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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>The review period for the December review ended on 19 November. The announcement of changes will take place on 3 December with implementation at the close on 17 December.</li>
<li>There could be two changes to the ASX100 and <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> prior to the regular rebalance if Spark Infrastructure and Oil Search are delisted.</li>
<li>Then there could be another change to the S&amp;P/ASX100 and up to five changes 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> at the regular review. Some impacts are large.</li>
</ul>


The review period for the December review ended on 19 November. The announcement of changes will take place on 3 December with implementation at the close on 17 December.
There could be two changes to the ASX100 and S&amp;P/ASX 200 (AS51 INDEX) prior to the regular rebalance if Spark Infrastructure and Oil Search are delisted.
Then there could be another change to the S&amp;P/ASX100 and up to five changes to the S&amp;P/ASX 200 (AS51 INDEX) at the regular review. Some impacts are large.


ASX100/200 Index Rebalance Preview: Permutations and Combinations as M&A Activity Booms

<ul>
<li>The National Court of PNG and the independent expert have given the go ahead for <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> shareholders to vote on the proposed merger with Santos.</li>
<li>If the Oil Search shareholders approve, the stock could be deleted at the close on 10 December. Spark Infrastructure could be deleted at the end of November following its acquisition.</li>
<li>There will be inclusions to the S&amp;P/ASX100 and S&amp;P/ASX 200 ahead of the regular rebalance. Then there will be more changes a couple of weeks later at the regular rebalance.</li>
</ul>


The National Court of PNG and the independent expert have given the go ahead for Oil Search Ltd (OSH AU) shareholders to vote on the proposed merger with Santos.
If the Oil Search shareholders approve, the stock could be deleted at the close on 10 December. Spark Infrastructure could be deleted at the end of November following its acquisition.
There will be inclusions to the S&amp;P/ASX100 and S&amp;P/ASX 200 ahead of the regular rebalance. Then there will be more changes a couple of weeks later at the regular rebalance.


Santos/Oil Search: Expert and Court Thumbs Up; Potential S&P/ASX Changes

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100 and <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> as part of the December index review on 3 December and the changes will be effective after the close of trading on 17 December.The review period for the rebalance ends on 19 November, so we are exactly two-thirds of the way through the review period.As of the close on 20 September, we see <a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a> as a potential inclusion to the S&amp;P/ASX100 and <a href="https://www.smartkarma.com/entities/link-administration-holdings-ltd" target="_blank" data-smartkarma-citation="entities:970:1" rel="noopener">Link Administration Holdings (LNK AU)</a> as a potential deletion.For 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>, potential inclusions are <a href="https://www.smartkarma.com/entities/imugene-ltd" target="_blank" data-smartkarma-citation="entities:20276:1" rel="noopener">Imugene Ltd (IMU AU)</a>, <a href="https://www.smartkarma.com/entities/paladin-energy-ltd" target="_blank" data-smartkarma-citation="entities:10117:1" rel="noopener">Paladin Energy (PDN AU)</a>, <a href="https://www.smartkarma.com/entities/amalgamated-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20978:1" rel="noopener">Event Hospitality and Entertainment (EVT AU)</a>, <a href="https://www.smartkarma.com/entities/liontown-resources-ltd" target="_blank" data-smartkarma-citation="entities:20488:1" rel="noopener">Liontown Resources (LTR AU)</a> 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>, while potential deletions are <a href="https://www.smartkarma.com/entities/kogan-com-ltd" target="_blank" data-smartkarma-citation="entities:23575:1" rel="noopener">Kogan.com (KGN AU)</a>, <a href="https://www.smartkarma.com/entities/redbubble-ltd" target="_blank" data-smartkarma-citation="entities:24321:1" rel="noopener">Redbubble Ltd (RBL AU)</a>, <a href="https://www.smartkarma.com/entities/monadelphous-group-ltd" target="_blank" data-smartkarma-citation="entities:553:1" rel="noopener">Monadelphous (MND AU)</a>, <a href="https://www.smartkarma.com/entities/omni-bridgeway-ltd" target="_blank" data-smartkarma-citation="entities:8840:1" rel="noopener">Imf Bentham Ltd (OBL AU)</a> and <a href="https://www.smartkarma.com/entities/spark-new-zealand-ltd-3dcc706a-f086-4dd4-882b-2a42a36ccf8d" target="_blank" data-smartkarma-citation="entities:26915:1" rel="noopener">Spark New Zealand (SPK AU)</a>.With multiple M&amp;A deal pending, including <a href="https://www.smartkarma.com/entities/afterpay-limited" target="_blank" data-smartkarma-citation="entities:26940:1" rel="noopener">Afterpay Touch (APT AU)</a>, <a href="https://www.smartkarma.com/entities/sydney-airport" target="_blank" data-smartkarma-citation="entities:19063:1" rel="noopener">Sydney Airport (SYD AU)</a>, <a href="https://www.smartkarma.com/entities/ausnet-services" target="_blank" data-smartkarma-citation="entities:10293:1" rel="noopener">Ausnet Services (AST AU)</a>, <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> and <a href="https://www.smartkarma.com/entities/spark-infrastructure-group" target="_blank" data-smartkarma-citation="entities:595:1" rel="noopener">Spark Infrastructure (SKI AU)</a>, there could be more additions to the index if deals are completed or highly likely to be completed by end November.Short interest on most potential inclusions is quite low, while the short interest on many potential exclusions is quite high.

