Event-Driven Archives | Page 47 of 188 | Smartkarma

Today saw the publication of three different articles regarding the Alimentation Couche-Tard (ATD CN) approach and offer to purchase all the shares of Seven & I Holdings (3382 JP)
The first in the Nikkei said ATD could push offer a high price, even up to ¥8 trillion. The second mentioned debt financing being feasible because of prodigious cash flow.
The third in Bloomberg noted that 7&i had requested the government upgrade its FEFTA status to “core”, which would lead to a more burdensome/restrictive government approval process.

Toyota Partial Offer Results – What Next?

Today after the close, Toyota Motor (7203 JP) reported the results of their ¥800bn Tender Offer Buyback, originally intended to repurchase 290.12mm shares from cross-holders.
In the end, 343.83mm shares were tendered (53.71mm shares more than originally expected, worth about ¥150bn at Tender Price). That creates back-end “issues” which must be considered.
The resulting supply/demand profile is mixed, but on balance, I expect sees positive demand into the H1 earnings announcement. Watch for another buyback possibly announced then.

Kioxia & Tokyo Metro: Japan’s Largest IPOs Since 2018 Expected This October

By Dimitris Ioannidis

Kioxia and Tokyo Metro with valuations of ~$10bn and ~$4.6bn are expected to be listed in October 2024 and become the largest Japanese IPOs since Softbank Corp (9434 JP) in 2018.
Kioxia Holdings (6600 JP) is currently forecasted to fail fast entries of both Global indices due to low IPO free float.
Tokyo Metro is expected to be added via fast-entry in one Global Index because of higher IPO free float. Forecasted demand of ~$140m is expected on the fifth trading day.

Huafa Prop (982 HK)’s CCASS Movements: Nothing To See Here

Ahead of Huafa Property Services Group (982 HK)‘s Scheme Meeting tomorrow, the 28th August, 42.57% of shares outstanding moved out of CCASS on the 8th July.
One argument for Huafa trading wide-ish to terms is due to “suspicious” CCASS moves between the Offer announcement and the vote.
Some investors even cite the Golden Throat Holdings (6896 HK) debacle. This is not a Golden Throat situation. Not even close. It is decidedly less interesting and benign.

KOSPI 200 December Rebalancing: Key Points to Watch for in Proactive Position Build-Up

The momentum for getting ahead on positions with KOSPI 200 rebalancing is holding steady. With around 60% of the screening period behind us, it’s time to start preparing our positions.
The current rebalancing’s screened changes have a relatively lower price volatility, suggesting a stronger chance for more aggressive position build-up now compared to previous rebalancings.
Trading volumes vary greatly among these changes, affecting their passive impact sizes. Consider using different weights in basket trading instead of equal weights.

Tohokushinsha Film (2329 JP): 3D Persists Despite Strong Pushback

On 24 July, 3D Investment Partners proposed to privatise Tohokushinsha Film (2329 JP) through a tender at JPY600-650. 3D has extended the offer validity period from 23 to 30 August.
The controlling shareholder, Mr Hisako, claims he is not a seller regardless of price. The Board goes through the motions, knowing that Mr Hisako will decide the offer’s fate.
3D’s persistence suggests that Mr Hisako’s resolve might be checked by bumping the offer. As this outcome is likely, the shares will continue to trade through terms.

Understanding Potential Issues Within SK Group from Hynix’s Kioxia CB Conversion

Hynix’s potential 15% stake in Kioxia doesn’t violate the 20% rule because KFTC’s mandatory stake rule doesn’t apply to foreign investments.
SK Group may transfer Hynix’s 15% Kioxia stake to SK Square by splitting Hynix and merging its investment arm with SK Square for future AI investments.
SK Square may attract more attention than Hynix short-term, as Kioxia’s stake via Hynix could boost market expectations for value transfer to SK Square.

MV Australia A-REITs Index Rebalance Preview: One Close Add & Capping Changes

The review period for the September rebalance ends on 30 August. We do not see any constituent changes for the index but there will be capping changes.
Home Consortium Ltd (HMC AU) is just outside inclusion zone at the moment and outperformance over the rest of the week could result in inclusion.
Home Consortium Ltd (HMC AU)‘s inclusion and capping changes will result in a one-way turnover of 5% and in a round-trip trade of A$62m.

JSE Sep 24 Rebalance: PPH Expected to Enter Top 40, AMS to Fall Out

By Charlotte van Tiddens, CFA

Last night, the price snapshot was taken for the JSE September rebalance. The rebalance is scheduled to take place during the closing auction on Friday the 20th of September.
PPH is expected to enter the Top 40 with AMS falling out. No changes are expected for the FINI, FINDI, INDI or RESI.
There are several noteworthy free float changes across ALSI constituents, particularly amongst foreign counters (detail below).

LG Corp: Three Key Catalysts + NAV Valuation

Three key catalysts for LG Corp include potential inclusion in Korea Value Up Index, an IPO of LG CNS in 1Q 2025, and an increasing probability of higher shareholder returns.
An IPO of LG CNS is likely in 1Q 2025. LG CNS is currently valued at about 7 trillion won and LG Corp has a 50% stake.
Our base case NAV valuation analysis of LG Corp suggests implied NAV of 15.3 trillion won or NAV per share of 96,957 won, which is 19.8% higher than current price.

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Aug 27

Daily Brief Event-Driven: Silverlake Axis (SILV SP): Voluntary Unconditional Offer and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Silverlake Axis (SILV SP): Voluntary Unconditional Offer
Shinko Electric (6967) Deal Approval Delayed; From Here, Big Gap-, Small Break-, Some Delay-Risk
KRX Value-Up Index Will Have Two Separate Indices, Excellent & Promising, With 150 Constituents
Huafa Property (982 HK): Buy With Both Hands
Shinko Electric (6967 JP): Tender Start Timelines Delayed
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Could Drop Some More
HK Connect SOUTHBOUND Flows (To 23 Aug 2024); Net Breaks the 28-Week Buying Streak on ETF Selling
Quiddity Leaderboard T50/100 Sep 24: Nuvoton Tech TDIV DEL Likely; Shin Kong M&A Consequences
Quiddity TDIV Sep 24 Flow Expectations: Final Expectations; One Deletion; US$253mn One-Way
KOSPI Size Indices: Momentum Stalls; (Some) Upward Migrations Sell-Off

Silverlake Axis (SILV SP): Voluntary Unconditional Offer

Silverlake Axis (SILV SP) has disclosed a voluntary unconditional offer from the Goh family and Ikhlas Capital. The default cash consideration is S$0.36, a 20.0% premium to the undisturbed price.
The combi consideration is S$0.30 in cash and one new redeemable preference share (RPS) in the offeror, which will be mandatorily redeemed after five calendar years at S$0.18 per RPS.
While not declared final, the offer is reasonable but not a knockout bid. The offeror is likely to use the voluntary delisting method to privatise Silverlake.

