Event-Driven Archives | Page 84 of 186 | Smartkarma

L’Occitane (973 HK) is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, according to Bloomberg. Mr Geiger has been exploring financing options for the potential deal.
The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.
L’Occitane released a solid 1QFY2024 update today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples.

NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang

Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.
The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.
As discussed in NTT (9432 JP) – Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?, there are questions on overhang. BUT… presumably there are mitigants.

KRX New Deal Index Rebalance Preview: Review Period Nearly Complete

The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
There is one change currently for each of the Secondary Battery, Bio and Game indices. Then there are a couple of changes for the Internet and BBIG indices.
There are four stocks that will have over 2 days of ADV to trade from passive trackers and these stocks could move around announcement of the changes.

India – Potential Float Changes & Impact

Over the last few weeks, companies in India have been disclosing their shareholding pattern as of end-June. There are a few companies with significant float changes from end-March and/or end-December.
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 see 6 stocks where there could be passive inflows and 2 stocks that could have passive outflows – but there are caveats.

An Update on Medtronic’s Tender Offer of Eoflow

In this insight, we provide an update of Medtronic’s tender offer of Eoflow.
The foreign ownership of Eoflow has surged in the past two months from 6.5% on 25 May to 33.2% as of 24 July.
We continue to believe that there is 95%+ probability of this M&A getting completed at the tender offer price of 30,000 won and Eoflow eventually becoming delisted in 2H 2023.

LQ45 Index Rebalance: Two Changes in a Few Days

Gudang Garam (GGRM IJ) and Mitra Adiperkasa (MAPI IJ) will replace Timah Persero (TINS IJ) and Japfa Comfeed Indonesia (JPFA IJ) in the LQ45 Index next week.
There are some large changes to free float plus capping changes for Bank Central Asia (BBCA IJ) and Bank Rakyat Indonesia (BBRI IJ).
There could be jumps in the stocks of the adds/deletes today, though there should be pre-positioning and a potential reversal later in the week.

KRX Latest Press Release: CFD Inspection Results & Immediate Impacts to Monitor

KRX stated in this press release that they have identified the suspected stocks involved in illegal trading and have reported them to the financial authorities (Korea FSC and Korea FSS).
The primary concern in the short term seems to revolve around whether the battery stocks are among the ones suspected of illegal trading, as reported to the financial authorities.
We must remain vigilant and ready for the potential recurrence of CFD-related price plunges, as seen in the recent two instances, affecting specific stocks in the short term.

Quiddity Leaderboard SET50 Dec 23: DELTA Deletion Fears Unrealistic

In this insight, we take a look at the potential ADDs/DELs for Thailand’s SET50 index rebalance in December 2023.
Delta Electronics Thai (DELTA TB) – one of the largest SET 50 members – has been in the Market Surveillance Measure list a couple of times already this year.
Although this creates some doubts over the fate of DELTA’s SET50 membership, at present, I believe DELTA will escape deletion in December 2023.

Strike Energy Yanks Its NBIO For Talon

O&G junior Talon Energy (TPD AU) announced it had received a non-binding Offer from Strike Energy (STX AU).
The all-scrip bid – by way of a Scheme – entailed an implied A$0.20/share in Strike shares plus Talon shareholders retaining their holding in Talon’s Mongolia gas project.
After Talon said it intended to undertake a process of evaluation of the Proposal before offering due diligence, Strike promptly withdrew its bid.

Apollo/Applus: Blocking Minorities

The spread has been in positive territory since the announcement. Apollo only bid the minimum requested by the Board. Investors hope for a counteroffer or Apollo sweetening its offer.
Exceeding the 75% threshold is key for Apollo to be able to quickly and effectively carry out the delisting of Applus+, the objective stated in the offer announcement.
Risk arbitrageurs holding now over 25%, may give that gentle push, otherwise delisting will be in jeopardy. A sweetening/counteroffer in the range €10-10.5/share seems very likely.

