Most Read Archives | Page 68 of 91 | Smartkarma

The FTSE TWSE Taiwan indices get rebalanced in line with the standard FTSE Global indices – on the third Friday of September.
The most interesting one is the probably the least famous. It has only one change but it has massive re-weightings because of the way the index is constructed.
Historical patterns suggest a right-way long-short basket, reversed on the event, is a good trade.

SENSEX Index Rebalance Preview: Adani Green Could Replace Dr. Reddy

We are two-thirds of the way through the review period for the December review of the S&P BSE SENSEX Index (SENSEX INDEX). Changes become effective at the close 16 December.
We see Adani Green Energy (ADANIGR IN) as the highest ranked non-constituent in inclusion zone, while Dr. Reddy’s Laboratories (DRRD IN) is the lowest ranked constituent in deletion zone.
Passive trackers will need to trade over 10 days of delivery volume on Adani Green Energy (ADANIGR IN) and Dr. Reddy’s Laboratories (DRRD IN), so the impact will be significant.

HSI, HSCEI, HSTECH: September Rebalance Flows Post Capping

The September rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituents at 8%. This will lead to large flows.
The largest inflows will be on Baidu (9888 HK), SenseTime Group (20 HK), China Shenhua Energy (1088 HK), Tencent (700 HK), Kuaishou Technology (1024 HK) and Anta Sports (2020 HK).
The largest outflows will be on Meituan (3690 HK), AIA Group (1299 HK), Sunny Optical (2382 HK), SMIC (981 HK), China Pacific Insurance (2601 HK) and China Construction Bank (939).

SKT ADR Play on the 31st for MSCI Exclusion

We need a hedge to short SKT on the 31st. For this, we need to consider trading SKT ADR, which is pretty liquid as DTV reaches nearly $8mil.
The play structure is simple. It exploits the pattern that passive flow is concentrated on underlying shares rather than ADRs. We witnessed this pattern in the last two cases.
Passive outflow may be aggravated since SKT leaves not only STANDARD but also sub-indices such as ESG. So, the degree of a temporary DR premium can get thicker.

Doosan Enerbility Placement – Selldown by Parent Doesn’t Send the Best Signal

By Clarence Chu

Doosan Corp (000150 KS) is looking to raise up to US$435m from trimming a portion of its stake in Doosan Enerbility (034020 KS).
The deal isn’t exactly a large one to process at just 5.2 days of three month ADV. Shares are offered at a discount range between 5.1-7.8%.
As there wasn’t a specific mention of the former’s intention to sell, we would argue that the deal isn’t particularly well flagged.

Hanjin Kal Club Deal: Shorting on Waning Proxy Fight & Flow Trading on MSCI Inclusion

Bando sold all of its 17% stakes through a club deal. Of this, about 3.8% went to LX Pantos. The remaining 13% found a new home among several institutional investors.
Outright shorting for Hanjin Kal seems to require a bit more cautious approach. That’s because there is still no definitive information on the owners of the 13% stake.
If the price correction does not go as harshly as expected and expectations for a proxy battle resurface, we should consider switching to flow trading aimed at MSCI inclusion.

Nitro’s Opportunistic A$1.58 Offer from Potentia

Nitro Software Ltd (NTO AU) entered a trading halt in response to an AFR report that Potentia has lobbed an indicative non-binding proposal at A$1.58 per share.
Potentia’s offer follows its success in securing a 17% stake at A$1.58 per share on Monday night. The stake is large enough to deter rival schemes.
The offer is opportunistic and unattractive. However, the ability of Potentia to relatively quickly secure a significant stake suggests that the Board will be under pressure to engage.

CGN Power (1816 HK): No Nuclear Jitters

Nuclear power is a clean energy source that contributes to energy savings and emissions reduction in society.
SASAC backed CGN Power (1816 HK) is China’s leading nuclear play, accounting for 55% of on-grid nuclear power generation, but just 1.2% of China’s total installed capacity of power generation.
As one of the few listed nuclear -plays in Asia, CGN trades at undemanding multiples, together with an attractive ROE and yield.

Doosan Corp: A Block Deal Sale of 4.5% Stake in Doosan Enerbility

By Douglas Kim

After the market close today, Doosan Corp (000150 KS) announced that it plans to sell a 4.5% stake in Doosan Enerbility (034020 KS) in a block deal sale.
The discount range on the block deal price is 5.1% to 7.8% based on today’s closing price of 21,700 won.
This block deal sale should have a positive impact on Doosan Corp but a negative impact on Doosan Enerbility.

Leapmotor IPO – Index Inclusion Timeline

Leapmotor (2007699D HK) is said to be looking to raise between US$1bn-US$1.5bn by selling 290.9m shares in its IPO. At the top end, the company will be valued at HK$53bn.
The performance of its peers over the last year leaves a lot to be desired and could lead to lower demand in the IPO.
Leapmotor (2007699D HK) should be added to the HSCI and the Hang Seng Tech Index, though timing depends on when the stock lists on the HKEX (388 HK).

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Aug 30

Most Read: PetroChina, Alibaba Group, Hoymiles Power Electronics, Alibaba (ADR), True Corp Pcl, Hanmi Science, Meituan, MACA Ltd, Adani Green Energy and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance & ETF Flow Recap: FTSE AW/AC, CH 50/A50, STI, KLCI, TW 50/Div+, STAR50, EPRA Nareit
CSRC and PCAOB “Agree” On Audit Terms – Now PCAOB Will Try To Prove a Negative
STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced
China ADRs Delisting – Tide Is Turning – Non-HK Listed ADRs Are Already Outperforming
Merger Arb Mondays (29 Aug) – Ramsay, DTAC/True, Pendal, Link Admin, Ramsay, Infomedia, ResApp, MACA
Hanmi Science Merger: Proxy Battle-Triggered Momentum Trading
Meituan (3690 HK): 2Q22, Reduced Loss, But Unnecessarily Reclassifies Revenue
MACA: Thiess’ Unsurprising Bump. NRW’s Move, If Any
SENSEX Index Rebalance Preview: Adani Green Could Replace Dr. Reddy
MACA’s Revised Thiess Offer Makes an NRW Rival Offer Increasingly Unlikely

Index Rebalance & ETF Flow Recap: FTSE AW/AC, CH 50/A50, STI, KLCI, TW 50/Div+, STAR50, EPRA Nareit

It was a busy week with a lot of review cutoffs for the FTSE country indices and the announcement of the STAR50 INDEX changes for September.
The coming week has the implementation of the JPXNK400, MSCI, HSI, HSCEI and HSTECH rebalances. Plus announcements of the changes to the FTSE, NIFTY and S&P/ASX indices.
There were outflows from iShares MSCI All Country Asia ex-Japan ETF (AAXJ US), IShares Core MSCI Asia Ex Japan ETF (3010 HK) and KraneShares CSI China Internet ETF (KWEB US).

CSRC and PCAOB “Agree” On Audit Terms – Now PCAOB Will Try To Prove a Negative

Friday in US time, the China Securities Regulatory Commission (CSRC), China’s MOF, and the US Public Company Accounting Oversight Board (PCAOB) “agreed” on a Statement of Protocol.
This SoP sets the outlines for PCAOB access to inspect/investigate audit papers and accounting firms in China and HK for companies listed in the US.
The releases’ difference in language is to be expected – different constituencies – but as PCAOB Chair Williams said, “Now we will find out whether those promises hold up.”

STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced

The index committee has continued to use a 6 month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in September.
One-Way turnover is estimated at 4.07% and will result in a one-way trade of CNY 2,265m. Passive trackers will need to trade between 1-5 days ADV on the adds/deletes.
The adds have outperformed the deletes and the CSI500 Index since the end of the review period. We’d look to buy the adds and hedge with CSI500 Index futures.

China ADRs Delisting – Tide Is Turning – Non-HK Listed ADRs Are Already Outperforming

By Sumeet Singh

On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.
On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.
In this note, we’ll talk about the latest developments and its implications.

Merger Arb Mondays (29 Aug) – Ramsay, DTAC/True, Pendal, Link Admin, Ramsay, Infomedia, ResApp, MACA

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Infomedia Ltd (IFM AU), Ramsay Health Care (RHC AU), Resapp Health (RAP AU), True Corp Pcl (TRUE TB).
Lowest spreads MACA Ltd (MLD AU), Nearmap Ltd (NEA AU), Dongzheng Automotive Finance (2718 HK), Excelpoint Technology (EXLP SP), MyDeal.com.au Ltd (MYD AU), China Vast Industrial Urban Development (6166 HK)

Hanmi Science Merger: Proxy Battle-Triggered Momentum Trading

This event provides three trading angles. 1. merger swap arbitrage, 2. passive flow trading, and 3. proxy battle-triggered momentum trading. But a proxy battle would be the only actionable one.
The market will likely see the dissolution of Hanmi Healthcare, owning a 6.43% stake in the holding company as a prelude to a full-fledged proxy battle.
Predicting the triggering timing is difficult, but we should note that the mother is 72 years old. How long she will remain in the current managerial position is highly doubtful.

Meituan (3690 HK): 2Q22, Reduced Loss, But Unnecessarily Reclassifies Revenue

By Ming Lu

The revenue growth rate decelerated, but operating loss shrank in 2Q22.
We believe the the revenue reclassification is unnecessary and suspicious.
We set a downside of 19% and a price target of HK$148.

MACA: Thiess’ Unsurprising Bump. NRW’s Move, If Any

Back on the 26th July, diversified contractor MACA Ltd (MLD AU) announced a friendly off-market cash offer from fellow contractor Thiess, at A$1.025/share, a 28.1% premium to the undisturbed price.
The Bidder’s Statement was dispatched on the 9 August. After rejecting NRW Holdings (NWH AU)‘s non-binding proposal (implied consideration of $1.085/share), MACA dispatched the Target Statement on the 25 August.
Thiess has now lifted its all-cash Offer to A$1.075/share – a 34.4% to undisturbed. MACA is trading marginally through the revised terms. The first closing date is the 12 September.

SENSEX Index Rebalance Preview: Adani Green Could Replace Dr. Reddy

We are two-thirds of the way through the review period for the December review of the S&P BSE SENSEX Index (SENSEX INDEX). Changes become effective at the close 16 December.
We see Adani Green Energy (ADANIGR IN) as the highest ranked non-constituent in inclusion zone, while Dr. Reddy’s Laboratories (DRRD IN) is the lowest ranked constituent in deletion zone.
Passive trackers will need to trade over 10 days of delivery volume on Adani Green Energy (ADANIGR IN) and Dr. Reddy’s Laboratories (DRRD IN), so the impact will be significant.

MACA’s Revised Thiess Offer Makes an NRW Rival Offer Increasingly Unlikely

Theiss has improved its MACA Ltd (MLD AU) offer from A$1.025 to A$1.075 per share. The offer is conditional on 90% minimum acceptances, FIRB approval and no prescribed occurrences.
Theiss increased its shareholding to 15.90% of outstanding shares due to acceptances from MACA founders and directors. This is a stumbling block to a potential NRW Holdings (NWH AU) scheme.
While the value of NRW’s default option remains higher than Thiess’ revised offer, it is increasingly unlikely that NRW will start a bidding war.

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Aug 29

Most Read: Alibaba Group, Hoymiles Power Electronics, PetroChina, Swire Pacific (A), Ramsay Health Care, Greentown Service Group, SK Innovation, China Tourism Group Duty Free Corp Ltd, True Corp Pcl and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CSRC and PCAOB “Agree” On Audit Terms – Now PCAOB Will Try To Prove a Negative
STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced
Index Rebalance & ETF Flow Recap: FTSE AW/AC, CH 50/A50, STI, KLCI, TW 50/Div+, STAR50, EPRA Nareit
Last Week in Event SPACE: Toshiba, Swire Pacific, Ramsay Health, Pendal, Intouch
Ramsay and KKR’s Game of Cat and Mouse
China Property Management: Lacking Independence
KODEX FnGuide Battery ETF Rebalancing Checkup
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Ramsay Health, Pendal, Nearmap, Xiamen Port, PTB Group, MACA
ECM Weekly (28th Aug 2022) – China Tourism, BA REIT, Hongjiu Fruit, YH Ent, Biocyto, WM, APM, Daiwa
Merger Arb Mondays (29 Aug) – Ramsay, DTAC/True, Pendal, Link Admin, Ramsay, Infomedia, ResApp, MACA

CSRC and PCAOB “Agree” On Audit Terms – Now PCAOB Will Try To Prove a Negative

Friday in US time, the China Securities Regulatory Commission (CSRC), China’s MOF, and the US Public Company Accounting Oversight Board (PCAOB) “agreed” on a Statement of Protocol.
This SoP sets the outlines for PCAOB access to inspect/investigate audit papers and accounting firms in China and HK for companies listed in the US.
The releases’ difference in language is to be expected – different constituencies – but as PCAOB Chair Williams said, “Now we will find out whether those promises hold up.”

STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced

The index committee has continued to use a 6 month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in September.
One-Way turnover is estimated at 4.07% and will result in a one-way trade of CNY 2,265m. Passive trackers will need to trade between 1-5 days ADV on the adds/deletes.
The adds have outperformed the deletes and the CSI500 Index since the end of the review period. We’d look to buy the adds and hedge with CSI500 Index futures.

Index Rebalance & ETF Flow Recap: FTSE AW/AC, CH 50/A50, STI, KLCI, TW 50/Div+, STAR50, EPRA Nareit

It was a busy week with a lot of review cutoffs for the FTSE country indices and the announcement of the STAR50 INDEX changes for September.
The coming week has the implementation of the JPXNK400, MSCI, HSI, HSCEI and HSTECH rebalances. Plus announcements of the changes to the FTSE, NIFTY and S&P/ASX indices.
There were outflows from iShares MSCI All Country Asia ex-Japan ETF (AAXJ US), IShares Core MSCI Asia Ex Japan ETF (3010 HK) and KraneShares CSI China Internet ETF (KWEB US).

