Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.</li>
<li>In this insight, we take a look at the potential index changes that could take place between now and the end of the June 2024 index rebal event.</li>
<li>Currently, I see 7 ADDs and 7 DELs for the SE600 index. There are more names just outside the border requiring small price changes to get involved in index changes. </li>
</ul>


The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
In this insight, we take a look at the potential index changes that could take place between now and the end of the June 2024 index rebal event.
Currently, I see 7 ADDs and 7 DELs for the SE600 index. There are more names just outside the border requiring small price changes to get involved in index changes. 


Quiddity Leaderboard SE600 Mar 24: 7 Changes Likely; Expected ADDs Could Outperform Expected DELs

Wuestenrot & Wuerttembergische / Event-Driven

<ul>
<li>The March 2023 index changes for the DAX index family were confirmed after the close on Friday 3rd March 2023.</li>
<li>There will be one change for DAX, two for MDAX, and two for SDAX mostly in line with our expectations. Separately, there is also a change in TecDAX.</li>
<li>In this insight, we take a closer look at our expectations for index flows and the recent price and volume performance of the names involved in the index rebalance event.</li>
</ul>


The March 2023 index changes for the DAX index family were confirmed after the close on Friday 3rd March 2023.
There will be one change for DAX, two for MDAX, and two for SDAX mostly in line with our expectations. Separately, there is also a change in TecDAX.
In this insight, we take a closer look at our expectations for index flows and the recent price and volume performance of the names involved in the index rebalance event.


Quiddity Flow Expectations for DAX Mar 23 Rebal: WUW GR Vs SDAX Seems Interesting

<ul>
<li>The index changes for DAX, MDAX, SDAX, and TecDAX were announced yesterday.</li>
<li>
<a href="https://www.smartkarma.com/entities/beiersdorf-ag" target="_blank" data-smartkarma-citation="entities:21588:1" rel="noopener">Beiersdorf AG (BEI GR)</a> will move from MDAX to DAX while <a href="https://www.smartkarma.com/entities/delivery-hero-se" target="_blank" data-smartkarma-citation="entities:24416:1" rel="noopener">Delivery Hero SE (DHER GR)</a> will move from DAX to MDAX.</li>
<li>Below is a closer look at the excess volume expectations and historical price and volume performance of the names involved in this Rebalance Event.</li>
</ul>


The index changes for DAX, MDAX, SDAX, and TecDAX were announced yesterday.

Beiersdorf AG (BEI GR) will move from MDAX to DAX while Delivery Hero SE (DHER GR) will move from DAX to MDAX.
Below is a closer look at the excess volume expectations and historical price and volume performance of the names involved in this Rebalance Event.


DAX, MDAX, SDAX, TecDAX June 2022 Rebalance: Encavis & Hensoldt Top Positives; Hypoport Top Negative