Shinko Electric (6967) Deal Approval Delayed; From Here, Big Gap-, Small Break-, Some Delay-Risk

Today after the close, Shinko Electric Industries (6967 JP) offered a progress report on the approvals for the JIC Consortium Tender Offer originally “scheduled” to start in late August 2024.
“Procedures and Steps Necessary under the competition laws of Vietnam and China have not been completed” so the Tender Offeror expects to commence the Tender Offer in/after late January 2025.
The announcement appears to suggest no update is likely for another five months or until the Tender Offer starts. That will introduce questions of further delay.

KRX Value-Up Index Will Have Two Separate Indices, Excellent & Promising, With 150 Constituents

KRX plans to launch the Value-Up Index as two separate indices: the “Excellent Value-Up Index” and the “Promising Value-Up Index.”
The universe will include 150 constituents from KOSPI 200 and KOSDAQ 150. Allocation between indices is undecided, with sector limits on number and weight confirmed.
The key indicators (ROE, PBR, shareholder return rate) remain unchanged. The Promising Index’s weights are undisclosed, but the Excellent Index favors financial and automotive stocks.

Huafa Property (982 HK): Buy With Both Hands

A state-owned Offeror pitching a lifetime high Offer Price – with a solid premium – for an illiquid company? Sounds like a slam dunk.
Yet property manager Huafa Property Services Group (982 HK) has perennially traded wide to Huafa Industrial Co., Ltd. Zhuhai (600325 CH)‘s terms. This is not justified.
The Scheme Meeting/SGM is tomorrow (28 August), with payment on (or before) the 30 September. Or a gross/annualised return of 4%/46%. Buy here. Then buy some more.

Shinko Electric (6967 JP): Tender Start Timelines Delayed

Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The tender start has been delayed from late August to around late January 2025.
The delay was due to outstanding China SAMR and Vietnam regulatory approvals. The stretched timeline suggests that SAMR will likely conditionally approve the deal.
While Ibiden Co Ltd (4062 JP)’s underperformance lowers the deal’s break price, timing, not break risk, remains the key concern. At the last close, the gross/annualised spread was 3.7%/7.5%.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Nuvoton Could Drop Some More

With the review period complete, Nuvoton Technology (4919 TT) is a near certain deletion from the Yuanta/P-Shares Taiwan Dividend Plus ETF in September.
Passive trackers will need to sell 20m shares in Nuvoton Technology (4919 TT). That is over 10% of float and the stock could continue to remain under pressure.
The potential deletion still appears to be under positioned. There could be renewed selling in the stock over the next few weeks.

HK Connect SOUTHBOUND Flows (To 23 Aug 2024); Net Breaks the 28-Week Buying Streak on ETF Selling

SOUTHBOUND was a net seller this past week for HK$1.5bn, the first week in 29 where SB was a net seller. It was all ETFs. Stocks were a net buy.
Gross volumes remain very low. Net volumes de minimis. Very August-ish. No sectors stood out.
The largest net buy was CSPC Pharmaceutical Group (1093 HK) where the net buying was the same size as the fifth largest net sell (Tencent (700 HK))

Quiddity Leaderboard T50/100 Sep 24: Nuvoton Tech TDIV DEL Likely; Shin Kong M&A Consequences

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).
Today is the base date for the September 2024 index rebal event and the expected ADDs/DELs discussed in this insight are our final index change expectations.
Separately, we also have a look at the T50/100 index implications of the Shin Kong Financial Holding (2888 TT) – Taishin Financial Holding (2887 TT) merger situation.

Quiddity TDIV Sep 24 Flow Expectations: Final Expectations; One Deletion; US$253mn One-Way

The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
Today is the base date for determining constituent weights/capping for the TDIV index September 2024 index rebal event.
We expect one deletion in September 2024 and we estimate the one-way capping flow to be around US$253mn.

KOSPI Size Indices: Momentum Stalls; (Some) Upward Migrations Sell-Off

The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August. Only 4 trading days to go.
We see 7 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 12 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
The upward migrations have underperformed the downward migrations over the last month as a few stocks have sold off hard. Some despite being included in global indices.

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Aug 26

Daily Brief Event-Driven: Shin Kong (2888.TW) And Taishin (2887.TW) Agree to Merge and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Shin Kong (2888.TW) And Taishin (2887.TW) Agree to Merge, But It Isn’t Clean, And It’s A Bad Price
Korea FSS Chief Calls for 10% Premium/Discount on Doosan Merger, Boosting Swap Spread to 30%
NIFTY MIDCAP150 Index Rebalance: 19 Changes a Side; Lots of Overlap with Other Index Flow
Quiddity NIFTY Sep 24 Rebal: US$647mn One-Way Capping for NIFTY Next 50; All Changes Were Predicted
Huafa Property Services (982 HK): What’s Going on as Shares Trades Very Wide Ahead of the Vote?
NIFTY NEXT50 Index Rebalance: 7 Changes on Expected Lines
Zomato: Index Inclusions & Passive Impact (Once Added to F&O)
Merger Arb Mondays (26 Aug) – China TCM, Henlius, Canvest, GA Pack, Huafa, Tohokushinsha
Henlius (2696 HK): Was There Any Doubt?
KRX Sector Indexes’ Rebalancing Event, Often off Traders’ Radar but with Significant Price Impacts

Shin Kong (2888.TW) And Taishin (2887.TW) Agree to Merge, But It Isn’t Clean, And It’s A Bad Price

After rumours were rekindled a week earlier, on 22 August 2024, Taishin Financial Holding (2887 TT) and Shin Kong Financial Holding (2888 TT) announced they would merge.
The ratio is 0.6022 shares of Taishin for every share of Shin Kong putting NEWCO assets at about the level of Taiwan #3 CTBC Financial. That’s bad.
There’s history here. LOTS of history. This would need approvals from the FSC and FTC, but CTBC is already a spoiner, and the SKFH Board Meeting was anything but clean.

