Event-Driven Archives | Page 76 of 187 | Smartkarma

CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, Kurita Water Industries, GMO Payment Gateway, Keio Corp and NGK Insulators have underperformed the Nikkei225 over the recent past.
The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.

EQD | KOSPI 200 Falling, LONG Support

By Nico Rosti

The KOSPI 200 INDEX closed down last week (CC=-1) and is going towards the Q2/median support at 314. The index is also OVERSOLD MONTHLY (CC=-3)
One possible scenario is to see the index downtrending into early/mid-November, find a bottom, and then begin a counter-rally from there.
The index could go down more this week, but a LONG trade could begin at 314 support, and if that does not hold, the next support area is at 306.

Quiddity Leaderboard ASX Dec 23: InvoCare, Origin Energy, New Crest, Allkem, and More

In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the December 2023 Rebalance.
There could be up to four ASX 200 changes including the intra-review changes that could potentially be triggered by M&A events.
The Origin Energy (ORG AU), Newcrest Mining (NCM AU), and Allkem Ltd (AKE AU) deals also could have interesting index change and/or flow implications over the next few weeks/months.

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Oct 22

Daily Brief Event-Driven: Index Rebalance & ETF Flow Recap: NKY and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank
Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Lithium Power, Vinda, Origin Energy, Liontown, Kenedix REITs
EQD | S&P/ASX200 Directionless or Downtrending?

Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank

Light & Wonder (LNW US)/ Light & Wonder (LNW AU) replaced United Malt Group Ltd (UMG AU) in the S&P/ASX 200 (AS51 INDEX) last week.
Newcrest Mining (NCM AU) stops trading this week and should be replaced by Newmont Mining (NEM US) CDIs in the ASX indices.
Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.

Last Week In Event SPACE: Shinko Electric Industries, MGM China, Decente, Sankei Real Estate,

If Descente Ltd (8114 JP) earnings disappoints, buy the dip. Itochu Corp (8001 JP) is buying for the long-term.
MGM China Holdings (2282 HK) has gained market share in mass table market, VIP, and total revenue. Yet MGM’s FY24E EV/EBITDA is ~40% below its two-year forward average EV/EBITDA pre-Covid.
If you had a J-REIT portfolio, Sankei Real Estate (2972 JP) would go in and push something else out or smaller. I think one gets beta-plus, which is usually called alpha.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Lithium Power, Vinda, Origin Energy, Liontown, Kenedix REITs

I tally 42 – 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 deal was discussed on Smartkarma this week:Lithium Power International (LPI AU)‘s Scheme. Vinda International (3331 HK) and Shinko Electric Industries (6967 JP) are in the cross hairs.
Key updates took place for: Origin Energy (ORG AU), Liontown Resources (LTR AU), Golden Eagle Energy (SMMT IJ) and Kenedix REITs.

EQD | S&P/ASX200 Directionless or Downtrending?

By Nico Rosti

The S&P/ASX 200 INDEX last week closed down (CC=-1, breached the Q2 support at 6918, entering OVERSOLD territory).
The index has been directionless since early August 2021, it is going down but it’s OVERSOLD MONTHLY (3 months down), so it could bounce in November.
The current MRM pattern is quite bullish from a CC perspective: here we analyze WEEKLY supports to see how far down the index can go, it could bounce soon.

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Oct 21

Daily Brief Event-Driven: Vinda (3331 HK): Tanoto Sees The Wood and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Vinda (3331 HK): Tanoto Sees The Wood
Advent & CenterBridge/Aareal Bank AG: Delisting Offer

Vinda (3331 HK): Tanoto Sees The Wood

On the 27 April, Vinda (3331 HK) announced its controlling shareholder Essity (ESSITYB SS) would commence a strategic review of its 51.59% ownership. See Essity Mulls Holding In Vinda (3331 HK).
That shook a variety of suitors out of the woodwork (so to speak) including (reportedly) Brazil’s Suzano, the world’s largest hardwood pulp producer, Bain Capital, CVC Capital, and DCP Capital.
The latest (alleged) interested party is the Tanoto family, currently holding a 7.03% stake, having first cleared 5% on the 26 September.

