Event-Driven Archives | Page 40 of 187 | Smartkarma

On Friday 15 November, KKR announced it would launch KKR Tender2 to buy the rest of FujiSoft not purchased in KKR Tender1. Their new price is ¥1 higher than Bain’s.
Fuji Soft Inc (9749 JP) announced (J) it supported the KKR2 Tender and rejected the Bain TOB Proposal. KKR1 shareholders are “made whole” at ¥9,451/share. Minimum is 53.22%.
The document, however, is a Governance Disaster – an absolute shambles, effectively gaslighting investors at every turn. And now investors can see it was problematic from the start.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade

Using data from the close on 15 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 16.9% and a one-way trade of TWD 57.5bn (US$1.77bn).
Short interest is at the highs in most forecast deletes, while the trend is mixed among the potential inclusions.

7&I (3382) – What If… A Modest Proposal

A lot of the talk around the news that Ito family scion Ito Junro had proposed to Seven & I Holdings (3382 JP) an MBO was about thwarting Alimentation Couche-Tard.
Several mentioned that this bid – seemingly uncompetitive at the moment – would make ACT back down. I discussed the bid and its repercussions here.
Here I suggest an alternate solution which might get everyone what they want.

Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional

On its first closing date on 15 November, Xingda International (1899 HK) declared the Chairman’s offer unconditional as the offeror and concert parties represented 60.76% of outstanding shares.
The result was surprising. The IFA opined that the offer was not fair or reasonable, and the independent Board recommended that the shareholder not accept it.
The CCASS movements suggest that the offer was declared unconditional mainly because friends and family supported the Chairman’s offer. The gross/annualised spread is 1.6%/92.6%.

Merger Arb Mondays (18 Nov) – Henlius, GAPack, Xingda, Seven & I, Fuji Soft, NEC Networks, Macromill

We 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: Renewable Japan (9522 JP), Shanghai Henlius Biotech (2696 HK), Macromill, Inc (3978 JP), Seven & I Holdings (3382 JP), Canvest Environmental Protection Group (1381 HK).
Lowest spreads: Nec Networks & System Integr (1973 JP), Net One Systems (7518 JP), Avarga Ltd (AVARGA SP), T Gaia Corp (3738 JP), Nishimoto (9260 JP), Elematec Corp (2715 JP).

Malaysia Airports (MAHB MK): A Firm Offer (Finally)

Talk about cutting it fine. On the pre-conditional long stop date, the Gateway Development Alliance has now made a firm Offer for Malaysia Airports Holdings (MAHB MK) at RM11/share.
The consortium, led by Khazanah Nasional’s subsidiary UEM Group Bhd and EPF, together with the Abu Dhabi Investment Authority and Global Infrastructure Partners, collectively hold 41.22%.
This is a Tender Offer with a 90% acceptance threshold. “The Joint Offerors reserve the right to revise the level of the Acceptance Condition to a lower level“.

KLCI Index Rebalance Preview: One High Probability Change; One at the Cusp

There is a high probability of Gamuda Bhd (GAM MK) replacing Genting Malaysia (GENM MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) in December.
99 Speed Mart Retail Holdings (99SPD MK) is a close add and needs small outperformance over the next week to be added. That could see Genting Bhd (GENT MK) deleted.
Passive funds benchmarked to the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) will need to buy 0.3-0.75x ADV on the potential adds and sell 0.9-1.3x ADV on the potential deletes.

Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?

By Xinyao (Criss) Wang

PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to “exit”.
Privatizing PAGD at low price and integrating it into the Ping An Group’s system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.
Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.

Taiwan Top 50 ETF Rebalance Preview: Shippers Sailing Back Into Indices

Wan Hai Lines (2615 TT) and Yang Ming Marine Transport (2609 TT) are currently in contention to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in December.
Passive trackers will need to trade around 0.5x ADV in the inclusions while impact on the forecast deletes is between 0.36-2.2x ADV.
Short interest has decreased and is near the lows for the forecast adds while short interest has been increasing in the forecast deletions.

Xingda (1899 HK): Go Figure As Offer Turns Unconditional

Back on the 24 September, tyre component manufacturer Xingda International (1899 HK) announced a zero-premium $1.30/share cash Offer from Liu Jinlan, chairman and executive director.
Liu and concert parties held 37.03%, and the Offer was conditional on a 50% acceptance hurdle. The IFA concluded the Offer was not fair.
Surprisingly, 23.73% of shares out have tendered, and the Offer is now unconditional in all respects. The Offer will remain open to acceptances until the 29th November.

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Nov 17

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought, High-Div SOEs Sold or Ignored, Again
China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross
Weekly Deals Digest (17 Nov) – Seven & I, Fuji Soft, Nishimoto, Macromill, CPMC, KEPCO, SF Holding
FXI Rebalance Preview: One Change in December as Shorts Spike
A/H Premium Tracker (To 15 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors
Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry
(Mostly) Asia-Pac M&A: Agro Kanesho, Nishimoto, Chita Kogyo, Macromill, Silk Logistics, Avarga, MAHB
Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha
China A50 ETFs Rebalance Preview: One Change to Close Out the Year

HK Connect SOUTHBOUND Flows (To 15 Nov 2024); Tech Bought, High-Div SOEs Sold or Ignored, Again

SOUTHBOUND gross trading activity still high. Net buying very strong. 7 names traded more than US$1bn. Last week I said tech would continue to be bought. It was.
The trend continues to net sales of ETFs and high div SOEs. Net buying is very, very broad-based. Tracker Fund of Hong Kong (2800 HK) is batted around like crazy.
I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US.