Last Week in Event SPACE: Toshiba, Swire Pacific, Ramsay Health, Pendal, Intouch

Based on an admittedly somewhat finger-in-the-air estimate of probability of privatisation, shorting Toshiba Corp (6502 JP) here against its Peer Basket is probably not a good outcome.
Swire Pacific (19 HK) has started buying back with 3.5x the average ADV impact on Bs vs As. That is likely to continue.
KKR’s all cash A$88/share Offer for Ramsay Health (RHC AU) is off. The alternative Offer has a lower implied value, and has been unceremoniously rejected, despite Ramsay’s horrible FY22 numbers.

Ramsay and KKR’s Game of Cat and Mouse

Ramsay Health Care (RHC AU) disclosed that the KKR & Co Inc (KKR US) consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected.
The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer.
The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt.

China Property Management: Lacking Independence

As China’s property market melts down, shares of property management companies are following suit.
And there are increasing governance issues attached to these management units as a slew of questionable parent/subsidiary transactions unfold.
Valuations for property management companies are trading at multi-year lows. That trend is likely to continue.

KODEX FnGuide Battery ETF Rebalancing Checkup

I recommend focusing on the ceiling regression play. In this regard, SK Innovation has the most notable regression spread, and we should use Samsung SDI as a hedge against it.
As for constituent change, SungEel HiTech is firmly positioned with a market cap of ₩1.34T and a float rate of 50%. And it belongs to the Waste batteries keyword.
But, it is unclear whether SungEel will be in the top 25 in scoring. We should patiently wait until confirmation as it’s still a worthy candidate requiring our attention.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Ramsay Health, Pendal, Nearmap, Xiamen Port, PTB Group, MACA

There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals were discussed this week: PTB Group Ltd (PTB AU)‘s and Bright Scholar Education (BEDU US).
Key updates took place for Ramsay Health Care (RHC AU), Pendal Group (PDL AU), Nearmap Ltd (NEA AU), Xiamen International Port H (3378 HK), andMACA Ltd (MLD AU).

ECM Weekly (28th Aug 2022) – China Tourism, BA REIT, Hongjiu Fruit, YH Ent, Biocyto, WM, APM, Daiwa

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, China Tourism’s listing appears to have set the ball rolling for others to follow.
After a flurry of activity in the prior week, there weren’t any major placements this week.

Merger Arb Mondays (29 Aug) – Ramsay, DTAC/True, Pendal, Link Admin, Ramsay, Infomedia, ResApp, MACA

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Infomedia Ltd (IFM AU), Ramsay Health Care (RHC AU), Resapp Health (RAP AU), True Corp Pcl (TRUE TB).
Lowest spreads MACA Ltd (MLD AU), Nearmap Ltd (NEA AU), Dongzheng Automotive Finance (2718 HK), Excelpoint Technology (EXLP SP), MyDeal.com.au Ltd (MYD AU), China Vast Industrial Urban Development (6166 HK)

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Aug 28

Most Read: Emperador, Healthcare & Medical Investment Corporation, Jafco Co Ltd, Ramsay Health Care, Nasdaq-100 Stock Index, Hoymiles Power Electronics, Model Solution, Samsung Electronics Pref Shares, PetroChina, Sungeel Hitech and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

STI Index Rebalance Preview: Three Cheers for Emperador?
FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities
JAFCO (8595) Down as Murakami Affiliates Sell the Pop on the Poison Pill, So Buy the Range Dip
Ramsay Keeps Door Ajar After KKR’s “Meaningful Inferior” Offer
NDX Short Conviction
STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced
Model Solution IPO Preview
JY Lee Pardoned; What Should He Do Next?
Index Rebalance & ETF Flow Recap: FTSE AW/AC, CH 50/A50, STI, KLCI, TW 50/Div+, STAR50, EPRA Nareit
SungEel HiTech: KOSDAQ 150 Early Entry in December

STI Index Rebalance Preview: Three Cheers for Emperador?

We expect Emperador (EMI SP) to be added to the FTSE Straits Times Index at the September rebalance after meeting the free float, market cap and liquidity requirements.
As the lowest ranked current index constituent, we expect Comfortdelgro Corp (CD SP) will be deleted heaping pressure on the beleaguered stock with over 4 days of ADV to sell.
Emperador (EMP PM) is an inclusion to the FTSE All-World Index and there is a lot to buy on that line from passive trackers at the close on 16 September.

FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities

The FTSE EPRA Nareit Index September rebalance will use data from 22 August. The changes will be announced on 31 August and implemented at the close on 16 September.
Healthcare & Medical Investment Corporation (3455 JP) is a potential inclusion, while there are a few others that are close adds on market cap & other criteria.
Healthcare & Medical Investment Corporation (3455 JP) is also an inclusion to the FTSE All Cap Index at the September rebalance and the EPRA Nareit inclusion will increase passive inflows.

JAFCO (8595) Down as Murakami Affiliates Sell the Pop on the Poison Pill, So Buy the Range Dip

Entities related to noted Japanese activist Yoshiaki Murakami had bought 11+%, suggested 15%, proposed 51%, and pestered Jafco Co Ltd (8595 JP) for an asset sale and super-large buyback.
JAFCO decided to launch a poison pill process as a hostile takeover defence mechanism, with the Record Date at August month-end.
The shares popped. I was bearish. It turns out Murakami affiliates sold the pop. And this starts the range trade.

Ramsay Keeps Door Ajar After KKR’s “Meaningful Inferior” Offer

KKR has all-but-abandoned its A$88/share cash offer for Ramsay Health Care (RHC AU), Australia’s largest private hospital group.
KKR’s alternative proposal involves $88/share for the 5,000 RHC shares, followed by A$78.20/cash + 0.22 Ramsay Generale de Sante (GDS FP) shares thereafter – or an indicative value of A$84.93/share.
Despite announcing horrible annual results, Ramsay’s board considers the alternative proposal to be meaningfully inferior to the KKR’s indicative proposal of $88.00/share.

NDX Short Conviction

By Thomas Schroeder

NDX was our top US short bet from 13,750/500. NDX below 13,000 is a risk off pivot for the global cycle. Conviction call to build NDX short on strength.
NDX 13k will now act as resistance with 12,500 and 12,100 downside targets. SPX reaction rise due Monday with resistance at 4,130/70.
Risk cycle peak rolled a bit early (before late August) sold weaker markets early (NDX, DAX, Taiwan, HK, Korea).

STAR50 Index Rebalance: Adds Continue to Outperform as Changes Are Announced

The index committee has continued to use a 6 month minimum listing history leading to five changes to the SSE STAR50 (STAR50 INDEX) in September.
One-Way turnover is estimated at 4.07% and will result in a one-way trade of CNY 2,265m. Passive trackers will need to trade between 1-5 days ADV on the adds/deletes.
The adds have outperformed the deletes and the CSI500 Index since the end of the review period. We’d look to buy the adds and hedge with CSI500 Index futures.

Model Solution IPO Preview

By Douglas Kim

Model Solution makes prototypes to mainly check design and function in the product development stage, which is before the mass production stage of new products such as IT devices.
The IPO price range is from 24,000 won to 27,000 won. The expected market cap of the IPO is from 153 billion won to 173 billion won.
The company had sales of 61.1 billion won (up 9.9% YoY) and operating profit of 8.9 billion won (up 32.1% YoY) in 2021.