Advent & CenterBridge/Aareal Bank AG: Delisting Offer

By Jesus Rodriguez Aguilar

The Delisting Agreement should end the Atlantic bidding for Aareal Bank AG (ARL GR) saga. Atlantic has been hoovering shares in the market since last 7 June.
Atlantic probably owns c.90.8%. Based on daily trading volumes, it would take many days to acquire shares and reach the 95% barrier required to implement a squeeze-out.
Spread is 0.3%/2.3% (gross/annualised, assuming settlement on 8 December), not too bad for a quick buck, but liquidity is razor thin.

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Oct 20

Daily Brief Event-Driven: Liontown Resources Placement – While Discount Is Wide and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price
Another Hidden Passive Flow Trading Opportunity Is Captured in Korea: SOL Semicon ETF December Rebal
Golden Eagle Energy: Share Sale Done. MTO Price Bumped
ZJLD Lock-Up – KKR’s US$680m Stake to Be Unlocked, Although the PE Could Opt to Wait
Liontown Resources (LTR AU): State of Play
Origin/Brookfield: Bump Expected Ahead Of 23 Nov Scheme Meeting
A Merger Share Swap Between Kolmar Korea and Yonwoo
Quiddity Leaderboard SE600 Dec 23: Novartis-Sandoz, Dechra, CHR, and Others

Liontown Resources Placement – While Discount Is Wide, It Is at a Premium to Its Pre-Takeover Price

By Clarence Chu

Liontown Resources (LTR AU) is looking to raise A$365m (US$230m) for capital expenditure and to plug its funding gap for the Kathleen Valley Lithium (KVL) project.
Together, the combined A$1.14bn equity/debt raising comes after Albemarle abandoned its A$6.6bn (US$4.2bn) acquisition bid for Liontown Resources earlier in the week.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Another Hidden Passive Flow Trading Opportunity Is Captured in Korea: SOL Semicon ETF December Rebal

For the impending December rebalancing, the effective date is set for December 18th, while the ETF rebalancing trading will take place on December 15th.
Jusung Engineering and Eugene Technology are likely to be added, while Lake Materials and SFA Semicon are expected to exit the index.
Aside from constituent changes, Hansol Chemical is anticipated to significantly benefit from the passive impact as the primary beneficiary of the ceiling reversion.

Golden Eagle Energy: Share Sale Done. MTO Price Bumped

This transaction just keeps on giving. First, you received an additional dividend. Now the Offer price has been increased.
On the 26 July, Geo Energy Resources (GERL SP) announced an intention to acquire a 58.65% stake in coal miner Golden Eagle Energy (SMMT IJ) (GEE).
Geo shareholders approved the purchase on the October 13 and the acquisition was completed on the 18 October. This triggered an MTO, which has been revised upward to IDR 1,305.50.

ZJLD Lock-Up – KKR’s US$680m Stake to Be Unlocked, Although the PE Could Opt to Wait

By Clarence Chu

ZJLD Group (6979 HK) raised US$676m in its Hong Kong IPO in April 2023. Its six-month lockup will expire on 26th Oct 2023.
ZJLD is a Chinese liquor company producing baijiu. As per F&S, the firm ranked third among all baijiu companies with three or more aroma types in terms of FY21 sales.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Liontown Resources (LTR AU): State of Play

Liontown Resources (LTR AU) resumes trading today after announcing a raise of up to A$1.18bn to fully fund the Kathleen Valley Lithium Project to first production and beyond.
The equity component is up to A$421m and the placement price of A$1.8/share is a 35.5% discount to the last close.
The placement price is higher than the stock price prior to the Albemarle Corp (ALB US) offer and during a period when its peers have performed poorly.

Origin/Brookfield: Bump Expected Ahead Of 23 Nov Scheme Meeting

On 20th October, the ACCC cleared Brookfield to take over Origin Energy (ORG AU).
The transaction still needs shareholder approval and AustralianSuper with its too-big-to-ignore 13.68% stake reckons terms are below long-term value.
The Scheme Booklet is out with a 23 November Scheme Meeting. The IE backs out a fair value range of $8.45-$9.48/share, but as at June 30. A bump is imminent.