China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross

By Xinyao (Criss) Wang

The new round of national TCM decoction pieces VBP has started. We think the overall price reduction would be relatively mild, and the impact on related TCM enterprises is limited.
The NHSA will vigorously promote the expansion of TCM VBP, which is another challenge for TCM injections. But the impact on exclusive TCM varieties and innovative TCM injections is smaller.
CR Boya has completed the acquisition of 100% equity of Green Cross and has included it in the scope of consolidated financial statements starting from November. Future M&As will continue.

Weekly Deals Digest (17 Nov) – Seven & I, Fuji Soft, Nishimoto, Macromill, CPMC, KEPCO, SF Holding

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: S.F. Holding (002352 CH) is premarketing an H Share listing to raise US$1.0-1.5 billion, Kansai Electric Power (9503 JP)‘s US$3.5 billion placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Fuji Soft Inc (9749 JP), Nishimoto (9260 JP), Macromill, Inc (3978 JP), Agro Kanesho (4955 JP), Renewable Japan (9522 JP), CPMC.

FXI Rebalance Preview: One Change in December as Shorts Spike

With one trading day left in the review period, we expect one change with China Merchants Securities Co Ltd (H) (6099 HK) replacing Yankuang Energy Group (1171 HK) in December.
Capping will result in selling for Meituan (3690 HK) and buying in Tencent (700 HK) and Alibaba Group Holding (9988 HK).
Short interest has jumped on both stocks, but the increase is far higher in China Merchants Securities Co Ltd (H) (6099 HK) compared to Yankuang Energy Group (1171 HK).

A/H Premium Tracker (To 15 Nov 2024): AH Premia Rise Sharply; Hs Shellacked Vs As In Most Sectors

Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.
Stocks in HK and mainland markets fell heavily with HK’s main indices down 6-7% and China’s blue chip indices down 3.3-3.6% (CSI 500 – 4.8%).
Within H/A Pairs, after outperforming the HK/mainland spread for weeks, spreads got shellacked. Worst week in a long time (-3.7%), perhaps on the back of “disappointing” lack of stimulus measures.

Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry

KKR & Co (KKR US) has secured the Fuji Soft Inc (9749 JP) Board’s unanimous support by bumping its second tender offer to JPY9,451, a JPY1 premium to Bain’s JPY9,450 offer.
The Board is claiming a “fiduciary duty” win as it has secured a higher offer from KKR but paradoxically signalling that it will not negotiate a bump from Bain.
Bain will likely walk rather than try to win the Board’s support by revising terms. At the last close, the gross spread to KKR’s offer is 3.7%.

(Mostly) Asia-Pac M&A: Agro Kanesho, Nishimoto, Chita Kogyo, Macromill, Silk Logistics, Avarga, MAHB

I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Six new deals this week! TOs for Agro Kanesho (4955 JP), Nishimoto (9260 JP), Chita Kogyo (5993 JP), Macromill (3978 JP). Also Silk Logistics (SLH AU) and Avarga (AVARGA SP).
Key updates took place on: Pacific Smiles (PSQ AU), ASMPT (522 HK), Nec Networks & System Integr (1973 JP), Seven & I (3382 JP), and Malaysia Airports Holdings (MAHB MK).

Last Week in Event SPACE: Seven & I, PA Gooddoctor, Nec Networks, Genscript/Legend, ASM PT, Hanwha

There are people who’ll take profit in Seven & I (3382 JP) because of path dependency til year-end. It will drag out a while: buy the dips, trim on pops.
Just like in Lufax Holding (6623 HK)‘s special dividend, expect Ping An to boost its holding in Ping An Healthcare and Technology (1833 HK) via the stealthy scrip dividend option.
The landscape for Nec Networks & System Integr (1973 JP) has FULLY changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable.

China A50 ETFs Rebalance Preview: One Change to Close Out the Year

The December review will use closing prices from 18 November to determine the list of stocks that will be included into and excluded from the ETFs.
As of the close on 15 November, we see NAURA Technology Group (002371 CH) replacing Huaneng Lancang River Hydropow (600025 CH) in the ETFs.
NAURA Technology has doubled in price this year, while Huaneng Lancang has corrected from its highs and could be deleted from the ETF in just one quarter.

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Nov 16

Daily Brief Event-Driven: 2025 High Conviction: PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

2025 High Conviction: PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock
Samsung Electronics: A Massive 10 Trillion Won Share Buyback Program
Sammy’s Massive Buyback: Play the Pref Compression, Not Outright Long
EQD | The “Landing Area” For The KOSPI 200 Is In Sight

2025 High Conviction: PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock

Ping An Healthcare (1833 HK) (PA Gooddoctor), which was spun off from Ping An Insurance (601318 CH) and listed in May 2018, has announced a change in use of proceeds.
Part of that change includes the payment of a punchy HK$9.70/share special dividend.
The more interesting aspect is that a scrip dividend is also afforded, which should allow a stealth MBO from Ping An at zero premium.

Samsung Electronics: A Massive 10 Trillion Won Share Buyback Program

By Douglas Kim

Samsung Electronics (005930 KS) announced a massive share buyback program worth 10 trillion won which represents 3.1% of its market cap.
Of this total amount, about 3 trillion won will be purchased and cancelled in the next three months. This will include 50,144,628 common shares and 6,912,036 preferred shares.
We believe that this massive share buyback and cancellation is likely to boost Samsung Electronics’ share price resulting in a strong outperformance relative to KOSPI in the next 6-12 months.

