In today’s briefing:
- SBI Shinsei Bank (8303 JP) IPO: TPX Add in Jan; Global Index: One in May; One in June
- [Japan Activism/M&A] Thinking About the Partial Tender Trade Coming in Dec25
- STAR&CHINEXT 50 Index Rebalance Preview: Potential Changes in December
- CSI A500 Index Rebalance Preview: Bunch of Changes to Lead to US$1.6bn Trade
- China Hongqiao (1378 HK): Index Impact of US$1.2bn Placement
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25
- Alibaba (9988 HK / BABA US): Brace for a Big Earnings Move
- China Hongqiao Placement: Good Valuation but Likely Opportunistic, on the Back of Chuangxin Listing
- S&P/ASX Index Rebalance Preview (Dec 25): Changes Across Indices as Positioning Picks Up
- Atlas Arteria (ALX AU): IFM Creeps To A ~35% Stake
SBI Shinsei Bank (8303 JP) IPO: TPX Add in Jan; Global Index: One in May; One in June
- SBI Shinsei Bank (8303 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 17 December.
- At the indicated IPO price of ¥1,440/share, the IPO will raise up to ¥367.6bn (US$2.38bn) and value SBI Shinsei Bank (8303 JP) up to ¥1,290bn (US$8.34bn).
- The stock should be added to the TOPIX INDEX at the close on 29 January while inclusion in global indices should take place in May and June.
[Japan Activism/M&A] Thinking About the Partial Tender Trade Coming in Dec25
- A month ago I wrote [Japan Activism/M&A] – Closing In On the Tsuruha Partial Tender – Likely Needs To Be Higher. Now we are <2wks to the deal.
- At the time, I said the Partial Tender Offer Price needed to be higher than the mooted ¥2,280. Tsuruha Holdings (3391 JP) shares are up 10.0% in that month.
- The three largest peers are -2.0% on average in that period. The average of 8 peers is +0.5%. I still expect the partial offer price needs to be near ¥3,100
STAR&CHINEXT 50 Index Rebalance Preview: Potential Changes in December
- There could be up to 4 constituent changes for the STAR&CHINEXT 50 Index in December. The announcement of the changes will be made after market close on 28 November.
- There will be between 0.1-0.35x ADV to trade in the changes but some of the forecast adds will have same-way flow from passive trackers of other indices.
- The forecast adds outperformed the forecast deletes in July and August before giving up all the gains (and more) in a near one-way move over the last month.
CSI A500 Index Rebalance Preview: Bunch of Changes to Lead to US$1.6bn Trade
- There could be 23 changes for the CSI A500 Index at the December rebalance. Turnover is estimated at 2.9% and the round-trip trade is around US$1.6bn.
- There is a fair amount of balance between sectors with Consumer Discretionary and Health Care expected to lose index spots to Industrials, Information Technology and Materials.
- The forecast adds outperformed the forecast deletes from June-September but have given up gains since then. Position in stocks that will have same-way flows from passive trackers of other indices.
China Hongqiao (1378 HK): Index Impact of US$1.2bn Placement
- China Hongqiao (1378 HK) is looking to raise US$1.2bn via a top-up placement at an indicative price of HK$29.2/share, a 9.6% discount from the last close.
- There will be limited passive buying from global index trackers at the time of settlement of the placement shares. However, there are a couple of potential index inclusions in December.
- Then there will be more passive buying from trackers of a global index, Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) next year.
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 5 December.
- We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.
- CATL (3750 HK) will have a 6-month trading history by implementation of the index changes and is a high probability inclusion to the index. But cornerstone lock-up ends tomorrow.
Alibaba (9988 HK / BABA US): Brace for a Big Earnings Move
- Alibaba (9988 HK) / Alibaba (BABA US) will announce quarterly results on Tuesday, November 25, 8:30 p.m. HKT (7:30 a.m. U.S. Eastern Time)
- Options markets anticipate an above average move with a bearish bias in traders’ expectations. Implied volatility is expected to drop significantly after the event.
- Get ready for Alibaba‘s earnings announcement. Potential above-average volatility in Alibaba has the potential to impact the wider market and Chinese benchmark indices.
China Hongqiao Placement: Good Valuation but Likely Opportunistic, on the Back of Chuangxin Listing
- China Hongqiao (1378 HK) is looking to raise around US$1.2bn from a primary placement.
- This represents 9.1 days of the stock’s three month ADV, and 2.9% of total shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
S&P/ASX Index Rebalance Preview (Dec 25): Changes Across Indices as Positioning Picks Up
- There could be 2 changes each for the ASX50 and ASX100 indices and 7 changes for the S&P/ASX 200 (AS51 INDEX) in December.
- Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 (AS51 INDEX).
- The forecast adds have outperformed (and continue to outperform) the forecast deletes to the S&P/ASX 100 Index and the S&P/ASX 200 (AS51 INDEX).
Atlas Arteria (ALX AU): IFM Creeps To A ~35% Stake
- Back on the 8th June 2022, IFM Global Infrastructure Fund announced a 15% stake in Atlas Arteria (ALX AU) (ATLAX), and subsequently floated the possibility of a non-binding proposal.
- However, IFM’s request, at the time, for limited company information on ATLAX , a US/Europe toll-road play, came to nought.
- Undeterred, IFM continues to accumulate shares. Reportedly, IFM now holds ~35% after picking up 1.9% this morning.
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