A Merger Share Swap Between Kolmar Korea and Yonwoo

On 19 October, Kolmar Korea announced that it will conduct a merger share swap with Yonwoo early next year to make it into a 100% wholly owned subsidiary.
We believe the merger share swap agreement between Kolmar Korea and Yonwoo is likely to have positive impact on both Kolmar Korea and Yonwoo.
After this share swap is completed, Yonwoo will be delisted. This merger is aimed at improving the inefficient governance structure caused by duplicate listings and improve management efficiency.

Quiddity Leaderboard SE600 Dec 23: Novartis-Sandoz, Dechra, CHR, and Others

The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
In this insight, we take a look at the potential index changes that could take place between now and the end of the December 2023 rebalance.
This includes a couple of intra-review index changes that could be triggered by the Dechra Pharmaceuticals (DPH LN) and Chr Hansen Holding A/S (CHR DC) takeover situations.

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Oct 19

Daily Brief Event-Driven: Shinko Electric (6967) Update – MitCorp In The Mix? and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Shinko Electric (6967) Update – MitCorp In The Mix?
ANTA Sports Investor Day Targets DESCENTE (8114) For Growth
Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake
Kenedix J-REIT Family Merger – Still Room (But Less Time) To Move (Redux-Ish)
A Shift in TIGER Top 10 ETF December Rebalancing: KB Financial Newly In But Not Ecopro Co
IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold
Macau Casinos: MGM China Looks Solid
India – Free Float Changes to Drive Passive Inflows
Youngpoong Paper Mfg: Concerns About CFD Related Selling – Another Margin Call?
Lithium Power (LPI AU): Codelco’s Binding Offer at A$0.57

Shinko Electric (6967) Update – MitCorp In The Mix?

Yesterday about 5 minutes before the close, Shinko Electric Industries (6967 JP) went into kehai, rising 8.6%, then falling back to end + 3% on the day.
This morning, the stock opened down 2%, rose 4%, fell 4%, then rose 4%. All in the first 45 minutes. Then it fell back 4% and ended down 2% today.
The proximate cause of all of this was a Reuters article out 5mins before the close yesterday suggesting Mitsubishi Corp (8058 JP) is considering bidding for Shinko Electric.

ANTA Sports Investor Day Targets DESCENTE (8114) For Growth

Yesterday, Anta Sports Products (2020 HK) held its Investor Day in Beijing. They talked about Descente Ltd (8114 JP) and their plans.
The presentation made by the Descente China Chairman talked about the evolution of performance and the target for 2026, suggesting higher profit now and growth going forward than market expectations.
None of this changes my outlook for why Itochu Corp (8001 JP) is buying Descente shares in the market. And the stock is going up.

Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake

Reuters reported that Mitsubishi Corp (8058 JP) is considering a joint bid for Fujitsu Ltd (6702 JP)’s 50% stake in Shinko Electric Industries (6967 JP).
Fujitsu first flagged a potential stake sale in its 1HFY22 results last October. Previously rumoured suitors include Apollo Global Management, Bain Capital, Dai Nippon Printing, JIC and KKR.
Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden Co Ltd (4062 JP) (up 63.2% YTD). The valuation is undemanding, which facilitates a potential offer.

Kenedix J-REIT Family Merger – Still Room (But Less Time) To Move (Redux-Ish)

A month ago I wrote there was still time, and room, to move on the Kenedix Merger.
Now there’s less time, but the situation and relationships are better understood.
Tracking Excess Volume during the period since the announcement is interesting. And it may tell you less than you think.

A Shift in TIGER Top 10 ETF December Rebalancing: KB Financial Newly In But Not Ecopro Co

While Ecopro Co’s stock has undergone significant corrections since August, KB Financial has sustained an upward trajectory, leading to a significant reversal in float-adjusted market cap.
The current disparity between the two exceeds ₩2T, making it challenging to anticipate another reversal until the screening period.
Ecopro Co and LG Energy Solution also warrant attention due to the narrow gap in their float-adjusted market capitalization. We should monitor any changes in their market capitalization moving forward.

