Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> will be deleted from the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> after the close of trading on 4 February and <a href="https://www.smartkarma.com/entities/arena-reit" target="_blank" data-smartkarma-citation="entities:12209:1" rel="noopener">Arena Reit (ARF AU)</a> will be included.</li>
<li>With this change announced, <a href="https://www.smartkarma.com/entities/telix-pharmaceuticals-ltd" target="_blank" data-smartkarma-citation="entities:26052:1" rel="noopener">Telix Pharmaceuticals (TLX AU)</a> is a high probability inclusion to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> next week when <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/arena-reit" target="_blank" data-smartkarma-citation="entities:12209:1" rel="noopener">Arena Reit (ARF AU)</a> has outperformed its peers over the last year and now trades at higher valuations. We would use price spikes on inclusion to rotate into its peers.</li>
</ul>



Ausnet Services (AST AU) will be deleted from the S&amp;P/ASX 200 (AS51 INDEX) after the close of trading on 4 February and Arena Reit (ARF AU) will be included.
With this change announced, Telix Pharmaceuticals (TLX AU) is a high probability inclusion to the S&amp;P/ASX 200 (AS51 INDEX) next week when Sydney Airport (SYD AU) will be deleted.

Arena Reit (ARF AU) has outperformed its peers over the last year and now trades at higher valuations. We would use price spikes on inclusion to rotate into its peers.


ASX200 Index Rebalance: Arena REIT to Replace Ausnet

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. </li>
<li>In March 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20. </li>
<li>In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential intra-quarterly changes.</li>
</ul>


The S&amp;P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies. 
In March 2022, Index rebalance events will take place for the S&amp;P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20. 
In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential intra-quarterly changes.


S&P/​ASX Indices: Quiddity Leaderboard for March 2022 Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> securityholders vote on the proposed merger with <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a>/ <a href="https://www.smartkarma.com/entities/home-consortium-ltd" target="_blank" data-smartkarma-citation="entities:29082:1" rel="noopener">Home Consortium Ltd (HMC AU)</a> on 25 January.</li>
<li>If approved, <a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> will stop trading after the close on 3 February and the shares in issue for <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> will increase substantially.</li>
<li>That will make <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HDN AU</a> the highest ranked non-ASX200 constituent and a high probability add for March. There could be an earlier inclusion to replace <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">SYD AU</a> in the index.</li>
</ul>



Aventus Group (AVN AU) securityholders vote on the proposed merger with HomeCo Daily Needs REIT (HDN AU)/ Home Consortium Ltd (HMC AU) on 25 January.
If approved, Aventus Group (AVN AU) will stop trading after the close on 3 February and the shares in issue for HomeCo Daily Needs REIT (HDN AU) will increase substantially.
That will make HDN AU the highest ranked non-ASX200 constituent and a high probability add for March. There could be an earlier inclusion to replace SYD AU in the index.


HDN/AVN Merger & Potential ASX200 Inclusion in March (Or Earlier)

<ul>
<li>There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a> and <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a>. </li>
<li>There will also be the large <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group (BHP AU)</a> upweight and funding trade following unification, and possibly the <a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a> acquisition by <a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a>. </li>
<li>Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.</li>
</ul>


There could be 2 changes to the ASX100 and ASX200 prior to the March rebalance due to the acquisitions of Ausnet Services (AST AU) and Sydney Airport (SYD AU). 
There will also be the large BHP Group (BHP AU) upweight and funding trade following unification, and possibly the Afterpay Touch (APT AU) acquisition by Square Inc (SQ US). 
Then there will be more changes to the ASX200 and ASX300 at the March rebalance. There could be a lot of new listings included in the ASX300.