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100 and S&amp;P/ASX 200 (AS51 INDEX) as part of the December index review on 3 December and the changes will be effective after the close of trading on 17 December.The review period for the rebalance ends on 19 November, so we are exactly two-thirds of the way through the review period.As of the close on 20 September, we see Pilbara Minerals (PLS AU) as a potential inclusion to the S&amp;P/ASX100 and Link Administration Holdings (LNK AU) as a potential deletion.For the S&amp;P/ASX 200 (AS51 INDEX), potential inclusions are Imugene Ltd (IMU AU), Paladin Energy (PDN AU), Event Hospitality and Entertainment (EVT AU), Liontown Resources (LTR AU) and Arena Reit (ARF AU), while potential deletions are Kogan.com (KGN AU), Redbubble Ltd (RBL AU), Monadelphous (MND AU), Imf Bentham Ltd (OBL AU) and Spark New Zealand (SPK AU).With multiple M&amp;A deal pending, including Afterpay Touch (APT AU), Sydney Airport (SYD AU), Ausnet Services (AST AU), Oil Search Ltd (OSH AU) and Spark Infrastructure (SKI AU), there could be more additions to the index if deals are completed or highly likely to be completed by end November.Short interest on most potential inclusions is quite low, while the short interest on many potential exclusions is quite high.

ASX100/​200 Index Rebalance Preview: Potential December Changes With Large Impact

In this weeks recap, we look at:<ul>
<li>the <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a> / <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> merger and the impact on the S&amp;P/ASX 100 and <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> </li>
<li>the spread on the <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> / <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> deal and potential index flows</li>
<li>the listing of <a href="https://www.smartkarma.com/entities/hyundai-heavy-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:33808:1" rel="noopener">Hyundai Heavy Industries (329180 KS)</a> and the potential Fast Entry into the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> </li>
<li>the potential changes to the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> at the December rebalance</li>
<li>the potential changes to the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> at the December rebalance</li>
<li>the potential changes to the Hang Seng Composite Index (HSCI) at the December and March rebalances</li>
</ul>There are no major index events in the coming week - there were enough in the last week!There were substantial inflows to onshore China ETFs in the last week, while there was finally an outflow (albeit a small one) from <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-fund" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KraneShares CSI China Internet Fund (KWEB US)</a>.

In this weeks recap, we look at:
the Santos Ltd (STO AU) / Oil Search Ltd (OSH AU) merger and the impact on the S&amp;P/ASX 100 and S&amp;P/ASX 200 (AS51 INDEX) 
the spread on the Keppel Corp (KEP SP) / Singapore Press Holdings (SPH SP) deal and potential index flows
the listing of Hyundai Heavy Industries (329180 KS) and the potential Fast Entry into the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) 
the potential changes to the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the December rebalance
the potential changes to the Hang Seng Tech Index (HSTECH INDEX) at the December rebalance
the potential changes to the Hang Seng Composite Index (HSCI) at the December and March rebalances
There are no major index events in the coming week - there were enough in the last week!There were substantial inflows to onshore China ETFs in the last week, while there was finally an outflow (albeit a small one) from KraneShares CSI China Internet Fund (KWEB US). 

