In today’s briefing:
- Nikkei 225 Index Rebalance: Rohm (6963) To Replace NTT Data Group (9613)
- Hygon/Sugon Merger: BIG Index Flows on Completion
- [Quiddity Index] Nikkei 225 Boots NTT Data (9613) Early, Rohm (6963) IN 3 July; $3.8bn a Side
- [Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL, Less Certain Than Before
- Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation
- Holcim Spin-off (Amrize) Deep Dive
- Quiddity Leaderboard ASX Sep25: Spartan-Ramelius Deal Consequences + Many High-Impact Index Changes
- Virgin Australia IPO Trading – Flying into Oil and Recent Air Crash Headwinds
- Why Is LG CNS One of the Hottest Stocks in Korea in the Past One Month? Answer: Stablecoin Platform
- A/H Premium Tracker (To 20 June 2025): Skew Move Continues as SB Buys But AH Premia Rise
Nikkei 225 Index Rebalance: Rohm (6963) To Replace NTT Data Group (9613)
- Following the results of NTT (9432 JP)‘s tender offer for NTT Data Corp (9613 JP), NTT Data will be deleted from the Nikkei 225 (NKY INDEX).
- ROHM Co Ltd (6963 JP) will be added to the Nikkei 225 (NKY INDEX) at the close on 3 July. The stock is up a fair bit from its lows.
- Nearly all the NTT Data Corp shares not tendered will be held by passives and there will be selling in the stock as index providers move the float lower/delete.
Hygon/Sugon Merger: BIG Index Flows on Completion
- On 26 May, Hygon Information Technology (688041 CH) and Dawning Information Industry (603019 CH) announced a merger in a sign of consolidation in China’s chipmaking industry.
- For each share of Dawning held, shareholders will receive 0.5525 shares of Hygon. With uncertainty on the timeline for merger completion, Dawning is trading at a 10% discount.
- On completion of the merger, passive trackers will need to buy over US$1.1bn of Hygon Information Technology C (688041 CH) with nearly of that from local index trackers.
[Quiddity Index] Nikkei 225 Boots NTT Data (9613) Early, Rohm (6963) IN 3 July; $3.8bn a Side
- Today the results of the NTT Data Corp (9613 JP) Tender Offer came out. NTT has 81.75%. I warned of lack of liquidity at that level yesterday here.
- Yesterday I proposed that ROHM Co Ltd (6963 JP) would replace NTT Data in the Nikkei 225 and that the likely timing was the last couple of days of August.
- Today, the Nikkei used the June 2020 rule change to announce NTT Data’s near-term deletion. Rohm goes in 3 July. 7.5x ADV to buy. $3.8bn a side to trade.
[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL, Less Certain Than Before
- I published a Sep25 Nikkei 225 prediction list last Wednesday. By Friday, we had a new paradigm due to an ad hoc change. That new paradigm informs the September selection.
- As it is, I expect one (1) ADD (Shift Inc (3697 JP)) and one (1) DELETE (Tokuyama Corp (4043 JP)) – a prediction which change on a corporate announcement.
- My confidence on the ADD is a little lower due to the implications of the choice of Rohm. And the interesting ECM trade for September remains Sony Financial.
Korea Holdco Rerating Pullback Risk: No Retroactive Treasury Cancellation
- Mandatory treasury cancellation isn’t in the current bill, but FSC and MOJ have started internal reviews; enforcement decree could drop as early as Q4.
- An internal policy paper suggests mandatory cancellation will apply only to newly acquired treasury shares, with tight limits on existing ones to curb owner control abuse.
- Lack of retroactive cancellation weakens the bull case, and while holdco sentiment stays upbeat, momentum may fade, opening the door to a tactical pullback.
Holcim Spin-off (Amrize) Deep Dive
Holcim will spin off its construction materials and solutions business into a standalone company, to be named Amrize on Friday, June 20th.
The first day of trading will be Monday, June 23, 2025.
Holcim plans to spin off Amrize, distributing one Amrize share for each Holcim share held.
Quiddity Leaderboard ASX Sep25: Spartan-Ramelius Deal Consequences + Many High-Impact Index Changes
- In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the September 2025 index rebal event.
- We expect one change for ASX 50, three changes for ASX 100, and four changes for ASX 200. Separately we see 9 ADDs and 7 DELs for ASX 300.
- The official index changes will be announced after the close on Friday 5th September 2025.
Virgin Australia IPO Trading – Flying into Oil and Recent Air Crash Headwinds
- Bain Capital raised around US$440m via selling some of its stake in Virgin Australia Holdings (VAH AU).
- Virgin Australia is the second largest airline group operating in the Australian aviation market, with an average 32% domestic RPT capacity market share in CY24.
- We have looked at the company’s past performance and provided our thoughts on valuations in our previous note. In this note, we talk about the trading dynamics.
Why Is LG CNS One of the Hottest Stocks in Korea in the Past One Month? Answer: Stablecoin Platform
- LG CNS has been one of the hottest stocks in the Korean stocks market in the past one month (up 87%), sharply outperforming KOSPI.
- The biggest driver of LG CNS’s share price in the past month has been that this company has the potential to become a leading stablecoin platform in Korea.
- Many investors believe that LG CNS has the expertise in blockchain/AI/cryptocurrency backend solutions to become one of the leading Won based stablecoin platforms in Korea.
A/H Premium Tracker (To 20 June 2025): Skew Move Continues as SB Buys But AH Premia Rise
- AH premia bounce back last week but the “skew” of wide premia converging and narrow premia moving wider continues. It has paid to be long wide H discounts.
- The previous week smelled like an RMB counter trade was being set up, “confirmed” by a Caixin article the weekend. The HKEX “confirmation” this past week, well, maybe wasn’t one.
- 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. Technical issue delayed this week’s Monitor.
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