JY Lee Pardoned; What Should He Do Next?

By Ken S. Kim

With JY Lee pardoned this past Monday, there is a lot of speculation about the speed of restructuring
A lot will depend on what happens with whether Samsung Life will be forced to sell its shares in Samsung Electronics
What should be done for the best of the family and shareholders is to buyout the pref shares

Index Rebalance & ETF Flow Recap: FTSE AW/AC, CH 50/A50, STI, KLCI, TW 50/Div+, STAR50, EPRA Nareit

It was a busy week with a lot of review cutoffs for the FTSE country indices and the announcement of the STAR50 INDEX changes for September.
The coming week has the implementation of the JPXNK400, MSCI, HSI, HSCEI and HSTECH rebalances. Plus announcements of the changes to the FTSE, NIFTY and S&P/ASX indices.
There were outflows from iShares MSCI All Country Asia ex-Japan ETF (AAXJ US), IShares Core MSCI Asia Ex Japan ETF (3010 HK) and KraneShares CSI China Internet ETF (KWEB US).

SungEel HiTech: KOSDAQ 150 Early Entry in December

So far, SungEel is in the top 50, currently ranked 38th. Given that the gap with 50th place is more than ₩100B, its early entry in December is very likely.
Rsupport is currently at the bottom with an average daily market cap of ₩0.27T. However, there are four other names under ₩0.30T, so we have to wait a little longer.
SungEel can expect a passive inflow equivalent to 1.0x ADTV. Combined with potential passive inflows from the local battery ETFs, it will form a quite solid flow momentum until December.

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Aug 27

Most Read: AMMB Holdings, Jafco Co Ltd, Ramsay Health Care, Samsung Life Insurance, Binance Coin, MACA Ltd, Nordea Bank AB, Chongqing Hongjiu Fruit and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Hong Kong: Where Have Shorts Been Building Up?
KLCI Index Rebalance Preview: The Gloves Could Come Off
Ramsay’s Overdue Update on the KKR Proposal
JAFCO (8595) Down as Murakami Affiliates Sell the Pop on the Poison Pill, So Buy the Range Dip
Ramsay Keeps Door Ajar After KKR’s “Meaningful Inferior” Offer
Another Flow Event Coming: Samsung Life Converting Equity Index Funds into EMPs
Mastercard Partnership with Binance: BNB Will Benefit from Network Effect
MACA’s Target Statement Responds To Thiess’ Offer
EURO STOXX 50 Quiddity Leaderboard: Two Potential ADDs with ~US$1bn Flows Each
Chongqing Hongjiu Fruit IPO – Not Fully Convinced but Appears Cheap on the Low End

Hong Kong: Where Have Shorts Been Building Up?

Short notional in Hong Kong is HK$439bn and has been falling over the last 18 months due to a drop in the market.
In terms of short notional to issue market cap, the Information Technology, Materials, Health Care and Consumer Discretionary sectors are up there, with Communication Services, Real Estate the least shorted.
Over the year, the largest shorts in terms of notional have been built on Xiaomi Corp, Meituan, JD.com, AIA Group Ltd, Postal Savings Bank of China, Orient Overseas, Techtronic Industries.

KLCI Index Rebalance Preview: The Gloves Could Come Off

AMMB Holdings (AMM MK) and Ql Resources (QLG MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) at the December rebalance.
One way turnover is estimated at 2.87% and the impact of passive flows is larger on the potential adds as compared to the potential deletes.
Westports Holdings (WPRTS MK) is a close add and there could be changes over the next few months as we approach the end of the review period.

Ramsay’s Overdue Update on the KKR Proposal

Ramsay Health Care (RHC AU) notes that discussions with KKR are ongoing, but the indicative proposal is held up by due diligence access to Ramsay Generale de Sante (GDS FP).
KKR proposed an alternative proposal that the Board rejected as “meaningfully inferior.” KKR remains interested, and its shenanigans are likely a move to nudge down the price.
At the last close, the risk/reward profile is favourable as the downside due to a deal break (-3% estimated decline) is lower than the upside (+20%) to the indicative proposal.

JAFCO (8595) Down as Murakami Affiliates Sell the Pop on the Poison Pill, So Buy the Range Dip

Entities related to noted Japanese activist Yoshiaki Murakami had bought 11+%, suggested 15%, proposed 51%, and pestered Jafco Co Ltd (8595 JP) for an asset sale and super-large buyback.
JAFCO decided to launch a poison pill process as a hostile takeover defence mechanism, with the Record Date at August month-end.
The shares popped. I was bearish. It turns out Murakami affiliates sold the pop. And this starts the range trade.

Ramsay Keeps Door Ajar After KKR’s “Meaningful Inferior” Offer

KKR has all-but-abandoned its A$88/share cash offer for Ramsay Health Care (RHC AU), Australia’s largest private hospital group.
KKR’s alternative proposal involves $88/share for the 5,000 RHC shares, followed by A$78.20/cash + 0.22 Ramsay Generale de Sante (GDS FP) shares thereafter – or an indicative value of A$84.93/share.
Despite announcing horrible annual results, Ramsay’s board considers the alternative proposal to be meaningfully inferior to the KKR’s indicative proposal of $88.00/share.

Another Flow Event Coming: Samsung Life Converting Equity Index Funds into EMPs

Another notable flow event is coming in the Korean local market. Samsung Life is preparing to shift from an index fund-focused management to an ETF-centric one.
Samsung Life’s conversion process will take 2-3 months. We need to secure guidelines on the conversion procedure, phased conversion volume, and the percentage of conversion to theme ETFs.
This can, in some cases, produce significant short-term flow events, as Samsung Life may accelerate the transfer of funds to KODEX’s theme ETFs during the conversion process.

Mastercard Partnership with Binance: BNB Will Benefit from Network Effect

By Rose Choy

The new Mastercard Binance debit card allows users to make purchases with selected cryptocurrencies in their Binance wallet and will first be rolled out in Argentina.
BNB, the Binance native token, will benefit from network effect as adoption for the crypto card grows.
Binance is expanding its payment strategy as a tool to drive user adoption and expand its ecosystem.

MACA’s Target Statement Responds To Thiess’ Offer

On the 26th July, diversified contractor MACA Ltd (MLD AU) announced a friendly off-market cash offer from fellow contractor Thiess, at A$1.025/share, a 28.1% premium to the previous close.
The Bidder’s Statement was dispatched on the 9 August. After rebuffing NRW Holdings (NWH AU)‘s non-binding proposal, MACA has now dispatched the Target Statement.
The IE deems the Offer, which remains subject to FIRB and ACCC approvals, to be fair. The first closing date is the 12 September.

EURO STOXX 50 Quiddity Leaderboard: Two Potential ADDs with ~US$1bn Flows Each

The EURO STOXX 50 Index is one of the most highly-watched indices in mainland Europe and the annual index review takes place in September.
In Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone’s Annual Big Impact Rebal Trades, we looked at the Potential ADDs/DELs and the historical performance of Rebalance Events.
With less than a week left until the Reference date, we take a final look at the rankings in this insight.