Index Rebalance & ETF Flow Recap: STO/OSH, KEP/SPH, HHI, SET50, HSTECH, HSCI

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

After a downturn in the price of the battery commodities and a reduction in tonnes exported, mining consolidations are back in vogue as miners take big bets on electric vehicles, as demand and prices increase for battery minerals.
<ul style="list-style-type: circle;">
<li>February last year, <a href="https://www.smartkarma.com/entities/wesfarmers-ltd" target="_blank" data-smartkarma-citation="entities:1104:1" rel="noopener">Wesfarmers Ltd (WES AU)</a> <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02342610-6A1020764?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">said</a> it would proceed with the development of a new lithium mine and processing hub in WA. The Mt Holland lithium project is a JV with <a href="https://www.smartkarma.com/entities/soc-quimica-y-minera-chile-b" target="_blank" data-smartkarma-citation="entities:24555:1" rel="noopener">Soc Quimica Y Minera Chile-B (SQM/B CI)</a>. Wesfarmers expects to lay out ~$950mn developing the mine, concentrator, and refinery (in Kwinana). A final investment decision was <a href="https://www.wesfarmers.com.au/util/news-media/article/2021/04/15/green-light-for-lithium-project" target="_blank" rel="noopener">announced</a> in February this year. </li>
<li>In <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02320079-6A1011583?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">December</a> last year, <a href="https://www.smartkarma.com/entities/igo-ltd" target="_blank" data-smartkarma-citation="entities:462:1" rel="noopener">IGO Ltd (IGO AU)</a> formed a JV with China’s <a href="https://www.smartkarma.com/entities/sichuan-tianqi-lithium-industries-inc" target="_blank" data-smartkarma-citation="entities:5698:1" rel="noopener">Tianqi Lithium Corporation  (002466 CH)</a>, paying $US1.4bn to acquire a 24.99% stake in the Greenbushes lithium mine in Western Australia. The mine produces ~2% of the world's spodumene concentrate from a hard rock lithium mine. The JV also includes a 49% stake in the downstream lithium hydroxide plant in Kwinana near Perth. The JV was formed after Tianqi faced an increasing debt obligation after the decline in lithium prices. Tianqi maintained a 26% stake in Greenbushes and a 51% stake in the hydroxide plant.
<ul style="list-style-type: circle;">
<li>This was a large bet, transforming IGO into a battery mineral and renewable energy play, away from its copper and gold heritage.  The deal was funded by debt and an A$766mn equity raise including a $446mn fully underwritten placement at $4.60, and a $320mn 1-for-8.5 pro-rata entitlement offer. The offer price represented a 9.7% discount to IGO’s last traded price.</li>
<li>The transaction was completed on the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02390039-6A1038822?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">30 June</a>. Around two months earlier, IGO <a href="https://www.australianmining.com.au/news/igo-sells-tropicana-stake-for-903m/" target="_blank" rel="noopener">sold</a> its 30% stake in the Tropicana gold mine joint venture for A$903mn.</li>
<li>Separately, IGO withdrew its takeover offer to <a href="https://www.smartkarma.com/entities/panoramic-resources-ltd" target="_blank" data-smartkarma-citation="entities:15960:1" rel="noopener">Panoramic Resources (PAN AU)</a> in <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02190245-6A961368?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">January</a> last year, citing a breach of conditions.</li>
</ul>
</li>
<li>
<a href="https://www.smartkarma.com/entities/pilbara-minerals-ltd" target="_blank" data-smartkarma-citation="entities:7460:1" rel="noopener">Pilbara Minerals (PLS AU)</a> acquired <a href="https://www.smartkarma.com/entities/altura-mining-ltd" target="_blank" data-smartkarma-citation="entities:13385:1" rel="noopener">Altura Mining (AJM AU)</a> late last year after the latter entered receivership in November.</li>
<li>
<div>
After circling each other for a couple of years, <a href="https://www.smartkarma.com/entities/galaxy-resources-ltd" target="_blank" data-smartkarma-citation="entities:13914:1" rel="noopener">Galaxy Resources (GXY AU)</a> and <a href="https://www.smartkarma.com/entities/orocobre-ltd" target="_blank" data-smartkarma-citation="entities:3572:1" rel="noopener">Orocobre Ltd (ORE AU)</a> entered into a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02364542-2A1293132?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">binding agreement</a> on the 19 April 2021, under which the two companies will merge via a Galaxy Scheme, following which, Orocobre will hold 100% in Galaxy. The A$4bn combined entity will be the fifth-largest lithium producer - and third-largest outside of China - boasting a diversified product base via four producing assets. This deal was discussed in <a href="https://skr.ma/W2guR" target="_blank" rel="noopener">Orocobre/Galaxy Resources: On A Charge</a>.
</div>
</li>
</ul>
Nickel miner <a href="https://www.smartkarma.com/entities/western-areas-ltd" target="_blank" data-smartkarma-citation="entities:15497:1" rel="noopener">Western Areas (WSA AU)</a> has now <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02408950-6A1046238?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">confirmed</a> media reports it is in preliminary discussions with IGO in relation to a change of control proposal. 
No price is mentioned, and due diligence has yet to be afforded.
More below the fold.

After a downturn in the price of the battery commodities and a reduction in tonnes exported, mining consolidations are back in vogue as miners take big bets on electric vehicles, as demand and prices increase for battery minerals.