Korea FSS Chief Calls for 10% Premium/Discount on Doosan Merger, Boosting Swap Spread to 30%

FSS Governor Lee challenged the legality of the Robotics-Bobcat merger ratio, citing Article 176-5 of the Capital Markets Act, allowing a 10% premium or discount.
Following the FSS Governor’s statements, Doosan must likely apply a 10% premium/discount to the Robotics-Bobcat merger, creating a 30% spread based on current stock prices.
Doosan may still revise or cancel the merger, but the FSS Governor’s comments might boost Bobcat short-term. Given the uncertainty, aggressive trading is risky.

NIFTY MIDCAP150 Index Rebalance: 19 Changes a Side; Lots of Overlap with Other Index Flow

There are 19 changes a side for the NIFTY Midcap 150 Index at the September rebalance. There are many stocks with same-way flows from passive trackers of other indices.
Estimated one-way turnover is 9.8% resulting in a one-way trade of INR 8.2bn (US$98m). With US$40.1bn tracking the index actively, the impact on the stocks will be much larger.
The adds have outperformed the deletes this year, though near-term performance has been meh. There was a similar trend in March and the adds could outperform nearer to implementation.

Quiddity NIFTY Sep 24 Rebal: US$647mn One-Way Capping for NIFTY Next 50; All Changes Were Predicted

The September 2024 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 23rd August 2024.
There will be two changes for NIFTY 50 and five changes for NIFTY 100 during the September 2024 index rebal event. All of these changes were as predicted.
All NIFTY 50 and NIFTY 100 changes will also be reflected in the NIFTY Next 50 index which could see US$647mn one-way capping flows.

Huafa Property Services (982 HK): What’s Going on as Shares Trades Very Wide Ahead of the Vote?

The Huafa Property Services Group (982 HK) vote on Huafa Industrial Co., Ltd. Zhuhai (600325 CH)’ HK$0.29 offer is on 28 August. However, shares trade wide ahead of the vote.
Several readers have enquired about the unusually high spread ahead of the vote of a seemingly clean deal. The conversations raised several concerns.
The concerns are unwarranted, and this remains a clean deal. At the last close and for the 30 September payment, the gross/annualised spread was 5.5%/68.9%.

NIFTY NEXT50 Index Rebalance: 7 Changes on Expected Lines

There are 7 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that will be implemented at the close on 27 September. Changes are on expected lines.
Estimated one-way turnover for the Nifty Next 50 Index (NIFTYJR INDEX) is 19.6% resulting in a one-way trade of INR 63.64bn (US$759m). Many stocks have over 1x ADV to trade.
The adds have outperformed the deletes this year but there has been big underperformance over the last month as stocks expected to benefit from rural spending have rallied.

Zomato: Index Inclusions & Passive Impact (Once Added to F&O)

Zomato (ZOMATO IN) has a market cap of over US$27bn but is not a member of the NIFTY Index and S&P BSE SENSEX Index since it is not an F&O member.
Once SEBI’s proposed and enhanced stock inclusion thresholds are implemented, Zomato (ZOMATO IN) should be added to the F&O segment of the market.
Passive NIFTY Index and S&P BSE SENSEX Index will have to buy a lot of Zomato stock at subsequent rebalances. The impact will be higher given the lower real float.

Merger Arb Mondays (26 Aug) – China TCM, Henlius, Canvest, GA Pack, Huafa, Tohokushinsha

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: Yichang HEC Changjiang Pharma (1558 HK), China Traditional Chinese Medicine (570 HK), Canvest Environmental Protection Group (1381 HK), Malaysia Airports Holdings (MAHB MK), Capitol Health (CAJ AU).
Lowest spreads: Tohokushinsha Film (2329 JP), Fuji Soft Inc (9749 JP), Descente Ltd (8114 JP), Second Chance Properties (SCE SP), Fancl Corp (4921 JP), C.I. TAKIRON Corporation (4215 JP).

Henlius (2696 HK): Was There Any Doubt?

Roughly six weeks ago, Shanghai Henlius Biotech (2696 HK) announced the scrip option condition was met. Just that Shanghai Fosun Pharmaceutical (2196 HK) (the Offeror) was weighing its options
This situation mirrored L’Occitane (973 HK)‘s (eventual) scrip option. And in place of Pleasant Lake in that transaction; Henlius has Loyal Valley Capital (5.8309% shareholder) behind the scenes.
Late Friday, Henlius updated the terms of Fosun’s Offer to now include the scrip option alternative. We expected nothing less. 1H24 results will also be out later today.

KRX Sector Indexes’ Rebalancing Event, Often off Traders’ Radar but with Significant Price Impacts

Early position buildup has minimal price impact, and even after the announcement, only a few stocks with a larger passive impact see significant movement.
Since these KRX sector indices include many small to mid-cap stocks, the price impact of constituent changes on ETF rebalancing day was quite noticeable.
Due to potential learning effects, build positions in predictable high-impact stocks before the announcement, then monitor flows and impacts to decide on targeting the ETF rebalancing trading day.

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Aug 25

Daily Brief Event-Driven: (Mostly) Asia-Pac M&A: APM Human Services and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

(Mostly) Asia-Pac M&A: APM Human Services, TCM, Alps Logistics, Fancl, Jeisys Medical, PropertyGuru
ESR Group (1821 HK): A Rumoured Offer Price Surfaces
Henlius (2696 HK): Share Alternative Facilitates the Vote
Japan Tobacco/Vector Group: Possible Bump-Up?
NIFTY Bank Index Rebalance: Canara Bank IN; Bandhan Bank OUT
China Healthcare Weekly (Aug.25)- China TCM 24H1 Profit Warning, Financing Activities, Giant Biogene
Weekly Deals Digest (25 Aug) – Seven & I, Iriso, Fancl, Alps Logistics, China TCM, Henlius, GA Pack
Trading Situation for Hyundai Motor’s 5% Stake in Korea Zinc, Set to Be Unlocked in October
NIFTY50 Index Rebalance: Trent, BEL to Replace Divi’s Lab, LTIMindtree
Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow

(Mostly) Asia-Pac M&A: APM Human Services, TCM, Alps Logistics, Fancl, Jeisys Medical, PropertyGuru

I tally 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal
Two new deals were discussed this week: Alimentation Couche-Tard (ATD CN)‘s non-binding proposal for Seven & I Holdings (3382 JP).; and EQT’s Offer for PropertyGuru (PGRU US).
Key updates took place on APM Human Services (APM AU), TCM (570 HK), GaPack (468 HK), Alps Logistics (9055 JP), Fancl Corp (4921 JP), and Jeisys Medical (287410 KS).

