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• S&P DJI commenced a market consultation for the S&P Global Water Index on 29 July and that could lead to quite a few changes to the index in October.
• We currently see 14 deletions and 10 inclusions for the index in October. Most of the changes will have a high impact from passive fund trading.
• There could be more changes in April 2023 once stocks listed in Emerging Markets are included in the index.

• Softbank today confirmed that the stories circulating about Softbank having hedged a decent portion – 200+mm shares – of its BABA position were true. 
• The market expectation had been that these pre-paid forwards would be held for another two years. The announcement today is that they will be physically settled early. 
• This means the entire accounting effect – worth ¥4.6trln – will hit the income statement (and balance sheet) in the current quarter. There are investment and index implications

• We do not expect any deletions from the FTSE TWSE Taiwan Dividend+ Index in September, but there will be a lot of passive flow due to capping changes.
• Based on the closing prices from 9 August, we estimate one-way turnover of 11.2% at the September rebalance resulting in a one-way trade of TWD 15,754m (US$525m).
• Most stocks with expected passive inflows are trading near their recent lows (leading to higher dividend yield), while most stocks with expected passive outflows have rallied recently (lower dividend yields).

• We discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement (12 August) that are being highlighted by the locals. 
• The potential inclusion candidates in the MSCI Korea Index emphasized by the locals in August 2022 include LG Energy Solution and Kakao Pay; potential exclusion candidate include SK Telecom. 
• The overall assessment of the MSCI Korea Index rebalance in August is rather mixed. There are two potential inclusions (LG Energy Solution and Kakao Pay) and one exclusion (SK Telecom). 

• Softbank will settle all of its forward derivative contracts on Alibaba by the end of September, representing 242mn ADRs. Some had years to run so this is truly surprising
• We estimate Softbank Group (9984 JP) raised $35b selling BABA-linked derivatives since mid-2020, which would imply average proceeds per ADR of $145 versus the $91 it trades at now
• But early settlement also has us wondering when the other show will drop and if that is related to global tech, China or Alibaba specifically 

• Just days after AMTD Digital (HKD US) was ramped 30,000% to a ridiculous valuation only weeks after its IPO, Magic Empire Global (MEGL US) IPOed and rose 2000+ on Day1.
• MEGL is a corporate advisory, helping smallcaps IPO then helping them comply with listing rules. 2 principals, 2 professionals, 5 staff with no moat had US$2.16mm in revenue in 2021.
• And it is worth US$2.3bn – 1000 x revenues and 10,000x earnings?  This is not OK. And it smacks of something unsavoury. 

• The SGX FTSE Taiwan Index Futures are CFTC certified and started trading on 20 July 2020 and use the FTSE Taiwan RIC Capped Index as the underlying.
• Volumes on the SGX FTSE Taiwan Index Futures have increased significantly since launch and the ADTV for July was US$3.34bn versus US$509m for the MSCI Taiwan Index Futures.
• At US$4.86bn, open interest for the SGX FTSE Taiwan Index Futures is also substantially higher than the open interest on the MSCI Taiwan futures at US$797m.

• GQG Partners (GQG) raised US$868m in its Australia IPO in Oct 2021. Its IPO linked lockup is set to expire soon.
• GQG is a global investment boutique with a focus on managing active equity portfolios.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Today Shinoken Group (8909 JP) announced it was the subject of an MBO where the CEO-founder invited Integral – a local PE fund – to help him restructure and grow.
• It is at a 45% premium to last, and management negotiated the price from a relatively insulting initial bid of ¥1,300 to ¥1,600 in the end, but it’s still light.
• It is not hugely light, but it is not a full price. It could definitely be a bit higher. The question is whether active foreigners will push. 

• Canon Inc (7751 JP) has just started its 17th buyback in 15 years. Like the 16 before, this one is for ¥50bn. 
• The patterns/dynamics of the canon buybacks in the past are remarkable when compared to buybacks of other companies. 
• There are outperformance and under-performance patterns vs Peers, and it is worth taking note if you have a position to trade. 

• S&P DJI commenced a market consultation for the S&P Global Water Index on 29 July and that could lead to quite a few changes to the index in October.
• We currently see 14 deletions and 10 inclusions for the index in October. Most of the changes will have a high impact from passive fund trading.
• There could be more changes in April 2023 once stocks listed in Emerging Markets are included in the index.

• Stocks that migrated from the JASDAQ and Mothers Boards to the Standard Market in April will be eligible for inclusion in the FTSE All-World/All-Cap indices at the March 2023 SAIR.
• Currently, we see 4 potential inclusions to the All-World Index and 12 potential inclusions to the All-Cap Index. There are some close adds on market cap and liquidity.
• The potential adds underperformed the TOPIX Index from April to June, but there has been a significant outperformance since then.

