Event-Driven Archives | Page 88 of 187 | Smartkarma

The review period for the Nikkei 225 (NKY INDEX) September rebalance ends end July. We take another stab at identifying potential inclusions and exclusions.
There will be a big impact on the potential index changes. Fast Retailing (9983 JP)‘s index weight could be capped and there will be a big funding trade.
There are many things to watch out for that could affect the impact on the inclusions, including stock splits among potential adds and stepwise inclusion of stocks in the index.

SK Square’s Special Dividend Momentum Trading: Entry Timing at Month End.

The market’s attention has shifted to the second part, which is the additional utilization of a portion of the harvest result for shareholder returns.
There is a significant possibility that the timing to allocate the ₩200B for shareholder returns will be advanced to late July or early August.
We should set up a position aiming for the potential for a special dividend, which may lead to momentum trading flow just before the quarterly ex-div date later this month.

Quiddity Leaderboard ES50 Sep 23: Ferrari Retains the Lead; US$1.26bn Potential Inflow

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

SK Square: Share Cancellation and More Share Buyback Likely from Sale of SK Shieldus in 2H 2023

SK Square announced that it will cancel treasury shares worth 2.5 million shares on 4 October 2023, which represents 1.8% of its current outstanding shares.
Our NAV analysis of SK Square suggests NAV of 9.4 trillion won or NAV per share of 66,421 won, representing a 45% upside from current levels.
SK Square’s positive shareholder return policies including higher share buybacks, cancellations, and dividends are result in further outperformance of SK Square relative to KOSPI this year.

Quiddity Leaderboard SE600 Sep 23: One Intra-Review Change and 4 Regular ADDs/DELs Likely

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.
There could be one intra-review deletion for the SE600 index in July or August.
I see 4 ADDs and 4 DELs for the SE600 index in the September 2023 Rebalance.

Vivendi Acquires A Stake In PCCW’s Viu

PCCW Ltd (8 HK) is selling an initial 26.1% equity stake in its streaming platform Viu, to Vivendi SA (VIV FP)‘s Canal+, for US$200mn.
Via a staggered investment, Canal+ can increase its equity to US$300mn. In addition, a further investment, at Canal+’s option, could result in increasing its stake in Viu to 51%.
Elsewhere, PCCW’s 18% discount to NAV is the narrowest in over two years.

💡 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

Jun 22

Daily Brief Event-Driven: HS Holdings (8699 JP) Buyback – Adds More to BVPS and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HS Holdings (8699 JP) Buyback – Adds More to BVPS
Quiddity Leaderboard ASX Sep 23: Many Changes Ahead
Hong Kong CEO & Director Dealings (21 June): China Feihe’s CFO Sells Around All-Time Low
Nikkei 225 Sep 2023 Review – The Mercari Conundrum
KFin Tech Lock-Up – US$183m Lockup Expiry Could See PE Investor Trim Further
KRX New Deal Index Rebalance Preview: Interesting Changes Emerging
Hyundai Elevator Chairwoman Hyun Seeks Capital from H&Q Korea
Alpha Auto Group/Lookers: Consolidation at a Cheap Offer Price

HS Holdings (8699 JP) Buyback – Adds More to BVPS

HS Holdings (8699 JP) remains an interesting hodgepodge of assets. It owns just under 50% of Mongolia’s biggest bank, recently IPOed Khan Bank (KHAN MO).
It has a pile of cash. And it has a glorified pawn shop business in Japan. The bank shares must be sold, to a significant degree, by end of year.
Today it announced a buyback tomorrow of 6.4% of shares out. I expect it is one of two large individual holders. We’ll probably know more within a week.

Quiddity Leaderboard ASX Sep 23: Many Changes Ahead

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.
I currently expect one change for the ASX 100 index and five changes (including one intra-review change) for the ASX 200 index.
There could be 7 ADDs and 5 DELs for the ASX 300 index.