Sammy’s Massive Buyback: Play the Pref Compression, Not Outright Long

The stock’s still below 1x PBR. But with Samsung’s tech gaps and slowdowns, going all-in on an outright long here off the back of this buyback feels way too early
The key is whether pref discounts tighten like 2015, but with a more balanced buyback this time and narrowing pref discounts, making a pref rally harder to predict short-term.
The goal’s the same as 2015—boosting the family’s control. If the remaining buyback leans pref-heavy, it could further tighten pref discounts, creating a potential opportunity to play the compression.

EQD | The “Landing Area” For The KOSPI 200 Is In Sight

By Nico Rosti

In a previous insight, on Oct 26th, we theorized 2 possible scenarios: a rally or a mini-crash for the KOSPI 200 INDEX, from the following week.
It looks like we are more in the mini-crash scenario (see chart below), at the moment, but the index is already very oversold according to our WEEKLY model.
Keep reading to find out where to buy based on our MRM WEEKLY models for the KOSPI 200.

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Nov 15

Daily Brief Event-Driven: NEC Network (1973 JP) Tender Offer – The Landscape Has Fully Changed and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

NEC Network (1973 JP) Tender Offer – The Landscape Has Fully Changed
CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid
Boqi Env (2377 HK)’s Partial Offer
Macromill (3978 JP): CVC’s Light Tender Offer at JPY1,150 Begs for Activism
Korea Pushes to Expand Director’s Duty of Loyalty: Focus on Hostile Takeover-Risk Conglomerates
Renewable Japan (9522 JP): Tokyu Fudosan (3289 JP)-Sponsored MBO Set at a 132% Takeover Premium
SBI Fintech Solutions: Tender Offer and Delisting
NPN X PRX: Swiggy Lists, Tencent 3Q FY24 Results, Market Awaits H1 FY25 Results and Strategy Update
Sihuan Pharmaceutical (460 HK): Buybacks, Now A Spin-Off
Monte Dei Paschi Poised for Strategic Merger Opportunity

NEC Network (1973 JP) Tender Offer – The Landscape Has Fully Changed

On 29-October, NEC Corp (6701 JP) announced a low-ball TOB to buy out subsidiary Nec Networks & System Integr (1973 JP). It deserved activism, but finding an activist was tough.
On 7 November, it got an activist, and I wrote on 8-November the Landscape Had Changed that they might have bought 6mm shares more in 5 days. They bought 8.4mm.
The Landscape Has FULLY Changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable. But Target Advisor DCF was ¥3,073-4,688 without synergies.

CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid

Today, CVC announced a deal to buy out Macromill, Inc (3978 JP). It is agreed and supported by management and the Board.
The shareholder register on this stock is wide open. It is not burdened by crossholders. It IS burdened by 7 large active holders who have 55%.
Those holders may complain about the process, the transparency, and the low price. This could be a target for an activist or a strategic overbidder.

Boqi Env (2377 HK)’s Partial Offer

Back on the 23rd October, flue gas treatment play China Boqi Environmental Hol (2377 HK) announced a buyback of 15% of shares out, at HK$1.20/share, a 16.5% premium to undisturbed.
The upshot of the buyback lifts the stake of co-founder Zeng Zhijun and concert parties to 32.59% – up from 27.71% – before options. A whitewash waiver is required.
A expected, the Offer Doc has now been delayed. It is now expected to be dispatched on or before the 29th November.

Macromill (3978 JP): CVC’s Light Tender Offer at JPY1,150 Begs for Activism

Macromill, Inc (3978 JP) has recommended CVC’s tender offer at JPY1,150, a 40.1% premium to the last close.
While the offer is attractive compared to historical trading ranges, it is 41% below the IPO price and 11% below the midpoint IFA DCF valuation range.
The lack of an irrevocable, open shareholder register and large foreign institutions’ shareholding increases the odds of activism to force a bump.

Korea Pushes to Expand Director’s Duty of Loyalty: Focus on Hostile Takeover-Risk Conglomerates

A Democratic Party insider noted some proposals need legal tweaks, so the December 10 deadline may slip, but they’re set on passing the expanded director loyalty duty.
FKI analyzed top conglomerates’ shareholder structures and found four of the top 10 facing substantial risks.
We need more clarity before jumping in, but with MBK driving Korea’s hostile M&A scene and the Commercial Act amendments, local chaebols facing control battles are a key KOSPI theme.

Renewable Japan (9522 JP): Tokyu Fudosan (3289 JP)-Sponsored MBO Set at a 132% Takeover Premium

Renewable Japan (9522 JP) has recommended a Tokyu Fudosan Holdings (3289 JP)-sponsored MBO at JPY1,250 per share, a 132.3% premium to the last close.
The high takeover premium reflects the 55% YTD decline in the share price. While the timing is opportunistic, the offer is attractive compared to peer multiples.
The irrevocables and low required minority acceptance rate ensure that this is a done deal. The tender runs from 15 November to 8 January 2025 (34 business days).

SBI Fintech Solutions: Tender Offer and Delisting

By Douglas Kim

After the market close on 14 November, SBI Fintech Solutions announced that the Japanese financial group SBI is pushing for a tender offer and delisting of SBI Fintech Solutions.
The tender offer price is 5,000 won per share, which is 36% higher than the closing price on 14 November. The tender offer size amount is about 26 billion won.
Given the relatively solid upside, we believe SBI Holdings is likely to successfully complete this tender offer and take the company private.