• Thomas Yau, Lifestyle International Holdings (1212 HK)‘s controlling shareholder, is offering to take the company private by way of a Scheme at HK$5/share, a 62.3% premium to last close.  
• Independent shareholders comprise 23.51% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.351% of shares out. 
• The Offer price is final. No dividends will be paid during the Offer period.

• Today Inpex Corp (1605 JP) announced Q2 earnings (results, presentation), a revised full-year forecast due to higher crude and lower yen, an 11%-above-guidance dividend, and a big buyback.
• The buyback is for up to 120mm shares spending up to ¥120bn, to run through year-end. Practically speaking, it is limited to 80mm shares or so at current price. 
• This should be a non-negligible portion of Real World Float, and I expect the buyback to have impact over the next five months.

• After shares were suspended on the 1 August, electronics play and property developer EVOC Intelligent Technology Company Limited H (2308 HK) has announced a privatisation at HK$1.75 per H-share.
• This Offer is by way of a Merger by Absorption, which incorporates a Scheme-like vote. There is no tendering condition.
• The premium to last close is just 15.13%; however, it is a 42.28% premium to the five-day closing average. This is EVOC’s third privatisation attempt in the past five years. 

• Just days after AMTD Digital (HKD US) was ramped 30,000% to a ridiculous valuation only weeks after its IPO, Magic Empire Global (MEGL US) IPOed and rose 2000+ on Day1.
• MEGL is a corporate advisory, helping smallcaps IPO then helping them comply with listing rules. 2 principals, 2 professionals, 5 staff with no moat had US$2.16mm in revenue in 2021.
• And it is worth US$2.3bn – 1000 x revenues and 10,000x earnings?  This is not OK. And it smacks of something unsavoury. 

• Nexon (3659 JP) reported Q2 earnings and Q3 forecasts today. Everything is generally “in-line” to tilting slightly light. But USD/yen volatility matters a lot. 
• The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. 
• The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there’s an index sell at end-September.

• We discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement (12 August) that are being highlighted by the locals. 
• The potential inclusion candidates in the MSCI Korea Index emphasized by the locals in August 2022 include LG Energy Solution and Kakao Pay; potential exclusion candidate include SK Telecom. 
• The overall assessment of the MSCI Korea Index rebalance in August is rather mixed. There are two potential inclusions (LG Energy Solution and Kakao Pay) and one exclusion (SK Telecom). 

• SOCAR announced its IPO book building results. The IPO price has been determined at 28,000 won (18% lower than the low end of the IPO range).
• Our base case target price for SOCAR is 27,176 won, which is 3% lower than the IPO price of 28,000 won. 
• We remain Negative on this IPO due to lack of upside. There were 348 companies involved in the IPO survey with the final demand ratio of 56 to 1.

• The Korea FSC disclosed the policy agenda, which was presented to President Yoon. The implementation will likely be in the fourth quarter.
• The FSC stated that it would grant appraisal rights to the shareholders of a parent company in an ECO (equity carve-out).
• This rule will likely be applied to DB Hitek and Foosung. Hence, our trading setup targeting these ECO events will require more sophisticated modifications.

• The rebalances of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) and NIFTY100 Index were implemented at the close on Friday.
• MSCI will announce the results of the August QIR pre-market on 12 August (Asia time). This is the last QIR to use the current methodology before we move to QCIRs.
• There were large outflows from KraneShares CSI China Internet ETF (KWEB US) during the week as investors pulled US$267m from the ETF.

• BHP Group Ltd (BHP AU) made a non-binding indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$25/share and was swiftly rejected.
• We feel an offer around the A$28.5-A$29/share range would get the OZ Minerals Ltd (OZL AU) Board to open up its books for due diligence.
• 3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We’d wait for a price around A$25/share to enter.

• Softbank posted record quarterly losses again ($23bn this time) after an aggressive writedown of private investments in the portfolio
• Vision Fund’s cumulative returns since FY17 are now less than $1bn and valuation losses for WeWork at the parent mean VF and related have lost money
• The good news is Softbank valuations are more closely aligned with reality whilst a ¥400bn buyback takes some of the sting away but tech values (and ARM) remain a risk

• Thomas Yau, Lifestyle International Holdings (1212 HK)‘s controlling shareholder, is offering to take the company private by way of a Scheme at HK$5/share, a 62.3% premium to last close.  
• Independent shareholders comprise 23.51% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.351% of shares out. 
• The Offer price is final. No dividends will be paid during the Offer period.

• Early 8 August, OZ Minerals Ltd (OZL AU) announced it had rejected BHP Group Ltd (BHP AU)‘s  indicative acquisition proposal at A$25.00/share, after BHP had bought less than 5%.
• The Board took a quick look over the weekend and decided “the Indicative Proposal significantly undervalues OZ Minerals” and rejected it out of hand. 
• It has been an obvious deal for years. This may not be BHP’s last go, but they will probably need to pay more like A$30/share to get it. 