Hong Kong CEO & Director Dealings (21 June): China Feihe’s CFO Sells Around All-Time Low

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 stock mentioned in this regular insight is China Feihe (6186 HK)

Nikkei 225 Sep 2023 Review – The Mercari Conundrum

Mercari Inc (4385 JP) is potentially a leading candidate for inclusion in the Nikkei 225 in September.
There are other technical reasons to think it is not.
This insight looks at the issue of why it might be a leading candidate and why it might not be.

KFin Tech Lock-Up – US$183m Lockup Expiry Could See PE Investor Trim Further

By Clarence Chu

KFin Technologies (1804170D IN) was listed on 29th Dec 2022, when it raised around US$180m in its India IPO. Its six-month lockup will expire on 24th Jun 2023.
KFin Technology (KFin) is a technology driven financial services platform providing comprehensive services and solutions to the capital markets ecosystem.
Coming up for six-month expiry is General Atlantic (the Promoter) and other pre-IPO shareholders. The Promoter had been the sole selling shareholder in the IPO.

KRX New Deal Index Rebalance Preview: Interesting Changes Emerging

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, Internet and Game indices. Plus there are a couple of changes for the BBIG indices.
SK Biopharmaceuticals Co Ltd (326030 KS) has overtaken SK Bioscience (302440 KS) on average market cap and there will be large flows on both stocks at the rebalance.

Hyundai Elevator Chairwoman Hyun Seeks Capital from H&Q Korea

It was reported in the local media that Hyundai Elevator Chairwoman Hyun Jeong-Eun is close to completing a deal with H&Q Korea in a deal worth nearly 300 billion won.
The three major reasons driving higher share price of Hyundai Elevator in the last three months include share buyback/cancellation, potential M&A, and solid 1Q 2023 results.
With noticeable downturn in the Korean construction sector, Hyundai Elevator could face worsening industry prospects for both residential and commercial elevators in the next 12-24 months in Korea.

Alpha Auto Group/Lookers: Consolidation at a Cheap Offer Price

By Jesus Rodriguez Aguilar

Long expected consolidation is arriving to UK car retailers. Alpha Auto agreed to acquire Lookers PLC (LOOK LN) via scheme at 120p/share, c.£465.4 million, 35.3% premium, 8.4x Fwd P/E.
The sector appears materially undervalued, with Lookers before announcement on 6.2x Fwd P/E, 4% FY23e yield (4x cover). My fair value estimate is 143p/share (multiples and DCF), 19% above offer price.
Spread 1.17%/4.32% (gross/annualised, assuming settlement around 1 October). Top shareholders have only signed letters of intent (40% aggregate). I’d be long in case of sweetening. VTU LN could be next.

💡 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

Jun 21

Daily Brief Event-Driven: Shinsei’s TOB Period Almost Done – What Next? and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Shinsei’s TOB Period Almost Done – What Next?
StubWorld: EcoPro Continues To Defy Logic
KOSPI200 Index Rebalance Preview: A Busy December Rebalance
Doosan Bobcat Placement – Past Deals Have Been Mixed but the Stock Has Been Doing Well
Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV’s Monumental Rights Offer
Doosan Bobcat Block Deal Sale: Concerned About North America Construction Sector Downturn
Quiddity Leaderboard for F100/250 Sep 2023: One F100 Change and Two F250 Changes Likely

Shinsei’s TOB Period Almost Done – What Next?

The Tender Offer by SBI Holdings (8473 JP) to take private SBI Shinsei Bank (8303 JP) is almost done. The tender closes on 23 June.
The stock has not traded below theTOB Price since the announcement. People have built positions. Expect minimal liquidity from here on out. I expect a somewhat ‘weak’ result.
Now starts a series of ‘technical’ events and deadlines which will culminate for some in delisting at end-Q3/start-Q4 and for some ends in years after an Appraisal Rights case.

StubWorld: EcoPro Continues To Defy Logic

EcoPro Co Ltd (086520 KS) has swatted aside analyst downgrades and the indictment of its chairman to touch an all-time high.
Preceding my comments on EcoPro are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

KOSPI200 Index Rebalance Preview: A Busy December Rebalance

Just over a quarter of the way through the review period, we see six changes for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the December rebalance.
There are a few stocks that are close adds at the current time and a move higher can take them into inclusion zone leading to more deletions.
While there is little to no short interest on the potential inclusions, short interest on the potential deletions ranges from 4.3-12.2 days of ADV and 0.5-3.5% of free float.

