In today’s briefing:
- Santos Ltd (STO AU): FIRB Approval For XRG’s Tilt Will Be No Pushover
- Gold Miners ETF (GDX US): BIG Impact of Benchmark Change
- MV Global Uranium & Nuclear Energy/Infra Index Rebalance: Double Inclusion for CGN Mining
- MV Global Defense Industry Index Rebalance: US$1.1bn Round-Trip Trade as Stocks Soar
- Santos (STO AU): XRG Consortium’s Big Offer; Index Impact
- A/H Premium Tracker (To 13 June 2025): HUGE H-Share Outperf Across The Board, “Beautiful Skew Move”
- MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
- Shin Kong (2888 TT)/Taishin (2887 TT) – Short Timer, FX Risk, Index Flows – Time To Buy Vs Peers
- Select Sector Indices and S&P Equal Weight Rebalance: US$12.7bn Round-Trip Trade Post Capping
- Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer
Santos Ltd (STO AU): FIRB Approval For XRG’s Tilt Will Be No Pushover
- Aussie O&G producer Santos Ltd (STO AU) has announced a non-binding Scheme from XRG, which comprises Abu Dhabi’s National Oil Company, Abu Dhabi Development Holding Company, and Carlyle
- The consortium is offering US$5.76 (A$8.89)/share, a 28% premium to last close. Initial Offers were pitched at US$5.04/share, followed by US$5.42/share.
- Confirmatory due diligence has been afforded. A firm bid would require a multitude of reg approvals in Australia, PNG, and the US.
Gold Miners ETF (GDX US): BIG Impact of Benchmark Change
- The VanEck Gold Miners ETF/USA (GDX US) has announced a benchmark change from the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index.
- That change will result in a bunch of constituent and weight changes in September. Estimated one-way turnover is 15.8% resulting in a one-way trade of US$3.1bn.
- The flow and turnover numbers will change following the June rebalance of the NYSE Arca Gold Miners Index and the September rebalance of the MarketVector Global Gold Miners Index.
MV Global Uranium & Nuclear Energy/Infra Index Rebalance: Double Inclusion for CGN Mining
- There is 1 add/delete for each of the MVIS Global Uranium & Nuclear Energy Index and the MarketVector Global Uranium and Nuclear Energy Infrastructure Index.
- Cgn Mining (1164 HK) is an add to both indices. Endesa SA is a delete from the Uranium&Nuclear Energy Index, Encore Energy is a delete from the Uranium&Nuclear Energy Infrastructure Index.
- The net round-trip trade across both indices is US$560m with capping changes resulting in much bigger flow for the MVIS Global Uranium & Nuclear Energy Index.
MV Global Defense Industry Index Rebalance: US$1.1bn Round-Trip Trade as Stocks Soar
- Hyundai Rotem, RENK Group and Karman Holdings will be added to the MV Global Defense Industry Index after the close of trading on 20 June.
- Constituent changes, float changes and capping changes result in an estimated one-way turnover of 8.8% and a round-trip trade of US$1.1bn.
- The index has moved up steadily over the last few years and the ETF has taken in a big chunk of money over the last 6 months.
Santos (STO AU): XRG Consortium’s Big Offer; Index Impact
- A consortium comprising ADNOC and Carlyle have offered US$5.76/share (A$8.8807/share) to take Santos Ltd (STO AU) private. That values Santos equity at A$28.8bn and an Enterprise Value of A$36bn.
- With the offer price at a premium of 28%-44% to last and VWAPs, and the Board supporting the offer, this looks like a done deal.
- Santos Ltd (STO AU) is a member of all the major S&P/ASX indices and there will be ad hoc inclusions to the indices at the time of the delisting.
A/H Premium Tracker (To 13 June 2025): HUGE H-Share Outperf Across The Board, “Beautiful Skew Move”
- AH spreads are SHARPLY narrower. The effect is dramatic across the “skew” i.e. very wide AH premia contracted more than very narrow premia. BYD is on its own.
- This smells very much like someone knows something. I expect RMB dual counters may be in the works. Caixin had an article Friday.
- 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.
MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
- There are no constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in June but there are plenty of float and capping changes.
- Estimated one-way turnover is 4.1% resulting in a round-trip trade of US$528m. There are 5 stocks with over 1x ADV to trade from passive trackers.
- The sell flows in Evolution Mining (EVN AU) will partially offset the buying from the passive S&P/ASX 50 Index trackers.
Shin Kong (2888 TT)/Taishin (2887 TT) – Short Timer, FX Risk, Index Flows – Time To Buy Vs Peers
- Shin Kong Financial Holding (2888 TT) and Taishin Financial Holding (2887 TT) are scheduled to merge in less than 6 weeks.
- The recent TWD strength has meant sharp losses for Shin Kong Life, but the merger agreement the FSC agreed has Taishin explicitly supporting Shin Kong Life.
- There are near-term flows and technical limitations which make this situation interesting again. Grab your shorts! It could be a bumpy ride!
Select Sector Indices and S&P Equal Weight Rebalance: US$12.7bn Round-Trip Trade Post Capping
- There are no constituent changes for the S&P 500 INDEX (SPX INDEX) in June but there are capping changes for the Select Sector indices and the Equal Weight Index.
- The round-trip trade is US$12.7bn with a big chunk from the Equal Weight Index, Communication Services Select Sector SPDR Fund (XLC US) and Consumer Discretionary Select (XLY US).
- The largest flows are expected in Meta, Amazon.com, Alphabet, Broadcom, Live Nation Entertainment, Tesla, T Mobile Us, Exxon Mobil, Fox, Omnicom Group, TKO Group Holdings and Netflix.
Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer
- Nakano Refrigerators (6411 JP) has recommended a tender offer from Marunouchi Capital at JPY7,900, a 35.0% premium to the last close price.
- The offer is attractive as it represents an all-time high and is above the midpoint of the IFA DCF valuation range.
- An attractive offer and irrevocables (33.19% ownership ratio) pave the way for deal completion. The tender runs from 17 June to 29 July.
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