• Today Inpex Corp (1605 JP) announced Q2 earnings (results, presentation), a revised full-year forecast due to higher crude and lower yen, an 11%-above-guidance dividend, and a big buyback.
• The buyback is for up to 120mm shares spending up to ¥120bn, to run through year-end. Practically speaking, it is limited to 80mm shares or so at current price. 
• This should be a non-negligible portion of Real World Float, and I expect the buyback to have impact over the next five months.

• EVOC Intelligent Technology Company Limited H (2308 HK) announced a privatisation offer from Mr Chen Zhi Lie, the ultimate controlling shareholder, at HK$1.75 per H share. 
• The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.  
• The offer price is final. The offer is attractive in comparison to long-term historical share prices and multiples. We think that Mr Chen’s third privatisation attempt will likely succeed. 

• Stocks that migrated from the JASDAQ and Mothers Boards to the Standard Market in April will be eligible for inclusion in the FTSE All-World/All-Cap indices at the March 2023 SAIR.
• Currently, we see 4 potential inclusions to the All-World Index and 12 potential inclusions to the All-Cap Index. There are some close adds on market cap and liquidity.
• The potential adds underperformed the TOPIX Index from April to June, but there has been a significant outperformance since then.

• Magic Empire Global (MEGL US) is the second biggest bubble in 2022, after AMTD Digital (HKD US). 
• We believe there are two major reasons for MEGL’s surging share price including US retail investors’ buying frenzy post AMTD Digital and the “scarcity effect” of new Chinese IPOs.
• Sell MEGL as it makes little sense to put any of your valuable amounts of capital into this stock. The bubble has already started to burst on MEGL. 

• There are 36 adds and 34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. Some of the changes are interesting.
• Based on the adds, deletes and capping changes, we estimate one way turnover of 4.75% and a two-way trade of JPY 444.45bn (US$3.3bn).
• Oriental Land (4661 JP) is a delete from the JPX Nikkei 400 Index but a high probability inclusion to the Nikkei 225 (NKY INDEX) at the September rebalance.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• In this insight, I have defined six key Segment Transfer requirements which prove to be decisive in this process.
• At present, there are 51 names that satisfy all of these conditions and there are more names that are close to being that group.

• Canon Inc (7751 JP) reported Q2 earnings early last week. Shares dropped 4% the next day but closed down only 1%. Now they are above the prior close. 
• They biked the dividend nicely (was ¥45/share last year, guided to ¥50 this year, but made ¥60/share instead. 
• And now they have announced another ¥50bn buyback on top of the one announced in May. Fourth time in 14 years a second tranche is announced in one year. 

• Lifestyle International Holdings (1212 HK) announced a privatisation offer from Mr Lau, the controlling shareholder and Chairman, at HK$5.00 per scheme share, a 62.3% premium to the undisturbed price.
• The offer price is final. Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). No shareholder holds a blocking stake.
• The offer price is unattractive for long-term shareholders and below average sell-side price targets. Nevertheless, this deal likely goes through as the headcount test is not applicable.

• The Ninth Annual JPX Nikkei 400 Index Review was announced on Friday 5 August. There are 36 Inclusions, 34 Deletions. They are mostly in line with Janaghan Jeyakumar, CFA‘s predictions.
• The “BIG SELL” is Oriental Land (4661 JP). The “BIG BUY” is Softbank Corp (9434 JP) as he predicted 11 months ago. There are some down-weights from capping.
• Oriental Land is also a potential Nikkei 225 Inclusion as discussed in Nikkei 225 Sep22 Annual Review; Data Final, Predictions Unch’d; Strategy Involved. 

• Hyundai Oilbank, this year’s biggest fish, dropped the IPO. Another big fish, CJ Olive Young, also officially announced that it would give up its listing.
• The bookbuilding results of SOCAR turned out to be disastrous, suggesting an increased possibility that a higher-than-typical flow level will likely be seen in WCP and K Bank. 
• In particular, despite the valuation issues, we should pay attention to the possibility of an unexpected level of local institutional flows flocking to WCP, which has less schedule risk.

• The rebalances of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) and NIFTY100 Index were implemented at the close on Friday.
• MSCI will announce the results of the August QIR pre-market on 12 August (Asia time). This is the last QIR to use the current methodology before we move to QCIRs.
• There were large outflows from KraneShares CSI China Internet ETF (KWEB US) during the week as investors pulled US$267m from the ETF.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• Placements continued to take center stage this week, beginning with Uber’s clean-up sale of Zomato.
• Socar launched its one-day bookbuild earlier in the week. We continued looking at the upcoming deals in our pipeline. 

• Lifestyle International Holdings (1212 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code. 
• Thomas Lau is the largest shareholder with 74.97%, as he has been since April 2019.
• A possible Offer ahead of a (potentially) improving retail outlook and the imminent opening of its Kai Tak project? 