Doosan Bobcat Placement – Past Deals Have Been Mixed but the Stock Has Been Doing Well

By Sumeet Singh

Doosan Enerbility (034020 KS) aims to raise around US$220m via selling around 4.9% of Doosan Bobcat Inc (241560 KS) .
This will be the third selldown in the company in less than a year with the previous two deals in Nov 22 and May 23 having delivered mixed results
In this note, we will run the deal through our ECM framework and comment on other deal dynamics.

Exploring Two Lucrative Arbitrage Trading Opportunities in CJ CGV’s Monumental Rights Offer

A capital increase event of this size allows for a classic arbitrage trading strategy involving the acquisition of subscription rights and the simultaneous sale of an equal amount of SSF.
We can aim to profit from the price movements between warrants and SSF during the warrants trading period by getting out of the positions before the trading period ends.
We will also likely encounter a significantly juicy price difference between warrants+subscription and SSF, given a discount rate of 25% with an enormous capital increase rate,

Doosan Bobcat Block Deal Sale: Concerned About North America Construction Sector Downturn

After the market close on 20 June, Doosan Enerbility announced that it will sell 5 million shares of Doosan Bobcat through a block deal worth about 300 billion won.
The block deal price range is from 54,800 won to 56,200 won, which represents a discount range from 6.18% to 8.51% (versus current price).
We have a negative view of Doosan Bobcat block deal as we expect lower share price of Doosan Bobcat in 2H 2023 due to construction sector downturn in North America.

Quiddity Leaderboard for F100/250 Sep 2023: One F100 Change and Two 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 see one change for the F100 index and two separate changes for the F250 index.
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.

💡 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

Jun 20

Daily Brief Event-Driven: Two Trading Opportunities from LG Chem’s Stake Sale in LG Energy Solution and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Two Trading Opportunities from LG Chem’s Stake Sale in LG Energy Solution
Canon Strikes Again. One Buyback Done, Another Begins. Shareholder Structure STILL Matters
Syngenta IPO – Index Entry Possibilities
MOG Digitech (1942 HK): What the Flow Is Going On?
Amara Holdings Gains On Possible Offer

Two Trading Opportunities from LG Chem’s Stake Sale in LG Energy Solution

This issue offers two trading opportunities. The first is the passive inflow resulting from an increase in the float rate. The second is the possibility of additional stake sales.
It will provide LG Energy with a passive inflow of 760K shares (₩426.4 billion), which is a significant passive impact at approximately 3.2x ADTV.
There would be further stake sales of LG Chem’s shares in LG Energy. LG Chem plans to pursue additional stake sales targeting local institutional investors.

Canon Strikes Again. One Buyback Done, Another Begins. Shareholder Structure STILL Matters

Canon Inc (7751 JP) has, as discussed in these pages, conducted 18 buybacks since the GFC. Every single one is ¥50bn. They are short and sharp. The longest? 23 days.
The most recent took 18 days, and was only 15% of ADV, significantly lower than the average of the last dozen at 23-24%.
This time, 3 days after the finished they launched another. The stock popped 5% the first day. There’s a reason for that. Shareholder structure STILL matters a lot.

Syngenta IPO – Index Entry Possibilities

Syngenta AG (SYNN SW) has passed the listing committee meeting to raise CNY 65bn (US$9.1bn) in a Main Board listing on the Shanghai Stock Exchange.
We forecast Syngenta AG (SYNN SW) will be added to the SSE180 Index, SSE50 Index and the CSI 300 Index (SHSZ300 INDEX) indices at the December rebalance.
Inclusion in the SSE A Share Index could take a year and that will hold up inclusion in Northbound Stock Connect and consequently in global indices.

MOG Digitech (1942 HK): What the Flow Is Going On?

MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.