ESR Group (1821 HK): A Rumoured Offer Price Surfaces

A media outlet that Reports on Deals reported that the consortium will offer HK$14.50 per share, a 22.1% and 61.8% premium to the last close (HK$11.88) and undisturbed price (HK$8.96).
While not a knockout offer, the consortium’s impending binding proposal suggests confidence that the offer price and structure would gain the support of the substantial shareholders.
The downside to a deal break is low as ESR’s valuation is undemanding. Its forward EV/EBITDA multiple is at a 30% discount to the median peers’ multiple.

Henlius (2696 HK): Share Alternative Facilitates the Vote

Shanghai Fosun Pharmaceutical (Group) (2196 HK) announced the Shanghai Henlius Biotech (2696 HK) share alternative offer, subject to proration due to a cap of 8% of outstanding shares.
The share alternative offer was necessary to facilitate the vote as the HK$24.60 offer is half the HK$49.60 IPO price.
The co-founders, HenLink and LVC, will likely tender some or all their shares for scrip. At the last close and for the December-end payment, the gross/annualised spread is 7.4%/17.9%.

Japan Tobacco/Vector Group: Possible Bump-Up?

By Jesus Rodriguez Aguilar

JT plans to acquire 100% of Vector Group at $15.00/share, a 29.9% premium. The offer requires over 50% acceptance, with Board support and completion expected by late 2024, pending approvals.
The shares go ex-dividend on August 30, with payment on September 12. Adjusted for the dividend, shares trade at a -0.4% gross spread. My fair value estimated is $15.92/share.
Consensus sets a target price of $16/share. JT may consider raising its offer to this level (6.67%), especially if they see Vector as a strong long-term investment.

NIFTY Bank Index Rebalance: Canara Bank IN; Bandhan Bank OUT

In line with our forecast, Canara Bank (CBK IN) will replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the close on 27 September.
Bandhan Bank Ltd (BANDHAN IN) will be deleted from a global index at the close on 31 August, so real float will increase a lot over the next month.
Passive trackers will need to buy over 2 days of ADV in Canara Bank (CBK IN) and sell 1 day of ADV in Bandhan Bank Ltd (BANDHAN IN).

China Healthcare Weekly (Aug.25)- China TCM 24H1 Profit Warning, Financing Activities, Giant Biogene

By Xinyao (Criss) Wang

China Traditional Chinese Medicine (570 HK)‘s profit warning suggests weaker-than-expected 2024H1 results, but the interim report is needed for clarity. This is unlikely to negatively affect the company’s privatization plans.
In 24H1, healthcare investment and financing activities have slowed, and it will take time for investors’ confidence in the sector to recover.
Giant Biogene (2367 HK)‘s 24H1 results exceeded expectations, leading management to raise its 2024 guidance. However, the profit margin declined, and we remain cautious about long-term growth prospects.

Weekly Deals Digest (25 Aug) – Seven & I, Iriso, Fancl, Alps Logistics, China TCM, Henlius, GA Pack

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: WeRide (WRD US) delayed its Nasdaw IPO, 99 Speed Mart Retail Holdings (99SPD MK) launched a US$530 million IPO.
Event-Driven developments: Seven & I Holdings (3382 JP), Iriso Electronics (6908 JP), Fancl Corp (4921 JP), China Traditional Chinese Medicine (570 HK), Shanghai Henlius Biotech (2696 HK), GA Pack.

Trading Situation for Hyundai Motor’s 5% Stake in Korea Zinc, Set to Be Unlocked in October

The market is watching closely for when Hyundai Motor might sell its 5% stake in Korea Zinc, with the lockup ending on October 7th.
Hyundai might mediate to end the lawsuit and lift the injunction, potentially agreeing to sell the stake to a third party or on the market.
The uncertainty around Hyundai’s Korea Zinc stake sale makes trading challenging, but its actions in Q4 could significantly affect Korea Zinc’s stock price and create trading opportunities.

NIFTY50 Index Rebalance: Trent, BEL to Replace Divi’s Lab, LTIMindtree

Trent (TRENT IN) and Bharat Electronics (BHE IN) will replace LTIMindtree (LTIM IN) and Divi’s Laboratories (DIVI IN) in the NIFTY Index (NIFTY INDEX) at the close on 27 September.
Passive trackers will need to trade at least 5 days of ADV and over 11 days of delivery volume in the stocks.
All the index changes are also changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) and there will be opposing flows (though much smaller in size) for the stocks.

Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow

Alimentation Couche-Tard has returned to the well with a NBIO for 7&I (3382 JP). This’ll be anathema to politicians who view 7&i as a local champion AND a lifeline entity.
Global travel outfit Webjet Ltd (WEB AU) has announced the separation of its two key divisions. The sum of the part is greater than the whole? I’ll take that bet.
The Kim family turn their focus to Hanwha Galleria (452260 KS) in the latest Partial Offer within the Hanwha Group complex.

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Aug 24

Daily Brief Event-Driven: StubWorld: More Partial Offers In The Hanwha Group Complex and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

StubWorld: More Partial Offers In The Hanwha Group Complex
Examining the Severity of Proration Risk in the Hanwha Galleria Tender Offer
EQD | HSI May Pull Back, Levels to BUY For Rally Continuation In September

StubWorld: More Partial Offers In The Hanwha Group Complex

After the Kim family-backed Hanwha Energy completed Hanwha Corporation‘s Partial Offer last month, Hanwha Galleria (452260 KS)‘s VP Kim Dong-seon has now launched a Partial Offer for 17.5% in Galleria.
Preceding my comments on Hanwha 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%.

Examining the Severity of Proration Risk in the Hanwha Galleria Tender Offer

The Hanwha Galleria tender offer has no cancellation risk but carries proration risk, keeping the spread at around 7%.
For Hanwha Galleria, most floating shares are held by retail investors, and the smaller float size compared to Hansol Logistics further reduces proration risk.
Even though the actual trading volume might be a concern, it’s still worth thinking about going for an aggressive strategy to take advantage of the spread, which is around 7%.

