Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>A new tool highlights which TSE companies have disclosed a policy/consideration; sometimes referred to as the "name and shame" list. In practice, more "name" than "shame". </li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a> is trading rich to its NAV. And the simple ratio (JCNC/<a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a>) is the highest level outside the 2008 GFC. </li>
<li>This is a rubbish Offer for <a href="https://www.smartkarma.com/entities/asia-cement-china-holdings" target="_blank" data-smartkarma-citation="entities:3374:1" rel="noopener">Asia Cement China (743 HK)</a>. Given how shareholders voted at last year's AGM, expect this Scheme to be voted down. Avoid.</li>
</ul>


A new tool highlights which TSE companies have disclosed a policy/consideration; sometimes referred to as the "name and shame" list. In practice, more "name" than "shame". 

Jardine Cycle &amp; Carriage (JCNC SP) is trading rich to its NAV. And the simple ratio (JCNC/Astra International (ASII IJ)) is the highest level outside the 2008 GFC. 
This is a rubbish Offer for Asia Cement China (743 HK). Given how shareholders voted at last year's AGM, expect this Scheme to be voted down. Avoid.


Last Week in Event SPACE: Jardine Cycle & Carriage, "Name & Shame", Asia Cement, Northern Minerals

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mmg-ltd" target="_blank" data-smartkarma-citation="entities:13961:1" rel="noopener">Mmg Ltd (1208 HK)</a> will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.</li>
<li>The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.</li>
<li>MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).</li>
</ul>



Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).


MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

Travis Lundy

<ul>
<li>The HSI added <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a> and deleted <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a>. HSCEI added <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining Group Co Ltd H (2899 HK)</a> deleted <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a> </li>
<li>HSTECH had no changes, but lots of flow. The index team sets capping levels, then resets them a three days before the actual rebalancing. There were some capping/recapping changes.</li>
<li>Below we offer tables showing all the changes and flows across the indices for each stock, ranked by Flows, ADV, and Ticker. And a spreadsheet with all the relevant data.</li>
</ul>


The HSI added BYD Electronics (285 HK) and deleted Country Garden Services (6098 HK). HSCEI added Zijin Mining Group Co Ltd H (2899 HK) deleted Xinyi Solar Holdings (968 HK) 
HSTECH had no changes, but lots of flow. The index team sets capping levels, then resets them a three days before the actual rebalancing. There were some capping/recapping changes.
Below we offer tables showing all the changes and flows across the indices for each stock, ranked by Flows, ADV, and Ticker. And a spreadsheet with all the relevant data.


HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>The June rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.</li>
<li>The round-trip trade across all stocks across the four indices is estimated at HK$32bn (US$4.1bn).</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto</a>, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba</a>, <a href="https://www.smartkarma.com/entities/netease-inc" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase</a>, <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining</a>, <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime</a> and <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics</a> are the largest buys while <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent</a>, <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings</a> are the largest sells.</li>
</ul>


The June rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.
The round-trip trade across all stocks across the four indices is estimated at HK$32bn (US$4.1bn).

Li Auto, Alibaba, NetEase, Zijin Mining, SenseTime and BYD Electronics are the largest buys while Tencent, Meituan, JD.com, Kuaishou Technology, Xiaomi and HSBC Holdings are the largest sells.


HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

<ul>
<li>Back in February last year, the Aussie Treasurer <a href="https://www.legislation.gov.au/F2023N00026/asmade/text" target="_blank" rel="noopener">prohibited</a> Yuxiao Fund from buying an additional 9.92% in <a href="https://www.smartkarma.com/entities/northern-minerals-ltd" target="_blank" data-smartkarma-citation="entities:20445:1" rel="noopener">Northern Minerals (NTU AU)</a> which would have increased its stake to 19.9%.</li>
<li>On the <a href="https://announcements.asx.com.au/asxpdf/20231121/pdf/05xl2d4q74m61v.pdf" target="_blank" rel="noopener">20th November 2023</a>, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis <a href="https://announcements.asx.com.au/asxpdf/20240527/pdf/063yqlgvx8zbll.pdf" target="_blank" rel="noopener">resigned his post</a> and the EGM cancelled.</li>
<li>The Aussie Treasurer has <a href="https://www.legislation.gov.au/F2024N00475/latest/text" target="_blank" rel="noopener">now made orders</a> requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. </li>
</ul>


Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. 


Northern Minerals (NMI AU): Chinese Investors Forced To Exit

China

China Hongqiao Group Ltd. manufactures aluminum products. The Company's aluminum products consist of molten aluminum alloy, aluminum alloy ingots and aluminum busbars.

Baoshan Iron & Steel Co., Ltd. manufactures and markets a variety of iron and steel products including cold rolled plates and coils, hot rolled plates and coils, seamless steel tubes, high-speed wire rods, and steel billets.  The company also operates in related energy production businesses.

