In today’s briefing:
- China A50 ETFs Rebalance Preview: Three Changes in September
- S&P/ASX Index Rebalance Preview (Sep 25): Potential Changes if Methodology Is Updated
- BoE: Policy Mistake Diagnosis
- Quiddity Leaderboard CSI 300/500 Dec25: Trade Moving in the Right Direction; Large Flows Expected
- [Japan M&A] Minebea Matches YAGEO for Shibaura Elec (6957) At ¥6,200. Presses on Early Cashout
- Kangji Medical (9997 HK): Q&A With The FA
- UK: Slowdown Softened In Q2
- HMM KRW 2T Tender: Full Pro-Rata Risk Assessment
- Quiddity Leaderboard ChiNext & ChiNext 50 Dec25: ~US$900mn Combined Flows One-Way; New Pair Trades
- [Japan M&A] Founder, KEPCO, Try ¥2,750 Bain-Led MBO on Rezil (176A). Light Given Growth – Bumpity?
China A50 ETFs Rebalance Preview: Three Changes in September
- Nearing the end of the review period for the September rebalance, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK).
- WuXi AppTec, Zhongji Innolight and BeiGene could replace China United Network, NARI Technology and China National Nuclear Power in the ETF at the close on 19 September.
- Passives will need to trade 0.1-0.7x ADV in the forecast changes. The forecast adds have massively outperformed the forecast deletes over the last 4 months.
S&P/ASX Index Rebalance Preview (Sep 25): Potential Changes if Methodology Is Updated
- S&P DJI have proposed methodology changes to the S&P/ASX family of indices to enhance representativeness and more quickly reflect changing market conditions. The consultation conclusions could be announced next week.
- The updated methodology could lead to 51 changes across the family of indices with implementation on 19 September. There will be a large impact on a number of stocks.
- The forecast adds have outperformed the forecast deletes over the last several months and near-term performance has been spectacular for the S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index changes.
BoE: Policy Mistake Diagnosis
- Inflation expectations have been persistently too high, while productivity trends poorly, driving wage and price inflation forecasts to grind higher in recent years.
- The BoE’s cutting cycle contributed to reversing the trend decline in expectations, and in turning a slight overshoot into a massive one, with a 3.2pp revision since Feb-23.
- We forecasted this excess for these reasons, so it was predictable and therefore a policy mistake to cut so soon. Further surprise should prevent the MPC from cutting again.
Quiddity Leaderboard CSI 300/500 Dec25: Trade Moving in the Right Direction; Large Flows Expected
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2025.
- Currently, we see 10 ADDs/DELs for the CSI 300 index and 49 ADDs/DELs for the CSI 500 index.
[Japan M&A] Minebea Matches YAGEO for Shibaura Elec (6957) At ¥6,200. Presses on Early Cashout
- After three months of NOT matching YAGEO’s bid for Shibaura Electronics (6957 JP) at ¥6,w00 as YAGEO’s proposal continues its long plod through FEFTA review, Minebea-Mitsumi has now matched ¥6,200.
- Key is that their bid closes before the indicative deadline for YAGEO to receive word on FEFTA approval. They are hoping this bid mollifies the irrevocables and everyone else.
- But if YAGEO cares, it could bump to ¥6,300 tomorrow and extend its tender offer which closes on Monday. But the put option is now struck higher, which de-risks this.
Kangji Medical (9997 HK): Q&A With The FA
- On the 12th August, Kangji Medical (9997 HK) announced an Offer, by way of a Scheme, from a consortium led by TPG and Qatar Investment Authority, together with the founders.
- The 9.9% premium to last close was less than ideal. A change of control premium (30%+) is arguably more commonplace in Asia-Pac. However, the Offer Price is a four-year high.
- I had a number of questions concerning the transaction, and managed to secure a one-on-one with the FA to the Offeror earlier today.
UK: Slowdown Softened In Q2
- June’s remarkable rebound compounded the resilience revealed by April’s upwards revision, which also broke flimsy fundamental stories blaming tariffs for a slowdown.
- IP no longer declined in April, but the broader growth profile still matches the residual seasonality that spuriously drives GDP dynamics in our forecast. H2 will be weaker.
- The BoE discounts headline GDP volatility without blaming seasonality, so another surprisingly strong quarter will be hard for hawks to ignore, reducing the rate cut risk.
HMM KRW 2T Tender: Full Pro-Rata Risk Assessment
- Watch next Monday’s premium and the share slice we can grab—these will drive hedge sizing with futures or other plays.
- Premium sits in the late 10% range, above expectations; HMM’s float is tight, with 80%+ effectively locked by KDB, KOBC, NPS, and passive holders.
- The tender pool is capped at ~15% of shares; with KDB taking 3–3.5%, about 4.5–5% remains available for the market.
Quiddity Leaderboard ChiNext & ChiNext 50 Dec25: ~US$900mn Combined Flows One-Way; New Pair Trades
- The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- We see 5 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event.
[Japan M&A] Founder, KEPCO, Try ¥2,750 Bain-Led MBO on Rezil (176A). Light Given Growth – Bumpity?
- To my knowledge, this may be the first Tender Offer takeout proposal on a “new ticker.” Rezil (176A JP) was listed just 16mos ago.
- This takeout is done on a highish-growth stock at 11.7x 1yr forward EV/EBITDA. It’s not expensive, but they have ~60%. BUT… there’s another Potential Player who may have Big Thoughts.
- Slightly long-dated, small-cap, likely to be illiquid. Watch how it trades early for hints.
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