NPN X PRX: Swiggy Lists, Tencent 3Q FY24 Results, Market Awaits H1 FY25 Results and Strategy Update

By Charlotte van Tiddens, CFA

It has been an eventful week for Naspers and Prosus – Tencent reported 3Q FY24 results yesterday after the HK close and Swiggy listed on the NSE and BSE.
Prosus sold shares in Swiggy worth $500m and retains an interest of 25% (fully diluted basis).
Since 2017, Naspers and Prosus invested $1.3bn to build a 31% stake. The group have created $2bn of value for shareholders following the listing.

Sihuan Pharmaceutical (460 HK): Buybacks, Now A Spin-Off

On the 6th October, Sihuan Pharmaceutical Hldgs (460 HK) announced a HK$500mn, 12-month buyback programme. Shares jumped 31% on the news, but have since given all that gain back.
Sihuan Pharma has now announced an intention to spin-off non-wholly-owned subsidiary Xuanzhu Biopharm on the HKEx.
Concurrent with the spin-off news. Sihuan Pharma acquired 6.9% in Xuanzhu Biopharm for RMB596mn, implying a full value of ~RMB8.5bn (~HK$9.2bn). This compares to Sihuan Pharma’s market cap of HK$6.6bn.

Monte Dei Paschi Poised for Strategic Merger Opportunity

By Jesus Rodriguez Aguilar

The Italian government sold a 15% stake in Banca Monte dei Paschi di Sien (BMPS IM), reducing its holding to 11.7%, signaling potential acquisition interest.
Banco BPM SpA (BAMI IM) and Anima Holding (ANIM IM)’s recent share purchases in BMPS suggest strategic positioning for a potential future acquisition within the Italian banking sector.
BMPS’s improved financial performance, attractive valuation (5.2x Fwd NTM P/E and 0.6x P/BVPS, and heightened investor interest create favorable conditions for a merger or acquisition.

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Nov 14

Daily Brief Event-Driven: Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value
KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
NTPC Green Energy IPO: Offer Details & Index Inclusion Timeline
StubWorld: Hanwha Corp; Genscript Biotech/Legend Biotech
INDIA: Index Changes Due to the 45 New Additions to the F&O Segment
7&I (3382 JP) – An ITO Family MBO? With Itochu? At ¥9trln? Maybe. Information Is Scarce
Go Digit IPO Lockup – Promoters and Investors Could Look to Sell in the US$2.1bn Release

Seven & I Holdings (3382 JP): The Rumoured MBO Price Underscores the Trapped Value

In response to media reports, Seven & I Holdings (3382 JP) confirmed receiving a non-binding proposal from Junro Ito (founder’s son) and Ito-Kogyo. No terms were disclosed.
Bloomberg suggests an MBO deal worth up to JPY9 trillion (US$58 billion), which implies an offer of JPY3,467.89, a 39.3% premium to the last close price.
The “white knight” MBO undermines Alimentation Couche-Tard (ATD CN)’s offer and is a proxy for the restructuring plan’s value. Couche-Tard will likely walk if a binding MBO proposal emerges.

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering

Kansai Electric Power (9503 JP) is looking to raise up to US$3.5bn via a primary offering and a sale of Treasury shares. Pricing date is between 26-29 November.
Kansai Electric Power (9503 JP) is among the better performing stocks from the Electric Utilities industry and trades at higher valuations compared to its peers.
There will be a fair bit of passive buying with around 29% of the offering being bought at the time of settlement of the shares.

NTPC Green Energy IPO: Offer Details & Index Inclusion Timeline

NTPC Green Energy Ltd (2214556D IN) is looking to raise INR 100bn (US$1.19bn) in its IPO. That will value the company at INR 910bn (US$10.8bn) at the top end.
The anchor allocations will be completed early next week, and the stock is expected to start trading on 27 November.
The stock will not get Fast Entry to global indices with the earliest inclusion scheduled for June 2025. So, limited passive buying in the medium-term.

StubWorld: Hanwha Corp; Genscript Biotech/Legend Biotech

Hanwha Corporation (000880 KS) is “expensive” on my monitor. But that doesn’t paint the whole picture. And what’s up with Genscript Biotech (1548 HK)‘s deconsolidation of Legend Biotech (LEGN US)?
Preceding my comments on Hanwha and Genscript Biotech/Legend Biotech are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

INDIA: Index Changes Due to the 45 New Additions to the F&O Segment

The National Stock Exchange (NSEIN IN) has announced a list of 45 stocks that will be added to the Futures & Options (F&O) segment of the market from 29 November.
There will be changes to the NIFTY Index, NSE Nifty Next 50 Index, S&P BSE SENSEX Index and the CNXIT Index over the next couple of rebalances.
There are some interesting situations out there, including a change to the universe for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that could lead to more changes.

7&I (3382 JP) – An ITO Family MBO? With Itochu? At ¥9trln? Maybe. Information Is Scarce

Yesterday a news article from Bloomberg suggested 7&i was “considering” an MBO. Seven & I Holdings (3382 JP) later confirmed they had received a non-binding proposal from ITO Junro/family.
The initial number was ¥9trln. If market cap? High. If EV, too low. That would have implied a price just over the first “grossly inadequate” ACT price.
There is a lot we don’t know. This changes the landscape. It probably shifts the range trade, but it will shift more when we get more clarity on ITO-san’s price.