Amara Holdings Gains On Possible Offer

Hotel and investment property play Amara Holdings (AMA SP) announced that its controlling shareholders are in discussions with a third party in relation to a possible transaction.
Shares up for grabs controlled by the Teo family are estimated to exceed 65% of shares out.
No price was mentioned. And there is no guarantee a firm Offer will unfold. Shares have gained 38% in the past three trading sessions.

💡 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

Jun 19

Daily Brief Event-Driven: JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF
Great Wall Motor (2333 HK) – RMB Dual Counter Trading Starts Today, Watch that A-Share Discount
Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Stock Moves
Merger Arb Mondays (19 Jun) – Golden Eagle, Hailan, Yitai Coal, Toshiba, Kenedix, Tesserent, Oishi
Weekly Deals Digest (18 Jun) – Toshiba, Kenedix, Abacus Storage King, Austal, Hailan, Yitai Coal
Amara Holdings (AMA SP): Key Shareholders Ponder an Offer

JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF

On 8 May I wrote JAPAN FLOW: Foreign Investor Inflows May Increase. Since the data used in that insight, TSE data shows net foreign buying of ¥3.5trln+.
Investor flows appear to work in patterns which are correlated to TOPIX gains and outperformance vs S&P500.
The history of autocorrelation of net buying suggests while the current streak may end, a four week average of net buys could remain positive for a while.

Great Wall Motor (2333 HK) – RMB Dual Counter Trading Starts Today, Watch that A-Share Discount

24 different HK-listed stocks will be tradable in RMB on the HKEX starting 19 June. They make up 35% of HKEX market cap, 40% of total turnover. They are fungible.
The ultimate goal is to allow mainland investors to trade HK stocks in RMB, but we’re not there yet. Southbound has yet to be approved for the 21 SB-eligible names.
Only five of the 24 have A-shares, and of those, three (China Mobile, CNOOC, and Great Wall Motor) have wide H-share discounts. Those should be the ones to look at.

Yuanta/P-Shares Taiwan Dividend Plus ETF: Day 1 Flows & Stock Moves

The Yuanta/P-shares Dividend Plus ETF (0056 TT) started to rebalance its holdings on Friday and will continue to do so for the next 4 trading days.
Stocks with buy flows dropped 0.8% on average on Friday while the stocks with sell flows rose 0.27%. On a flow weighted basis, the numbers were -0.63% vs +1.99%.
The stocks with outflows have outperformed stocks with inflows by a huge margin in the recent past and short interest has jumped on most stocks recently.

Merger Arb Mondays (19 Jun) – Golden Eagle, Hailan, Yitai Coal, Toshiba, Kenedix, Tesserent, Oishi

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – 111 Inc (YI US), United Malt Group Ltd (UMG AU), Silk Laser Australia (SLA AU), Estia Health (EHE AU), Chindata Group (CD US), ENM Holdings (128 HK).
Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Musgrave Minerals (MGV AU), Toyo Construction (1890 JP), Lian Beng (LBG SP), Penguin International (PBS SP).

Weekly Deals Digest (18 Jun) – Toshiba, Kenedix, Abacus Storage King, Austal, Hailan, Yitai Coal

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 – Amman Mineral Internasional (1416286D IJ), Tata Technologies (TATATECH IN), JD Industrials (2231713D CH) and JD Property (JDP HK) IPOs.
Event-Driven developments Toshiba Corp (6502 JP), Kenedix Office Investment Co (8972 JP), Abacus Property (ABP AU), Austal Ltd (ASB AU), Tesserent Ltd (TNT AU), Hailan Holdings (2278 HK), Yitai Coal.

Amara Holdings (AMA SP): Key Shareholders Ponder an Offer

Amara Holdings (AMA SP) received a written notification from Mr Albert Teo Hock Chuan (CEO) and Ms Susan Teo Geok Tin (Company Secretary) that they mulling an offer.
The shares entered a trading halt on 16 June as the share price increased 23.9% from S$0.355 on 14 June to S$0.440 per share on 16 June.
Recent SGX privatisation proposals have shown that offerors tend to be miserly with their premiums. The sharp share price rally makes it challenging to launch an offer.