• 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 are Lifestyle International Holdings (1212 HK), 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Yashili, ResApp.
• Lowest gross spreads are Excelpoint Technology (EXLP SP), Frasers Hospitality Trust (FHT SP),  MyDeal.com.au Ltd (MYD AU), Cocoaland Holdings (COLA MK), True Corp Pcl (TRUE TB), China VAST. 

• The Companies (Amendment) Act 2021 of the Cayman Islands (Amendment Act), which will come into force on 31 August 2022, will abolish the current ‘headcount test’.
• Those companies incorporated in the Cayman Islands, and subject to a members’ Scheme of Arrangement, were previously required to satisfy the headcount test under section 86 of the Companies Act.
• This development clarifies previous uncertainty/ambiguity which could arise, with ‘take private’ deals of Cayman-incorporated, Hong Kong-listed companies, where a Scheme is the favoured privatisation path.

• Indonesian Digital Banks are an increasing focus for investors given their potential to serve the huge numbers of underbanked in Indonesia through tapping into e-commerce and fintech ecosystems and customers.
• Players such as Bank Jago,Allo Bank Indonesia, PT Bank Neo Commerce, and Bank Rakyat Indo Agroniaga lead the field with the potential to tap their respective potential ecosystems.
• We prefer Bank Jago and Allo Bank Indonesia, given the former’s exposure to the GoTo‘s ecosystem and the latter’s to CT Corp, Bukalapak, and Grab (GRAB US). 

• Canon Inc (7751 JP) reported Q2 earnings early last week. Shares dropped 4% the next day but closed down only 1%. Now they are above the prior close. 
• They biked the dividend nicely (was ¥45/share last year, guided to ¥50 this year, but made ¥60/share instead. 
• And now they have announced another ¥50bn buyback on top of the one announced in May. Fourth time in 14 years a second tranche is announced in one year. 

• There are 36 adds and 34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. Some of the changes are interesting.
• Based on the adds, deletes and capping changes, we estimate one way turnover of 4.75% and a two-way trade of JPY 444.45bn (US$3.3bn).
• Oriental Land (4661 JP) is a delete from the JPX Nikkei 400 Index but a high probability inclusion to the Nikkei 225 (NKY INDEX) at the September rebalance.

• Bajaj Finance Ltd (BAF IN) [“BAF”] reported Q1FY23 PAT of approx. INR 2600cr which puts it on track to post INR 11,000cr+ PAT in FY23, in line with our projections. 
• BAF is back on its pre-COVID growth trajectory as also highlighted in our prior note. Q1FY23 AUM growth came in at 6.2% QoQ and annualized ROE is back to 20%+.
• The strong Q1FY23 earnings is despite elevated competition in the marketplace which led BAF to forgo business where margin profile was not attractive.

• The Ninth Annual JPX Nikkei 400 Index Review was announced on Friday 5 August. There are 36 Inclusions, 34 Deletions. They are mostly in line with Janaghan Jeyakumar, CFA‘s predictions.
• The “BIG SELL” is Oriental Land (4661 JP). The “BIG BUY” is Softbank Corp (9434 JP) as he predicted 11 months ago. There are some down-weights from capping.
• Oriental Land is also a potential Nikkei 225 Inclusion as discussed in Nikkei 225 Sep22 Annual Review; Data Final, Predictions Unch’d; Strategy Involved. 

• Hyundai Oilbank, this year’s biggest fish, dropped the IPO. Another big fish, CJ Olive Young, also officially announced that it would give up its listing.
• The bookbuilding results of SOCAR turned out to be disastrous, suggesting an increased possibility that a higher-than-typical flow level will likely be seen in WCP and K Bank. 
• In particular, despite the valuation issues, we should pay attention to the possibility of an unexpected level of local institutional flows flocking to WCP, which has less schedule risk.

• Participate in SJM Holdings (880 HK)‘s Excess Application Auction, though one would need to bid for a fantastically large quantity of shares to get anything, because everyone else will
• At a 11% gross spread to terms, and potential 4Q22 completion, Yashili(1230 HK) IS A CLEAR BUY. The world is a bit risk averse and it shows up in spreads.
• The ‘headcount test‘ for Cayman-incorporated companies failed to move with the times and address the fact that the majority of shares of Hong Kong-listed companies were held by HKSCC Nominees.

• The Nikkei was up 0.6% last week (-2.1% YTD) while the yen weakened 1.2% to 135/$ 
• Prime Minister Kishida met with US House Speaker Nancy Pelosi. China cancelled a meeting between the Foreign Ministers of Japan and China.  
• Record high temperatures of 40c, record high Covid cases, 575k people evacuated due to torrential rain & flooding…..keep calm and carry on.

• Alcoa Corp is seeing improving shipment volumes and benefitting heavily from the stronger U.S. dollar as well as the higher alumina price index.
• Higher costs and lower aluminum and alumina premiums combined with lower metal prices, which included about $40 million to set inventories to net realizable value, more than offset those advantages.
• It is worth highlighting that Alcoa holds accreditations from the Aluminum Stewardship Initiative, the most comprehensive independent system for auditing ethical aluminum production.