IndusInd Bank (IIB IN): Passive Buying Coming Up as Foreign Room Crosses Key Threshold

Foreign investors sold ~5.7m shares of Indusind Bank (IIB IN) from July to September. That selling has pushed foreign room above the key 15% threshold.
With foreign room crossing 15%, passive trackers will need to buy a chunk of Indusind Bank (IIB IN) stock at the end of November.
There will be positioning on Indusind Bank (IIB IN) though it appears some of that was taken off in the last couple of days.

Macau Casinos: MGM China Looks Solid

Macau’s mass GGR in 3Q23, including slots, was down just 6.7% on 3Q19 levels, but up 11.1% quarter-on-quarter.
The shifting regulatory sands across the gaming landscape has resulted in VIP baccarat revenue accounting for 24% of GGR in 3Q23, down from 43.8% in 3Q19, and 64.6% in 3Q13.
All concessionaires have been impacted by the collapse of the junket industry. But those who relied less on VIP flow have fared better on a comparative basis.

India – Free Float Changes to Drive Passive Inflows

Over the last few weeks, companies in India have been disclosing their shareholding pattern as of end-September. There are a few 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 couple of months resulting in action from passive trackers.
We find 9 stocks where there could be inflows with passive trackers needing to buy over 1 day of ADV on most stocks.

Youngpoong Paper Mfg: Concerns About CFD Related Selling – Another Margin Call?

Youngpoong Paper Mfg’s shares declined sharply by 30% to 33,900 won today, trading only 190k shares (3% of ADTV).
There is high probability that this sell-off could be related to CFD related margin call.
Daiyang Metal, the largest shareholder of Youngpoong Paper Mfg, also dropped limit down today. The Korea Exchange has temporarily suspended trading of both Youngpoong Paper and Daiyang Metal.

Lithium Power (LPI AU): Codelco’s Binding Offer at A$0.57

Lithium Power International (LPI AU) has entered a scheme implementation deed with Corporacion Nacional del Cobre de Chile (Codelco) at A$0.57 per share, a 119.2% premium to the undisturbed price.
Shareholders representing 32.47% of outstanding shares will vote in favour of the scheme. Forums suggest that retail shareholders are broadly resigned to accepting the offer.
The offer is conditional on FIRB approval. The scheme meeting will be held on 23 January 2024. At the last close, the gross spread was 7.5%.

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Oct 18

Daily Brief Event-Driven: Ryoyo (8068) – Ryosan (8140): Recent and Former Activist Targets To Merge and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Ryoyo (8068) – Ryosan (8140): Recent and Former Activist Targets To Merge
Newcrest/Newmont & Potential S&P/ASX Changes
Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM
Liontown Resources (LTR AU): Trading Halt Extended; Passive Selling Update
Liquid Universe of European Ordinary and Preferred Shares: October‘23 Report
Quiddity Leaderboard F100/250 Dec 23: ~7 Changes Possible; LONG Playtech SHORT 888 Interesting
Lithium Power (LPI AU): Cedelco’s Offer

Ryoyo (8068) – Ryosan (8140): Recent and Former Activist Targets To Merge

Today post-close, Ryoyo Electro (8068 JP) and larger equity affiliate (20.1%) Ryosan Co Ltd (8140 JP) announced their final Management Integration Plan (merger by holdco) after signalling a deal May23.
Activist-Ish-Y Silchester sold their stake in Ryosan to Ryoyo in February at a 20% premium. Activist Murakami-san had a top10 Ryosan stake end-March, went substantial 27 June, now owns 10%.
Both low-margin/ROE electronics traders have been subject to activist campaigns over the years. Both “survived”. Now they are banding together to be a bigger independent low-margin electronics trader.

Newcrest/Newmont & Potential S&P/ASX Changes

Newcrest Mining (NCM AU) shares stop trading after the close on 26 October and Newmont Mining (NEM US) CDIs will start trading from the open on 27 October.
Newmont Mining (NEM US) CDIs should replace Newcrest Mining (NCM AU) in the S&P/ASX indices from 27 October. But there could be index changes at the subsequent rebalances.
Based on the case of Block (SQ2 AU), we could see Newmont Mining (NEM US) CDIs deleted from the ASX20 Index in December and from the ASX50 Index in March/June.