💡 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

Jun 18

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

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, STAR50, KOSDAQ150, CPSE/CNXBANK, Kenedix Merger
Last Week in Event SPACE: Kesei/Oriental Land, Intouch, Abacus Property, Great Eagle, JS Global
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-A Rising Tide Lifts All Boats
SET50 Index Rebalance: TLI, WHA to Replace JMART, JMT
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Lutronic, Hailan, Mason, Tesserent, Kenedix

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, STAR50, KOSDAQ150, CPSE/CNXBANK, Kenedix Merger

There were a bunch of rebalances across different index families that were implemented at the close of trading on Friday.
The coming week is quieter though there are a couple of ad hoc rebalances for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) and KOSDAQ 150 Index (KOSDQ150 INDEX).
Yet another week of inflows to Tracker Fund of Hong Kong Ltd (2800 HK) as the number of units outstanding is nearly the highest over the last couple of years.

Last Week in Event SPACE: Kesei/Oriental Land, Intouch, Abacus Property, Great Eagle, JS Global

Activist investor influence in distributing Keisei Electric Railway Co (9009 JP)‘s ¥1,980bn Oriental Land (4661 JP) stake to existing shareholders could unleash over 150% potential upside
Intouch Holdings (INTUCH TB) is coming up cheap versus Advanced Info Service (ADVANC TB). Yet the longer-term view suggests otherwise.
Abacus Property (ABP AU) confirmed the spin-off of an ASX-listed self-storage REIT with A$3bn in total assets. There’s a trade here.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-A Rising Tide Lifts All Boats

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

SET50 Index Rebalance: TLI, WHA to Replace JMART, JMT

Thai Life Insurance (TLI TB) and WHA Corp Pcl (WHA TB) will replace Jaymart PCL (JMART TB) and JMT Network Services (JMT TB) in the SET 50 Index in June.
Estimated one-way turnover is 1.7% and will result in a one-way trade of THB 1,533m. The Financials and Real Estate sectors gain at the expense of the other sectors.
The largest impact of passive buying will be on Thai Life Insurance (TLI TB) in terms of days of ADV to buy and in terms of free float to buy.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Lutronic, Hailan, Mason, Tesserent, Kenedix

There are xx – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Five new deals were discussed this week: Lutronic (085370 KS) tender Offer;Hailan (2278 HK)‘s VGO; Mason (273 HK)‘s Scheme; Tesserent (TNT AU)Scheme, & Kenedix Office (8972 JP)‘s merger.
Key updates took place for Toyo Construction (1890 JP), Inner Mongolia Yitai Coal Company Ltd (3948 HK), and HKBN Ltd (1310 HK).

💡 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

Jun 17

Daily Brief Event-Driven: JS Global (1691 HK)’s SharkNinja Spin-Off and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

JS Global (1691 HK)’s SharkNinja Spin-Off
Georg Fischer/Uponor: Terms and Aliaxis’s Honourable Exit
Liquid Universe of European Ordinary and Preferred Shares: June‘23 Report

JS Global (1691 HK)’s SharkNinja Spin-Off

Back on the 23 February, household appliance maker JS Global Lifestyle (1691 HK) proposed spinning off SharkNinja’s ex-Asia Pac ops in the U.S.
This spin-off would be undertaken as a distribution in-specie, creating a parallel listing structure for SharkNinja and the remaining operations.
Shareholders of JSG will vote on the separate listing at the EGM on the 26 June, with the last day cum-entitlement on the 27 June.

Georg Fischer/Uponor: Terms and Aliaxis’s Honourable Exit

By Jesus Rodriguez Aguilar

White knight Georg Fischer AG (FI/N SW) announced a voluntary recommended public €28.85/share cash offer for Uponor OYJ (UNR1V FH), a 12% premium to Aliaxis’s offer, with c.37% irrevocable undertakings.
Although Aliaxis could still block a squeeze-out, GF and Uponor could make its life difficult and are granting it an honourable exit with capital gains around €55 million.
Spread is 0.52%/1.05% (gross/annualised, assuming settlement by mid-December). Although I believe the deal will close, it is probably not worth going long Uponor it on this spread level.

