In today’s briefing:
- Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- Gold Miners ETF (GDX US): Benchmark Change; 8 Adds, 24 Deletes, US$12.7bn Trade
- MarketVector Vietnam Local Index Rebalance: 4 Adds; 9.5% Turnover; US$112m Trade
- LG Electronics India IPO: Big Market Cap, Small Float -> Small Passive Flows
- Tata Capital IPO: Big Listing, Big Valuation, Small Float
- Zijin Mining (2899 HK): Where To From Here?
- [Japan M&A/Activism] Soft99 Plummets, Rebounds, Activist Rebuts, KeePer Lab Holds, MBO Extends
- HEW: Watching What Didn’t Happen
- LG Electronics India IPO: Updates Support the Bull Case
Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- The ex-date for Sony Financial Group (8729 JP)‘s spinoff from Sony Corp (6758 JP) is 29 September. There will be passive flows at the close on the day.
- There will be no selling from the TOPIX Index and Fglobal trackers. There will be selling from Nikkei 225 (NKY INDEX) trackers and potentially from Mglobal trackers.
- Sony Financial Group (8729 JP) has announced a buyback of up to 1bn shares (13.99% of shares out) over the next year and that will support the stock.
Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- Chery Automobile Co. Ltd. (9973 HK)‘s IPO range is HK$27.75-HK$30.75/share and will raise up to HK$10bn (US$1.3m) if the oversubscription option is exercised, valuing the company at HK$169bn (US$21.7bn).
- The stock should be added to the HSCI Index in December and that will make the stock eligible for inclusion in Southbound Stock Connect.
- There will be no inclusion in global indexes for the next year, but there is a possibility of inclusion in the Hang Seng TECH Index (HSTECH INDEX) in December.
Gold Miners ETF (GDX US): Benchmark Change; 8 Adds, 24 Deletes, US$12.7bn Trade
- There is 1 add for the MarketVector Global Gold Miners Index but the VanEck Gold Miners ETF will buy 8 stocks and sell 24 stocks due to a benchmark change.
- Estimated one-way turnover is 26.8% and the round-trip trade for the ETF is US$12.7bn. There are 23 stocks with over 5x ADV to trade.
- The ETF adds have underperformed the ETF sells in the last month, but a basket of ETF upweights has outperformed a basket of ETF downweights.
MarketVector Vietnam Local Index Rebalance: 4 Adds; 9.5% Turnover; US$112m Trade
- FPT Corp,Vietnam Airlines Jsc, Sacombank and Gelex Electricity Jsc will be added to the MarketVector Vietnam Local Index at the close on 19 September.
- Estimated one-way turnover is 9.5% and that results in a round-trip trade of US$112m. There are a couple of stocks with more than 1x ADV to buy from passives.
- The largest passive inflow will be in Masan Group (MSN VN) following a large increase in the free float for the stock.
LG Electronics India IPO: Big Market Cap, Small Float -> Small Passive Flows
- LG Electronics India (123D IN) is looking to list on the exchanges by selling 101.8m shares at a valuation of US$8.7bn and raising around US$1.3bn in its IPO.
- The new valuation is around 24% lower than the rumoured valuation at the time of the DRHP filing last December.
- The stock will not get Fast Entry to global indices. Inclusion at regular rebalances will commence in June 2026 but flow will be small given the low float.
Tata Capital IPO: Big Listing, Big Valuation, Small Float
- Tata Capital Limited (TATACAP IN) is looking to list on the exchanges by selling up to INR155bn (US$1.75bn) of stock at a valuation of around INR 1,384bn (US$15.6bn).
- The stock will not get Fast Entry to either of the global indices. The earliest inclusion in a global index should take place in June 2026.
- The stock should be added to the Large Cap segment in the AMFI Classification in January and to the Nifty Next 50 Index in March.
Zijin Mining (2899 HK): Where To From Here?
- As Zijin Gold (2259 HK)‘s share price defies gravity, so does Zijin Mining Group Co Ltd H (2899 HK)‘s.
- Full disclosure: I misread the room. I thought Zijin Gold was fully priced at HK$71.59/share. As was Zijin Mining. Zijin Gold is now up 92% and Zijin Mining 20%.
- Zijin Gold currently trades at a 100% premium to peers on forward PER and EV/EBITDA multiples.
[Japan M&A/Activism] Soft99 Plummets, Rebounds, Activist Rebuts, KeePer Lab Holds, MBO Extends
- On 25 September, with the stock trading just below Effissimo’s terms, the Soft99 Corp (4464 JP) Board came out AGAINST the Effissimo proposal 66% higher than the MBO terms.
- The fine print said that the Soft99 deal had enough shares to get over the line assuming Keeper Labs tendered according to agreement due to Board Support. Shares plummeted.
- Effissimo issued a stunning rebuttal which showed Board incompetence/negligence, possible breach of fiduciary duty. Today, MBO Bidco extended, the stock popped, but details are key.
HEW: Watching What Didn’t Happen
- The US government shutdown removes the potential for official statistics to damp dovish concern, raising the likelihood of October’s cut, especially with other weak data.
- EA unemployment’s rise reflected rounding rather than substance. UK national accounts revealed healthy balance sheets, aside from the government, and bullish lending stats.
- Next week’s calendar stays thin with US releases suspended and Europe’s cycle focusing on the following week. The RBNZ, BoT, BSP and Peru announce rates next week.
LG Electronics India IPO: Updates Support the Bull Case
- LG Electronics India (123D IN)/LGEIL, a subsidiary of LG Electronics (066570 KS), aims to raise up to US$1.3 billion through a secondary offering.
- I previously discussed the IPO in LG Electronics India IPO: The Bull Case and LG Electronics India IPO: The Bear Case.
- In this note, I look at the recent updates outlined in the RHP. Overall, the RHP updates are supportive of the bull case.
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