Pan Ocean To Sell 5.8% Stake in Hanjin Kal To Secure Funds to Acquire HMM

On 17 October, Pan Ocean (028670 KS) announced that it will sell its 3.9 million shares (5.85% stake) in Hanjin KAL Corp (180640 KS) for about 163 billion won.
The main purpose of this stake sale is to secure more funds for Pan Ocean to potentially acquire HMM Co., Ltd. (011200 KS).
As evidenced by the recent increase in Baltic Dry Index, the potential expansion of the war in Israel could benefit major bulk shipping companies such as Pan Ocean.

Liontown Resources (LTR AU): Trading Halt Extended; Passive Selling Update

Liontown Resources‘ Suspension from Quotation “pending the release of an announcement regarding the finalisation of funding arrangements associated with the Kathleen Valley Project” could last till the open 20 October.
Short interest continued to increase prior to the trading halt and passive selling will be higher following Hancock increasing its stake to 19.9%.
The immediate funding for Liontown Resources (LTR AU) could come from debt sources with an equity raise coming later this year or early next year.

Liquid Universe of European Ordinary and Preferred Shares: October‘23 Report

By Jesus Rodriguez Aguilar

Since mid-September, spreads have generally tightened across our European liquid universe of ordinary and preferred shares (12 have tightened, 7 widened).
Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation), Grifols, Atlas Copco.
Recommended trades long ordinary / short preferred shares: Fuchs, SSAB Svenska Stal.

Quiddity Leaderboard F100/250 Dec 23: ~7 Changes Possible; LONG Playtech SHORT 888 Interesting

In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2023 Rebalance.
Dechra Pharmaceuticals (DPH LN) and Network International Holdings (NETW LN) are currently involved in takeover situations. When those deals close, intra-review changes can be triggered.
Including these changes, there could be up to one F100 change and seven F250 changes between now and the end of the year.

Lithium Power (LPI AU): Cedelco’s Offer

Lithium Power International (LPI AU) has announced it has entered into a Scheme Implementation Deed with Chilean state miner Codelco, the world’s largest copper producer.
Codelco is offering LPI shareholders A$0.57/share, a whopping 119% premium to last close. LPI’s major shareholder, Minera Salar Blanco SpA with 28.25%, is supportive. As is LPI’s board.
The Scheme Meeting is expected to be held on the 23 January with implementation on the 8 February. Clean deal.

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Oct 17

Daily Brief Event-Driven: India – Positioning on Some Interesting* Names and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

India – Positioning on Some Interesting* Names
J&T Global Express (1519 HK): Index Inclusion Possibility & Timelines
Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes
WisdomTree Oct ’23 Rebalance: Estimated Flows for All Adds and Deletes in DEM, XSOE & DGS
Quiddity A/H Premium Tracker (To Oct13): Volatility Up Bigly, Wide Spreads Wider
Attractive Yield of Kumho Petrochem Pref Shares Amid 100 Billion Won of Common Shares Cancellation
Golden Eagle Energy: Last Day To Buy Cum-Divvie
Schaeffler/Vitesco: A Three-Step Merger Process
EQD | NIFTY WEEKLY Weak Bounce, Ready to Fall Next Week?

India – Positioning on Some Interesting* Names

Polycab India, Macrotech Developers, Paytm, Tata Communications, Tata Motors DVR, Apl Apollo Tubes, Persistent Systems and Suzlon Energy have run up over the recent past and have heightened investor attention.
The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.

J&T Global Express (1519 HK): Index Inclusion Possibility & Timelines

J&T Global Express (1936374D CH) is looking to raise HK$3.92bn (US$501m) in its IPO by selling 326.55m shares at HK$12/share, valuing the company at HK$105.75bn (US$13.52bn).
J&T Global Express (1936374D CH) will not get Fast Entry to any indices but should be added to the HSCI in March. Inclusion to Southbound Stock Connect will take longer.
Inclusion in other indices will take longer with the highest probability of index inclusion in September 2024.

