% in 2025, boosting volatility and short-term trades; a hike to 0.25% could cool momentum but widen arbitrage and basis spreads.
- If the major shareholder tax threshold drops to ₩1B, year-end retail dumps and Jan buybacks will return—but with less wild swings and more measured short-term fade and momentum trades.
- If the tax revamp drops end-July, expect a September Assembly push. Usually effective next January, but like 2023’s cap gains hike, changes might apply immediately in 2025.
The Final ACT Comedy of Errors Opens the Way for Real Value to Emerge at Seven & I
- ACT’s bid for Seven & I has been withdrawn and Seven will be better off long-term because of it – although we detail here how competitors are catching up fast.
- Once York HD has been split off, the company can at last focus on its crucial local CVS operation: Japan makes up 25% of revenues but almost 50% of profits.
- The potential is real and we are bullish on the long-term value but we would have been more bullish if the former CEO Ryuichi Isaka was still on board.
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