Go Digit IPO Lockup – Promoters and Investors Could Look to Sell in the US$2.1bn Release

By Sumeet Singh

Go Digit General Insurance raised US$315m in its India IPO in May 2024, via selling a mix of primary and secondary shares. Its IPO lockup is set to expire soon.
Go Digit General Insurance is a digital full stack insurance company, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products.
In this note, we will talk about the lockup dynamics and possible placement.

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Oct 24

Daily Brief Event-Driven: Surging Buzz Around the Potential Split of Samsung Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Surging Buzz Around the Potential Split of Samsung Electronics
Tokyo Metro (9023 JP): One Miss; A Bigger Index Inclusion Coming?
India: Potential Free Float Changes & Passive Flows in November
Auswide Bank (ABA AU)/ MyState (MYS AU) Merger: A Done Deal
Quiddity Leaderboard F100/F250 Dec 24: Thoughts Deliveroo and Coca-Cola; More Intra-Review Changes

Surging Buzz Around the Potential Split of Samsung Electronics

We’re starting to see some local market players getting ready and setting up trades that bet on a potential split for Samsung Electronics.
Samsung could leverage the buzz around spinning off its foundry business to split key units—foundry, memory chips, and others—into two or three separate companies at the shareholder meeting.
Additionally, the valuation gap between Samsung Electronics and Biologics has narrowed more than it has in the last decade, making it an even more attractive opportunity.

Tokyo Metro (9023 JP): One Miss; A Bigger Index Inclusion Coming?

Tokyo Metro (9023 JP) had a blockbuster listing yesterday, finishing the day 45% higher. That took the estimated div yield down from 3.33% (at the IPO price) to 2.3%.
One expected index inclusion will not take place due to insufficient information on IPO allocations and that leads to a much lower free float than expected.
That inclusion will now be deferred to June; BUT there could be two other (bigger) index inclusions on the cards prior to that.

India: Potential Free Float Changes & Passive Flows in November

Companies in India have disclosed their shareholding pattern as of end-September in October. There are companies with significant float changes from end-March and/or end-June.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 11 stocks with passive inflows from global trackers while 6 could see passive outflows in November.

Auswide Bank (ABA AU)/ MyState (MYS AU) Merger: A Done Deal

The Auswide Bank (ABA AU) IE has considered Mystate Ltd (MYS AU)’s all-scrip merger offer in the best interests of the Auswide shareholders. However, the opinion comes with caveats.
The offer is conditional on Auswide shareholder and regulatory approvals (ACCC, Treasury). The scheme meeting is on 2 December.
Vote risk is low due to the lack of substantial shareholders and the disinterested retail base. At the last close and for 18 December payment, the gross/annualised spread was 1.6%/10.3%.

Quiddity Leaderboard F100/F250 Dec 24: Thoughts Deliveroo and Coca-Cola; More Intra-Review Changes

In this insight, we take a look at the potential ADDs and DELs for the F100 and F250 indices during the December 2024 index rebal event.
Separately, we see multiple M&A-related intra-review changes in the next few months.
There could also be more regular changes during the December 2024 rebalanced event

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Oct 23

Daily Brief Event-Driven: Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher
The Tokyo Metro (9023 JP) IPO And Aftermarket – What To Look For
Australia: Potential Passive Selling in November Will Be Big
Shinko Electric (6967 JP): A Casualty of the China TCM Deal Break
Quiddity Leaderboard T50/100 Dec 24: Two Important Takeaways for the TDIV Index
KRX’s Final Call on Value-Up ETF Launch & December Rebalancing Preview
Quiddity Leaderboard TDIV Dec 24: Trade Successful; +9.5% in Three Weeks; More Upside Possible.
NIFTY200 Momentum30 Index Rebalance Preview: 56% Turnover, Big Trade & Strong Momentum
CEMEX’s Low-Balled MTO. For Good Reason
Laopu Gold (6181 HK): IPO Lock-Up Expiry Might Prove Golden for Global Index Inclusion

Tokyo Metro (9023 JP): Listing Tomorrow; Div Yield and Index Flows Should Take It Higher

Tokyo Metro (9023 JP) priced its IPO at the top end (JPY 1200/share), raised JPY 348.6bn (US$2.3bn) and the company is valued at JPY 697bn (US$4.62bn).
The stock starts to trade today, and the grey market is indicating an open 20% higher. Not surprising considering that the IPO was heavily oversubscribed.
Even at a price of JPY 1440/share, the estimated dividend yield is 2.78% and that should keep the stock supported. Index inclusions will result in more buying next week.

The Tokyo Metro (9023 JP) IPO And Aftermarket – What To Look For

The Tokyo Metro (9023 JP) IPO is one of the largest IPOs of recent years, well-flagged, and it is hot hot hot! A super stable, well-known, well-respected, service provider.
There are numerous attractions but I expect people have not thought too deeply about the demand and supply dynamics of different holder types. It’s worth thinking about.
This was priced “cheap” but everyone knows that so there may be flippers. This is probably more Japan Post Bank than Japan Post Insurance.

Australia: Potential Passive Selling in November Will Be Big

There could be two or three Aussie names that are deleted from global passive portfolios in November. In each of the cases, there is a lot to sell from passives.
One name is very high probability while the deletion of the others depends on the day of the week chosen.
Shorts have been built up on the stocks and there are strong indications of positioning. But the extent of the positioning varies, and the stocks could have differently.

