In today’s briefing:
- Xero (XRO AU): Index Flows Following the Capital Raise
- FWD Group (1828 HK): Offering Details & Index Entry Timeline
- A/H Premium Tracker (To 27 June 2025): “Beautiful Skew” Continues as SB Buys, AH Premia Fall Back
- KRX Semicon Index Sep Rebalance — Watch Closely
- Merger Arb Mondays (30 June) – Toyota Industries, Santos, Pointsbet, Dickson, HKBN, OneConnect
- Saint Bella IPO (2508.HK): Pricing and Post-IPO Performance, Wild Price Swings Could Be Short-Lived
- HKBN (1310 HK): China Mobile Inches Closer Toward Precondition Satisfaction
- (Mostly) Asia-Pac M&A: Santos, PointsBet, New World Resources, SmartPay, SBI Sumishin Net Bank, Humm
- Anjoy Foods Group HK Offer: Value Stock or Value Trap? Key Facts, Financials and Valuation
- FWD Group Holdings (1828 HK): Low Free Float Delays and Limits Global Index Inclusion
Xero (XRO AU): Index Flows Following the Capital Raise
- Xero Ltd (XRO AU) has entered into a binding agreement to acquire Melio Limited for an upfront cash consideration of US$2.5bn in cash and Xero Ltd (XRO AU) stock.
- The cash consideration is being funded mainly through a fully underwritten A$1.85bn (US$1.2bn) institutional placement. There is also a non-underwritten Share Purchase Plan to raise around A$200m.
- Given the large size of the institutional placement, there will be an increase in index shares and the passive buying that follows should mop up over 20% of the placement.
FWD Group (1828 HK): Offering Details & Index Entry Timeline
- FWD Group Holdings (FWD HK) is looking to raise up to HK$3.99bn (US$508m) in its IPO, valuing the company at HK$48.82bn (US$6.22bn).
- Cornerstone investors will take up more than half the base offering and that will delay index inclusion to well into 2026.
- FWD Group Holdings (FWD HK) could be added to the HSCI Index and Southbound Stock Connect in December. That could bring some buying into the stock from mainland investors.
A/H Premium Tracker (To 27 June 2025): “Beautiful Skew” Continues as SB Buys, AH Premia Fall Back
- AH premia gives back previous week gains but the “beautiful skew” of wide premia converging more than narrow premia continues. It has paid to be long wide H discounts.
- It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers. Technical issue delayed this week’s Monitor.
KRX Semicon Index Sep Rebalance — Watch Closely
- 67 semi names screen into TMI Large-Mid; with stable churn, they’re a solid base for the Sept rebalance. Filter by ADTV and mkt cap to get likely basket.
- Last year’s Sept rebalance saw wild moves, especially in the week prior, driven by low visibility from the non-public BMI universe, which amped up uncertainty and volatility.
- This year’s TMI-based rebalance may see more front-loading and smoother flows, but with low market awareness and no playbook yet, chunky moves are still on the table.
Merger Arb Mondays (30 June) – Toyota Industries, Santos, Pointsbet, Dickson, HKBN, OneConnect
- I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Santos Ltd (STO AU), Seven & I Holdings (3382 JP), Ainsworth Game Technology (AGI AU).
- Lowest spreads: Bright Smart Securities And (1428 HK), New World Resources (NWC AU), Avjennings Ltd (AVJ AU), Hainan Meilan International Airport (357 HK), Toyota Industries (6201 JP).
Saint Bella IPO (2508.HK): Pricing and Post-IPO Performance, Wild Price Swings Could Be Short-Lived
- Saint Bella, a leading postpartum care and recovery group in China, priced its upsized IPO at fixed offer price of HK$6.58 per share.
- The offer size adjustment option has been fully exercised. The company issued and allotted 14,313,000 additional offer shares.
- Saint Bella sold 109,733,000 shares and raised net proceeds of ~HK$630M or ~$80M. The stock jumped ~49% on first day as a public company and peaked at HK$11.00 per share.
HKBN (1310 HK): China Mobile Inches Closer Toward Precondition Satisfaction
- China Mobile (941 HK) has secured all PRC regulatory approvals for its HKBN Ltd (1310 HK) offer. The remaining precondition is approval from the HK Communications Authority.
- I Squared, while technically still in the race, is rapidly running out of time. It needs to announce an offer before China Mobile opens its offer for acceptance.
- Despite the HKBN CEO’s comments that the China Mobile offer is not good enough, China Mobile has no pressing need to bump if a competing offer fails to materialise.
(Mostly) Asia-Pac M&A: Santos, PointsBet, New World Resources, SmartPay, SBI Sumishin Net Bank, Humm
- I tally 43 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
- Two new deal were discussed on Smartkarma this week: Humm Group (HUM AU) and VIOL (335890 KS).
- Key updates/news took place onSantos (STO AU), PointsBet (PBH AU), New World Resources (NWC AU), SmartPay (SMP AU), Dickson Concepts (113 HK), and SBI Sumishin Net Bank (7163 JP).
Anjoy Foods Group HK Offer: Value Stock or Value Trap? Key Facts, Financials and Valuation
- Anjoy Foods Group (2648 HK), already listed in Shanghai, is offering 40 million shares in Hong Kong to raise up to HKD2.6 billion (USD335 million); Offer closes today, June 30th.
- HK offer is priced at a decent discount to A share price and at valuation multiples that are aligned with its peer group and business fundamentals.
- With limited organic growth and little evidence of a strategic pivot to higher-value offerings, Anjoy Foods lacks a compelling long term investment case.
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.
💡 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 Analytics and News
- ✓ Events & Webinars