Zhongjin Gold Corp Ltd acquires, explores and develops properties for gold production. The Company's products also include silver, electrolytic copper and sulphuric acid.

Aluminum Corporation of China Limited, also known as Chalco, is a producer of alumina and primary aluminum in China. The Company refines bauxite into alumina and smelts alumina to produce primary aluminum.

Inner Mongolian Baotou Steel Union Co., Ltd. smelts and processes ferrous metal products.  The Company's products include plates, seamless metal tubes, heavy tubes, square steel, wire rods, steel pipes, steel scraps, and other related products.

Inner Mongolia Baotou Steel Union (600010 CH)

Jiangxi Copper Company Ltd. operates in the copper mining, milling, smelting and refining to produce copper cathode and other related products, including pyrite concentrates, sulphuric acid and electrolytic gold and silver businesses.  The Company also provides smelting and refining services pursuant to tolling arrangements for customers.

Shandong Gold Mining Co., Ltd. operates gold mining and production businesses. The Company provides gold exploration, processing, and outsourcing gold smelting services. Shandong Gold Mining also conducts gold jewelry purification and non-ferrous metal production businesses.

CMOC Group Limited operates as a mineral mining and exploration company. The Company focuses on non-ferrous metal mining. CMOC Group specializes in mining and trading of base and rare metals.

Yunnan Aluminium Co., Ltd. primarily manufactures and markets aluminum products. The Company's products include aluminum ingots, aluminum rolls, and aluminum alloys.

Jinduicheng Molybdenum Co.,Ltd. is involved in molybdenum mining, dressing, smelting, processing, research and trade in Asia.

Jinduicheng Molybdenum Co, Ltd. (601958 CH)

Fortescue Metals Group Ltd. explores for and produces iron ore. The Company conducts business worldwide.

POSCO Holdings Inc. manufactures and distributes steel products. The Company produces crude steel, hot rolled steel, cold rolled steel, stainless steel, steel plates, wire rods, galvanized steel, electrical steel, and other related products. POSCO Holdings markets its products worldwide.

JFE Holdings, Inc. is a holding company which was established through the merger of NKK Corp and Kawasaki Steel Corp.  The Company manages and conducts its subsidiaries' business, which is steel production and integrated engineering services.

Vedanta Limited mines, produces, and exports base metals. The Company mines and distributes metals such as zinc, iron ore, copper, silver, and aluminium, as well as operates power plants. Vedanta markets its products worldwide.

Newcrest Mining Limited is a gold mining, exploration and production company. The Company is geographically focused in Australia, the Pacific region and Asia. Newcrest Mining operates projects within six provinces in four countries, focusing on the Cadia East and Lihir MOPU expansion projects and the Wafi Golpu and Namosi greenfield projects.

Glencore Plc is a diversified natural resources company. The Company operates in three groups: Metals and Minerals, Energy Products, and Agricultural Products. Glencore Plc offers its products and services around the world.

Nippon Steel Corp is an integrated steel maker. The Company produces various types of steel products used for industrial machinery & equipment and exports them worldwide.  Nippon Steel provides plant construction and urban development and also develops new businesses such as chemicals, ceramics, electronic equipment and information & communication systems.

China Steel Corporation manufactures and markets a variety of steel products. The main products are hot rolled coils and sheets, cold rolled coils and sheets, wire rods, steel plates, and steel bars.

Nucor Corporation manufactures steel products.  The Company's products include carbon and alloy steel, steel joists, steel deck, cold finished steel, steel grinding balls, steel bearing products, and metal buildingsystems. Nucor also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap.

Northern Star Resources Ltd manufactures precious metals. The Company provides mining and production of gold. Northern Star Resources serves customers in Australia and North America.

Zijin Mining Group Co., Ltd., through its subsidiaries, explores, mines, produces, refines, and sells gold and other mineral resources in China.

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Zijin Mining Group Co Ltd H (2899 HK)

Last Week in Event SPACE: Jardine Cycle & Carriage, "Name & Shame", Asia Cement, Northern Minerals

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

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

The rights price is HK$2.62, a 24.7% discount to the TERP. Precedents suggest that MMG shares should continue to decline heading into the ex-rights...

Arun George

HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

The Hang Seng Index team provides initial expected changes 2wks before the rebalance, then we review/recap/re-recap 3 days before. That's done....

Travis Lundy

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices for capping. The round-trip trade across the four...

Brian Freitas

Northern Minerals (NMI AU): Chinese Investors Forced To Exit

I don't have a strong conviction either way on Northern Minerals here; but the expulsion of Yuxiao, an agitating presence, removes an overhang....

David Blennerhassett

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