In today’s briefing:
- MSCI India November SAIR: Potential Changes with Big Flow & Impact
- Renault & Nissan – Capital Manoeuvres In the Dark
- SBI Obtains Approval – Has Plan To Buy 0.965% of Shinsei – It Isn’t Strategic, It’s Technical
- KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
- SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
- Socionext IPO Trading – Upsized IPO with Strong Demand. Peers Inched Downwards, but Upside Remains
- Clarifying KRX’s Confusing Heads-Up Designation System for KOSPI 200/KOSDAQ 150 Review
- Pushpay: BGH Resurrects The Catholic Opportunity
- MSCI Korea November SAIR: Potential Deletes Continue to Slide
- Toshiba (6502) – JIP Gets Preferred Bidder Status and We Get The First Price Leak
MSCI India November SAIR: Potential Changes with Big Flow & Impact
- We see 9 potential adds and 2 potential deletes for the MSCI India Index at the November SAIR. There are a few stocks close to the cutoffs.
- Inclusion in the index will require passive trackers to buy 7-14 days of ADV on the stocks. That increases to 18-55 days of delivery volume.
- There appears to be significant pre-positioning on a lot of the potential adds and the shareholding pattern as of end September should provide a better picture.
Renault & Nissan – Capital Manoeuvres In the Dark
- In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
- Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately. But since then? Crickets.
- Over the weekend, we have news talks are coming to a head. My feeling? The results won’t be pretty – a messy agreement which inspires nobody, but probably still works.
SBI Obtains Approval – Has Plan To Buy 0.965% of Shinsei – It Isn’t Strategic, It’s Technical
- SBI Holdings (8473 JP)‘s unit SBI Regional Bank Holdings KK (SBI 地銀ホールディングス株式会社) today announced it had received FSA authorisation to turn the company into a Bank Holding Company.
- There are some technicalities involved. SBI announced it would buy 2.5mm shares of Shinsei on-market to get to 50.05% by end-March 2023. This will disappoint some, but…
- I expect investors should continue to look at the big picture. Technicalities are technicalities. Strategy is strategy. The big picture is unchanged and there isn’t that much room to manoeuvre.
KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
- 90% of the way through the review period of the Kospi 200 Index December rebalance, we see two potential changes to the index. There is another potential inclusion failing liquidity.
- This rebalance is expected to have the lowest turnover as compared to any of the Kospi 200 Index rebalances over the last few years. Partly lower markets, partly no IPOs.
- That said, passive trackers are estimated to need to trade over 10 days of ADV on one of the potential adds and both potential deletes.
SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
- Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
- Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
- We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.
Socionext IPO Trading – Upsized IPO with Strong Demand. Peers Inched Downwards, but Upside Remains
- Socionext (6526 JP) raised around US$463m in its Japan IPO. The IPO consisted of 100% secondary shares.
- Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.
- In this note we will talk about the trading dynamics.
Clarifying KRX’s Confusing Heads-Up Designation System for KOSPI 200/KOSDAQ 150 Review
- The KRX gives three heads-up types: WARNING (illegal trading), ADMINISTRATIVE (insolvency), & ATTENTION (inappropriate accounting). Those losing eligibility are ADMINISTRATIVE (KOSPI 200) and ADMINISTRATIVE + ATTENTION (KOSDAQ 150).
- Those designated as WARNING keep the eligibility for KOSPI 200/KOSDAQ 150 unless delisting is decided. We can find these heads-up designations on the KRX website, which is available in English.
- Osstem is currently an ATTENTION issue, so ineligible at this point. Knotus was designated as a WARNING issue in June and underwent a trade suspension. Nevertheless, it maintains eligibility.
Pushpay: BGH Resurrects The Catholic Opportunity
- Back on the 26 April, church donor management tech play Pushpay Holdings (PPH NZ) announced “unsolicited, non-binding and conditional expressions of interest or approaches from third parties“. No price was mentioned.
- Roughly a month later, BGH Capital and Sixth Street, both existing shareholders, entered into a cooperation agreement with respect to a potential transaction for Pushpay. Again, no price was provided.
- Pushpay has now announced it has received a non-binding proposal. Word on the street this involves BGH. Still, no price was made public. A 30% premium to undisturbed is ~NZ$1.34/share.
MSCI Korea November SAIR: Potential Deletes Continue to Slide
- With a week to the start of the review period, we forecast one inclusion and a lot more deletions for the MSCI Korea Index at the November SAIR.
- The impact from passive fund trading is pretty large on the potential and close deletes while the impact is a lot more muted on the sole potential add.
- There will be pre-positioning on most of the names already and part of that shows up in sharply higher short interest on a few stocks.
Toshiba (6502) – JIP Gets Preferred Bidder Status and We Get The First Price Leak
- Overnight, a few news outlets are running with the story that Toshiba Corp (6502 JP) has granted “preferred bidder” status to the Japan Industrial Partners (JIP)-led consortium bid.
- JIP had originally signed up with public-private fund JIC, forming one of the four bids (the other three being CVC, Bain, and Brookfield) but JIP and JIC split last month.
- “Preferred Bidder status” is just that. It’s not exclusive, but one can read between the lines. But the articles have interesting details, including the first trial ballon price leak.
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