EQD | HSI May Pull Back, Levels to BUY For Rally Continuation In September

By Nico Rosti

We have correctly forecasted a August rally for the Hang Seng Index in previous insights, here and then here – the rally is on, but a pullback is coming.
The pullback may come in this week or the next, but it’s probably behind the corner, the index can continue higher after the pullback.
In this insight we want to expose what are the levels to buy LONG to benefit from a highly probable continuation of the rally in September.

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Aug 23

Daily Brief Event-Driven: Couche-Tard Bid for 7&I (3382) – FEFTA and Economic Security and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Couche-Tard Bid for 7&I (3382) – FEFTA and Economic Security
NPS Will Vote Against the Merger Between SK Innovation and SK E&S
Insulet Launches a Patent Lawsuit Against Eoflow in Europe
A Tender Offer to Purchase a 17.5% Stake in Hanwha Galleria by Kim Dong-Sun
NPS Effectively Decides to Exercise Appraisal Rights Against SK Innovation: Trading Considerations
Korea’s New Retail Pool Borrow Fee Calculation & Disclosure Rules: Impacts on Flow Trading
Both Hanwha Aerospace Spinoffs Remain in KOSPI 200: Trading Value Gap Between Trading Suspension
Quiddity Leaderboard SET50 Dec 24: 4 Changes Possible; Reference Period Starts on 1st Sep
Brookfield/Grifols: Update & Recap, Spread, Discount

Couche-Tard Bid for 7&I (3382) – FEFTA and Economic Security

The largest potential inbound cross-border M&A in years – for a national champion no less – gets a lot of press coverage.
This morning, a Nikkei article noted Alimentation Couche-Tard (ATD CN) was likely to need “prior approval” from Japanese regulatory authorities for its takeover “the Nikkei has learned.”
It wasn’t difficult for the Nikkei to learn that. METI publishes a FEFTA List. 7&i has been on it for years as Type II Designated Business, requiring prior approval.

NPS Will Vote Against the Merger Between SK Innovation and SK E&S

NPS will vote against the merger between SK Innovation and SK E&S, mainly due to significant concerns about destroying shareholder value (especially for SK Innovation shareholders).
Sustinvest also recommended that institutional investors vote against this merger, citing that the merger ratio between SK Innovation and SK E&S is disadvantageous to SK Innovation’s general shareholders.
If NPS exercises its appraisal rights, this could put a knife in the wheel of the M&A merger between SK Innovation and SK E&S.

Insulet Launches a Patent Lawsuit Against Eoflow in Europe

Eoflow announced Insulet had filed an injunction on 3 July against Eoflow and Menarini requesting a ban on the manufacture, sale, distribution, and use of EOPatch in 17 European countries.
Given that Eoflow should have reported this event earlier, this is likely to result in further loss of confidence on Eoflow by many investors in the near term.
If Eoflow is able to complete its rights offering (albeit lower amount than proposed), this could boost its chances to become a formidable competitor to Insulet on a global basis.

A Tender Offer to Purchase a 17.5% Stake in Hanwha Galleria by Kim Dong-Sun

It was announced that a tender offer to purchase a 17.54% stake in Hanwha Galleria has been launched by Kim Dong-Sun (Vice President at Hanwha Galleria).
Tender offer price is 1,600 won per share, which is 22.8% higher than the closing price on 22 August. Tender offer amount is 54.4 billion won.
On 23 August, Hanwha Galleria’s share price is likely to rise close to the tender offer price as many investors believe the tender offer is likely to be successful.

NPS Effectively Decides to Exercise Appraisal Rights Against SK Innovation: Trading Considerations

NPS’s opposition suggests a likely vote against the merger, but if they plan to exercise appraisal rights, they might abstain to preserve that option.
NPS typically exercises appraisal rights when the spread exceeds 5%, as seen in past mergers like Celltrion and Samsung. They didn’t act when the spread was below 5%.
The key question is whether SK Innovation can boost its stock price to avoid NPS exercising rights. Otherwise, the merger may pass, but the stock could drop significantly.

Korea’s New Retail Pool Borrow Fee Calculation & Disclosure Rules: Impacts on Flow Trading

The new rule mandates that retail pool fees be tied to the fees paid by institutional borrowers, and this information must be publicly disclosed.
This rule ensures faster, more accurate market release of stock-specific borrow fees, which are now tied to actual fees received, replacing the arbitrarily set rates by brokerages.
With short-selling resuming next April, this rule could drive new flow trading strategies and significantly influence target screening in the short-selling market.

Both Hanwha Aerospace Spinoffs Remain in KOSPI 200: Trading Value Gap Between Trading Suspension

KRX announced that both Hanwha Aerospace and the new Hanwha Industrial Solutions will be added to the KOSPI 200.
Since 2020, two K200 spinoffs had both companies remain: DL Holdings and DL E&C in January 2021, and SK Telecom and SK Square in November 2021, with notable value increases.
This trade isn’t risk-free and requires a sophisticated hedge setup, but the trading opportunities from this flow situation are worth close attention.

Quiddity Leaderboard SET50 Dec 24: 4 Changes Possible; Reference Period Starts on 1st Sep

The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.
Currently, we see 4 expected ADDs/DELs but the 3-month reference period used for average market cap rankings starts on 1st September and only after that the rankings will become stable.

Brookfield/Grifols: Update & Recap, Spread, Discount

By Jesus Rodriguez Aguilar

Bloomberg reported that Brookfield (BN CN) is seeking bank backing for up to €9.5 billion in debt to facilitate a potential take-private acquisition of Grifols SA (GRF SM).
Considering a €10.18/share possible offer price (institutionals are seeking €12), the A shares are trading at a 7.3% gross spread and are pricing a 62.5% possibility of deal completion.
The preferreds trading at 17.5% discount vs ordinary shares should be favored in case of takeover, with Long B shares/short A shares my preferred way to get involved.

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Aug 22

Daily Brief Event-Driven: JD.com (9618 HK): Index Implications of Walmart Placement and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

JD.com (9618 HK): Index Implications of Walmart Placement
China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands
Thoughts On Webjet (WEB AU)’s Demerger
Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]
Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index
Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek
S&P/ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes
TCM (570 HK): Profit Warning Is No Biggie
Quiddity Leaderboard S&P500 Sep 24 Rebal: Palantir, Apollo, Workday Racing for Mega$ Flows

JD.com (9618 HK): Index Implications of Walmart Placement

Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.