• With the review period for the September rebalance of the Nikkei 225 (NKY INDEX) complete, we take a look at the potential inclusions and exclusions for the index.
• The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.
• The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.

• SJM Holdings (880 HK) announced earnings on Monday and a HK$3bn Rights Issue last night designed to inject capital into Macau gaming licensee SJM Resorts. 
• An increase in share capital is required to pre-qualify for then tender process where the Macau Govt would allocate a 10-year gaming concession starting 1 Jan 2023. 
• 54.7% SJM Holder/Parent Sociedade de Turismo e Diversões de Macau (STDM) had previously extended a loan to SJM designed to allow SJM to inject capital to SJM Resorts.

PT Metrodata Electronics, Tbk (MTDL:IJ), publicly listed company on Indonesia Stock Exchange since 1990, is a Digital Solution Provider and Technology Innovator in Indonesia that leads and enables the digital economy hub. MTDL builds strategic alliances with world-class ICT companies. The Company has two main business units, including Distribution Business (providing World-Class ICT Hardware and Software) that handles distribution through Omnichannel to partnered dealers (both offline and online) and ICT solution companies, as well as runs an e-commerce business (e-catalogue for Government/B2G). Its Distribution network covers more than 150 cities in Indonesia and has more than 5,200 channel partners and more than 100 world-class IT products and service brands. The second business unit, Solution & Consulting Business, is a digital solution provider that provides a complete range of ICT solutions based on Metrodata’s 8 Pillars of Digital Solutions, which consist of Cloud Services, Big Data & Analytics, Hybrid IT Infrastructure, Security, Business Application, Digital Business Platform, Consulting & Advisory Services, and Managed Services to support digital business transformation, for Enterprise, Corporate, SME, and Public Sector segment.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

• Semirara Mining And Power Corp (SCC PM) will replace Security Bank (SECB PM) in the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the close of trading on 5 August.
• Passive trackers will need to buy 5.5 days of ADV on Semirara Mining And Power Corp (SCC PM) and sell nearly 30 days of ADV on Security Bank (SECB PM).
• Historically, the adds have outperformed the deletes and there has been a pop/drop in the adds/deletes the day after announcement. Square off existing pre-positions by mid week.

• Alibaba’s revenue stopped growing for the first time on record.
• We still believe the revenue growth rate will recover in the December quarter.
• We believe the stock price will have at least an upside of 29% after a significant plunge.

• Shenzhou Intl Group Holdings (2313 HK) is a high probability deletion in September, while JD Health (6618 HK) is currently the highest ranked non-constituent stock.
• There are a couple of other stocks that are close to the inclusion/exclusion thresholds and price changes over the next few weeks will determine if there are any more changes.
• Short interest on JD Health (6618 HK) is high in terms of days to cover and as a percentage of free float. Covering could take the stock higher.

• Alibaba Group (9988 HK)’s 1QFY23 results were above consensus but it was still quite disappointing with revenue and OP declining 0.1% and 19.1% YoY respectively.
• Withholding the disclosure of active buyers, which Alibaba was proudly speaking of in the previous quarter, is a tell-tale sign that the business is undergoing some serious trouble.
• With expectations of 9.4% YoY OP growth in the next 3-quarters and 42% YoY OP growth in FY24, we think consensus is optimistic from 2QFY23 and bound for a correction.

• Canon Inc (7751 JP) reported Q2 earnings early last week. Shares dropped 4% the next day but closed down only 1%. Now they are above the prior close. 
• They biked the dividend nicely (was ¥45/share last year, guided to ¥50 this year, but made ¥60/share instead. 
• And now they have announced another ¥50bn buyback on top of the one announced in May. Fourth time in 14 years a second tranche is announced in one year. 

• Lifestyle International Holdings (1212 HK) was suspended this morning pursuant to Hong Kong’s Takeovers Code. 
• Thomas Lau is the largest shareholder with 74.97%, as he has been since April 2019.
• A possible Offer ahead of a (potentially) improving retail outlook and the imminent opening of its Kai Tak project? 

• The ACCC is seeking views on whether Dye & Durham’s proposed sale of GlobalX and the Australian operations of SAI Global, is sufficient to approve Link Administration (LNK AU)‘s takeover.
• Separately, the postponed Scheme meeting will be held on the 22 August.  The Independent Expert continues to conclude that the Revised Scheme is fair and reasonable.
• The proposed date for the announcement of ACCC’s findings is the 8th September, one day prior to the Second Court Date.

• The data is largely unchanged since the Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out set of predictions published 15 days ago.
• The consultation results are out. They are as expected too. This has the hallmarks of a VERY well-signalled trade. But it’s a biggie. The funding trade alone is ¥600bn.
• Because of the data, market conditions, and the variability of choice at the edges, I believe that warrants particular strategy.