Chongqing Hongjiu Fruit IPO – Not Fully Convinced but Appears Cheap on the Low End

By Ethan Aw

Chongqing Hongjiu Fruit (6689 HK) is looking to raise up to US$93m in its HK IPO.
Chongqing Hongjiu Fruit (CHJF) is a multi-brand fresh fruit distributor in China with an end-to-end supply chain. They have 1.0% market share as China’s second largest fruit distributor
CHJF had grown at an impressive rate even in the face of COVID-19. In this note, we will take a look at its valuations vs that of listed peers.

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Aug 26

Most Read: Healthcare & Medical Investment Corporation, Pendal Group, AMMB Holdings, Pegatron Corp, Ramsay Health Care, SJM Holdings, Softbank Group, China Tourism Group Duty Free Corp Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities
Pendal Group (PDL AU): Perpetual’s Bump Should Get the Deal Done
KLCI Index Rebalance Preview: The Gloves Could Come Off
FTSE TWSE Dividend+ Sep 22 Capping: Massive Negative Flows for Farglory, Greatek, & Elan
Ramsay’s Overdue Update on the KKR Proposal
Hong Kong: Where Have Shorts Been Building Up?
Hong Kong CEO & Director Dealings – 25th August 2022
Pendal Enters Scheme With Perpetual
Softbank (9984 JP) – This Time, It’s Chime
CTG Duty Free (1880 HK): Our Earnings Forecasts and Views on H-Share Fair Value

FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities

The FTSE EPRA Nareit Index September rebalance will use data from 22 August. The changes will be announced on 31 August and implemented at the close on 16 September.
Healthcare & Medical Investment Corporation (3455 JP) is a potential inclusion, while there are a few others that are close adds on market cap & other criteria.
Healthcare & Medical Investment Corporation (3455 JP) is also an inclusion to the FTSE All Cap Index at the September rebalance and the EPRA Nareit inclusion will increase passive inflows.

Pendal Group (PDL AU): Perpetual’s Bump Should Get the Deal Done

Pendal Group and Perpetual Ltd have entered into a SID where Pendal shareholders will receive 1 share of Perpetual for every 7.5 shares in Pendal, plus cash of A$1.976/share.
While this is a premium to the last close and undisturbed prices, it is a discount to longer term prices. The Pendal Board has unanimously recommended the offer though.
In the short-term expect short covering on Pendal Group (PDL AU) and increased shorts on Perpetual Ltd (PPT AU) as arbs step in to close the gap.

KLCI Index Rebalance Preview: The Gloves Could Come Off

AMMB Holdings (AMM MK) and Ql Resources (QLG MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) at the December rebalance.
One way turnover is estimated at 2.87% and the impact of passive flows is larger on the potential adds as compared to the potential deletes.
Westports Holdings (WPRTS MK) is a close add and there could be changes over the next few months as we approach the end of the review period.

FTSE TWSE Dividend+ Sep 22 Capping: Massive Negative Flows for Farglory, Greatek, & Elan

The index constituent weights of the FTSE TWSE Dividend+ Index will be capped during the upcoming September 2022 Index quarterly index review.
In addition, Elan Microelectronics (2458 TT) could also get deleted as discussed in FTSE TWSE Quiddity Leaderboard Sep 2022: Elan Micro (2458 TT) Could Be a Big Negative Surprise
In this insight, we take a look at Quiddity’s expectations for index flows resulting from these events.

Ramsay’s Overdue Update on the KKR Proposal

Ramsay Health Care (RHC AU) notes that discussions with KKR are ongoing, but the indicative proposal is held up by due diligence access to Ramsay Generale de Sante (GDS FP).
KKR proposed an alternative proposal that the Board rejected as “meaningfully inferior.” KKR remains interested, and its shenanigans are likely a move to nudge down the price.
At the last close, the risk/reward profile is favourable as the downside due to a deal break (-3% estimated decline) is lower than the upside (+20%) to the indicative proposal.

Hong Kong: Where Have Shorts Been Building Up?

Short notional in Hong Kong is HK$439bn and has been falling over the last 18 months due to a drop in the market.
In terms of short notional to issue market cap, the Information Technology, Materials, Health Care and Consumer Discretionary sectors are up there, with Communication Services, Real Estate the least shorted.
Over the year, the largest shorts in terms of notional have been built on Xiaomi Corp, Meituan, JD.com, AIA Group Ltd, Postal Savings Bank of China, Orient Overseas, Techtronic Industries.

Hong Kong CEO & Director Dealings – 25th August 2022

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. However, such disclosures are by no means an absolute.
These insights also flag those companies where shares have been pledged, both recently and ongoing.

Pendal Enters Scheme With Perpetual

On the 4 April, asset manager Pendal (PDL AU)‘s board unanimously determined the indicative cash/scrip Offer proposal from Perpetual (PPT AU) undervalued the current and future value of the company.
Pendal And Perpetual have now entered into a SID such that Pendal shareholders will receive 1 Perpetual share for every 7.5 Pendal shares plus $1.976 cash for each Pendal share.
The negotiation clincher was the increase in the cash component by A$0.306/share. Should the deal complete, Pendal will hold 47% in the enlarged entity.

Softbank (9984 JP) – This Time, It’s Chime

By Victor Galliano

US fintech Chime, another high-profile fintech in Softbank’s Vision Fund 2 portfolio, sees its secondary market valuation in the private market fall by nearly 50% on a year-to-date basis
Chime had been planning to IPO in 1H 2022, with its IPO valuation estimated at close to USD40bn; poor market conditions have led to the IPO being shelved
Chime’s reduced valuation is another hit to Softbank’s portfolio, which has yet to feature a recent “down round”, and which we believe negatively impacts its Vision Fund 2 in particular

CTG Duty Free (1880 HK): Our Earnings Forecasts and Views on H-Share Fair Value

By Osbert Tang, CFA

Our earnings projections for China Tourism Group Duty Free Corp Ltd (1880 HK) are 14% and 18% below market consensus respectively. We think these are more realistic expectations.
At IPO price of HK$158, CDFC H-share sits on 23.9x FY23F PER. We think it is difficult to trade above 22x – the average for top consumer discretionary names.
Weakened visitor appetite to Sanya, potentially higher discounts, increase in border opening, higher fixed cost and uncertainties for duty free policies beyond 2025 are negative earnings factors.

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Aug 25

Most Read: Xinjiang Daqo New Energy, Yang Ming Marine Transport, Emperador, Healthcare & Medical Investment Corporation, China Tourism Group Duty Free Corp Ltd, Swire Pacific (A), Pegatron Corp, Intouch Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CSI300 Index Rebalance Preview: Outperformance Continues & Could Keep Going
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: HUGE Turnover as Review Period Ends
STI Index Rebalance Preview: Three Cheers for Emperador?
FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities
China Tourism Group A/H Trading – Decent Support from Long-Only but Minimal Retail Participation
StubWorld: Swire’s NAV Discount Further Narrows As Buyback Kicks Off
CTG Duty-Free H-Share Listing: Thoughts on First Day Trading
FTSE TWSE Dividend+ Sep 22 Capping: Massive Negative Flows for Farglory, Greatek, & Elan
Intouch’s NAV Discount Not Supported By Higher Look-Through Payout
CTG Duty Free H Share Listing: Trading Debut

CSI300 Index Rebalance Preview: Outperformance Continues & Could Keep Going

Past the midway mark in the review period, we see 18 potential changes to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the December rebalance.
We estimate a one-way turnover of 3.32% at the December rebalance leading to a one-way trade of CNY 8.55bn.
The potential adds have outperformed the potential deletes and the Shanghai Shenzhen CSI 300 Index over the last few months, with the outperformance widening over the last few weeks.