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

By Jesus Rodriguez Aguilar

Since mid-May, spreads have generally tightened across our liquid universe (13 have tightened, 6 widened).
Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.
Recommended trades long preferred / short ordinary shares: Carlsberg, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.

💡 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

Jun 16

Daily Brief Event-Driven: Market Talk on the Five Stocks Hitting the Lower Limit Yesterday and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Market Talk on the Five Stocks Hitting the Lower Limit Yesterday
Abacus Offers ASK – The Back End Trade Is Still Better
Great Eagle Holdings (41 HK): Copy That!
ASK Listing – Asset Quality Seems to Trump It’s Peer, However Settlement Period Is Long
Austal (ASB AU): Attracting Takeover Interest

Market Talk on the Five Stocks Hitting the Lower Limit Yesterday

The trigger for yesterday’s sell-off was the sudden collective decision of the brokerages that had been allowing credit trading for these stocks to halt credit trading simultaneously.
There is a possibility that the identities of the stocks under investigation were leaked, and these brokerages took preemptive actions.
There have also been observations of large-cap stocks that may become the next targets. Some notable examples include Cosmo Chemical, Kum Yang, Posco International, and Ecopro Co.

Abacus Offers ASK – The Back End Trade Is Still Better

This morning, Abacus Property (ABP AU) units were halted for trading and the Institutional Offer for Abacus Storage King (future ASK AU) units were launched.
The Offer is underwritten by Barrenjoey and Morgan Stanley. The Institutional Offer will be completed by Friday, and results announced Monday 19 June, with trading halt lifted.
Then the Retail portion of the Offer will be conducted til 27 July. EGM the same day. Delayed settlement trading of ASK and New ABP (ABG AU) will start 1Aug.

Great Eagle Holdings (41 HK): Copy That!

Ever since Lo Ying-shek, the founder of Great Eagle (41 HK) passed away in 2006, as invariably happens, family relations deteriorated as the children sought to assert control over GE.
Matters reached a crescendo when Lo’s wife brought legal action against HSBC International Trustee in 2016 as executor of a large % of shares into GE.
That plaintiff action failed, as did subsequent appeals. The latest battle centers on a judge’s ruling which extensively incorporated (read copied) the defendant’s submission in his final decision.

ASK Listing – Asset Quality Seems to Trump It’s Peer, However Settlement Period Is Long

By Clarence Chu

Abacus Property (ABP AU) is looking to de-staple Abacus Storage King (ASK AU) , its self-storage business. The offer will be underwritten by Morgan Stanley and Barrenjoey.
Offering 1 ASK share for every 5.6 ABP share, the REIT is looking to raise A$225m (US$153m) via offering 159.6m shares at a A$1.41-1.47/share price band.
The deal is effectively an IPO, and after having been in the making for some time now, it is well flagged as well.

Austal (ASB AU): Attracting Takeover Interest

Austal Ltd (ASB AU) is drawing takeover interest from Cerberus Capital, according to AFR. Cerebus joins Arlington Capital Partners and Bondi Partners as rumoured suitors, increasing the bid odds.
Takeover interest in Austal is driven by the desire to capitalise on the opportunities presented by the AUKUS defence pact between Australia, the US and the UK.
Andrew Forrest’s 19.34% stake can make or break a deal. Peer multiples point to an offer of at least A$2.80, a 22% premium to the last close.

💡 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

Jun 15

Daily Brief Event-Driven: 5 Stocks in Korea Drop Limit Down – Caused by CFD Derivatives Related Margin Call Again? and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

5 Stocks in Korea Drop Limit Down – Caused by CFD Derivatives Related Margin Call Again?
Yamauchi Family Office Buys More Toyo; Toyo Claims More Malfeasance, ISS Supports YFO
StubWorld: Intouch Not As Attractive As At First Glance
Abacus Property (ABP AU): Abacus Storage King De-Stapling to Unlock Value
CPSE / CNXBANK Index Rebalance Preview: Capping Changes in June
STAR50 Index Rebalance Preview: One High Probability Change; One ‘It Depends’

5 Stocks in Korea Drop Limit Down – Caused by CFD Derivatives Related Margin Call Again?

There were five stocks in Korea that dropped limit down (30%) today. They included Pang Rim, Dongil Industries, Manho Rope & Wire, Taihan Textile, and Dongil Metal.
The share price decline of these five stocks are similar to the crash in eight stocks in Korea in April which were related to CFD derivatives related margin call selling.
Domestic securities firms in Korea have been trying to significantly reduce their exposure to CFD related trading and in this process, these sharp drops could be caused by this selling.