Shinko Electric (6967 JP): A Casualty of the China TCM Deal Break

At first glance, the Shinko Electric Industries (6967 JP) and China TCM merger arb has little or no similarities regarding the region, precondition, sector, type of offeror, or offer structure.
The aftermath of China Traditional Chinese Medicine (570 HK) has resulted in funds resizing well-held merger arb positions, mainly long-dated names with tail event risks. This has increased the Shinko spread.
Shinko’s tail event risk (no SAMR approval) remains low. Timing remains the primary risk, as a delay is possible. At the last close, the gross/annualised spread was 8.9%/29.2%.

Quiddity Leaderboard T50/100 Dec 24: Two Important Takeaways for the TDIV Index

The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
In this insight, we take a look at the potential ADDs and DELs for the December 2024 index rebal event.
Currently, we see one change for T50 and two changes for T100 but there are four more weeks to the base date and our expectations can change until then.

KRX’s Final Call on Value-Up ETF Launch & December Rebalancing Preview

Despite feedback from ETF managers, KRX is moving forward with the simultaneous listing of 12 ETFs tracking the Value-Up Index on November 4th.
Government-Backed organizations are launching a 200 billion KRW Value-Up Fund for the Value-Up Index stocks, targeting an AUM boost to over 1 trillion KRW by year-end.
For new additions in the December rebalancing, the safest bets are POSCO Holdings, JB Financial Group, and HK inno.N.

Quiddity Leaderboard TDIV Dec 24: Trade Successful; +9.5% in Three Weeks; More Upside Possible.

In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the December 2024 index rebal event.
I currently see 5 ADDs and 4 DELs but some of these names are different from what we had last time (link).
The current estimate for one-way flow in December 2024 is US$1.54bn.

NIFTY200 Momentum30 Index Rebalance Preview: 56% Turnover, Big Trade & Strong Momentum

There could be 16 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December.
If all changes are on expected lines, one-way turnover is estimated at 55.6% and that will result in a one-way trade of INR 62bn (US$736m).
Since June, the potential adds to the index have outperformed the index and the potential deletes by a big margin. Momentum could keep the outperformance going till implementation date.

CEMEX’s Low-Balled MTO. For Good Reason

Back on the 25th April 2024, a Dacon/DMCI Holdings (DMC PM)-led consortium entered into a SPA to acquire 89.86% in CEXMEX (CHP PM) from Cemex SAB de CV (CEMEXCPO MM).
The completion of the sale triggered a mandatory tender offer for the remaining 10.14% of shares out. The Offer Price is ₱1.42/share (before considerable fees), a 8% discount to undisturbed.
The Offer Period spans October 23 to November 21. There’s the possibility of a technical bump. Don’t expect a follow-on delisting Offer. The Bidders’ intention is to maintain CEMEX’s listing.

Laopu Gold (6181 HK): IPO Lock-Up Expiry Might Prove Golden for Global Index Inclusion

By Dimitris Ioannidis

Laopu Gold (6181 HK) is expected to fail the fcap threshold at the December 2024 review due to low free float unless its price surges ~22% in the next week.
The 6-month lock-up expiry will lift the fcap closely above the threshold significantly increasing the probability of inclusion at the March 2025 review.
If the mcap qualifies for the small-cap segment, its inclusion is possible at the November 2024 review due to lower fcap requirements.

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Oct 22

Daily Brief Event-Driven: Fuji Soft (9749 JP) – The Fine Print Is Worth Reading and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Fuji Soft (9749 JP) – The Fine Print Is Worth Reading
Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Capping Flows in December
Entry Opportunities from Delisting Risk Due to Korea Zinc’s Post-Buyback Volume Drying Up
Doosan’s Tweaked Restructuring Play: My Take on Hitting Robotics’ 13% Spread
Hyundai Motor India IPO: How Far to Fast Entry?
Korea Zinc: Court Dismisses the Second Injunction Filed by MBK
Quiddity Leaderboard ASX Dec 24: Clarity Pharma and Resolute Mining Competing for ASX 200 Spot
International Games System (3293 TT): Positioning & Potential Passive Buying

Fuji Soft (9749 JP) – The Fine Print Is Worth Reading

On 11-Oct, Bain submitted a binding proposal for Fuji Soft Inc (9749 JP). On 15-Oct, FSI acknowledged, but questioned the Nozawa family commitment. Founder Nozawa wrote letters the 17th.
O 18-Oct, FSI reiterated support for the KKR First Tender in a late night drop. It included fine print, but no media coverage. Today, FSI filed a Target Opinion Amendment.
That filing included yet more fine print not in the public filing Friday. And KKR extended. The new fine print is nuanced. But worth reading.

Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy

Over the last few days, Shinko Electric Industries (6967 JP) shares have dipped lower than the previous standard trading range.
I expect this weakness is related to investors in other deals deciding to sell this deal too. I believe it is not related to Shinko specifically.
For that, while gap risk remains somewhat high, I still see break risk as low and see this as a great opportunity to buy the dip.

Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Capping Flows in December

The December rebalance for the HSIII Index only involves capping to limit stocks to 12% of the index weight. There will not be any constituent changes.
Estimated one-way turnover at the rebalance is 4.4% resulting in a round-trip trade of HK$2.9bn (US$378m).
The largest outflows are expected to be from Meituan (3690 HK) and JD.com (9618 HK) with inflows spread across the other index constituents.

Entry Opportunities from Delisting Risk Due to Korea Zinc’s Post-Buyback Volume Drying Up

Korea Zinc’s delisting daily trading volume cutoff is 20K, about 0.12% of the total. We might see volumes plummet, making it tough to maintain even that 20K level.
Keep an eye on trading opportunities; we have some time with delisting risks, but low trading volume could lead to being booted from the KOSPI 200 and Global Index.
This sell-off could spike short-term volatility and create great entry points for trading, especially after the court approved the buyback tender, denying MBK’s injunction.