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: HUGE Turnover as Review Period Ends

We do not forecast any deletions from the FTSE TWSE Taiwan Dividend+ Index in September. There will be a lot of flow from dividend yield changes and capping changes.
Based on the closing prices from 22 August, we estimate one-way turnover of 13.6% at the September rebalance resulting in a one-way trade of TWD 19,664m (US$653m).
Passive inflows will be focused (for the most part) on stocks that have underperformed and outflows will mainly be on recent outperformers.

STI Index Rebalance Preview: Three Cheers for Emperador?

We expect Emperador (EMI SP) to be added to the FTSE Straits Times Index at the September rebalance after meeting the free float, market cap and liquidity requirements.
As the lowest ranked current index constituent, we expect Comfortdelgro Corp (CD SP) will be deleted heaping pressure on the beleaguered stock with over 4 days of ADV to sell.
Emperador (EMP PM) is an inclusion to the FTSE All-World Index and there is a lot to buy on that line from passive trackers at the close on 16 September.

FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities

The FTSE EPRA Nareit Index September rebalance will use data from 22 August. The changes will be announced on 31 August and implemented at the close on 16 September.
Healthcare & Medical Investment Corporation (3455 JP) is a potential inclusion, while there are a few others that are close adds on market cap & other criteria.
Healthcare & Medical Investment Corporation (3455 JP) is also an inclusion to the FTSE All Cap Index at the September rebalance and the EPRA Nareit inclusion will increase passive inflows.

China Tourism Group A/H Trading – Decent Support from Long-Only but Minimal Retail Participation

By Sumeet Singh

China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158/share.
As per Frost & Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
In this note, we talk about the deal pricing and the trading dynamics.

StubWorld: Swire’s NAV Discount Further Narrows As Buyback Kicks Off

By Shifara Samsudeen, ACMA, CGMA

Swire Pacific (19 HK) has bought back B/A shares in ratios of 63/37 and 72/28 over two days. Listing Rules suggest the ratio has to be higher than 76.71/23.29.
Preceding my comments on Swire 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%.

CTG Duty-Free H-Share Listing: Thoughts on First Day Trading

CTG Duty-Free Group has priced its IPO at HK$158 per share, at a slight premium to the midpoint of the indicative IPO price range of HK$143.5-165.5 per share.
At HK$158 per share, the company raised net proceeds of HK$15,892.3 (approx. US$2.0bn) and the IPO is priced at an almost 30% discount to CTG’s A-share last close price.
Cornerstone investors subscribed for approx. 38.4% of the H-share offering (or 1.9% of the total issued share capital of the company post-offering) with some existing shareholders subscribing under placing guidelines.

FTSE TWSE Dividend+ Sep 22 Capping: Massive Negative Flows for Farglory, Greatek, & Elan

The index constituent weights of the FTSE TWSE Dividend+ Index will be capped during the upcoming September 2022 Index quarterly index review.
In addition, Elan Microelectronics (2458 TT) could also get deleted as discussed in FTSE TWSE Quiddity Leaderboard Sep 2022: Elan Micro (2458 TT) Could Be a Big Negative Surprise
In this insight, we take a look at Quiddity’s expectations for index flows resulting from these events.

Intouch’s NAV Discount Not Supported By Higher Look-Through Payout

Intouch Holdings (INTUCH TB)‘s discount to NAV is back to levels last seen in November 2021, where euphoric trading was rolling over subsequent to Gulf Energy Development (GULF TB)‘s VTO.
Intouch’s net cash increased in the 2Q22 and its look-through interim dividend payout is the highest in at least five years.
I’d be shorting Intouch here and buying Advanced Info Service (ADVANC TB), with a view to mean reversion of ~25% NAV discount.

CTG Duty Free H Share Listing: Trading Debut

China Tourism Group Duty Free Corp Ltd (1880 HK)/CTGDF priced its H Share at HK$158.00 per share to raise net proceeds of US$2.0 billion. The H Share starts trading tomorrow.
The H Share listing price implies an AH discount of 27.2% at A Share price of RMB189.80. This compares to an average AH discount of 46.6% of listed AH shares.
The China Tourism Group Duty Free Corp Ltd (601888 CH) A Shares are trading close to fair value. The H Shares valuation is unattractive compared to peers.

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Aug 24

Most Read: Yang Ming Marine Transport, Toshiba Corp, Hyundai Marine & Fire Insurance Co., Ltd, Emperador, Swire Pacific Ltd-Cl B, Yum China Holdings Inc, SinoPac Holdings, Bright Scholar Education, Healthcare & Medical Investment Corporation, Xiamen International Port H and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: HUGE Turnover as Review Period Ends
Toshiba (6502) Update – No Longer Worthwhile to Be Short Toshiba Vs Peers
10 Tradable Names for KOSPI Size Index Migration & Hyundai Mipo in Conjunction with MSCI Nov IR
STI Index Rebalance Preview: Three Cheers for Emperador?
Swire Buyback Update – It’s On, and Regulatorily Constrained
Yum China Pursues Primary Listing Conversion On The HKEx
FTSE TWSE Quiddity Leaderboard Sep 2022: Elan Micro (2458 TT) Could Be a Big Negative Surprise
Bright Scholar: Cheap Homecoming, Yet Limited Downside
FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities
Xiamen Port (3378 HK)’s Composite Doc Out; Shareholders To Vote On 16 Sept

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: HUGE Turnover as Review Period Ends

We do not forecast any deletions from the FTSE TWSE Taiwan Dividend+ Index in September. There will be a lot of flow from dividend yield changes and capping changes.
Based on the closing prices from 22 August, we estimate one-way turnover of 13.6% at the September rebalance resulting in a one-way trade of TWD 19,664m (US$653m).
Passive inflows will be focused (for the most part) on stocks that have underperformed and outflows will mainly be on recent outperformers.

Toshiba (6502) Update – No Longer Worthwhile to Be Short Toshiba Vs Peers

Since late June when I recommended to not be long Toshiba vs Peers, Toshiba has fallen 9.5% vs Peers (-6% on its own and an equal-weighted Peer Basket is +3.9%).
If one assumes the likelihood of a privatisation has not gone down, and the likely takeout price is the same, back-end adjusted, probability-adjusted IRRs are up 6-8%, to decent levels.
This changes my recommendation from Bearish to Probability-Adjusted Bullish, but it is nuanced, and it is still a range trade.