• Hankyung, published an article that GIC (the Government of Singapore Investment Corp) is in the process of buying a stake in LG Energy from LG Chem.
• Hankyung is one of the two most well-established economic daily newspapers in Korea, along with Maekyung. So, we must see that this article has considerable credibility.
• GIC will likely close the deal before an additional passive flow event kicks in. LG Chem is also highly likely to prefer to close the deal as soon as possible.

• SJM Holdings (880 HK) announced earnings on Monday and a HK$3bn Rights Issue last night designed to inject capital into Macau gaming licensee SJM Resorts. 
• An increase in share capital is required to pre-qualify for then tender process where the Macau Govt would allocate a 10-year gaming concession starting 1 Jan 2023. 
• 54.7% SJM Holder/Parent Sociedade de Turismo e Diversões de Macau (STDM) had previously extended a loan to SJM designed to allow SJM to inject capital to SJM Resorts.

• As of the last close, we see SinoPac Holdings (2890 TT) replacing Powerchip Semiconductor Manufacturing Corp (6770 TT) in the FTSE TWSE Taiwan 50 Index at the September rebalance.
• However, Powerchip Semiconductor Manufacturing Corp (6770 TT) is a high probability inclusion to the FTSE All-World Index that will be implemented at the same time.
• Passive trackers will need to buy 6 days of ADV on SinoPac Holdings (2890 TT). The impact is lower on PSMC (6770 TT) but short interest is very high.

• Alibaba’s revenue stopped growing for the first time on record.
• We still believe the revenue growth rate will recover in the December quarter.
• We believe the stock price will have at least an upside of 29% after a significant plunge.

• Hoya Corp (7741 JP) today announced great Q1 earnings and a bullish above-consensus revenue forecast for this fiscal year. It also announced a small share buyback. 
• However, the dominant factor in flows near-term will be pre-positioning for a possible Nikkei 225 inclusion in September. That is what will push the stock around. In or not. 
• Hoya has recently outperformed a Peer Basket despite forward expected EPS and EBIT not seeing relative improvement. That suggests some relative risk if it doesn’t get selected for Nikkei 225.

• Aier Eye Hospital Group (300015 CH) could replace China Pacific Insurance (Group) Co., (601601 CH) in the FTSE China A50 Index (XIN9I INDEX) at the September rebalance.
• The inclusion of PetroChina (601857 CH) in the FTSE All-World Index could result in another change to the XIN9I Index with Zhangzhou Pientzehuang Pharmaceutical (600436 CH) at risk of deletion.
• There has been no announcement from FTSE yet on the potential increase in the number of index constituents from 50 to 100, though that could happen any time.

• AMTD Digital’s stock price has started to sink and now there are news that the Cheung Kong (CK) Group (HK) wants to sell its stake in AMTD Group Co.
• The discussion of the CK Group disposing its stake in AMTD Group altogether is likely to further negatively impact AMTD Digital’s share price.
• Li Ka-Shing and his family probably want to distance themselves from all the unnecessary media attention given to AMTD Digital (HKD US) and AMTD Idea Group (AMTD US). 

• Microstrategy Inc (MSTR US)‘s Michael Saylor will now assume the new role of Executive Chairman and Phong Le, MSTR’s President, will serve as the company’s new CEO.
• As Executive Chairman, Saylor will focus more on MSTR’s bitcoin acquisition strategy and related bitcoin advocacy initiatives.
• With one of the most bullish and influential players in the industry now focusing on crypto, this should be considered bullish, according to some media reports. That’s a desperate takeaway.

• Giant Biogene (GB) aims to raise around US$500m in its Hong Kong IPO.
• GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
• In this note, we talk about the not-so-positive aspects of the deal.

• The data is largely unchanged since the Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out set of predictions published 15 days ago.
• The consultation results are out. They are as expected too. This has the hallmarks of a VERY well-signalled trade. But it’s a biggie. The funding trade alone is ¥600bn.
• Because of the data, market conditions, and the variability of choice at the edges, I believe that warrants particular strategy.

• Orica Ltd (ORI AU) have announced a fully underwritten A$650m institutional share placement at a price of A$16/share to fund the acquisition of Axis Mining Technology.
• Orica Ltd (ORI AU) are using the recent strength in the stock price to raise A$282m more than needed for the acquisition.
• The offering should result in an intra-quarter increase in shares in the MSCI, FTSE and S&P/ASX indices that should result in buying of 6.75m shares from passive trackers.

• AMTD Digital is the biggest bubble of 2022, which is ready to pop. AMTD Digital provides digital solutions platform in Asia.
• AMTD Digital currently has a market cap of US$371 billion (US$2,002 per ADS share) (as of 1:40PM NYC time). The company’s market cap is more than JPMorgan Chase & Co.
• No doubt, AMTD Digital is the biggest bubble in 2022 and the bursting of this huge bubble will also devastate (mostly) retail investors in the US. 