Yamauchi Family Office Buys More Toyo; Toyo Claims More Malfeasance, ISS Supports YFO

Today, YFO (WK1 Limited) filed an amendment to its Large Shareholder Filing saying it had increased its stake from 27.19% to 28.51%. GK Yamauchi No10 Family Office bought 1.32%.
Almost immediately, Toyo Construction (1890 JP) said YFO had likely conducted an illegal act according to US Securities Exchange Act of 1934, Rule 14e-5. This is likely hogwash.
YFO is upping its stake for a zero premium tender and Toyo is fighting old battles. And the stock chugs higher.

StubWorld: Intouch Not As Attractive As At First Glance

Intouch Holdings (INTUCH TB) is coming up cheap versus Advanced Info Service (ADVANC TB). Yet the longer-term view suggests otherwise.
Preceding my comments on Intouch are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn on a 90-day moving average, and a % market capitalisation threshold of at least 20%.

Abacus Property (ABP AU): Abacus Storage King De-Stapling to Unlock Value

Abacus Property (ABP AU) has proposed the de-stapling of Abacus Storage King (ASK), the self-storage assets, along with the proposed A$225.0 million equity raising in ASK.
A key logic of the de-stapling is the potential unlocking of the large, implied discount to NTA in the commercial portfolio. The EGM on the de-stapling proposal is in July.
The equity raise is a key headwind to the rerating. Our SoTP valuation is A$3.10 per unit, which is a 20% upside to the last close price.

CPSE / CNXBANK Index Rebalance Preview: Capping Changes in June

The CPSE ETF (CPSEBE IN) and Nifty Bank Index (NSEBANK INDEX) will have its quarterly rebalancing at the close on 29 June.
There are no constituent changes for the indices in June but there will be capping and float changes for the stocks and there is a reasonable impact on many stocks.
Both indices have performed well over the recent past and active investors can take advantage of the passive flows to increase or decrease existing positions.

STAR50 Index Rebalance Preview: One High Probability Change; One ‘It Depends’

The review period for the September rebalance ends 31 July. We expect the changes to be announced 25 August with the implementation taking place after the close on 8 September.
We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.
One way turnover is estimated at 3.45% resulting in a one-way trade of CNY 3,675m. The impact on the deletions will be larger than that on the inclusions.

💡 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

Jun 14

Daily Brief Event-Driven: Kenedix Office/Resi/Commercial Three-Way Merger – Size Matters and Index Flows Do Too and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Kenedix Office/Resi/Commercial Three-Way Merger – Size Matters and Index Flows Do Too
Potential Delisting of 5 Preferred Stocks in Korea at End of June
Korea FSS Favors 10% Treasury Stock Limit over Mandatory Cancellation: At-Risk Names
KOSDAQ150 Ad Hoc Index Rebalance: HFR (230240) To Replace BH (090460)
Kenedix Merger: Office, Residential, Retail & Index Implications
Tesserent (TNT AU)’s Offer From Thales
HSTECH Index Rebalance Preview (Sep): One Change or Two?
Hailan (2278 HK): Yeung Bets On Shareholder Apathy
Kenedix Office Investment (8972 JP): Merger with Kenedix Residential and Kenedix Retail REIT
Tesserent (TNT AU): Thales’s A$0.13 Offer

Kenedix Office/Resi/Commercial Three-Way Merger – Size Matters and Index Flows Do Too

Today after the close, Kenedix Office Investment Co (8972 JP), Kenedix Retail REIT (3453 JP), and Kenedix Residential Investment (3278 JP) announced a three-way merger for Nov 1.
Kenedix Office REIT (KDO) will be the surviving entity, and what is now three REITs of ¥150-250bn in size will become one diversified REIT of ¥630-650bn.
That will trigger a size uplift and should also trigger index inclusion.

