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: Global Index Inclusions Later This Year + A Kicker
- SK Square: Time to Take Profits + Why Are There Holdco Discounts in the First Place?
- KOSPI Size Indices: Overlaps Between Active & Passive Flows
- US Claims Continue To Cruise Calmly
- Johns Lyng (JLG AU): PEP’s A$4/Share Offer Looks Light
- Basis for the 5 Trillion Won Moving Money Estimate for KOSPI Size Index Migration Event
- HEW: Kicked Can Lands Steady
- [Quiddity Index Jul25] KOSPI 200 Leaderboard for Dec25 Rebal: 4 In/Out But Too Early to Bet
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: Global Index Inclusions Later This Year + A Kicker
- NTT DC REIT (NTTDCR SP) could raise up to US$824m in its IPO if the overallotment option is exercised and the stock is expected to start trading on 14 July.
- Cornerstone investors will own 16.8% of shares out following the IPO but there is no lock-up on these shares. The sponsor will own 20%/25% depending on whether overallotment is exercised.
- NTT DC REIT (NTTDCR SP) should be added to the smallcap segment of global indices in November and December while inclusion in local indices will take a lot longer.
SK Square: Time to Take Profits + Why Are There Holdco Discounts in the First Place?
- We are changing our View on SK Square (402340 KS) to Negative.
- The major reason for this change is due to the surge in its share price along with lack of upside relative to its NAV.
- Regarding SK Square, our holdco discount remains 40%. However, if there are real, positive continued efforts to improve corporate governance, this holdco discount could be reduced further.
KOSPI Size Indices: Overlaps Between Active & Passive Flows
- The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
- Nearing halfway in the review period, we forecast 53 migrating stocks. Among new listings, 1 stock could be added to LargeCap, 3 to MidCap and 1 to SmallCap.
- Two potential downward migrations could be deleted from a global index in August. The new listing that is a potential LargeCap add could be added to a globalindex in September.
US Claims Continue To Cruise Calmly
- Rising continuing claims in recent months have been heralded as a canary warning of belated suffering in the labour market. But the problem is ending before it ever began.
- US employment growth is still aligned with its long-run average, and the unemployment rate is unchanged on the year. Openings and quits are also steady with averages.
- The Fed needs excess disinflation to cut, and we believe this won’t materialise. That also avoids demand and policy pressure on the BoE and ECB, helping them hold rates.
Johns Lyng (JLG AU): PEP’s A$4/Share Offer Looks Light
- A month ago, Integrated building services provider Johns Lyng (JLG AU) fielded a non-binding Offer, by way of a Scheme, from Aussie fund manager Pacific Equity Partners (PEP).
- JLG and PEP have now entered into a SID at A$4/share, a 77% premium to undisturbed. CEO Scott Didier, JLG’s largest shareholder with 17.64%, is supportive.
- A shareholder vote is expected to take place in October, with the transaction potentially wrapping up in November. This may need more gruel.
Basis for the 5 Trillion Won Moving Money Estimate for KOSPI Size Index Migration Event
- NPS allocates ~6% of its 76T won consignment book to mid/small-cap, with ~3.6T effectively benchmarked to the KOSPI Mid Cap Index via its hybrid BM.
- Publicly raised funds add ~1.1T won across 358 products benchmarked to KOSPI Mid Cap, bringing total estimated exposure (incl. NPS) to ~4.7T won.
- Including other pensions and off-radar private funds, total KOSPI Mid Cap exposure rounds out to ~5T won — the base case local street uses for passive impact modeling.
HEW: Kicked Can Lands Steady
- Trump kicked the tariff can a few weeks to 1 August, leaving other policymakers and markets in a wait-and-see mode. Pricing was little changed amid little news elsewhere.
- We thematically explored the market implications of resilience rolling cuts later, how healthy the US labour market data is, and dug into the UK’s political problems.
- Next week’s UK labour market and inflation data are critical ahead of an August BoE decision we believe remains finely balanced. US and EA inflation are other highlights.
[Quiddity Index Jul25] KOSPI 200 Leaderboard for Dec25 Rebal: 4 In/Out But Too Early to Bet
- KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the KRX. Here we look at Dec25 index rebal.
- We expect up to 6 ADDs and 6 DELs in the KOSPI 200 index during the December 2025 index rebal event based on the latest available data.
- This is up from 4 ADDs and 4 DELs last month, but there is a lot of potential sector threshold borderline volatility to change both the number and the names.
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