In today’s briefing:
- Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated
- HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
- Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
- CATL A/H Listing – Thoughts on A/H Premium
- Korea Short Selling: What Happened on Day 1?
- ENN Energy (2688 HK): This Is An Avoid
- AMFI Stock Reclassification Preview (Jun 2025): Plenty of Change With More Likely
- Quiddity Leaderboard TDIV Jun25: US$2.1bn One-Way; 17% Turnover; Sector-Neutral Trade Ideas
- HKBN (1310 HK): I Squared Inches Closer to a Competing Offer
- Makino Milling Machine (6135 JP): Nidec Launches Its Offer
Trump Team’s Weird Tariff Math – Not Meant to Be Negotiated
- For weeks, if not months, the world has been wondering what the “reciprocal tariffs” would be, and what the logic would be behind them.
- There is talk of VAT, and NTBs, and huge tariff step-ups after quotas are exceeded (US exports of milk and cheese to Canada – high tariffs, but quotas not exceeded).
- But a quick check of the math on the Trump Executive Order and Annex I tells you the logic is different than what everyone expected.
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
- China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
- In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
- Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .
Northern Star’s Acquisition of De Grey Mining: The Many Index Implications & Flows
- Northern Star Resources (NST AU)‘s acquisition of De Grey Mining (DEG AU) is expected to complete in the next 3 weeks.
- There will be an ad hoc inclusion to the S&P/ASX 200 (AS51 INDEX) and passive buying in Northern Star Resources (NST AU) from a bunch of trackers of different indices.
- The acquisition brings Northern Star Resources (NST AU) close to inclusion in the S&P/ASX 20 Index, but it’s not there yet.
CATL A/H Listing – Thoughts on A/H Premium
- Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
- CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
- We have looked at the company’s past performance in our earlier notes. In this note, we talk about its recent updates and provide our thoughts on valuations.
Korea Short Selling: What Happened on Day 1?
- Short notional ticked higher on the KOSPI and KOSDAQ markets and is expected to continue increasing over the next few months.
- Since the resumption of short selling, foreign holdings of Korean equities have increased from 29.26% to 29.3%.
- The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) to KOSDAQ 150 Index (KOSDQ150 INDEX) ratio has stayed stable over the last 3 trading days.
ENN Energy (2688 HK): This Is An Avoid
- Back on the 26th March, ENN Energy (2688 HK) announced a cash/scrip Offer from ENN Natural Gas (600803 CH), its largest shareholder.
- Investors hoping for a clean (er) exit, or one where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name.
- The Offer pivots on where the newly-listed H-shares trade. The IFA’s assessment on the theoretical value of these H-shares is unrealistic.
AMFI Stock Reclassification Preview (Jun 2025): Plenty of Change With More Likely
- We currently forecast 10 stocks moving from MidCap to LargeCap, 10 stocks moving from LargeCap to MidCap, 9 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.
- From the new listings, 2 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
- There are multiple stocks among the AMFI changes that will be changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) and/or Nifty Midcap 150 Index in September.
Quiddity Leaderboard TDIV Jun25: US$2.1bn One-Way; 17% Turnover; Sector-Neutral Trade Ideas
- The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
- In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the June 2025 index rebal event.
- We expect five changes for the TDIV index. On top of that, there will be capping flows too.
HKBN (1310 HK): I Squared Inches Closer to a Competing Offer
- Today’s HKBN Ltd (1310 HK) monthly update notes that I Squared has completed due diligence and is finalising the terms of a possible preconditional offer.
- The I Squared bid will likely be a modest premium to the China Mobile offer with a 50% minimum tendering condition. The key unknown is securing regulatory approvals.
- China Mobile (941 HK) will first react to an I Squared offer by maintaining terms. However, regardless of whether I Squared secures regulatory approvals, it is likely to match terms.
Makino Milling Machine (6135 JP): Nidec Launches Its Offer
- Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
- The offer was launched despite securing all regulatory approvals and the Board’s postponement request. The launch could also be an attempt to thwart a competing proposal.
- Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.
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