Potential Delisting of 5 Preferred Stocks in Korea at End of June

In this insight, we discuss the increasing likelihood of delisting of five preferred stocks in Korea at end of June.
These five preferred stocks are as follows: Samsung Heavy Industries Pref, SK Networks Pref, DB Hitek Pref, Hyundai BNG Steel Pref, and Heungkuk Fire & Marine Insurance Pref 2B.
Because the combined market cap of these five preferred shares is 37 billion won, it will have only a minor, positive impact on their common counterparts.

Korea FSS Favors 10% Treasury Stock Limit over Mandatory Cancellation: At-Risk Names

The local market believes that the FSS plans to push forward with the 10% limitation measure. Last week’s seminar served as a proactive way to inform the market about it.
The market is paying attention to the potential emergence of stock overhang risks due to the establishment of limits on listed companies’ treasury stock holdings.
Lotte Holdings and Doosan Corp are considered to fall into this category. They may attempt to sell treasury stock early on to meet the 10% limit.

KOSDAQ150 Ad Hoc Index Rebalance: HFR (230240) To Replace BH (090460)

Following Bh Co Ltd (090460 KS) moving from the KOSDAQ to KOSPI Market, the stock will be deleted from the KOSDAQ 150 Index and replaced with HFR Inc (230240 KS).
The change will be implemented at the close on 19 June and passive trackers will need to trade over 1x ADV on both stocks.
We had HFR Inc (230240 KS) as a potential replacement candidate and there could be pre-positions built up on the stock.

Kenedix Merger: Office, Residential, Retail & Index Implications

Kenedix Office Investment Co, Kenedix Residential Investment and Kenedix Retail REIT have announced a three-way absorption merger to create Kenedix Realty Investment Corporation.
The increased size and liquidity of the merged entity will put the stock on the radar of active investors and there could be a re-rating higher.
There will be some passive flows into the merged entity at the time of merger implementation and this will help the stock outperform its peers.

Tesserent (TNT AU)’s Offer From Thales

Cybersecurity firm Tesserent Ltd (TNT AU) has announced it has entered into a Scheme with France’s Thales SA (HO FP).
Thales is offering A$0.13/share, a whopping 165% premium to last close. Although, TNT is down 87% from its January 2021 high.
The Offer is conditional on TNT shareholder approval and FIRB/OIO approvals. Those regulatory approvals will not be straightforward.

HSTECH Index Rebalance Preview (Sep): One Change or Two?

We expect one change to the Hang Seng Tech Index (HSTECH INDEX) in September – though there could be a second change as well.
Estimated one-way turnover is 2.13% resulting in a one-way trade of HK$2.01bn in case there are two index changes. Turnover will be lower if there is only one change.
Short interest on some of the potential changes is over 15% of float and there could be big moves on the stocks post announcement of the changes.

Hailan (2278 HK): Yeung Bets On Shareholder Apathy

Back on the 8 May, small-cap PRC property play Hailan Holdings (2278 HK) announced a voluntary Offer from Yueng Man, Hailan’s controlling shareholder.
The Offer Price is HK$3.38/share, a miserly 5% premium to last close, and a 60% discount to the RNAV. The Composite Doc is now out.
The key condition is Yueng getting 90% of disinterested shareholders to tender. That looks a stretch, yet minorities are disengaged. Not one has turned up at the last three AGMs.

Kenedix Office Investment (8972 JP): Merger with Kenedix Residential and Kenedix Retail REIT

The merger ratio is 0.67 Kenedix Office Investment Co (8972 JP)/KDO units per Kenedix Residential Investment (3278 JP)/KDR unit and 0.84 KDO units per Kenedix Retail REIT (3453 JP)/KRR unit.
The merger is sensible due to scale (the merged entity will be the third-largest J REIT by asset size), expansion opportunities and improved capital recycling.
The merger requires approval from all three sets of unitholders. We think this is likely as the deal metrics are fair for all three sets of unitholders.

Tesserent (TNT AU): Thales’s A$0.13 Offer