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Jul 25

Daily Brief Event-Driven: Alpha Generation Through Share Buybacks in Korea: June & July 2023 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Alpha Generation Through Share Buybacks in Korea: June & July 2023
KOSPI Size Indices – Plenty of Overlap With Other Index Flows
Quiddity Leaderboard NIFTY Sep 23: 5 ADDs/DELs for NIFTY Next 50 Unless the Methodology Changes
FXI Rebalance Preview: One Potential Change in September
GS AM Consortium/ Kahoot!: Agreed Fair Offer

Alpha Generation Through Share Buybacks in Korea: June & July 2023

In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in June and July 2023.
We provide a list of 38 stocks in the Korean stock market that have announced share buyback programs in June and July 2023.
The top four market cap stocks that have announced share repurchases include Celltrion Inc, Celltrion Healthcare, Hyundai Elevator, and SFA.

KOSPI Size Indices – Plenty of Overlap With Other Index Flows

The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.
Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

Quiddity Leaderboard NIFTY Sep 23: 5 ADDs/DELs for NIFTY Next 50 Unless the Methodology Changes

In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.
The NIFTY Next 50 methodology was supposed to change in June 2023 but this has been kept on hold for now. This change could still take place before September 2023.
In this insight, we take a look at our expectations for index changes under both the existing methodology and the proposed new methodology.

FXI Rebalance Preview: One Potential Change in September

As of 24 July, there could be one set of changes for the iShares China Large-Cap (FXI) (FXI US) in September.
There should be less than 1x ADV to buy on ZTE Corp H (763 HK) while there will be nearly 2x ADV to sell on Anhui Conch Cement (914 HK).
Short interest has been inching higher on ZTE Corp H (763 HK) while it is barely moving on Anhui Conch Cement (914 HK) as the stock trades near its lows.

GS AM Consortium/ Kahoot!: Agreed Fair Offer

Kahoot! ASA (KAHOOT NO) saw better times on the stock market during the pandemic. To revive fortunes, GS AM has enlisted top shareholders and offers NOK 35/share “best and final” price.
This represents 29.1x EV/Fwd NTM EBITDA, 3.3% FCF yield. I believe the offer price is fair. Interloper risk seems low: a competing bid should come above NOK 38.5, surely overpaying.
Spread is 0.74%/2.15% (gross/annualised, assuming settlement by 30 November). With better opportunities elsewhere, I would wait for the share price to come under NOK 34.5 to open a position.

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Jul 24

Daily Brief Event-Driven: LG Energy Solution (373220 KS) – Potential Float Increase Coming Up and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

LG Energy Solution (373220 KS) – Potential Float Increase Coming Up
111 (YI US): The Privatisation Offer Gets a Reboot
Merger Arb Mondays (24 Jul) – JSR, 111, Estia, Newcrest, InvoCare, Origin, Golden Eagle, Dali Foods
Fortescue: Twiggy’s Share Separation
EQD | KOSPI 200 Index WEEKLY: Rising After a Brief Pullback
Inflexion/DWF: Deal Announcement
EQD | NIFTY Index WEEKLY: Topping (In The) Tails

LG Energy Solution (373220 KS) – Potential Float Increase Coming Up

Selling from the ESOP program in the first quarter could result in an increase in LG Energy Solution (373220 KS)‘s float in local and global indices.
The largest buying from passive trackers could take place next month with over 3% of the real float needing to be bought.
Short interest has increased in the last month and short covering could take the stock higher ahead of the passive buying.

111 (YI US): The Privatisation Offer Gets a Reboot

111 Inc (YI US), China’s largest virtual pharmacy network, amended an SC 13D filing on 13 July, which belatedly updated the consortium’s privatisation offer of US$3.66 per ADS.
The consortium has been revamped such that the lead investors (Dr Gang Yu, Dr Junling Liu and Shanghai Guosheng Capital Management) are joined with 13 additional investors.
The development facilitates the signing of a definite agreement. The consortium represents 95.27% of the voting power, which ensures a successful vote. At last close, the gross spread is 9.6%.

