In today’s briefing:
- The BIG March 2023 “Wednesday Thursday Trade”
- S.M. Entertainment: Proration Musings
- S&P/ASX Index Rebalance Preview: Changes from Now to June
- Rakuten Bank (5838 JP) IPO: Listing in April, TPX Inclusion in May, MSCI SC in August
- India: AMFI Stock Reclassification Preview (June 2023)
- Rakuten Bank (5838 JP) – Another Net-Bank IPO, This One With TOPIX and Other Index Inclusions
- Japan Banks: Markets Overreact to SVB’s Collapse
- MBK/Unison Launch ANOTHER Tender on Osstem Implant (048260 KS) To Squeeze Out Minorities
- MBK/Unison Capital Announces a Second Tender Offer for Osstem Implant to Take It Private
- ASICS (7936) | Running Is Recession Proof
The BIG March 2023 “Wednesday Thursday Trade”
- Every year it’s the same trade. But it isn’t really. But it kinda is. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
- But, ceteris paribus, it is still possibly a ¥1,580,876,450,407 buying spree to take place on one day into the close later this month. Or something close to it.
- And for a two-day period, over the last ten years, the average return is 1.60% on these two days with a 9:1 win ratio. Lots of angles here.
S.M. Entertainment: Proration Musings
- After HYBE (352820 KS) conceded to Kakao Corp (035720 KS) earlier this month, S.M.Entertainment Co (041510 KS)‘s shares have declined 23%.
- Kakao’s Partial Offer of ₩150,000/share closes on the 26 March.
- Unadjusted proration is 36.8%, conservatively rising to 48.5%. It may settle at 61% if HYBE maintains its position – but that is probably a tad optimistic.
S&P/ASX Index Rebalance Preview: Changes from Now to June
- There could be an addition to the S&P/ASX 100 Index and S&P/ASX 200 (AS51 INDEX) in April following OZ Minerals Ltd (OZL AU)‘s acquisition by BHP Group Ltd (BHP AU).
- Then there could be another change for the S&P/ASX 200 (AS51 INDEX) at the regular rebalance in June.
- Passive trackers will need to trade between 4.5-18 days of ADV on the potential adds/ deletes. Short interest has started to increase on a couple of stocks.
Rakuten Bank (5838 JP) IPO: Listing in April, TPX Inclusion in May, MSCI SC in August
- Rakuten Bank (EBANKZ JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 21 April.
- News reports indicate a raise of US$800mn (JPY 106.8bn) at the mid-point of the IPO range, valuing the company at JPY 305bn (US$2.3bn).
- The stock should be added to the TPX INDEX at the close on 30 May where trackers will need to buy over 14% of the stock issued in the IPO.
India: AMFI Stock Reclassification Preview (June 2023)
- Nearly halfway through the review period, we see 10 stocks moving from MidCap to LargeCap and vice versa, and 9 stocks moving from SmallCap to MidCap and vice versa.
- Financials are poised to be the biggest gainers in the reshuffle with 6 stocks moving from MidCap to LargeCap and 5 stocks moving from SmallCap to MidCap.
- Over the last 6 months, stocks expected to migrate upward have outperformed stocks that are expected to migrate downward., though there has been a downward drift this year.
Rakuten Bank (5838 JP) – Another Net-Bank IPO, This One With TOPIX and Other Index Inclusions
- Today, Rakuten (4755 JP) and Rakuten Bank (5838 JP) announced that Rakuten Bank had received TSE approval to list (English) on TSE Prime, with expected listing date 21 April 2023.
- This had been in the works since July 2022, and they selected advisors in September 2022. The low end of the offer price range seems attractive. More diligence needed.
- There will be index inclusions. Unlike SBI Sumishin Net Bank (7163 JP) which is going to TSE Standard, Rakuten Bank is going to Prime.
Japan Banks: Markets Overreact to SVB’s Collapse
- Following the collapse of SVB and Signature Bank last week, Japan’s big four banks have fallen by around 15% due to their exposure to US government bonds.
- However, the Japanese banks have managed the interest rate risk far better than the collapsed US banks and therefore, we feel the price drop is unwarranted.
- With Japan likely to scrap its zero rates policy, we think this could be a rather intriguing opportunity to make generous gains on the long side in Japan’s banking sector.
MBK/Unison Launch ANOTHER Tender on Osstem Implant (048260 KS) To Squeeze Out Minorities
- As discussed in MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI, at end-Jan, they launched a deal to get a minimum of 15.4%.
- They ended up getting 61.16%. That left 10.6% of shares out in unaffiliated hands.
- Now they have launched another tender offer to buy the remaining at the same KRW 190k price. There is no minimum. Straight simple risk arb.
MBK/Unison Capital Announces a Second Tender Offer for Osstem Implant to Take It Private
- MBK/Unison Capital consortium announced a second tender offer for Osstem Implant (048260 KS) today in order to take the company private.
- The tender offer price is 190,000 won per share, which is the same price as the first tender offer price.
- The number of shares for the tender offer is 1,654,916, accounting for 10.62% of the outstanding shares.
ASICS (7936) | Running Is Recession Proof
- Good news from Nike’s Q3 report, which bodes well for Asics March quarter
- Why was Nike’s stock down? Margins were down 330bps on inventory mark downs
- Running is recession proof according to the footwear makers themselves
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
