In today’s briefing:
- SK Telecom (017670 KS): Implications of Zero Foreign Room
- SK Telecom: MSCI Special Deletion & Immediate Price Spike on Share Recall
- Woodside Shareholders Approve Deal but Not WPL’s Green Credentials; Now People Talk About Flows
- FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time
- Woolies Moves On MyDeal (MYD AU)
SK Telecom (017670 KS): Implications of Zero Foreign Room
- Foreign investors hold 106.51m shares of SK Telecom (017670 KS) versus a limit of 107.23m shares. There are only 723k more shares (1 day of ADV) available for foreign buying.
- MSCI will delete SK Telecom (017670 KS) from its indices once the foreign room reaches zero, while FTSE will likely reduce the investability weight in two tranches of 5% each.
- SK Telecom (017670 KS) could continue underperforming KT Corp (030200 KS) in the short-term due to passive selling and inability of foreign investors to buy the stock.
SK Telecom: MSCI Special Deletion & Immediate Price Spike on Share Recall
- Looking at these past similar cases, the MSCI will likely announce SKT’s special deletion within 2-3 days of reaching zero foreign room and rebalancing within 2-3 days after the announcement.
- We will see a passive outflow of about 2M shares or about ₩115B, equivalent to 2.7x ADTV, which will likely lead to an immediate price spike.
- ETF funds tracking the MSCI have a large proportion of loaning SKT shares. So, when an MSCI down-weight occurs to SKT, an immediate recall will push up the price.
Woodside Shareholders Approve Deal but Not WPL’s Green Credentials; Now People Talk About Flows
- The EGM of Woodside Petroleum (WPL AU) today approved the BHP Petroleum merger in overwhelming fashion. 98.66% FOR.
- They did not approve of the Climate Report the board submitted to vetting by shareholders for the first time. That got 51% “support.”
- But now that’s done, people will talk about flows. So far the trade has worked but now time to think about how far to stretch it.
FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time
- Celltrion Inc (068270 KS)’s deletion seems pretty much a foregone conclusion as its average float-adjusted market cap on May 3-19 is way below the next one in line.
- Shinhan Financial (055550 KS) is the one to replace Celltrion based on the numbers so far. There is close to a ₩1T gap with the next one, POSCO (005490 KS).
- In this rebalancing, the flow impact of the addition/deletion is even more significant. So, their share price fluctuations on June 10 will likely be more substantial than last time.
Woolies Moves On MyDeal (MYD AU)
- Woolworths Ltd (WOW AU) proposes to acquire all shares in MyDeal.com.au Ltd (MYD AU) other than those held by Sean Senvirtne and other key management personnel.
- MyDeal shareholders will receive $1.05/share in cash, a punchy 62.8% premium to last close, but just 5% above its 2020 IPO price.
- This proposal is being done by way of a Scheme with expected completion in Q3/Q4 2022.
Before it’s here, it’s on Smartkarma