• Orica Ltd (ORI AU) is launching an institutional offering of shares today to fund the purchase of Axis Mining Technology to expand the Digital [Mining] Solutions offering.
• Orica has launched an equity offering of >2x the size of the takeover (adds A$280mm of working capital). Both acquisition and placement are expected to be accretive in Year1.
• There will be a separate SPP on the follow. Expect this to be well-received and expect “fast money” to be rebuffed. There is significant passive buying to do.

• BABA HK is following Tencent’s path and pattern to new lows as BABA is pressing on pattern support after completing a counter trend rally and dual top (120).
• 100 near resistance and sell zone for a test on 80. New low projections at 66 and 60. Bear pressure to resume after an uptick attempt.
• On a new low the macro picture will begin to show bull divergence/support for a bullish Q4.

• ResApp Health (RAP AU) has entered into an amended and restated Scheme Implementation Deed concerning a proposed takeover by Pfizer Inc (PFE US). 
• After a sensitivity/specificity cough trial fell short of a March pilot study, Pfizer Offered A$0.146/share on the 21 June. Shares have traded wide to terms since on possible retail pushback.
• The revised consideration of $0.208/share matches the preferred value and within the assessed value range of $0.146 – $0.279/share determined by the Independent Expert’s Report on 14 July 2022.

• Orica Ltd (ORI AU) is looking to raise US$450m (~A$650m) from issuing 40.6m primary shares at a 7% fixed discount to its last close.
• The proceeds will be used to fund the acquisition of Axis Mining Technology and the firm’s working capital needs.
• The deal is relatively large one to process, representing 22.3 days of three month ADV and 9.2% of current mcap.

• Hankyung, published an article that GIC (the Government of Singapore Investment Corp) is in the process of buying a stake in LG Energy from LG Chem.
• Hankyung is one of the two most well-established economic daily newspapers in Korea, along with Maekyung. So, we must see that this article has considerable credibility.
• GIC will likely close the deal before an additional passive flow event kicks in. LG Chem is also highly likely to prefer to close the deal as soon as possible.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• In this insight, I have defined six key Segment Transfer requirements which prove to be decisive in this process.
• At present, there are 51 names that satisfy all of these conditions and there are more names that are close to being that group.

• On the 6 May, Yashili International Holdings (1230 HK) announced a pre-conditional Offer, by way of a Scheme, from China Mengniu Dairy Co (2319 HK).
• Pre-Conditions concern three sales and purchase agreements, including Danone selling, and Mengniu acquiring 25% of Yashili at HK$1.20/share. A 16 August EGM will enable shareholders to vote on the SPAs.
• Assuming the SPAs are approved, Mengniu will make an Offer at HK$1.20/share, a 161% premium to the undisturbed price.  

• With the review period for the September rebalance of the Nikkei 225 (NKY INDEX) complete, we take a look at the potential inclusions and exclusions for the index.
• The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.
• The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.

• The data is largely unchanged since the Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out set of predictions published 15 days ago.
• The consultation results are out. They are as expected too. This has the hallmarks of a VERY well-signalled trade. But it’s a biggie. The funding trade alone is ¥600bn.
• Because of the data, market conditions, and the variability of choice at the edges, I believe that warrants particular strategy.

• China Tourism Group Duty Free Corporation Limited (CDF) now aims to raise US$2-3bn in its H-share listing in Hong Kong.
• 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 will talk about the recent updates from its revised filings and revisit valuations.

• AMTD Digital (HKD US) shares are up 230x since its listing at US$7.80 per ADS on 15 July. Its market cap is a staggering US$334 billion.
• AMTD Idea Group (AMTD US) accounts for 99.4% of the voting power. In January 2022, it increased its AMTD Digital shareholding to 97.1% of outstanding shares at US$1.2 billion valuation.
• AMTD Digital’s financials are uninspiring and cannot justify the share price ramp. No sane valuation methodology can support the share price.    

• Uber (UBER US) is looking to raise US$420m in its share sale in Zomato (ZOMATO IN). The selldown will be a clean-up sale.
• Uber had earlier inherited its stake in Zomato in 2020 when it sold UberEats India to the latter. 
• We had earlier flagged the possibility of a selldown given that most of Zomato’s investors would come off their respective one-year lockups. 

• AMTD Digital is the biggest bubble of 2022, which is ready to pop. AMTD Digital provides digital solutions platform in Asia.
• AMTD Digital currently has a market cap of US$371 billion (US$2,002 per ADS share) (as of 1:40PM NYC time). The company’s market cap is more than JPMorgan Chase & Co.
• No doubt, AMTD Digital is the biggest bubble in 2022 and the bursting of this huge bubble will also devastate (mostly) retail investors in the US. 

• Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering & Construction newly made the list.
• Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.
• The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.