Merger Arb Mondays (24 Jul) – JSR, 111, Estia, Newcrest, InvoCare, Origin, Golden Eagle, Dali Foods

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 – Chindata Group (CD US), Estia Health (EHE AU), 111 Inc (YI US), ENM Holdings (128 HK), JSR Corp (4185 JP), Costa Group Holdings (CGC AU).
Lowest spreads Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Penguin International (PBS SP), ARTERIA Networks Corp (4423 JP), Inner Mongolia Yitai Coal Company Ltd (3948 HK).

Fortescue: Twiggy’s Share Separation

Prior to recent developments, Andrew Forrest held a 36.25% stake in Fortescue Metals (FMG AU).
An ASIC shareholder disclosure into the giant iron-ore miner earlier this year fuelled speculation, culminating in an ASX notice Andrew was separating from his wife after 31 years of marriage.
A private statement assures there will be no impact on the control of FMG. But that won’t put a stop to the rumour mill.

EQD | KOSPI 200 Index WEEKLY: Rising After a Brief Pullback

The KOSPI 200 (KOSPI2 INDEX EQUITY) last week closed the week down (CC=-1) after a strong rise the previous week. Could be getting ready to rise higher.
The index last week tested supports in the Market Reversal Matrix’s Q2/Median support area (around 335).
Valid support levels for the coming week (if CC=-2) are between 333 (Q2) and 324 (Q3).

Inflexion/DWF: Deal Announcement

There were no surprises and Inflexion launched the offer for DWF Group (DWF LN) well ahead of the 7 August PUSU deadline. DWF shares increased by c. 15%.
The final proposal maintains what was announced: 97p in cash plus a 3p dividend,8.0x EV/Fwd NTM EBIT and 8.2x Fwd P/E, and an 18% discount to the IPO price.
The closing share price pre-first announcement was 56.5p, taking it as break, the market is pricing a 94% chance to complete the deal. Spread is 2.6%/6.2% (gross/annualised). Long.

EQD | NIFTY Index WEEKLY: Topping (In The) Tails

The NIFTY Index has been in a strong rally since early April 2023, returning almost +17% as of last Friday’s Close. The MRM tool shows the index is OVERBOUGHT WEEKLY .
The NIFTY Index has reached a “Tails” area of the current pattern: forecasts in these price areas are less reliable, but the MRM tool indicates the index is topping.
SHORT trades can be implemented at prices > Last Close (19745). Higher prices are possible, it could take +1/+2 weeks for the index to complete its topping process.

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Jul 23

Daily Brief Event-Driven: SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle
Last Week in Event SPACE: Takisawa Machine Tools, Kesei Electric/Oriental, Shenzhen Int’l/Way, HMM
Index Rebalance & ETF Flow Recap: ASX, SK Telecom, Yuanta ETFs
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Where Is the Stimulus

SBI Shinsei Bank (8303) Calls Its EGM and Appraisal Rights Seekers Prepare for Battle

The SBI Holdings Tender Offer for SBI Shinsei Bank (8303 JP) was completed about four weeks ago, and in something of a surprise, only 3.7% of 26.98% minority holdings tendered.
The stock traded above terms every day during the Tender Offer Period. People accumulated in order to pursue their appraisal rights later. That is big.
This week, SBI Shinsei announced the schedule of dates relating to the squeezeout EGM. The record date was early. The reverse stock split announced is as expected, possibly game-able.

Last Week in Event SPACE: Takisawa Machine Tools, Kesei Electric/Oriental, Shenzhen Int’l/Way, HMM

Keisei Electric (9009 JP)‘s valuation has deviated from Oriental Land (4661 JP)‘s since the proposed expansion of Tokyo Disney Sea, Fantasy Springs. That bifurcation should now reverse.
Don’t expect a serious fight in Nidec (6594 JP)‘s hostile for Takisawa Machine Tool (6121 JP). Fanuc could counter. It is possible others could step up but we wouldn’t know.
On the back of the news to spin off and list some logistics ops, Shenzhen International (152 HK) is probably a buy on weakness vs Stub Ops Peers.

