In today’s briefing:
- Nikkei 225 Deletions/Additions in March(?) 2022 Due to TSE Market Structure Changes
- Nippon Paint (4612) – A BIG Secondary Which Is a Tough Sell, with Variable Index Implications
- China Mobile (600941 CH): Potential Index Fast Entry
- ECM Weekly (9th Jan 2022) – LG Energy, Hyundai Engineering, JL Mag, 2022 Pipeline, 2021 Performance
- Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct
Nikkei 225 Deletions/Additions in March(?) 2022 Due to TSE Market Structure Changes
- The TSE will move to a new cash equity market structure on 4 April 2022. There will be three new sections: TSE Prime, TSE Standard, and TSE Growth.
- The Nikkei Index Team in July 2021 announced a change to the Nikkei 225 Average Guidebook language which said constituents had to be members of TSE Prime going forward.
- At least one Nikkei 225 name and possibly two are headed for TSE Standard when the TSE makes its announcement on 11 January 2022. Suggested treatments are discussed.
Nippon Paint (4612) – A BIG Secondary Which Is a Tough Sell, with Variable Index Implications
- When Wuthelam took control of Asia’s largest coatings business, Nippon Paint Holdings (4612 JP), in August 2020, I was bearish. It was great for the Goh family but minorities lost.
- At the time, I said “Float is low”, and “There are cross-holders who don’t need to be there. This would be a very good sell for them. “
- 17 months later, 6 financial institutions will now sell their cross-holdings. There is float impact and some immediate index impact.
China Mobile (600941 CH): Potential Index Fast Entry
- China Mobile (600941 CH) listed on 5 January after raising CNY 56bn in its A-share IPO. The stock could get Fast Entry to the CSI300, SSE50 and SSE180 indices.
- Stocks will be deleted from these indices to maintain the number of index constituents. Jonjee High-Tech could be deleted from the CSI300 and Shandong Gold Mining from the SSE50.
- China Mobile (600941 CH) trades at a 41.7% premium to China Mobile (941 HK), substantially lower than the 89% premium for China Telecom (601728 CH)/China Telecom (H) (728 HK).
ECM Weekly (9th Jan 2022) – LG Energy, Hyundai Engineering, JL Mag, 2022 Pipeline, 2021 Performance
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- LG Energy Solution (LGENERGY KS) started book building for its mega US$10bn+ IPO
- Placements too got off to a large, if not strong, start with Sea Ltd (SE US) and Nippon Paint Holdings (4612 JP) US$1bn+ deals.
Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct
- A group of shareholders of Nippon Paint Holdings, plan to raise around US$1.4bn via selling nearly 6% of the stock.
- The shares haven’t done much this year and despite having corrected by around 40% since the start of 2021, they are trading just about inline with analyst average target price.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Before it’s here, it’s on Smartkarma