ASX100/​200/300 Index Rebalance Preview (March 2022): A Lot Happening From Now to March

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

This morning 18 October, 2021, <a href="https://www.smartkarma.com/entities/homeco-daily-needs-reit" target="_blank" data-smartkarma-citation="entities:33526:1" rel="noopener">HomeCo Daily Needs REIT (HDN AU)</a> and <a href="https://www.smartkarma.com/entities/aventus-group" target="_blank" data-smartkarma-citation="entities:25897:1" rel="noopener">Aventus Group (AVN AU)</a> announced they had entered into a Binding Scheme Implementation Deed for HDS to acquire AVN through a Scheme of Arrangement. This will create a combined portfolio of A$4.1bn and a combined market cap of A$3.2bn on a pro-forma basis. Terms are that AVN security-holders will receive 2.2 HDN securities AND either A$0.285/unit of cash or 0.038 HMC securities (either or, not a combination). HDN is contributing 93% of the total consideration paid to AVN holders. <a href="https://www.smartkarma.com/entities/home-consortium-ltd" target="_blank" data-smartkarma-citation="entities:29082:1" rel="noopener">Home Consortium Ltd (HMC AU)</a> is contributing the other 7%, which will lower HMC's ownership of HDN post-merger. The consideration results in a premium of 15.3% from the Friday close, a 16.4% premium to one-month VWAP, and a 41.9% premium to 30 June 2021. There is ~4% accretion involved for security-holders of both sides assuming the cash option is take-up.Both HDN and AVN boards unanimously recommend/support the deal (AVN in the absence of a superior proposal) and AVN shareholders and directors representing 29.3% of AVN voting rights (22.6% by BBRC Retail and 6.7% by the AVN Board) have agreed to vote for the Scheme. Separately, HMC has done a deal to buy a 6% stake in AVN directly from BBRC at a cash amount equal to the Offer Price. That will leave the HMC holding at 13.5% post-merger.HDN is the smaller of the two and existing AVN shareholders will end up with nearly 57% of the total NEWCO HDN shares out after the deal (AVN minorities will have 47.1% while after selling 6% to HMC, BBRC will have 10.1%). HMC will have 13.5% of the post-merger business. Importantly, the entire management team of AVN is expected to join HMC, and the CEO and CFO of AVN will become CEO and CFO, respectively, of HDN MergeCo.The Scheme Booklet will be out in about two months, the Scheme meeting executed in late January 2022, and implementation will be mid-February under the proposed schedule. This looks like a decent deal, and a done deal.

This morning 18 October, 2021, HomeCo Daily Needs REIT (HDN AU) and Aventus Group (AVN AU) announced they had entered into a Binding Scheme Implementation Deed for HDS to acquire AVN through a Scheme of Arrangement. This will create a combined portfolio of A$4.1bn and a combined market cap of A$3.2bn on a pro-forma basis. Terms are that AVN security-holders will receive 2.2 HDN securities AND either A$0.285/unit of cash or 0.038 HMC securities (either or, not a combination). HDN is contributing 93% of the total consideration paid to AVN holders. Home Consortium Ltd (HMC AU) is contributing the other 7%, which will lower HMC's ownership of HDN post-merger. The consideration results in a premium of 15.3% from the Friday close, a 16.4% premium to one-month VWAP, and a 41.9% premium to 30 June 2021. There is ~4% accretion involved for security-holders of both sides assuming the cash option is take-up.Both HDN and AVN boards unanimously recommend/support the deal (AVN in the absence of a superior proposal) and AVN shareholders and directors representing 29.3% of AVN voting rights (22.6% by BBRC Retail and 6.7% by the AVN Board) have agreed to vote for the Scheme. Separately, HMC has done a deal to buy a 6% stake in AVN directly from BBRC at a cash amount equal to the Offer Price. That will leave the HMC holding at 13.5% post-merger.HDN is the smaller of the two and existing AVN shareholders will end up with nearly 57% of the total NEWCO HDN shares out after the deal (AVN minorities will have 47.1% while after selling 6% to HMC, BBRC will have 10.1%). HMC will have 13.5% of the post-merger business. Importantly, the entire management team of AVN is expected to join HMC, and the CEO and CFO of AVN will become CEO and CFO, respectively, of HDN MergeCo.The Scheme Booklet will be out in about two months, the Scheme meeting executed in late January 2022, and implementation will be mid-February under the proposed schedule. This looks like a decent deal, and a done deal. 

HomeCo Daily Needs REIT (HDN AU) To Merge with Aventus (AVN AU) In Self-Takeunder

Australia

HomeCo Daily Needs REIT operates as a real estate investment trust. The Company invests in and manages portfolio of retail assets.

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HomeCo Daily Needs REIT (HDN AU)

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