Index Rebalance & ETF Flow Recap: ASX, SK Telecom, Yuanta ETFs

JFSL spun off from Reliance Industries (RIL IN) last week and Ventia (VNT AU) replaced Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX).
The IDX should announce the changes to the IDX30, LQ45 and IDX80 indices early in the coming week.
There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) while Taiwan focused ETFs had outflows.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Where Is the Stimulus

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

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Jul 22

Daily Brief Event-Driven: Privatization of HMM: Enormous Shares Dilution Risk and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Privatization of HMM: Enormous Shares Dilution Risk
Alpha Auto Group/Lookers: From Done Deal to Uncertain Situation

Privatization of HMM: Enormous Shares Dilution Risk

The Korean government has initiated the M&A privatization of HMM, the largest container shipping company in Korea.
We are Negative on the shares of HMM Co., Ltd. (011200 KS) in the next 6-12 months. We expect additional 20% to 30%+ downside risk on HMM in this period.
Although HMM has a strong balance sheet, more investors are likely to emphasize on the negatives including excessive share dilution risk and worsening environment for the global shipping industry.

Alpha Auto Group/Lookers: From Done Deal to Uncertain Situation

Lookers disclosed that Cinch (largest shareholder with 19.52% stake) plans to vote against the scheme. The shares have dropped to halfway between the pre-offer price and Alpha Auto’s offer.
The shares are pricing a 45% probability of deal completion. This sector has a track record of failed deals, so it is understandable that investors are spooked.
Top Lookers shareholders are keen on selling and an offer from Lithia could well happen. At around 103p I’d be long, as I consider the risk reward is balanced.

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Jul 21

Daily Brief Event-Driven: Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics
Lasertec (6920) – The State of Things May Be Different Than You Think
Quiddity Primer for CSI 300/500 Index Rebalance Events

Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics

Insiders holding more than 10% of SO must disclose block deals 30 days in advance if they plan to sell more than 1% of SO or an amount exceeding ₩5B.
The trading window and pricing range for short positions, based on the assumption of deal-taking, will likely vary significantly as the timing of price reflection will see a drastic change.
There is an increasing likelihood that major shareholders will accelerate their planned block deals and bring them to the market in abundance before October.

Lasertec (6920) – The State of Things May Be Different Than You Think

Lasertec (6920) is a shoo-in for Nikkei 225 inclusion in September according to the quantitative analysis. The amount to buy is a small multiple of ADV, making the inclusion “unimpressive.”
It is probably worth looking at the details of ownership, of volume, and of relationship to other stocks in the same general sector.
It is also worth thinking about flow channels (stock up or down changes flows) and forward fundamental calculations.

Quiddity Primer for CSI 300/500 Index Rebalance Events

CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
During the periodic index rebalance events, a large number of stocks move into or out of these indices giving rise to significant flow events and attractive trading opportunities.
In this insight, we take a brief look at the index selection methodology and the historical price and volume performance of the CSI 300/500 index rebalance baskets.

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Jul 20

Daily Brief Event-Driven: What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing
Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
Quiddity Leaderboard T50/100 Sep 23: AI Frenzy Causes Many Changes to Expectations
Quiddity Leaderboard TDIV Sep 23: AUM Assumption Changes Again; SHORTs Down 15.6% Vs Index
Searchlight/Gresham House: Attractive Spread
Essential Metals/Develop Global: Rock Steady With MinRes Support

What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing

Yonhap News reported on the exclusive coverage of Ecopro BM and L&F’s KOSPI transfer listing.
L&F announced through the disclosure that they are considering the KOSPI transfer listing. Ecopro BM told another local news outlet that they are not currently reviewing the KOSPI transfer listing.
It seems that L&F’s KOSPI transfer listing is almost a confirmed fact. However, the Ecopro company in question may be Ecopro Co, not Ecopro BM.

Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping

Using data from the close on 19 July, there could be 5 changes to the Yuanta/P-Shares Taiwan Top 50 ETF and 2 deletions for the Yuanta/P-Shares Taiwan Dividend Plus ETF.
Stocks that are expected to benefit from the AI revolution could gain ETF inclusion while shipping stocks are the ones expected to be deleted from the ETF.
There has been a huge increase in shorts on some of the potential inclusions and on most of the potential deletions. That will affect how stocks trade near term.