Nikkei 225 Index Rebalance Preview (Mar 2024): Ranking, Capping, Funding & Other Changes

The review period for the Nikkei 225 (NKY INDEX) March rebalance ends end January. There could be three changes at the rebalance with sector balance in focus.
Depending on the changes, passive trackers will need to buy between 6-28x ADV (11-50% of real float) on the inclusions and sell between 2.8-44x ADV on the deletions.
Fast Retailing (9983 JP) could be capped at 11% of the index weight and there will be buying in Nitori Holdings (9843 JP) due to the stepwise addition.

WisdomTree Oct ’23 Rebalance: Estimated Flows for All Adds and Deletes in DEM, XSOE & DGS

By Charlotte van Tiddens, CFA

HDFC Bank (HDFCB IN) is the largest buy (XSOE) – estimated flow $44m. Grupo Financiero Banorte SAB d (GFNORTEO MF) is the 2nd largest buy – estimated flow $40m.
Wistron Corp (3231 TT) is the largest sell – estimated flow $68m. POSCO Holdings (005490 KS) is the 2nd largest sell – estimated flow $59m.
Our estimate for the total value of new constituent buys is $1.38bn. We expect deletions to the value of $1.41bn to be sold down across the 3 funds.

Quiddity A/H Premium Tracker (To Oct13): Volatility Up Bigly, Wide Spreads Wider

The Brand-Spanking New (9 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
We used to do it. We brought it back better, with lots of cool interactive tables, and charts, heat maps, and comparative data. And 50 Trade Recommendations.
The last 9 weeks (since the start of the new Trcker and Portfolio 8 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%, -0.29%, -0.71%.

Attractive Yield of Kumho Petrochem Pref Shares Amid 100 Billion Won of Common Shares Cancellation

On 16 October, Kumho Petrochem (011780 KS) announced that it will cancel 0.77 million shares on 23 October, representing 2.6% of its outstanding shares or about 100 billion won.
We particularly like Kumho Petrochem preferred shares which provide a dividend yield of nearly 6.7% which is 2x the dividend yield of the common shares.
Foreigners have been net buyers of Kumho Petrochem preferred shares this year while they have been net sellers of its common shares this year.

Golden Eagle Energy: Last Day To Buy Cum-Divvie

Back on the 26 July, Geo Energy Resources (GERL SP) announced an intention to acquire a majority stake in coal miner Golden Eagle Energy (SMMT IJ) (GEE).
GEO shareholders have now approved the purchase of a 58.7% stake in Golden Eagle from Indonesian conglomerate Rajawali Group, triggering an MTO at IDR1,255/share, which is subject to Indonesia’s OJK.
In addition, GEE announced a special/additional dividend, with a cum-entitlement today, the 17th of October.

Schaeffler/Vitesco: A Three-Step Merger Process

By Jesus Rodriguez Aguilar

Schaeffler (SHA GR) offers €91.00/share for Vitesco Technologies Group (VTSC GR), in cash, 20% premium to 3-month VWAP, 3.3x EV/Fwd EBITDA. There is no minimum acceptance rate.
Later Schaeffler will unify its share classes (current voting ratio 3.01) to use them as currency for Vitesco shareholders not accepting the cash offer (essentially the parent company of Schaeffler).
Vitesco shareholders are being generously rewarded (my fair value estimate is #€74/share), I believe most will tender. Spread is 1.04%/3.70% (gross/annualised, assuming settlement by 31 January). I’d buy below €90/share.

EQD | NIFTY WEEKLY Weak Bounce, Ready to Fall Next Week?

By Nico Rosti

The NIFTY 50 Index closed last week up at 19751.05, 2nd week up, in synch with the S&P 500 INDEX WEEKLY bounce.
The index has not moved up much from a price perspective, weak bounce. Resistance levels must be monitored: if the index rallies this week it could pull back next week.
The trade orientation is to go SHORT once the NIFTY reaches Q2/Q3 OVERBOUGHT resistance levels in the 20167-20230 price area, this week. SHORT Trade at Close is also valid.

