In today’s briefing:
- Mandatory Cancellation of Existing Treasury Shares: A Historic Stock Market Event in the Making
- ASX200 Index AdHoc Rebalance Preview: Potential Replacement for Spartan Resources (SPR AU)
- GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
- A/H Premium Tracker (To 11 July 2025): “Beautiful Skew” Continues – BIG AH Premia Compression
- [Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
- BYD (1211 HK): Sales Volume Slowing Down in 2Q25, But Competitors Facing Cash Flow Stress
- TOPIX Inclusions: Who Is Ready (Jul 2025)
- NTT DC REIT IPO Trading – Decent Demand, High Yield and Discount Should Help
- LQ45 Index Rebalance Preview (Jul 2025): Identifying Potential Index Changes
- Samsung Daily Buyback Flow Compiled (Excel): Notable Flow/Price Sync Pattern Identified
Mandatory Cancellation of Existing Treasury Shares: A Historic Stock Market Event in the Making
- The bill’s side notes clearly state that the mandatory cancellation rule applies retroactively to existing treasury shares without any exemptions.
- If this passes the Assembly as-is, it’ll trigger a historic forced cancellation of treasury stock across ~1,660 companies—about three-quarters of the K-equities market.
- Watch if this punchy bill clears committee and floor without cuts. Dems plan to fast-track it Sept 1, holding the majority to push it solo, aiming for year-end rollout.
ASX200 Index AdHoc Rebalance Preview: Potential Replacement for Spartan Resources (SPR AU)
- There will be an ad hoc inclusion for the S&P/ASX 200 (AS51 INDEX) at the close on 22 July following Spartan Resources (SPR AU)‘s acquisition by Ramelius Resources (RMS AU).
- There are a couple of stocks that are trading neck and neck on average free float market cap and one of them is likely to be added to the index.
- Both stocks have seen a big increase in cumulative excess volume over the last few weeks, indicative of positioning in the stock.
GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
- GMO Internet (4784 JP) was squeezed after a merger which was a Reverse Takeover followed by a ridiculous TOPIX inclusion. Then the parent tried an offering, which failed.
- The clearing price demanded was WAAAY lower so the offering was pulled. Shares fell 70%, then bounced 65%. Now 48x book and 66x EBITDA for an ISP. Super expensive. Manipulated.
- ParentCo needs to sell 90mm shares ASAP. The only clean way is through a liquidation trust to get shares lower before a larger offering.
A/H Premium Tracker (To 11 July 2025): “Beautiful Skew” Continues – BIG AH Premia Compression
- AH premia flat among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It has paid well to be long wide H discounts.
- Weeks ago I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
- 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.
[Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
- Diamond Dining (3073 JP) (DD Group) head Matsumura-san appears to be getting out in this Polaris MBO for the dining group.
- The premium is low, and the the price is probably light, but there are a couple of small things which mean it isn’t quite as light as it might look.
- But the company prints cash, so yeah, it’s light. This should probably be a bit better, but F&B is a fickle business.
BYD (1211 HK): Sales Volume Slowing Down in 2Q25, But Competitors Facing Cash Flow Stress
- The sales volume growth rate slowed down month by month in 2Q25.
- The domestic sales volume was stagnant in 2Q25 and decreased YoY from March to June.
- However, competitors expanded aggressively; therefore, we believe small ones may go bankrupt.
TOPIX Inclusions: Who Is Ready (Jul 2025)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- At the end of July 2025, GMO Financial Gate (4051 JP) and Azoom (3496 JP) will be included in the TOPIX Index.
- Newly-Listed company Kitazato (368A JP) will also be included in the TOPIX index at the end of this month.
NTT DC REIT IPO Trading – Decent Demand, High Yield and Discount Should Help
- NTT DC REIT (NTTDCR SP), a data center REIT, raised around US$772m in its Singapore IPO.
- The IPO portfolio comprises six mainly freehold data centres in the U.S., Austria and Singapore with an aggregate appraised valuation of US$1.6bn
- We have looked at the past performance in our earlier notes. In this note, we will talk about the trading dynamics.
LQ45 Index Rebalance Preview (Jul 2025): Identifying Potential Index Changes
- The review period for the LQ45 Index July rebalance ended on 30 June. The changes should be announced later in two weeks, becoming effective after the close on 31 July.
- We highlight 2 potential inclusions and 2 potential exclusions for the index at the rebalance, though there is a possibility that there are no constituent changes.
- Both potential inclusions will have over 2x ADV to trade from passive trackers and the flow is significant for one stock.
Samsung Daily Buyback Flow Compiled (Excel): Notable Flow/Price Sync Pattern Identified
- Daily buyback flow data for Samsung (ord + pref) since last Nov compiled — Excel file attached below.
- Started with ~1M/day (for ord), ramped up at 20–30%, then tapered post-60% — same playbook in both legs, with the second showing even more methodical, steady pacing.
- Price action tracked buyback flow closely — especially in leg 2, where the mid-heavy-light volume pattern showed strong consistency.
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