Quiddity Leaderboard T50/100 Sep 23: AI Frenzy Causes Many Changes to Expectations

In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the September 2023 Rebalance.
Some semiconductor/electronic component stocks have seen their share prices skyrocket in recent months due to AI-related excitement causing drastic shifts in Leaderboard rankings.
In my last insight, I expected two T50 changes and one T100 change. Now I expect five T50 changes and three T100 changes.

Quiddity Leaderboard TDIV Sep 23: AUM Assumption Changes Again; SHORTs Down 15.6% Vs Index

In this insight, we take a look at Quiddity’s flow expectations for the September 2023 index rebalance.
Since my last insight, my estimate for the tracking AUM estimate assumption for September 2023 has increased and has caused changes to my flow expectations.
Separately, the SHORTs suggested in my last insight have underperformed the index by 15.6% in 3 weeks. I have updated my thoughts on that as well.

Searchlight/Gresham House: Attractive Spread

Searchlight agreed to acquire via scheme of arrangement UK asset manager Gresham House PLC (GHE LN) for 1,105p/share in cash, c.£470 million, 12.6x EV/Fwd NTM EBITDA, 17.6x Fwd P/E. Terms are final.
Irrevocables plus letters of intent total 33%. Although the consensus median TP is 1,170p/share (c. 5.8% higher), it seems difficult to argue with a 63% premium.
Taking 680p break, the shares are pricing an 89% probability of completion. Spread is 4.3%/10.3% (gross/annualised), which explains why the shares have been liquid since the offer announcement. Long.

Essential Metals/Develop Global: Rock Steady With MinRes Support

At the 20 April Scheme Meeting, Mineral Resources (MIN AU) (with 19.55%) and other shareholders voted against the Tianqi Lithium JV transaction for Essential Metals (ESS AU).
This left Essential in no man’s land until MinRes (presumably) made a move. But on the 3 July, Develop Global (DVP AU) announced a binding Scheme with ESS.
The all-scrip Scheme transaction has the backing of MinRes, which also owns a ~13% stake in Develop. This deal – this time- looks all stitched up.

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Jul 19

Daily Brief Event-Driven: S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
StubWorld: SZ International’s Logistics Spin-Offs
Ventia Services (VNT) Selected to Join ASX 200 – Not A Surprise
Quiddity Leaderboard ES50 Sep 23: Massive Flows; Might Be Time for LONG Ferrari – SHORT Vonovia
Quiddity Leaderboard SE600 Sep 23: CD Projekt Could Become an Intra-Review ADD
EQD | Hang Seng Index (HSI) WEEKLY Deep-But-Brief Pullback
Investigating HMM’s Latest Bond Conversion Situation for a Shorting Setup

S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September

Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.

StubWorld: SZ International’s Logistics Spin-Offs

Shenzhen International (152 HK) seeks to spin off logistic assets on a PRC exchange; and 51.56%-held Shenzhen Expressway Co H (548 HK) intends to place out A shares.
Preceding my comments on SZ Int’l/SZ E’Way 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%.

Ventia Services (VNT) Selected to Join ASX 200 – Not A Surprise

After the Blackmores Ltd (BKL AU) Scheme Meeting result was announced earlier today, post-close the S&P/ASX team announced Ventia (VNT AU) would replace it on 21 July at the close.
This is not that surprising. Janaghan Jeyakumar, CFA expected it in June, and it was a super-close second recently for him for the Sep rebalance.
Given the shareholder structure and flow dynamics, it’s worth taking a closer look.

Quiddity Leaderboard ES50 Sep 23: Massive Flows; Might Be Time for LONG Ferrari – SHORT Vonovia

The ES50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
As ES50 index changes generally involve large cap names, these Rebalance events have historically had significant volume and ADV impact.
In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2023.