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

European Event-Driven Analyst

Jesus Rodriguez Aguilar

On 24 April, <a href="https://www.smartkarma.com/entities/leonardo-spa" target="_blank" data-smartkarma-citation="entities:21190:1" rel="noopener">Leonardo SpA (LDO IM)</a> <a href="https://www.leonardocompany.com/en/press-release-detail/-/detail/24-04-2021-leonardo-acquista?f=%2Finvestors" target="_blank" rel="noopener">agreed to acquire</a> a 25.1% stake in <a href="https://www.smartkarma.com/entities/hensoldt-ag" target="_blank" data-smartkarma-citation="entities:33024:1" rel="noopener">Hensoldt AG (HAG GR)</a>  from KKR for €23 per share.<ul>
<li>For an implied equity value of €2,415 mn and an implied EV of €2,980 mn.</li>
<li>The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E.</li>
</ul>This follows conversations with other firms with interests in defence, which included <a href="https://www.smartkarma.com/entities/indra-sistemas-sa" target="_blank" data-smartkarma-citation="entities:21277:1" rel="noopener">Indra Sistemas Sa (IDR SM)</a>, Leonardo, <a href="https://www.smartkarma.com/entities/saab-ab" target="_blank" data-smartkarma-citation="entities:22469:1" rel="noopener">Saab AB (SAABB SS)</a> and <a href="https://www.smartkarma.com/entities/thales-sa" target="_blank" data-smartkarma-citation="entities:21483:1" rel="noopener">Thales SA (HO FP)</a>.Leonardo seeks to increase the defence electronics business and access new European defence programs. Both Hensoldt and Leonardo have co-operated on the Eurofighter and this tie-up will allow them to gain critical mass vs. other European champions such as Dassault and Thales.The German government has a golden share in the company, which allows the German government to block strategic decisions.KKR has succeeded in extracting value from its investment: from €12/share upon listing to €17.07/share in the 25.1% sale to KfW and now €23/share in this 25.1% sale to Leonardo. KKR retains c.18% of Hensoldt.On 23 April, Hensoldt closed at €15.58. Upon opening of the market on 26 April, expect Hensoldt to increase to levels c. €23 per share.Recommendation is long Hensoldt, TP €24.6 (implied EV/Fwd EBITDA valuation from comparables), c. 7% upside to the price agreed between KKR and Leonardo.

On 24 April, Leonardo SpA (LDO IM) agreed to acquire a 25.1% stake in Hensoldt AG (HAG GR)  from KKR for €23 per share.
For an implied equity value of €2,415 mn and an implied EV of €2,980 mn.
The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E.
This follows conversations with other firms with interests in defence, which included Indra Sistemas Sa (IDR SM), Leonardo, Saab AB (SAABB SS) and Thales SA (HO FP).Leonardo seeks to increase the defence electronics business and access new European defence programs. Both Hensoldt and Leonardo have co-operated on the Eurofighter and this tie-up will allow them to gain critical mass vs. other European champions such as Dassault and Thales.The German government has a golden share in the company, which allows the German government to block strategic decisions.KKR has succeeded in extracting value from its investment: from €12/share upon listing to €17.07/share in the 25.1% sale to KfW and now €23/share in this 25.1% sale to Leonardo. KKR retains c.18% of Hensoldt.On 23 April, Hensoldt closed at €15.58. Upon opening of the market on 26 April, expect Hensoldt to increase to levels c. €23 per share.Recommendation is long Hensoldt, TP €24.6 (implied EV/Fwd EBITDA valuation from comparables), c. 7% upside to the price agreed between KKR and Leonardo.

Leonardo/Hensoldt: Acquisition of Controlling Stake

Germany

HENSOLDT AG produces and distributes sensors. The Company offers sensor systems for protection, surveillance, and situational awareness in the fields of radar, optronics, electronic warfare, and avionics. HENSOLDT offers space radars, direction finders, electronic warfare systems, and night vision attachments worldwide.

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Hensoldt AG (HAG GR)

Quiddity Leaderboard SE600 Mar 24: 7 Changes Likely; Expected ADDs Could Outperform Expected DELs

My latest estimate for one-way flow is US$95mn. The expected ADDs have strong positive momentum while the expected DELs have strong negative momentum.

Janaghan Jeyakumar, CFA

Quiddity Flow Expectations for DAX Mar 23 Rebal: WUW GR Vs SDAX Seems Interesting

I would be Bullish SDAX ADD Wuestenrot & Wuerttembergische (WUW GR) vs the SDAX index because historically SDAX ADDs have clearly outperformed the...

Janaghan Jeyakumar, CFA

DAX, MDAX, SDAX, TecDAX June 2022 Rebalance: Encavis & Hensoldt Top Positives; Hypoport Top Negative

A discussion on June 2022 index changes for DAX, MDAX, SDAX, and TecDAX. Enclavis and Hensoldt are names with highest positive impacts and Hypoport...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Leonardo/Hensoldt: Acquisition of Controlling Stake

On 23 April, Hensoldt closed at €15.58. Upon opening on 26 April, expect share price to increase to c. €23 per share. On an EV/Fwd EBITDA basis,...

Jesus Rodriguez Aguilar

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