• Community group buying is starting to face multiple headwinds from funding shortages to excessive price competition.
• Even though Pinduoduo (PDD US) is yet to announce any job cuts or scaling back of operations, we think the operating environment shouldn’t be much different from competitors.
• With QoQ revenue growth at a standstill and sales and marketing cost cutting almost fully exhausted, we think the current consensus expectations are too optimistic and bound for a correction.

• SK REITs (395400 KS) announced today that it will conduct a rights offering worth 210 billion won, representing 25% of its current market cap of 829 billion won.
• The rights offering will allow SK REITs to acquire SK U Tower. The rights offering price is 5,060 won, which is 5.4% discount to the current price of 5,350 won.
• We would subscribe to this SK REITs rights offering. The SK U Tower in Bundang has excellent location and it has SK Hynix as the main tenant.

• EVOC Intelligent Technology Company Limited H (2308 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers on 1 August.
• It is likely that after two failed attempts, Mr Chen Zhi Lie, the ultimate controlling shareholder, will try a third time to privatise EVOC.
• The previous offer of HK$1.50 per H Share in 2020 marginally missed the 90% minimum acceptance condition. Expect a similar structure with a likely slightly higher offer price.  

• SenseTime Group (20 HK) stock has been crushed following the lock-up expiry at the end of June with the stock now trading 40% below the IPO price.
• The company has recently bought back stock providing some support. More importantly, SenseTime Group (20 HK) was included in Southbound Stock Connect on 29 July.
• We expect a big increase in the free float adjustment factor (FAF) in the Hang Seng Indexes at the September rebalance that will provide some much needed passive inflows.

• Last Friday saw the end of the review period for the upcoming rebalance of the MSCI, NIFTY, NKY and STAR50 indices, among others.
• The coming week has the implementation of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) and NIFTY100 Index rebalances at the close on 5 August.
• There were big inflows to the Tracker Fund of Hong Kong Ltd (2800 HK) last week with over US$500m flowing in.

• After a prolonged delay, the Cayman Islands legislative gazette was published on 29 July, which stated that the amended Cayman Islands Act would come into force on 31 August. 
• The Act will remove the headcount test for schemes, eliminating a layer of uncertainty for controlling shareholders wishing to privatise listed Cayman-incorporated companies.
• In light of this development, we look at current active privatisations, past failed privatisations and rumoured transactions which stand to gain a new lease of life from this Act.

• Semirara Mining And Power Corp (SCC PM) will replace Security Bank (SECB PM) in the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the close of trading on 5 August.
• Passive trackers will need to buy 5.5 days of ADV on Semirara Mining And Power Corp (SCC PM) and sell nearly 30 days of ADV on Security Bank (SECB PM).
• Historically, the adds have outperformed the deletes and there has been a pop/drop in the adds/deletes the day after announcement. Square off existing pre-positions by mid week.

• Electronics Parts and Devices manufacturer Minebea Mitsumi (6479 JP) has announced a 25% premium Tender Offer to take over connector-maker Honda Tsushin Kogyo (6826 JP). 
• It is not an overwhelming bid, but is supported by Panasonic Corp (6752 JP) which owns an equity affiliate stake, and crossholders and friendly shareholders hold a lot.
• This looks like it will complete, despite being a little light on price. 

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• There were no major IPO launches during the week. Soosan will list early next week.
• There were a number of placements/blocks across the region, including GDR launches for Swiss listing.

• The Companies (Amendment) Act 2021 of the Cayman Islands (Amendment Act), which will come into force on 31 August 2022, will abolish the current ‘headcount test’.
• Those companies incorporated in the Cayman Islands, and subject to a members’ Scheme of Arrangement, were previously required to satisfy the headcount test under section 86 of the Companies Act.
• This development clarifies previous uncertainty/ambiguity which could arise, with ‘take private’ deals of Cayman-incorporated, Hong Kong-listed companies, where a Scheme is the favoured privatisation path.

• With the review period for the September rebalance of the Nikkei 225 (NKY INDEX) complete, we take a look at the potential inclusions and exclusions for the index.
• The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.
• The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.

• Tencent and Huawei launched beta tests for car-hailing platform almost simultaneously.
• Alibaba begins to disconnect Ant Group to avoid implicating each other.
• Missfresh dismissed almost all employees in its headquarters in Beijing.

• Thursday post-close, HS announced Q1 earnings, and Khan Bank Q2 earnings. Both magnificent. Book Value is up HUGE, and combined HS Q1-Khan Q2 is ¥7.7bn – 20% of mkt cap.
• On Friday 29 July, HS Holdings (8699 JP) announced it had sold HS Debt Collection Agency – the last “earning asset” except for the 55% stake in Khan Bank. 
• This lifts shadow book value even higher… Deep value with a catalyst. BUT… in an otherwise unannounced postscript to Q1 earnings, HS announced it bought a stake in a… pawnshop?