In today’s briefing:
- Taishin (2887 TT)/Shin Kong (2888 TT) Merger: Index Flows in July
- HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added
- NTT DC REIT IPO – Thoughts on Valuation
- KCC Corp: EB Issue of $625 Million Of HD KSOE + KCC Corp and KCC Glass Share Swaps
- FWD Group Holdings (1828 HK): Low Free Float Delays and Limits Global Index Inclusion
- [Quiddity Index] MV Junior Gold Miners Sep25 Rebalance Predictions: Flow Expectations
- Jilin Jiutai Bank (6122 HK): Another Hobson’s Choice
- HEW: Payrolls Waking Up Rates Pricing
- SEBI Vs Jane Street: India’s Most Shocking Index Manipulation Case Yet
- Lens Technology IPO Preview
Taishin (2887 TT)/Shin Kong (2888 TT) Merger: Index Flows in July
- Taishin Financial Holding (2887 TT) and Shin Kong Financial Holding (2888 TT) announced a Merger of Equals in August 2024 and completion is expected on 24 July.
- Taishin Financial Holding (2887 TT) has underperformed its peers over the last 18 months while Shin Kong Financial Holding (2888 TT) has underperformed its peers following the merger announcement.
- There will be passive flows in the merged entity following the completion of the merger and could help reverse some of Taishin Financial Holding (2887 TT)‘s underperformance.
HSCI Index Rebalance Preview and Stock Connect (Sep 2025): Plenty of Recent IPOs Could Be Added
- We see 28 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.
- A lot of the potential adds are very recently listed stocks that have a limited trading history. The low free float could lead to price spikes in the stocks.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
NTT DC REIT IPO – Thoughts on Valuation
- NTT DC REIT (NTTDCR SP) (NDC), a data center REIT, aims to raise up to US$810m 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 company’s past performance in our previous note. In this note, we will talk about valuations.
KCC Corp: EB Issue of $625 Million Of HD KSOE + KCC Corp and KCC Glass Share Swaps
- KCC announced that it is issuing an EB worth $625 million in foreign currency using its stake in HD Korea Shipbuilding & Offshore Engineering as the underlying asset.
- The asset that is used as the underlying asset for the EB is 2.056 million shares of HD Korea Shipbuilding & Offshore Engineering held by the KCC Corp
- We believe this large EB issue by KCC Corp is likely to have a positive impact on KCC Corp but slightly negative impact on HD KSOE.
FWD Group Holdings (1828 HK): Low Free Float Delays and Limits Global Index Inclusion
- FWD Group Holdings (1828 HK) fails to meet the minimum free float thresholds of both Global indices prior to the IPO lock-up expiry.
- The security is expected to be added to Global All-World at the September 2026 review following the 6-month lock-up expiry.
- The security is likely to remain excluded from Global Standard even after the lock-up expiry due to insufficient float cap.
[Quiddity Index] MV Junior Gold Miners Sep25 Rebalance Predictions: Flow Expectations
- The MV Junior Gold Miners index represents the performance of small-cap gold and silver mining companies listed around the world.
- This index is reviewed semi-annually in March/September. During these reviews, names can be added or deleted from the index. We like it because a lot of money tracks it.
- There are several potential ADDs/DELs for the Index Rebal Event in September 2025 but as yet most are Medium Conviction. There are a couple of large capping flows expected.
Jilin Jiutai Bank (6122 HK): Another Hobson’s Choice
- After Jilin Jiutai Bank (6122 HK) was suspended, again, I mused in Jilin Jiutai Bank (6122 HK): Now Is The Time To Be Delisted an expected Offer from Jilin Province Trust.
- Jilin Province has now made a voluntary Offer at HK$0.70/share (~0.2x P/B!), below my HK$0.80/share estimate. Apart from a Scheme-like vote, this Offer has an onerous 90% acceptance condition.
- And IF the Offer fails and IF Jilin Jiutai cannot resume trading, in accordance with Rule 6.01A(2)(b) of the Listing Rules, Jilin Jiutai may be delisted.
HEW: Payrolls Waking Up Rates Pricing
- Dovish rate pricing had been ignoring resilient data until US payrolls delivered a rude awakening. We believe rates remain too dovish relative to reality and equity prices.
- BoE surveys also revealed resilience in defiance of dovish pricing, while the rise in EA unemployment merely matched ECB forecasts and was heavily reliant on Italy.
- Next week’s deadline for US tariffs is the main risk event, as not all countries will likely get an extension. Monetary policy decisions come from the RBA, RBNZ, BNM, and BOK.
SEBI Vs Jane Street: India’s Most Shocking Index Manipulation Case Yet
- SEBI has cracked down on Jane Street Group, a global trading giant, for manipulating the BANKNIFTY index during expiry days using coordinated cash and F&O trades.
- The Group allegedly pushed up prices in morning sessions to create misleading signals, and then profited massively by taking opposite positions in options.
- SEBI estimates illegal gains of INR 43,289 crore in Index Options over a two-year period, primarily through this strategy.
Lens Technology IPO Preview
- Lens Technology is getting ready to complete its IPO in Hong Kong. Lens Technology is planning to raise as much as HK$4.77 billion (US$608 million) in this IPO.
- If the offer size adjustment and overallotment options are exercised, the IPO gross proceeds could increase to HK$6.3 billion (US$803 million).
- In 2024, the company held a 13% share of the global market for precision structural parts and modules for consumer electronics and a 20.9% share of smart vehicle interaction systems.
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