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Oct 16

Daily Brief Event-Driven: Japan – Increase in Shorts on Some Interesting* Stocks and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Japan – Increase in Shorts on Some Interesting* Stocks
EOFLOW/Medtronic Tender: Pretrial Timetable and Latest Court Filings
TSI Holdings (3608) – Yet Another Big Buyback; Still Good, Still Cheap, Now W/ Engagement Investors
S&P/ASX200 Index Ad Hoc Rebalance Preview: Replacement for Invocare (IVC)
Light & Wonder CDIs Replace United Malts in ASX200 – Be Careful Is All I Can Say
Trading Angles Using Severely Backwardated Hanwha Ocean’s SSFs Ahead of the Rights Trading
Merger Arb Mondays (16 Oct) – NWS, Haitong Intl, Eoflow, Liontown, Origin Energy, Estia, Pact, JSR

Japan – Increase in Shorts on Some Interesting* Stocks

CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, GMO Payment Gateway, Kurita Water Industries and Open House have all underperformed the Nikkei 225 over the recent past.
The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.

EOFLOW/Medtronic Tender: Pretrial Timetable and Latest Court Filings

Latest filings on Insulet Corp (PODD US)’s voluntary dismissal without prejudice only to Flex (FLEX US), Eoflow (294090 KS)’s motion to restart Korean sales, dismiss a count and a timetable.
Examining the court filings suggests Medtronic Plc (MDT US)’s access to court unredacted documents is restricted. Medtronic’s limited access makes evaluating the transaction’s potential litigation risk challenging.
Eoflow’s defence in the court documents is based on reverse engineering and procedural arguments. The KRX will rule on Eoflow’s share trading suspension by 1 November.

TSI Holdings (3608) – Yet Another Big Buyback; Still Good, Still Cheap, Now W/ Engagement Investors

In April 2022, I wrote about Tsi Holdings (3608 JP) saying in the first three bullet points it could double in two years. It doubled in one.
They bought back shares held by JDB in April 2022, then they launched another buyback program in January 2023, and completed it last month.
Now they have launched another to buy back 8.46% with a ToSTNeT-3 for half on Monday AM. The rest is expected on market through end-March 2024.

S&P/ASX200 Index Ad Hoc Rebalance Preview: Replacement for Invocare (IVC)

Light & Wonder (LNW AU) will replace United Malt Group Ltd (UMG AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 17 October.
Invocare Ltd (IVC AU) is expected to stop trading after the close on 3 November and Boss Resources (BOE AU) is best placed to be the replacement.
There are stocks that are close on the heels of Boss Resources (BOE AU) and will compete for a place. Two of those could be added at the December rebalance.

Light & Wonder CDIs Replace United Malts in ASX200 – Be Careful Is All I Can Say

Post-Close Friday it was announced that Light & Wonder (LNW AU) Chess Depositary Interests would replace United Malt Group Ltd (UMG AU) at the close on 17 October.
This was announced before US markets opened. Light & Wonder (LNW US) shares popped 5.65%, closing 5.8% through the Aussie line.
This is a possibly deceptive index add. I’d be quite careful.

Trading Angles Using Severely Backwardated Hanwha Ocean’s SSFs Ahead of the Rights Trading

First, we can take on some risk and build up a short position using SSFs from now, aiming for an aggressively low price (likely Day 1) during the rights trading.
If this approach seems somewhat risky, the second is to wait until the rights trading and, although accepting some sacrifice in the spread, build positions relatively risk-free.
We can also actively build up a long position in the significantly backwardated SSFs from now and, instead, set up an aggressive short on the underlying shares.

Merger Arb Mondays (16 Oct) – NWS, Haitong Intl, Eoflow, Liontown, Origin Energy, Estia, Pact, JSR

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 – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), Haitong International Securities Group (665 HK), Orecorp Ltd (ORR AU), Liontown Resources (LTR AU).
Owest spreads Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), Pact Group Holdings (PGH AU), Origin Energy (ORG AU), T&K Toka Co Ltd (4636 JP), Healthway Medical Corp (HMED SP).