Quiddity Leaderboard SE600 Sep 23: CD Projekt Could Become an Intra-Review ADD

In this insight, we take a look at the names leading the race to become ADDs/DELs for the SE600 and EURSTX Indices for the September 2023 Rebalance.
SimCorp A/S (SIM DC) could trigger an intra-review ADD prior to the September 2023 Rebalance.
Apart from that, I expect four other changes during the regular rebalance in September 2023. These expected ADDs and DELs are different from those in my last insight.

EQD | Hang Seng Index (HSI) WEEKLY Deep-But-Brief Pullback

The Hong Kong Hang Seng Index (HSI) last week closed strongly up. This week it’s pulling back, but MRM pattern readings forecast a very short-lived pullback (-1 to -2 weeks).
The suggested strategy is: let the index play out its pullback (warning: it can be volatile) and then enter LONG trades when the probability is good.
Suggested support price areas are between 18965 (Q2) and 18732 (Q3) – or this Friday at Close (as long as the close is negative).

Investigating HMM’s Latest Bond Conversion Situation for a Shorting Setup

Those that the local market is particularly interested in are the 192nd convertible bonds (CB) held by KDB, along with the 193rd bonds with warrants (BW) owned by KOBC.
These two bonds’ call option exercise date is September 25th. Upon conversion of these bonds, 200M new shares will be issued (41% of SO and a 30% dilution).
The key is the trade-off between not disrupting the selling process and avoiding any breach of trust. The prevailing local sentiment suggests that KDB and KOBC will choose stock conversion.

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Jul 18

Daily Brief Event-Driven: Nidec (6594) Goes Hostile On Takisawa Machine Tool (6121) – I’ve Got 🍿🍿 and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Nidec (6594) Goes Hostile On Takisawa Machine Tool (6121) – I’ve Got 🍿🍿
Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors
Keisei Electric: Valuation Distortion Set to Unravel with Fantasy Springs’ Opening in Spring 2024
Quiddity Leaderboard F100/250 Sep 23: Two F100 Change and Three F250 Changes Likely
Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting
Inflexion/DWF: Compelling Value

Nidec (6594) Goes Hostile On Takisawa Machine Tool (6121) – I’ve Got 🍿🍿

Last year Nidec Corp (6594 JP) approached machine tool maker Takisawa Machine Tool (6121 JP) interested in an integration with their sub. Takisawa said “Talk to the hand.”
Now Nidec – a blue chip (from Kyoto no less, which traditionally abhors hostile activity) – has gone hostile on Takisawa bidding 65-100% depending how you see undisturbed.
Lots of moving parts on this one, but in the end, Retail probably decides this.

Seizing Shorting Opportunities on Krafton as ARM Seeks Anchor Investors

One noteworthy aspect is SK Square’s strategic move towards gradually shifting its investment portfolio from platform businesses to companies within the semiconductor supply chain.
Given SK’s aim to acquire a 1-2% stake as an anchor investor in ARM, selling the Krafton stake is necessary to secure sufficient funds for the potential ARM investment.
We may consider positioning to capitalize on SK Square’s potential block deal for its Krafton stake, aligning with the schedule for selecting anchor investors in August for the ARM listing.

Keisei Electric: Valuation Distortion Set to Unravel with Fantasy Springs’ Opening in Spring 2024

By Oshadhi Kumarasiri

Since the announcement of the proposed Tokyo Disney Sea expansion in 2015, Keisei Electric Railway Co (9009 JP)‘s price perfromance has significantly diverged from Oriental Land (4661 JP)‘s price performance.
The valuation disparity may result from the Disney Sea expansion’s impact, possibly due to Keisei Electric’s value-oriented investor base.
Fantasy Springs’ opening could resolve the valuation distortion, leading to potential rewards in a Long Keisei Electric and Short Oriental Land trade.

Quiddity Leaderboard F100/250 Sep 23: Two F100 Change and Three F250 Changes Likely

In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the September 2023 Rebalance.
I currently expect two changes for the F100 index and three changes for the F250 index.
As always, there are several names lurking just outside the borders and could be involved in index changes in September 2023 if there are sharp price changes.