China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands

China Traditional Chinese Medicine (570 HK) profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes.
The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM’s profits or prospects.
If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote.

Thoughts On Webjet (WEB AU)’s Demerger

Back on the 22 May, global travel outfit Webjet (WEB AU) announced it was exploring the separation of its two divisions – Webjet and Webjet B2C – via a demerger.
If the demerger is implemented, shareholders will receive one Webjet B2C share for every Webjet share; plus retain their existing shares in Webjet (to be renamed WEB Travel Group).
A demerger booklet has been dispatched, with a 17th September vote on the in-specie distribution. If approved, WEB Travel (ex-entitlement) and Webjet B2C commence trading on the 23rd September.

Eoflow: Rights Offering of 82 Billion Won and [Medtronic & Eoflow – Don’t You Forget About Me]

After the market close on 21 August, Eoflow (294090 KS) announced a rights offering capital raise of 9.1 million new shares, representing share dilution of 23%.
Based on the expected rights offering issue price of 9,040 won, the company is expected to raise 82.2 billion won in this capital raise.
Eoflow has monthly cash burn rate of about 3.3 billion won. If the rights offering is successful, it would have adequate capital resources for about a couple of years.

Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple

The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.

LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index

LG Electronics aims for 7% growth, a 7x EV/EBITDA multiple, and a ₩1,000 DPS with a 25% payout ratio, likely disclosing details by late October or early November.
LG Electronics’ value-up disclosure highlights major non-financial companies’ participation before the value-up index launch, driven by regulatory pressure and concerns about index inclusion.
Samsung and Hyundai are likely to disclose value-up plans by early September, prompting an upward revision of flow size predictions for the value-up index launch.

Trading Situation Arising from Local Pensions’ Unusual Buying of DB HiTek

From early June until yesterday, local pension funds have purchased nearly 4% of DB HiTek’s SO. This places DB HiTek in a dominant first position in their net buying list.
The timing of local pension funds beginning to buy DB HiTek coincidentally aligns with May 22, when DB Inc was requested by the KFTC to transition into a holding company.
Focus on potential price impact from DB Inc.’s buying and value-up index inflows. Considering a relative overweight in DB HiTek may be strategic despite some risk.

S&P/ASX Index Rebalance Preview: Review Period Nearly Done; Big Impact Changes

With 2 trading days left in the review period, there could be 30 adds/deletes across the S&P/ASX family of indices in September.
Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
The forecast adds have hugely outperformed the forecast deletes. Borrow recall on the deletes and increased borrow availability on the adds could result in underperformance following announcement of the changes.

TCM (570 HK): Profit Warning Is No Biggie

China Traditional Chinese Medicine (570 HK) flagged a 60-70% drop in its 1H24E net profit versus 1H23, due to reduced sales/profit of TCM concentrate, bad debt provisions, and remedial taxes.
MAC triggers? No – Sinopharm won’t exercise such right, even if one was ostensibly triggered. I’d be surprised if Sinopharm wasn’t fully aware of TCM’s underlying operations.
Get involved on any dips today. Trading wide at a 11.7%/38.7% gross/annualised spread, assuming Dec-end payment.

Quiddity Leaderboard S&P500 Sep 24 Rebal: Palantir, Apollo, Workday Racing for Mega$ Flows

The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
In this insight, we take a look at the upcoming constituent changes in the run up to the September 2024 index rebal event.
We expect two regular changes in September 2024. There are also several live M&A events which could trigger intra-review index changes in the late-2024/early-2025.

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Aug 21

Daily Brief Event-Driven: Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications
Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line
Trading Considerations for Won Appreciation & Korean ADR Premium Volatility
Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder
Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion
APM Human Services (APM AU): Scheme Vote on 18 September
APM Human Services (APM AU): 18th Sept Vote On Madison Dearborn’s Offer
Quiddity Leaderboard ASX Sep 24: Trade Delivers Strong Return Again; 3 Days Remaining for Base Date
FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in October
Galderma (GALD): Successful Injection in Swiss & Global Indices

Korea FSS Releases Final Guidelines for Short Selling Compliance: Trading Implications

This final guideline formalizes earlier drafts by the FSS. Though not strictly mandatory, its detailed requirements mean it functions as a de facto rule that must be followed closely.
The new, stringent requirements are likely to eliminate common stock borrowing practices in Korea, making timely transactions difficult.
New trading patterns and market flows may emerge when short selling resumes in April, with increased importance of borrow balance data and potential rise in counter-flow trading.

Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line

By Oshadhi Kumarasiri

It was reported yesterday that Alimentation Couche-Tard (ATD CN) has put forward a bold proposal to acquire Seven & I Holdings (3382 JP).
The offer price remains undisclosed, but the market may be anticipating a significant premium based on the share price movement following the news.
However, we believe the offer price could fall short of market expectations, and it is likely that Seven & i will reject the proposal.

Trading Considerations for Won Appreciation & Korean ADR Premium Volatility

Increased exchange rate volatility affects the ADR premium, but past patterns show that exchange rate and ADR premium directions may not always align, requiring consideration of specific contextual factors.
If the won appreciates below the 1,300s range, overseas institutions may shift to asymmetric selling of underlying shares for foreign exchange profit, as shown by rising ADR premiums.
We should watch for peak conditions to capture significant ADR premiums. Trading options include borrowing underlying shares for ADR conversion, even under the current short-selling ban.

Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder

Murakami’s entities, City Index Eleventh and Aya Nomura, reported a 5.06% position in Iriso Electronics (6908 JP). The purchases were from 25 July to 13 August.
Murakami’s average buy-in price over the last 60 days was JPY2,378.90 per share, a 7.8% discount to the last close price.
Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. The former is likely as Iriso is cash-rich with a P/B less than 1x.

Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion

Guzman Y Gomez (GYG AU) listed on 20 June and is eligible for inclusion in the S&P/ASX family of indices at the September rebalance.
Whether the stock is included in indices depends on the index providers estimate of free float. We expect index providers to assign floats of between 25-35% for the stock.
Inclusion in one global index could come in November and another in December. Inclusion in the S&P/ASX indices will depend on whether float is higher than 30% or lower.