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Oct 15

Daily Brief Event-Driven: Allkem/Livent (AKE AU | LTHM US) Merger Update: MUCH More Than Meets The Eye and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Allkem/Livent (AKE AU | LTHM US) Merger Update: MUCH More Than Meets The Eye
Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown
Last Week In Event SPACE: EOFlow, Fast Retailing, JMDC, Origin Energy
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Tensions Rise
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Newcrest Mining, Haitong Int’l, Liontown, NWS, IMAX China
Quiddity Leaderboard ChiNext & ChiNext 50: Final Expectations

Allkem/Livent (AKE AU | LTHM US) Merger Update: MUCH More Than Meets The Eye

The Allkem/Livent “merger of equals” discussed in Allkem/Livent (AKE AU | LTHM US) Merger Of Lithium Equals Has Index Surprises and Allkem/Livent: Enlarged Charging Unit is on track.
As of the end of last month, all approvals are received or are expected to be received. The Scheme Booklet is expected next month. Deal is expected to close end-CY2023.
The deal STILL has interesting side issues with index. Even more interesting than Newcrest/Newmont. This is an update with more detail as we probably have 8-10 weeks left.

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, TOPIX FFW, SSE50, AS51, ChiNext, Kenedix, Liontown

An ad hoc S&P/ASX 200 (AS51 INDEX) rebalance will be implemented at the close on 17 October with Light & Wonder (LNW AU) replacing United Malt Group Ltd (UMG AU).
The rebalances of Wisdomtree Emerging Markets (DEM US), Wisdomtree Em Small Cap (DGS US) and Wisdmtree Emerg Mkt Ex-St Ow (XSOE US) will be implemented on 18 October.
There were net outflows from onshore China ETFs with inflows to larger cap ETFs and outflows mainly from the CSI Smallcap 500 Index and CSI 1000 Index trackers.

Last Week In Event SPACE: EOFlow, Fast Retailing, JMDC, Origin Energy

Should the nominated directors, to be voted on by EOFlow (294090 KS)‘s shareholders at the November EGM, include Medtronic Plc (MDT US) executives, then game on.
Fast Retailing (9983 JP) STILL has a Nikkei 225 problem, which means it probably has to underperform Nikkei 225 slightly between now and the Base Date (31 July 2024).
JMDC (4483 JP) has been one of the more annoying partial tenders out there. Even post-facto, it is tough to know what the disposition was. This is extraordinarily vexing.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Tensions Rise

By Simon Harris

Weekly summary of vol changes and moves across Global Markets
Analysing ATM volatility and skew changes over the last 5 days
We suggest a few trades to take advantage of the implied vol surfaces

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Newcrest Mining, Haitong Int’l, Liontown, NWS, IMAX China

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.
One new deal was discussed on Smartkarma this week: Haitong Securities Co Ltd (A) (600837 CH)‘s Offer for Haitong International Securities Group (665 HK).
Key updates took place for: Origin Energy (ORG AU), Estia Health (EHE AU), Newcrest Mining (NCM AU), Liontown Resources (LTR AU), NWS (659 HK),IMAX China (1970 HK), and Eoflow (294090 KS).

Quiddity Leaderboard ChiNext & ChiNext 50: Final Expectations

The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we take a look at our final expectations for the ADDs and DELs for the December 2023 and their flow implications.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 14

Daily Brief Event-Driven: What EOflow Insiders Are Saying on the Current Situation & An Objective Interpretation of It and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

What EOflow Insiders Are Saying on the Current Situation & An Objective Interpretation of It
S&P/ASX 200 Index Adhoc Change: Light & Wonder (LNW) To Replace UMG
WisdomTree Oct 2023 Rebalance (Wed, 18 Oct)
Naspers: Discount to Prosus Market Value Reaches Narrowest Level Since Prosus Listing

What EOflow Insiders Are Saying on the Current Situation & An Objective Interpretation of It

They said that EOflow has made a strategic decision not to raise any objections to the court’s injunction to temporarily suspend the sale and marketing activities of EOPATCH.
They stated their commitment to making efforts to actively prove that they are not subject to KRX’s substantive delisting examination. Hence, they aim to resume trading from November 1st.
They subtly hinted at a degree of caution, suggesting that the final agreement with Medtronic might undergo slight modifications to align with the outcome of this preliminary injunction.

S&P/ASX 200 Index Adhoc Change: Light & Wonder (LNW) To Replace UMG