10 Tradable Names for KOSPI Size Index Migration & Hyundai Mipo in Conjunction with MSCI Nov IR

Ten names, five each for each direction, are almost guaranteed to migrate between MID and LARGE. From the last time we checked, Hyundai Marine and Hanmi Science are newly added.
The rebalancing trading day is September 8, and both directions of MID⇔LARGE cause significant passive impact. So, Long/Short basket trading is a practical approach, starting about 20 days before effective.
We should consider approaching this event in conjunction with the MSCI IR. This is because of Hyundai Mipo Dockyard, the only candidate likely to join the MSCI Standard this November.

STI Index Rebalance Preview: Three Cheers for Emperador?

We expect Emperador (EMI SP) to be added to the FTSE Straits Times Index at the September rebalance after meeting the free float, market cap and liquidity requirements.
As the lowest ranked current index constituent, we expect Comfortdelgro Corp (CD SP) will be deleted heaping pressure on the beleaguered stock with over 4 days of ADV to sell.
Emperador (EMP PM) is an inclusion to the FTSE All-World Index and there is a lot to buy on that line from passive trackers at the close on 16 September.

Swire Buyback Update – It’s On, and Regulatorily Constrained

And on the 6th Day, Swire Pacific (A) (19 HK) commenced its buyback.
It took until the 6th day for Swire to start its buyback, and now that it has started, we may have a little better idea of the parameters. And impact.
So far, they appear to be bending the rules a little, but it is still the way it should be. So there is still a trade here to do.

Yum China Pursues Primary Listing Conversion On The HKEx

Last week Yum China Holdings Inc (9987 HK) announced it has applied for voluntary conversion to a primary listing on the Hong Kong Stock Exchange.
Should all necessary approvals from the HKEx be satisfied, Yum will become dual primary listed on the New York Stock Exchange and the HKEx.
This regulatory process, facilitated by rules introduced by the HKEx over the past year, enables the de-listing of the ADRs and the smooth transition to a sole HK listing.

FTSE TWSE Quiddity Leaderboard Sep 2022: Elan Micro (2458 TT) Could Be a Big Negative Surprise

Monday 22nd August 2022 was the base date for the FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 Indices for the September 2022 Rebalance.
With the reference period for selection now complete, we take a look at the potential ADDs and DELs for the Taiwan 50 and Taiwan Mid-Cap 100 Indices.
One special candidate, Elan Microelectronics (2458 TT) could be in for a big negative surprise when the results are announced in a couple of weeks.

Bright Scholar: Cheap Homecoming, Yet Limited Downside

Bright Scholar Education (BEDU US) (BSE), an operator of schools across China, the UK, and the US, received an Offer earlier this year from Huiyan Yang, the chairperson.
Yang is offering US$3.32/ADS – adjusted for the recent reverse split – a 44% premium to the undisturbed price.
Yang controls 92.5% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.

FTSE EPRA Nareit Developed Asia Preview: A Few Inclusion Possibilities

The FTSE EPRA Nareit Index September rebalance will use data from 22 August. The changes will be announced on 31 August and implemented at the close on 16 September.
Healthcare & Medical Investment Corporation (3455 JP) is a potential inclusion, while there are a few others that are close adds on market cap & other criteria.
Healthcare & Medical Investment Corporation (3455 JP) is also an inclusion to the FTSE All Cap Index at the September rebalance and the EPRA Nareit inclusion will increase passive inflows.

Xiamen Port (3378 HK)’s Composite Doc Out; Shareholders To Vote On 16 Sept

Back on 2 June, SOE terminal operator Xiamen International Port (3378 HK) announced a pre-conditional Offer of $2.25/share from Xiamen Port Holding, a Fujian SASAC-controlled entity.
The pre-conditions – NDRC, MoC, SAFE, and CSRC – were fulfilled on the 16 August.
The Composite Doc is now out. The H-class meeting will be held on the 16 September. There is no tendering condition. Payment should be the 6 October.

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Aug 23

Most Read: Sumber Alfaria Trijaya Tbk Pt, China Shenhua Energy Co H, Huitongda, Yang Ming Marine Transport, Daiwa House Reit Investment, Hyundai Marine & Fire Insurance Co., Ltd, SinoPac Holdings, PetroChina, Softbank Group, Samsung Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses
Index Rebalance & ETF Flow Recap: S&P/ASX, CSI300, SSE50, HSI, HSCEI, HSTECH, HSCI, CTG IPO, KQ150
HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: HUGE Turnover as Review Period Ends
Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion
10 Tradable Names for KOSPI Size Index Migration & Hyundai Mipo in Conjunction with MSCI Nov IR
FTSE TWSE Taiwan 50 Index Rebalance Preview: PSMC (6770) Deletion Could Offset Some All-World Flow
FTSE China A50 Index Rebalance Preview: PetroChina & EVE Energy Are Potential Adds
Softbank Short Resistance
Samsung Electronics: Local Market’s Bet on a Buyback

FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses

FTSE announced the results of the September SAIR for the FTSE All-World/All-Cap indices on Friday. There are 243 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
The largest inflows will go to PSMC (6770 TT), Sumber Alfaria Trijaya (AMRT IJ), Daqo New Energy (DQ US) and Tianqi Lithium (002466 CH).
FTSE will switch index membership from the US ADRs to the HK listings for New Oriental Education & Technology Group (9901 HK) and XPeng (9868 HK).

Index Rebalance & ETF Flow Recap: S&P/ASX, CSI300, SSE50, HSI, HSCEI, HSTECH, HSCI, CTG IPO, KQ150

A busy Friday with the end of the S&P/ASX review period and announcement of changes to the Hang Seng family of indices and FTSE AW/AC at the September rebalance.
Monday is the review cutoff for the FTSE TWSE Taiwan 50, STI, FTSE China 50 and A50 indices, among others. STAR50 Sep changes announcement expected post market close on Friday.
There were some big inflows into Asia focused ETFs during the week, while the outflows from KraneShares CSI China Internet ETF (KWEB US) continued for yet another week.

HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: HUGE Turnover as Review Period Ends

We do not forecast any deletions from the FTSE TWSE Taiwan Dividend+ Index in September. There will be a lot of flow from dividend yield changes and capping changes.
Based on the closing prices from 22 August, we estimate one-way turnover of 13.6% at the September rebalance resulting in a one-way trade of TWD 19,664m (US$653m).
Passive inflows will be focused (for the most part) on stocks that have underperformed and outflows will mainly be on recent outperformers.

Daiwa House REIT Placement – Well-Flagged but Low on DPU Accretion

By Ethan Aw

Daiwa House Reit Investment (8984 JP) is looking to raise around US$98m to acquire four new properties.
Overall, the deal is well flagged with Daiwa House REIT (DHR) making capital raises almost an annual routine. The acquisition would be accretive to DPU as well.
In this note, we will look at the assets to be acquired, impact on forecast and portfolio, and run the deal through our framework.

10 Tradable Names for KOSPI Size Index Migration & Hyundai Mipo in Conjunction with MSCI Nov IR

Ten names, five each for each direction, are almost guaranteed to migrate between MID and LARGE. From the last time we checked, Hyundai Marine and Hanmi Science are newly added.
The rebalancing trading day is September 8, and both directions of MID⇔LARGE cause significant passive impact. So, Long/Short basket trading is a practical approach, starting about 20 days before effective.
We should consider approaching this event in conjunction with the MSCI IR. This is because of Hyundai Mipo Dockyard, the only candidate likely to join the MSCI Standard this November.

