In today’s briefing:
- Swiggy (SWIGGY IN): US$7.6bn Lock-Up Expiry & Index Inclusion
- Solactive Global Lithium Index Rebalance: Passive Flows Next Week
- Evolution Mining (EVN AU): Global Index Inclusion in May as Gold Rallies
- IDX30/LQ45/IDX80 Index Rebalance: Few Changes
- Fujitsu (6702) – Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳
- [Quiddity Index Apr25] KOSPI 200 Leaderboard Jun25: 6 ADDs and 6 DELETEs
- YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid
- Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square
- HLB Merger Arb Setup: How Cancellation Risk Could Lead to Extra Profits
- SK Telecom’s Block Deal Sale of 10.8 Million Shares of Kakao Corp
Swiggy (SWIGGY IN): US$7.6bn Lock-Up Expiry & Index Inclusion
- Swiggy (SWIGGY IN) listed in November 2024 and around 85% of the shares outstanding (US$7.6bn) will unlock on 13 May.
- Nearly 80% of the shares that unlock are held by pre-IPO PE/VC investors and they are 100% in the money in most cases. Expect the selldown to commence soon.
- Swiggy (SWIGGY IN) should be added to one global index in June, while inclusion in the other global index will require a small price increase or selling from PE/VC investors.
Solactive Global Lithium Index Rebalance: Passive Flows Next Week
- Solactive has announced the review results for the Global Lithium Index. There are no constituent changes for the index but there will be capping changes for a few stocks.
- Estimated one-way turnover is 10.8% and will result in a round-trip trade of US$208m. There are some stocks with over 0.5x ADV to trade.
- The index has been in a secular downtrend over the last few years and there have been big redemptions from ETFs tracking the index.
Evolution Mining (EVN AU): Global Index Inclusion in May as Gold Rallies
- Evolution Mining‘s stock price has moved higher over the last year as Gold has gone on a big run. The increased market cap should result in a global index inclusion.
- Evolution Mining (EVN AU) has performed in line with its peers over the last year and trades in line with the group on most valuation parameters.
- Positioning has jumped in Evolution Mining (EVN AU) and its peers over the last couple of months. The index inclusion could result in outperformance over the next few weeks.
IDX30/LQ45/IDX80 Index Rebalance: Few Changes
- There is 1 constituent change for the IDX30 Index and 2 changes for the IDX80 Index to be implemented at the close on 30 April.
- The largest passive flows are expected in Bank Rakyat Indonesia, Bank Jago Tbk PT, Bank Mandiri Persero, Bank Tabungan Negara Persero, Adaro Energy and Bukalapak.com PT Tbk.
- There are only 4 days to implementation, so there could be relatively big moves on the changes to the IDX30 Index.
Fujitsu (6702) – Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳
- Fujitsu Earnings. Revenues +2.1%, OP +77.5%, Pretax +65.1%, Net -13.0% (basis effect from FY23 one-offs). Forecast? Revs -2.8%, OP/adj +35.8%/+17.2%, Net/adj +77.4%/+3.7%. All guided measures shy vs the Street consensus.
- The company presented a progress update on its Medium-Term Management Plan. Core profits are better. Things are improving.
- The company also announced a big 11-month ¥170bn buyback. Last year’s was ¥180bn (completed 24 March). Worth checking out the details (and our brand-new buyback tool)
[Quiddity Index Apr25] KOSPI 200 Leaderboard Jun25: 6 ADDs and 6 DELETEs
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
- In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual review in June 2025.
- We expect six ADDs and six DELs for the KOSPI 200 index during this index rebal event based on the latest available data.
YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid
- Yageo Corporation (2327 TT) bid ¥4,300 for Shibaura Electronics (6957 JP). Minebea Mitsumi (6479 JP) overbid at ¥4,500. YAGEO overbid Minebea at ¥5,400 on 17 April (expected to start 7-May)
- Apparently, YAGEO was a bit upset by the public comments by Shibaura regarding custom/mass-market/online different ways of doing business. YAGEO responded with receipts. Shibaura will respond later.
- On the 22nd, Minebea noted they would delay their intended 23rd start date. Now they have more irrevocables. In the end, I expect YAGEO’s, not Minebea’s, top price defines this.
Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square
- In a rare move, Jardine Matheson (JM SP)-controlled Hongkong Land (HKL SP) has sold nine floors (147,025 square feet) of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
- HKL plans to use the proceeds to provide enhancements to the property sold, the reduction of net debt; and for a share buyback. Shares are up 9% as I type.
- HKL is focussed on divesting US$4bn to US$6bn of its balance sheet assets in the next three years. HKL’s CEO Michael Smith: “Recycling capital is our top priority right now“.
HLB Merger Arb Setup: How Cancellation Risk Could Lead to Extra Profits
- We go long on HLB LS, short on HLB Inc, and close the short once HLB LS converts. If the deal falls through, there’s potential for extra profits.
- The view that the merger’s worse for HLB LS is gaining support, making it likely the spread could go negative, though there’s risk, the chances are pretty high.
- The 4% spread is the floor for arb profit, and cancellation risk could add extra gains. This angle deserves serious consideration right now.
SK Telecom’s Block Deal Sale of 10.8 Million Shares of Kakao Corp
- Prior to market open on 25 April, SK Telecom announced that it plans to sell 10.8 million shares of Kakao, representing 2.4% of outstanding shares in a block deal sale.
- The sale of Kakao Corp shares and using the proceeds to further acquire shares in SK Broadband and invest in AI businesses is a solid move by SK Telecom.
- We believe that this trading down gap of Kakao Corp is likely to be covered soon in the next several days/weeks so it represents a short term buying opportunity.
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