Daily BriefsMost Read

Most Read: Shinsei Bank, Hyundai Heavy Industries, Centuria Office REIT, Bank Negara Indonesia Persero and more

In today’s briefing:

  • Shinsei Looks To A Poison Pill, But Probably Not Really
  • Hyundai Heavy Industries: In the Zone for KOSPI200 Fast Entry
  • FTSE EPRA Nareit Rebalance Done: Trades From Here
  • Hong Kong Buybacks: Xiaomi and Tencent Led Weekly Buybacks
  • BBNI – DuPont Suggests ~60% Higher Profit

Shinsei Looks To A Poison Pill, But Probably Not Really

By Travis Lundy

On Thursday 9 September, SBI Holdings (8473 JP) announced a Tender Offer aimed at lifting its stake in Shinsei Bank (8303 JP) to 48% at a sharp premium (up 46%). It hadn’t warned Shinsei Bank of its intention to do so.

Kana Inagaki and Leo Lewis at the FT had a story early Thursday evening describing the situation – the most concise and accurate take I have seen. I followed up hours later with something wordier in SBI (8473) Launches a HOSTILE Tender Offer on Shinsei Bank (8303)! On Thursday night the ADRs rose to ¥1930/share equivalent. 

On Friday, the stock went limit up, Smartkarma held a Flash Webinar, and Mio Kato added Shinsei Bank – Valuations to the anthology. 

Over the weekend, articles were everywhere in the media, but they didn’t say much. Shinsei hadn’t told them what to say and SBI had already done the talking for its part. 

Trading resumed on Monday and the stock opened above the Tender Offer Price ¥2000/share before closing a bit lower. 

Yesterday saw articles suggesting Shinsei Bank would send SBI a list of questions to answer, would look at what they got back, and then would decide their opinion. 

But TODAY we see the real start of the game. 

The Nikkei reported in a short article a few hours ago that Shinsei’s board would meet this week to approve an “emergency” poison pill defence. 

How that would work might matter, but it might not. 

More below the fold.

Hyundai Heavy Industries: In the Zone for KOSPI200 Fast Entry

By Brian Freitas

Hyundai Heavy Industries (1748326D KS) raised KRW 1.08 trillion (US$920m) in its IPO by selling 18m shares at KRW 60,000/share. The issue was heavily oversubscribed and some of that enthusiasm has spilled into trading on day 1.

The stock is currently trading at KRW 118,500/share, up 97% from the IPO price.

The stock is now in range for inclusion in the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) via Fast Entry at the December rebalance. The announcement of the Fast Entry will come a lot earlier, likely in mid to late October.

With a very small free float, the stock will not make it into the FTSE All-World and MSCI Standard Index via Fast Entry. Inclusion in those indices will take place in the first half of 2022 at the earliest.

FTSE EPRA Nareit Rebalance Done: Trades From Here

By Travis Lundy

The FTSE EPRA Nareit Rebalance was completed on 17 September 2021.

The trade from late June or early July worked quite well up to the announcement on 1 September, and only worked mildly well from there. 

In FTSE EPRA Nareit Rebalance Decided; Sub-Baskets Worth Trading Still after the announcement, I split the universe into three groups – “Still Add”, “Middle”, and “Maybe Done” and recommended the following:

  • Long/short basket of STILL TO BUY vs ALREADY DONE
  • Long STILL TO BUY vs FTSE EPRA Nareit Asia Pacific
  • One could add an “In The Middle” basket on the long side [vs FTSE EPRA Nareit Asia Pac]

The original trade was to be long the dotted light blue line (add basket vs Asia Pacific Index). Then in the trading day before the red dot I recommended being long the yellow line and the purple polka-dotted line.

So…. now what?

Read on.

Hong Kong Buybacks: Xiaomi and Tencent Led Weekly Buybacks

By Ke Yan, CFA, FRM

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Sep 17.

In the past 7 days, the top 3 companies that repurchased the most shares from the market were Xiaomi Corporation (1810 HK) (HKD 741.4 million worth of buybacks), Tencent Holdings Limited (700 HK) (HKD 520.1 million worth of buybacks), Xinyi Glass Holdings Limited (868 HK) (HKD 140.6 million worth of buybacks).

BBNI – DuPont Suggests ~60% Higher Profit

By Daniel Tabbush

As we prepare for our SK webinar with BBNI on 21 September a simple DuPont analysis shows clearly how returns can swell. As margins rise alongside falling credit costs, ROA can move substantially higher. 

Before it’s here, it’s on Smartkarma