FTSE TWSE Taiwan 50 Index Rebalance Preview: PSMC (6770) Deletion Could Offset Some All-World Flow

Today is the review cutoff and we expect SinoPac Holdings (2890 TT) to replace Powerchip Semiconductor Manufacturing Corp (6770 TT) in the FTSE TWSE Taiwan 50 Index in September.
Passive Taiwan50 trackers will need to buy over 5 days ADV on SinoPac Holdings (2890 TT) and sell less than a days ADV on Powerchip Semiconductor Manufacturing Corp (6770 TT).
Powerchip Semiconductor Manufacturing Corp (6770 TT) has been added to the FTSE All-World Index and those trackers need to buy around 96.5m shares.

FTSE China A50 Index Rebalance Preview: PetroChina & EVE Energy Are Potential Adds

PetroChina (601857 CH) and EVE Energy (300014 CH) could replace China Pacific Insurance (Group) (601601 CH) and Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH) in the index at the September rebalance.
Assuming both changes are implemented, estimated one-way turnover is 2.24% and will result in a one-way trade of CNY 1,180m.
There has been no announcement from FTSE yet on the potential increase in the number of index constituents from 50 to 100.

Softbank Short Resistance

By Thomas Schroeder

Softbank (9982 JP) is knocking on 6,000 compelling resistance that sets up a short trade just under this barrier. 5,300 lower pattern support is the level to test/break.
RSI is also building energy for a powerful breakout from the triangle/flat range with a bear spin.
6,000 is a stiff barrier and if it caps will set in motion a higher degree decline to retest the 4,200-macro support line.

Samsung Electronics: Local Market’s Bet on a Buyback

The local market is betting that Samsung Electronics will announce an additional shareholder return measure. Special dividends or buyback? They lean towards a buyback.
It is unlikely that it will be another pref-skewed buyback. The Lee family needs cash now, so preventing the dilution of voting shares becomes the top priority.
Hence, we should not have high expectations for a further decline in the pref discount. Instead, we should consider designing a short position aimed at block sales.

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Aug 22

Most Read: Sumber Alfaria Trijaya Tbk Pt, Chow Tai Fook Jewellery, SenseTime Group, Huitongda, China Shenhua Energy Co H, Lenovo, Haier Smart Home Co Ltd, China Pacific Insurance, Link Administration and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses
HSI Index Rebalance: Another Small Step Towards 80 Members, But BIG Impact
HSCEI Index Rebalance: SenseTime (20 HK) Added As FAF Increases Dramatically
HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect
Index Rebalance & ETF Flow Recap: S&P/ASX, CSI300, SSE50, HSI, HSCEI, HSTECH, HSCI, CTG IPO, KQ150
Hang Seng TECH Index Rebalance: No Changes BUT Big Turnover
Hang Seng Index Rebalance – FOUR Names IN, None Out (The March to 80 Continues)
Hang Seng Tech Rebalance – No Name Changes But Lots of Flow
HSCEI Rebalance – One In, One Out, 3.1% One-Way Flow
Merger Arb Mondays (22 Aug) – Link, Alliance, Nearmap, Genex, Ramsay, Lifestyle, EVOC, Giordano

FTSE All-World/All-Cap Index Rebalance: Changes, Switches, Hits & Misses

FTSE announced the results of the September SAIR for the FTSE All-World/All-Cap indices on Friday. There are 243 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
The largest inflows will go to PSMC (6770 TT), Sumber Alfaria Trijaya (AMRT IJ), Daqo New Energy (DQ US) and Tianqi Lithium (002466 CH).
FTSE will switch index membership from the US ADRs to the HK listings for New Oriental Education & Technology Group (9901 HK) and XPeng (9868 HK).

HSI Index Rebalance: Another Small Step Towards 80 Members, But BIG Impact

The inclusion of China Shenhua Energy Co H (1088 HK), Chow Tai Fook Jewellery (1929 HK), Hansoh Pharmaceutical (3692 HK) and Baidu (9888 HK) takes us to 73 index constituents.
Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 5.09% and will result in a one-way trade of HK$10,562m.
There are large shorts on Chow Tai Fook Jewellery (1929 HK) and Hansoh Pharmaceutical (3692 HK) and there could be some short covering from now to implementation.

HSCEI Index Rebalance: SenseTime (20 HK) Added As FAF Increases Dramatically

SenseTime Group (20 HK)‘s Free-Float Adjustment Factor (FAF) increases from 3% to 40% following lock-up expiry and the stock will replace China Pacific Insurance (2601 HK) in the HSCEI INDEX.
Using prices from the close on 19 August, estimated one-way turnover is 3.82% and will result in a one-way trade of HK$2,751m at the close on 2 September.
Increase in the FAF on a couple of stocks saves them from index deletion in September but is probably not enough to save them from index deletion in December.

HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.

Index Rebalance & ETF Flow Recap: S&P/ASX, CSI300, SSE50, HSI, HSCEI, HSTECH, HSCI, CTG IPO, KQ150

A busy Friday with the end of the S&P/ASX review period and announcement of changes to the Hang Seng family of indices and FTSE AW/AC at the September rebalance.
Monday is the review cutoff for the FTSE TWSE Taiwan 50, STI, FTSE China 50 and A50 indices, among others. STAR50 Sep changes announcement expected post market close on Friday.
There were some big inflows into Asia focused ETFs during the week, while the outflows from KraneShares CSI China Internet ETF (KWEB US) continued for yet another week.

Hang Seng TECH Index Rebalance: No Changes BUT Big Turnover

There are no changes to the index names, but FAF and capping changes will lead to a one-way turnover of 4.5% and one-way flow of HK$3,287m.
An increase in the FAF from 3% to 40% will result in passive inflows of HK$1.18bn for SenseTime Group (20 HK) – that is over 5 days of ADV.
There are large shorts on some of the stocks that will have passive outflows and some of these positions could be covered on implementation day.

Hang Seng Index Rebalance – FOUR Names IN, None Out (The March to 80 Continues)

The Hang Seng Index Team announced four changes to the Hang Seng Index, bringing membership to 73 from 69, on its way to 80, but later than originally targeter mid-2022.
Additions are China Shenhua Energy Co H (1088 HK), Chow Tai Fook Jewellery (1929 HK), Hansoh Pharmaceutical (3692 HK), and Baidu (9888 HK).
Official placeholder turnover is about 3.8%. Small changes due to capping updates still to come. China Shenhua and possibly Chow Tai Fook look interesting as trades.

Hang Seng Tech Rebalance – No Name Changes But Lots of Flow

The Hang Seng Index Team announced the index review for the Hang Seng Tech Index Friday after the close. There were no additions or deletions.
However, there is a 4.9% one-way turnover on reasonably heavy FAF and capping changes. Sensetime sees a huge FAF increase. Tencent, Meituan, and Kuaishou get re-capped higher. Xiaomi lower.
There is a fair bit of flow, but the obvious big name – SenseTime Group (20 HK) – has potential overhang. Watch Haier Smart Home Co Ltd (6690 HK).

HSCEI Rebalance – One In, One Out, 3.1% One-Way Flow