Quiddity Leaderboard-DAX Sep 23: SHORT Sartorius LONG Merck Trade STILL Interesting

In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
As things stand, I do not see any changes for the DAX index as-is, but there are couple of names requiring only small price gains to trigger Fast Entry changes.
I see one change between MDAX and SDAX and one separate ADD/DEL for the SDAX index in the September 2023 rebalance.

Inflexion/DWF: Compelling Value

DWF Group (DWF LN) is discussing with Inflexion regarding a 100p/share offer (£342 million implied equity value, 53% premium, 8.2x Fwd P/E, but 18% discount to IPO price). PUSU is 7 August.
Spread to the offer price is 16.2%. The market is pricing a 53% chance to complete the deal, which seems low. Poor cash generation and leverage are already known.
The shares trade at 6.7x Fwd P/E, 7.6% dividend yield and 18.6% FCF yield (IBES estimates). Considering that management has said it would recommend the offer, my TP is 100p.

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Jul 17

Daily Brief Event-Driven: SK Telecom (017670 KS): Foreign Room Increase Has Implications and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

SK Telecom (017670 KS): Foreign Room Increase Has Implications
Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
Lutronic Tender Offer by Hahn & Company: 2nd Round
Quiddity Leaderboard ASX Sep 23: Intra-Review Replacement for BKL and Many Other Expected Changes
EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?
EQD | Nikkei 225 (NKY) WEEKLY Falling: Support (Short-Term)
Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report

SK Telecom (017670 KS): Foreign Room Increase Has Implications

Foreign investors have been selling SK Telecom (017670 KS) for over a year now. That has taken foreign room from near zero to close to 15% now.
That could mean index inclusion for SK Telecom (017670 KS) with timing dependent on when the 15% foreign room threshold is crossed.
SK Telecom (017670 KS) has performed in line with KT Corp (030200 KS) but trades at higher valuations on most parameters.

Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare

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), Chindata Group (CD US), ENM Holdings (128 HK), Estia Health (EHE AU), Poly Culture Group Corp H (3636 HK), Costa Group Holdings (CGC AU).
Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Kenedix Residential Investment (3278 JP), Penguin International (PBS SP), Challenger Technologies (CHLG SP).

Lutronic Tender Offer by Hahn & Company: 2nd Round

According to local media (Seoul Economic Daily), Hahn & Company plans to make a second round of tender offer for Lutronic Corp, in order to meet the delisting requirements.
The tender offer price is 36,700 won, the same as the first tender offer price.
We believe that Hahn & Co is likely to successfully complete this second round of tender offer of Lutronic and it is likely to be delisted in the coming months.

Quiddity Leaderboard ASX Sep 23: Intra-Review Replacement for BKL and Many Other Expected Changes

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 2023 Rebalance.
Blackmores Ltd (BKL AU) could get deleted from the index family, triggering intra-review changes in the next few days.
Including the intra-review changes, ASX 300 could see 12 ADDs and 10 DELs, ASX 200 could see 4 changes, and ASX 100 could see one change between now and September.

EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?

A previously published insight correctly highlighted an high-probability opportunity to go LONG and join the KOSPI 200‘s current multi-month Bull run.
The index closed the week strongly up, now we want to evaluate how far this new leg up could go: a total of +3/+4 weeks up, price targets =359-385.
Holders of KOSPI 200 LONG positions: Covered Calls can be written at Strikes between 346 and 360, expiry August 10th (4 weeks). A pullback is highly probable from 360.

EQD | Nikkei 225 (NKY) WEEKLY Falling: Support (Short-Term)

Nikkei 225 (NKY INDEX) has pulled back from its peak. Direction currently unclear but last week’s positive Close was super weak (+0.1%) , may lead to lower prices this week.
If the index falls this week, a -1 or -2 weeks down is the most common pattern, followed by a rebound. Reversal probability is =75% for -2 weeks down.
Valid support levels for buy-the-dips are between 32067 and 31554. If lower, up to -3 weeks down this pattern is still bullish, from -4 weeks it turns bearish.

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