Doosan’s Tweaked Restructuring Play: My Take on Hitting Robotics’ 13% Spread

The big question is how to cash in on the dissenters’ rights spread for Robotics. The main concern is cancellation risk, but the FSS doesn’t seem too negative on approval.
To sustain nuclear momentum, Enerbility needs heavy borrowing for facility investments, requiring a lower debt ratio. Offloading debt-heavy Bobcat is a move shareholders might support.
With NPS unlikely to ignore the government’s nuclear push, Robotics’ spread could narrow quickly. Despite cancellation risk and no hedge, the remaining juice makes an outright position worth considering.

Hyundai Motor India IPO: How Far to Fast Entry?

Hyundai Motor (005380 KS) raised INR 279bn (US$3.3bn) by selling some of its stake in Hyundai Motor India (1342Z IN), valuing Hyundai India at INR 1,593bn (US$18.95bn).
The anchor investor book was fully subscribed. The non-institutional and retail books were undersubscribed, so institutions got more stock. And that changes the free float estimates for one global index.
Even with the higher float, Hyundai Motor India (1342Z IN) is unlikely to get Fast Entry to one global index later this month. Index inclusions should commence in February 2025.

Korea Zinc: Court Dismisses the Second Injunction Filed by MBK

By Douglas Kim

The Seoul Central District Court dismissed the second injunction filed by MBK Partners and Young Poong to suspend the share buyback/tender offer by Korea Zinc Chairman Choi and his allies.
As a result of the court dismissing the second injunction filed by MBK, the M&A fight for Korea Zinc is likely to continue until the AGM in March 2025.
Depending upon Korea Zinc’s tender offer subscription, there is a possibility of MBK buying more shares directly from the market if the subscription falls below the proposed amounts.

Quiddity Leaderboard ASX Dec 24: Clarity Pharma and Resolute Mining Competing for ASX 200 Spot

In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
We currently do not see any index changes for ASX 20 and ASX 100.
We continue to expect one change for ASX 50. However, our expectations for ASX 200 have changed since our last insight (link).

International Games System (3293 TT): Positioning & Potential Passive Buying

International Games System (3293 TT) could be added to a global index at the end of November and there will be a lot of buying in the stock.
The big rally in the stock has led to International Games System (3293 TT) trading expensive to its regional peers.
There has been an increase in cumulative excess volume over the last month. But there could still be more to go over the next week.

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Oct 21

Daily Brief Event-Driven: Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside
China Healthcare Weekly (Oct.20)-A Big Lesson from China TCM’s Deal Break, “Must Option” of Biotech
Fujikura (5803 JP): Positioning & Potential Passive Buying
Merger Arb Mondays (21 Oct) – Seven & I, Fuji Soft, Henlius, Canvest, GA Pack, Dyna-Mac
Korea Value-Up Index: Estimated Passive Flows as ETF Launches Coming
[JAPAN ACTIVISM] Murakami Group Now 23.5% on Exedy (7278) – LOTS of Room Left To Run
SSE50 Index Rebalance Preview: Potential Inclusions Continue to Outperform; Trim into Strength
EQD | Nikkei 225 Option Implied Volatility Analysis – Focus on Bank of Japan Rate Decision Catalyst
EQD / NSE Vol Update / Options Mkt. Structural Changes Incoming: 15x Position Limits + 3x Lot Size

Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside

The Fuji Soft Inc (9749 JP) Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors.
Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible.
KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside.

China Healthcare Weekly (Oct.20)-A Big Lesson from China TCM’s Deal Break, “Must Option” of Biotech

By Xinyao (Criss) Wang

The “industry clearing” of innovative drug companies is far longer and more brutal than imagined. But Chinese innovative drug ecosystem will ultimately usher in a better innovation pattern in the future.
For every innovative pharmaceutical company with ambitious goals, globalization is a “must option”. With more and more Chinese biotech achieving success, the internationalization prospects will become better and better.
China TCM’s privatization failure made us realize large SOEs we always believe in would violate their commitments to market/investors.Now, we need to get back to the fundamentals to minimize losses.

Fujikura (5803 JP): Positioning & Potential Passive Buying

Fujikura Ltd (5803 JP) could be added to a global index at the end of November and there will be a lot of buying in the stock.
Following the rally in the stock, Fujikura Ltd (5803 JP) trades expensive to the average and median of its peers on most valuation metrics.
The increase in cumulative excess volume in Fujikura Ltd (5803 JP) over the last 3 months far outpaces the increase in its peers.

Merger Arb Mondays (21 Oct) – Seven & I, Fuji Soft, Henlius, Canvest, GA Pack, Dyna-Mac

We 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: Seven & I Holdings (3382 JP), Shanghai Henlius Biotech (2696 HK), Shinko Electric Industries (6967 JP),Canvest Environmental Protection Group (1381 HK), Arcadium Lithium (LTM AU).
Lowest spreads: Trancom Co Ltd (9058 JP), Fuji Soft Inc (9749 JP), Silverlake Axis (SILV SP), T Gaia Corp (3738 JP), Descente Ltd (8114 JP), Pasco Corp (9232 JP).

Korea Value-Up Index: Estimated Passive Flows as ETF Launches Coming

The KRX announced the 100 constituents of the much-awaited Korea Value-Up Index on 24 September. There were hits and misses but broad consensus was that the index is a miss.
Following market feedback, the KRX could conduct a special rebalance of the index in December. But this could be after the launch of ETFs tracking the index.
With a big overlap and similar characteristics as the KOSPI 200 Index, there could be limited assets benchmarked to the Korea Value-Up Index in the short-term.