February last year, Wesfarmers Ltd (WES AU) said it would proceed with the development of a new lithium mine and processing hub in WA. The Mt Holland lithium project is a JV with Soc Quimica Y Minera Chile-B (SQM/B CI). Wesfarmers expects to lay out ~$950mn developing the mine, concentrator, and refinery (in Kwinana). A final investment decision was announced in February this year. 
In December last year, IGO Ltd (IGO AU) formed a JV with China’s Tianqi Lithium Corporation  (002466 CH), paying $US1.4bn to acquire a 24.99% stake in the Greenbushes lithium mine in Western Australia. The mine produces ~2% of the world's spodumene concentrate from a hard rock lithium mine. The JV also includes a 49% stake in the downstream lithium hydroxide plant in Kwinana near Perth. The JV was formed after Tianqi faced an increasing debt obligation after the decline in lithium prices. Tianqi maintained a 26% stake in Greenbushes and a 51% stake in the hydroxide plant.

This was a large bet, transforming IGO into a battery mineral and renewable energy play, away from its copper and gold heritage.  The deal was funded by debt and an A$766mn equity raise including a $446mn fully underwritten placement at $4.60, and a $320mn 1-for-8.5 pro-rata entitlement offer. The offer price represented a 9.7% discount to IGO’s last traded price.
The transaction was completed on the 30 June. Around two months earlier, IGO sold its 30% stake in the Tropicana gold mine joint venture for A$903mn.
Separately, IGO withdrew its takeover offer to Panoramic Resources (PAN AU) in January last year, citing a breach of conditions.



Pilbara Minerals (PLS AU) acquired Altura Mining (AJM AU) late last year after the latter entered receivership in November.


After circling each other for a couple of years, Galaxy Resources (GXY AU) and Orocobre Ltd (ORE AU) entered into a binding agreement on the 19 April 2021, under which the two companies will merge via a Galaxy Scheme, following which, Orocobre will hold 100% in Galaxy. The A$4bn combined entity will be the fifth-largest lithium producer - and third-largest outside of China - boasting a diversified product base via four producing assets. This deal was discussed in Orocobre/Galaxy Resources: On A Charge.



Nickel miner Western Areas (WSA AU) has now confirmed media reports it is in preliminary discussions with IGO in relation to a change of control proposal. 
No price is mentioned, and due diligence has yet to be afforded.
More below the fold. 

Australia

Pilbara Minerals Ltd. is a mineral exploration company. The Company owns mineral tenements in the west Pilbara region of Western Australia where it explores for iron ore, gold and base metals, particularly copper and nickel.

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Pilbara Minerals (PLS AU)

ASX100/200 Index Rebalance Preview: Permutations and Combinations as M&A Activity Booms

This is going to be a busy rebalance for the ASX100 & ASX200 indices with M&A driven changes followed by changes at the regular review. There is a...

Brian Freitas

Santos/Oil Search: Expert and Court Thumbs Up; Potential S&P/ASX Changes

Spark Infra and Oil Search could be deleted from the ASX100 & ASX200 indices ahead of the regular rebalance. Then there will be more changes at the...

Brian Freitas

ASX100/200 Index Rebalance Preview: Potential December Changes With Large Impact

There could be 1 change to the ASX100 and 5 changes to the ASX200 at the December rebalance. With a long M&A pipeline, there could be additional...

Brian Freitas

Index Rebalance & ETF Flow Recap: STO/OSH, KEP/SPH, HHI, SET50, HSTECH, HSCI

This recap highlights Insights covering the index rebalance space in Asia as well as announcements that could result in index changes. We also look...

Brian Freitas

IGO/Western Areas: Battery Mineral Grab

Western Areas has generally underperformed peers over the past year. It is clearly in place. and if not from IGO, there's no reason another suitor...

David Blennerhassett

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ASX100/200 Index Rebalance Preview: Permutations and Combinations as M&A Activity Booms

This is going to be a busy rebalance for the ASX100 & ASX200 indices with M&A driven changes followed by changes at the regular review. There is a...

Brian Freitas

Santos/Oil Search: Expert and Court Thumbs Up; Potential S&P/ASX Changes

Spark Infra and Oil Search could be deleted from the ASX100 & ASX200 indices ahead of the regular rebalance. Then there will be more changes at the...

Brian Freitas

ASX100/​200 Index Rebalance Preview: Potential December Changes With Large Impact

There could be 1 change to the ASX100 and 5 changes to the ASX200 at the December rebalance. With a long M&A pipeline, there could be additional...

Brian Freitas

Index Rebalance & ETF Flow Recap: STO/OSH, KEP/SPH, HHI, SET50, HSTECH, HSCI

This recap highlights Insights covering the index rebalance space in Asia as well as announcements that could result in index changes. We also look...

Brian Freitas

IGO/Western Areas: Battery Mineral Grab

Western Areas has generally underperformed peers over the past year. It is clearly in place. and if not from IGO, there's no reason another suitor...

David Blennerhassett

ASX100/200 Index Rebalance Preview: Potential December Changes With Large Impact