APM Human Services (APM AU): Scheme Vote on 18 September

The APM Human Services (APM AU) IE considers Madison Dearborn Partners (MDP)’s A$1.45 offer fair and reasonable as it is within the A$1.40 to A$1.74 valuation range.
The offer is conditional on FIRB, US HSR and shareholder approval. FIRB approval should be forthcoming as MDP is the second-largest shareholder.
While the offer remains underwhelming, rollover shareholders and quiet retail boards should ensure the vote passes. At last close and for the 10 October payment, the gross/annualised spread is 1.4%/10.1%.

APM Human Services (APM AU): 18th Sept Vote On Madison Dearborn’s Offer

Back on the 31st May, employment and disability services play APM Human Services (APM AU) and US PE-outfit Madison Dearborn Partners, entered a Scheme at A$1.45/share, in cash.
That’s a 74.7% premium to undisturbed. A scrip option was afforded, and Executive Chair, Megan Wynne and CEO, Michael Anghie will take up that option, if the Scheme is implemented.
The Scheme Booklet is now out, with a Scheme Meeting to be held on the 18th September. Expected implementation on the 10 October. The IE says fair & reasonable.

Quiddity Leaderboard ASX Sep 24: Trade Delivers Strong Return Again; 3 Days Remaining for Base Date

In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the September 2024 index rebal event.
We continue to expect one change for ASX 100 and two changes for ASX 200.
Separately, there could be 14 ADDs and 6 DELs for ASX 300.

FnGuide Semiconductor Top10 Index Rebalance Preview: Two Changes Likely in October

With the start of the review period around the corner, there could be two changes for the FnGuide Semiconductor Top10 Index at the October rebalance.
Wonik Ips (240810 KS) and Techwing Inc (089030 KS) are potential adds while ISC Co Ltd (095340 KS) and Dongjin Semichem (005290 KS) are potential deletes.
Passives will need to trade more than 2x ADV on two potential changes and more than 1x ADV on another potential change.

Galderma (GALD): Successful Injection in Swiss & Global Indices

By Dimitris Ioannidis

Galderma (GALD SW) is one of the largest Global and Swiss Index additions at the August and September 2024 reviews following its recent IPO valued at ~$17bn.
The company is forecasted to get added in the second Global Index at the September 2024 review. Estimated demand is ~$162m and ~5.0 ADV.
The IPO lock-up expiry is forecasted to generate an additional demand of ~$42m and ~1.3 ADV at the December 2024 review.

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Aug 20

Daily Brief Event-Driven: MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN) and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)
Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere
FXI Rebalance Preview: China Tower (788 HK) Could Replace CICC (3908 HK)
HK CEO & Director Dealings (19th Aug 2024): Merlin Selling Swire Pac/Props; Chans Buying Hang Lung
Liquid Universe of European Ordinary and Preferred Shares: August‘24 Report
China A50 ETFs Rebalance Preview: Two High Probability Changes in Sep
Archimed Group Seeks Delisting of Jeisys Medical Through Stock Exchange
KOSDAQ150 Index Adhoc Rebalance Preview: Replacements for Jeisys Medical

MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)

Today, part-way through the day, the Nikkei ran an article saying that Alimentation Couche-Tard (ATD CN) had made a confidential non-binding proposal to buy Seven & I Holdings (3382 JP).
7&i shares obviously went up (limit up in a hurry, staying there, large size traded limit up at close).
Now things get complicated. 7&i has said they received a non-binding proposal for all the shares. There will be a Special Committee of all Independent Directors. All stakeholders will matter.

Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere

Seven & I Holdings (3382 JP) shares rose 22.7% as it confirmed media reports that it had received a confidential, non-binding preliminary proposal from Alimentation Couche-Tard (ATD CN).
The interest is unsurprising due to the weak share price performance. Since ValueAct’s open letter on 25 January 2022, the shares are up 5.2% vs. the Nikkei 225 up 38.0%.
Couche-Tard aims for a friendly offer, which is challenging as it requires support from the founder’s family and the Japanese government. Therefore, the probability of a binding proposal is low.

FXI Rebalance Preview: China Tower (788 HK) Could Replace CICC (3908 HK)

With the review cutoff done, we expect just one change for the iShares China Large-Cap (FXI) (FXI US) ETF in September.
China Tower (788 HK) is a high probability inclusion while China International Capital Corporation (3908 HK) is a high probability deletion.
There has been an increase in cumulative excess volume for both stocks in the last few months, but the pace has slowed noticeably in the recent past.

HK CEO & Director Dealings (19th Aug 2024): Merlin Selling Swire Pac/Props; Chans Buying Hang Lung

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular insight include: Swire Pacific (19/87 HK)/Swire Properties (1972 HK) and Hang Lung (10 HK)/Hang Lung Properties (101 HK).

Liquid Universe of European Ordinary and Preferred Shares: August‘24 Report

By Jesus Rodriguez Aguilar

Since mid-July, share-price spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 8 widened, 2 remained at same level).
Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA (GRF SM) (see section on the company), Media-for-Europe, Sixt.
Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.

China A50 ETFs Rebalance Preview: Two High Probability Changes in Sep

With the review cutoff done, there should be two changes for the CSOP FTSE China A50 (HKD) (2822 HK) / iShares FTSE/Xinhua A50 China (2823 HK) ETFs in September.
Huaneng Lancang River Hydropow (600025 CH) and China National Nuclear Power (601985 CH) should replace China Tourism Group Duty Free Corp (601888 CH) and Yihai Kerry Arawana (300999 CH).
China Tourism Group Duty Free (1880 HK) will be deleted from a global index later this month and there could be some opportunities to trade the A/H arb.

Archimed Group Seeks Delisting of Jeisys Medical Through Stock Exchange

Jeisys Medical announced that it has decided to exchange shares with Syracus Subco, its largest shareholder. The stock exchange ratio between Syracus Subco and Jeisys Medical is 1 to 1.3575606.
The exchange date is 23 October. Through this stock exchange, Archimed Group (owner of Syracus Subco) seeks to delist Jeisys Medical (287410 KS).
Jeisys Medical also announced that it plans to cancel 1,075,838 common shares, representing 1.4% of its outstanding shares.