[JAPAN ACTIVISM] Murakami Group Now 23.5% on Exedy (7278) – LOTS of Room Left To Run

This past week, activist Murakami-san’s City Index Eleventh announced that the companies which jointly report now own 20.3%, which translates to 23.5% of voting rights. Average in-price? ¥2,928/share.
The 2030 Plan from April saw 8% ROE by 2030, 6% by 2026. They’ve since bought back 11% of shares out. Better, but 1/4 of market cap is net cash+securities.
If one assumes they spend the net cash+securities to buy back stock 10% higher than here, pro-forma PBR is <0.6x. ROE would be 7+%. There’s room to run here, still.

SSE50 Index Rebalance Preview: Potential Inclusions Continue to Outperform; Trim into Strength

With over 95% of the review period complete, 4 non-constituents are in inclusion zone and 6 constituents are in deletion zone.
We estimate one-way turnover of 6.5% at the December rebalance leading to a one-way trade of CNY 11.95bn (US$1.7bn). Index arb balances could increase the impact on the stocks.
The potential adds have continued to outperform the potential deletes. There has been a big jump in the last few weeks as markets have rallied. Trim positions into strength.

EQD | Nikkei 225 Option Implied Volatility Analysis – Focus on Bank of Japan Rate Decision Catalyst

By Gaudenz Schneider

Nikkei 225 (NKY INDEX) option implied volatility is stabilizing at an elevated level. This Insight analyses term structure, skew, open interest, and more.
We identify a tactical option opportunity that profits from the current volatility structure.
Are Consumer Price Index and Bank of Japan interest rate decision announcements systematically followed by unusually large market moves? We run the numbers.

EQD / NSE Vol Update / Options Mkt. Structural Changes Incoming: 15x Position Limits + 3x Lot Size

By Sankalp Singh

SEBI-Mandated structural changes continue to percolate through for Options Markets. Position limits & lot sizes have been increased drastically, tilting regulations away from Retail & towards more Institutional participation.
IV levels are in the middle of their 12-month ranges. Vol-Regime Model currently in “High & Down” state – grind lower in IVs projected.
In spite of a stronger underlying index, upcoming Bank earnings results have supported BankNifty IVs.

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Oct 20

Daily Brief Event-Driven: TCM (570 HK): Likely Rush for The Exits As Deal Busts and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

TCM (570 HK): Likely Rush for The Exits As Deal Busts
Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter
(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM
A/H Premium Tracker (To 18 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More
HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props
Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong
Weekly Deals Digest (20 Oct) – China TCM, GA Pack, Tokyo Metro, Rigaku, CR Beverage, Horizon Robotic

TCM (570 HK): Likely Rush for The Exits As Deal Busts

China Traditional Chinese Medicine (570 HK) (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
This deal lapse changes the Hong Kong M&A landscape; if you can’t rely on SOE transactions to get up, what next? The immediate question now is downside support on Monday.

Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter

On Tuesday, Fuji Soft Inc (9749 JP) said they had received the legally-binding Bain proposal on 11 October, but noted they could not confirm founder Nozawa-san’s agreement or intentions.
Founder Nozawa Hiroshi responded with a pair of impassioned letters Thursday criticising process, asking Fuji Soft to withdraw support for KKR, and switch to or allow the Bain Offer.
Fuji Soft on Friday reiterated support for the KKR First Tender, but interestingly, saw a majority resolve to suggest common shareholders NOT tender because of the optionality.

(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM

I tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
One new deals discussed this week: Bossini International (592 HK) low-balled scrip Offer from Viva Goods (933 HK). Beijing Capital Grand (1329 HK) also suspended due to the Takeovers code.
Key updates took place on: GJS (2611 HK)/Haitong Securities (600837 CH), Fuji Soft Inc (9749 JP), Hotel Property Investments (HPI AU), TCM (570 HK) and Dyna Mac Holdings (DMHL SP)

A/H Premium Tracker (To 18 Oct 2024): AH Premia Drop Sharply; High Premia May Contract More

Huge volumes traded on the mainland, Southbound volumes dropped, AH Premia contracted a little bit, but not much. Things are starting to stabilise.
Average AH pairwise volatility is super high. Intracorrelation of spreads quite low. Lots of room to market-make wide spreads/high premia. High premia may continue to contract on speculation.
Continuing different onshore and offshore opinion regarding the nature and vibe of Chinese stimulus will continue to lead to interesting dispersion. Identify the trend, then market make around it.

HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props

This past week saw mainland investors trade HK$476bn of stock. Not as big as last “week” but still big. BABA buying has slowed, but net buying was still HK$24.4bn
The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.
High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.

Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong

Couche-Tard execs do the rounds in Tokyo, complaining about not being able to do the rounds. This sounds like they are trying to make themselves sound nice. For now
First the low-balled VTOs for AIS (ADVANC TB) and Thaicom (THCOM TB). Then the Intouch (INTUCH TB)/Gulf Energy (GULF TB) amalgamation. Then, arguably, the next unorthodox development will take place.
Investors buying SAMTY HOLDINGS (187A JP) in size may withhold shares, either they’ll try to become the fulcrum investor to get into the Bidco OR they will try for a bump.

Weekly Deals Digest (20 Oct) – China TCM, GA Pack, Tokyo Metro, Rigaku, CR Beverage, Horizon Robotic