KOSDAQ150 Index Adhoc Rebalance Preview: Replacements for Jeisys Medical

Archimed, via its Korean entity Syracuse Subco, now holds 91.35% of Jeisys Medical (287410 KS) following the second tender offer. Jeisys shares will be delisted in the next couple months.
Jeisys Medical (287410 KS) is a KOSDAQ 150 Index (KOSDQ150 INDEX) constituent and there will be a replacement for the stock in the index.
Recent ad hoc replacements to the KOSDAQ 150 Index (KOSDQ150 INDEX) have traded well and that warrants positioning for this event.

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Aug 19

Daily Brief Event-Driven: Hang Seng Internet & IT Index Rebalance: Three Changes & A Few Surprises and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Hang Seng Internet & IT Index Rebalance: Three Changes & A Few Surprises
HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)
HSCEI Sep24 Rebal – Two ADDs, Two DELETEs, Two Surprises, Middling Flows
Hang Seng Index Sep24 Rebal – No Name Changes, Some Capping, 1% One-Way Flow – Total 0️⃣🍔
Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)
Apple Inc (AAPL US): $43bn Passive Buying Driven by Berkshire Selling & Market Consultation
Sep24 HSTECH Index Rebal – ASMPT (522 HK) ADDed as Expected, After Post-Earnings Fall
Merger Arb Mondays (19 Aug) – China TCM, Henlius, Canvest, CPMC, JTower, Fuji Soft PropertyGuru
Apple (AAPL): Berkshire’s Sell-Off Triggers $37bn Demand from S&P 500
Quiddity Leaderboard ChiNext & ChiNext 50 Dec 24: US$417mn One-Way; Some Changes to Expectations

Hang Seng Internet & IT Index Rebalance: Three Changes & A Few Surprises

There will be 3 changes for the Hang Seng Internet & Information Technology Index (HSIII) at the September rebalance. There are some surprises.
Estimated one-way turnover at the rebalance is 3.4% resulting in a round-trip trade of HK$2.04bn (US$262m). 7 stocks will have over 1x ADV to trade.
Weimob Inc. (2013 HK) is a surprise add. There is 6x ADV to buy from passive trackers and shorts are 12% of shares out and 24x ADV to cover.

HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)

As expected, ASM Pacific Technology (522 HK) will replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 6 September.
Estimated one-way turnover at the rebalance is 3.2% resulting in a round-trip trade of HK$6.5bn. Passives need to buy over 7x ADV in ASM Pacific Technology (522 HK).
Positioning appears light in both stocks. Expect ASM Pacific Technology (522 HK) to move up and Ping An Healthcare and Technol (1833 HK) to move lower near-term.

HSCEI Sep24 Rebal – Two ADDs, Two DELETEs, Two Surprises, Middling Flows

The HSCEI is famous but has less AUM tracking it passively than you’d think. Nevertheless it is well-known and well-watched.
J&T Global Express (1519 HK) and New Oriental Education & Techn (9901 HK) were ADDs. JD Logistics (2618 HK) and SenseTime Group (20 HK) are DELETEs.
PICC Property & Casualty H (2328 HK) was NOT included. This was a surprise. We may see some disappointment this week from pre-positioning getting sold.

Hang Seng Index Sep24 Rebal – No Name Changes, Some Capping, 1% One-Way Flow – Total 0️⃣🍔

The Hang Seng Index Committee its slow move (lack of movement) towards 100 names and sector rebalancing to tech and healthcare. This is really disappointing.
This time? We get nothing. No name changes. Some capping flows. 6 FAF changes.
Minimal flows on the HSI rebalance to be effective on 9 September.

Hang Seng Index (HSI) Rebalance: Meh (Or Will We Ever Get to 100 Stocks?)

In a surprise (maybe should not have been!), there are no constituent changes for the Hang Seng Index (HSI INDEX) in September. However, there are float and capping changes.
Estimated one-way turnover is 1% and estimated round-trip trade is HK$3.73bn (US$478m). There are no stocks with over +/-0.5x ADV to trade but flows could add to/offset other index flows.
We remain at 82 index constituents and the road to 100 constituents appears to be a long drawn out torturous one. At this glacial pace, could be an eternity away.

Apple Inc (AAPL US): $43bn Passive Buying Driven by Berkshire Selling & Market Consultation

Berkshire Hathaway Inc Cl B (BRK/B US) held over 5% of Apple (AAPL US). Nearly half of that was sold in the June quarter to take the holding to 2.63%.
Berkshire’s selling should result in an increase in Apple (AAPL US)‘s free float in the S&P 500 INDEX (SPX INDEX) and other related indices.
There will also be large buying in Apple (AAPL US) from the Technology Select Sector SPDR (XLK US) ETF if the proposals in the market consultation are implemented.

Sep24 HSTECH Index Rebal – ASMPT (522 HK) ADDed as Expected, After Post-Earnings Fall

HSTECH sees one ADD, one DELETE and several capping and re-capping actions. One of the re-caps is already an un-recap (i.e. a new capping), to be updated.
The ADD is ASM Pacific Technology (522 HK), as expected, with significant ADV impact to buy. The DELETE is Ping An Healthcare and Technol (1833 HK), also a big sell.
Across the three major indices, Alibaba Group Holding (9988 HK) is the big dollar sell and HSTECH changes are the biggies in terms of ADV impact.

Merger Arb Mondays (19 Aug) – China TCM, Henlius, Canvest, CPMC, JTower, Fuji Soft PropertyGuru

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: Yichang HEC Changjiang Pharma (1558 HK), JTower (4485 JP), China Traditional Chinese Medicine (570 HK), Canvest Environmental Protection Group (1381 HK), Capitol Health (CAJ AU).
Lowest spreads: Fuji Soft Inc (9749 JP), Descente Ltd (8114 JP), Second Chance Properties (SCE SP), C.I. TAKIRON Corporation (4215 JP), Fancl Corp (4921 JP), Alps Logistics (9055 JP).

Apple (AAPL): Berkshire’s Sell-Off Triggers $37bn Demand from S&P 500

By Dimitris Ioannidis

Free float is forecasted to increase from ~94% to 100% in S&P 500 and other US and Global indices after Berkshire halved its stake in Apple (AAPL US) .
Forecasted demand from S&P 500 and S&P TMI is 164.2m shares, $37.1bn and 3.0 ADV at the close of 20 September 2024.
Materialization of the free float increase is uncertain due to debatable strategic shareholder classification. ETF ratios and current free float improve the confidence of the forecast.

Quiddity Leaderboard ChiNext & ChiNext 50 Dec 24: US$417mn One-Way; Some Changes to Expectations