Smartkarma Daily Briefs

• Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
• The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
• The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.

• The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
• For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
• Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2024.

For our next Corporate Webinar we are glad to welcome iFAST’s Executive Director and Director of Corporate Communications, Mr Jean Paul Wong. 

In the upcoming webinar, Jean will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Alec Tseung.

Alec will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session.

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Thursday, 7 March 2024, 19:00 SGT.

About iFAST Corporation 

iFAST Corp (stock code: AIY) is a wealth management Fintech platform, with assets under administration (AUA) of S$19.83 billion as at 31 December 2023. Incorporated in the year 2000 in Singapore and listed on the SGX-Mainboard in December 2014, the Group is also present in Hong Kong, Malaysia, China, and UK. Through the years, the Group has built a well-established Fintech ecosystem connecting its product providers and clients. iFAST Corp holds the requisite licences in the various jurisdictions it operates in to provide a wide range of products and services.

As at end December 2023, the Group offers access to over 21,000 investment products including over 13,000 funds from over 320 fund houses, over 2,400 bonds, stocks and ETFs listed on the Singapore, Hong Kong, US, Malaysia, UK, and China A stock exchanges, as well as services including pension administration solutions, online discretionary portfolio management services, research and investment seminars, Fintech solutions, and investment administration and transaction services.

• Last October, I wrote about the plan the sponsor of Sankei Real Estate (2972 JP) had to exchange buildings with the REIT to clean it up, then buy more units.
• Today they announced the completion of the Portfolio Rebalancing Plan started in March 2023. And the plan to buy more units. The assets transferred out were gone at end Jan-2024.
• Now that’s done, and there are units to buy. Maximum 46,652 units over maximum 220 days.

• Government sees foreign investors as key for Corporate Value-Up success, considering reinstating short selling.
• Planning to expand short selling beyond 350 stocks, but anticipating pushback from retail investors, likely capping additional stocks around 100.
• The head of the Financial Supervisory Service will formally disclose these plans during the upcoming short selling conference scheduled for March 13th.

• Yankuang Energy, CGN Power and China Coal Energy are buys, China Resources Beer, China Vanke and Wuxi Biologics are sells for the iShares China Large-Cap (FXI) (FXI US) in March.
• Shorts have been spiking in China Vanke (2202 HK) while there has been covering in Yankuang Energy (1171 HK), China Resources Beer Holdings (291 HK) and Wuxi Biologics (2269 HK). 
• There has been an increase in cumulative excess volume on all the adds and deletes over the last few months. There could be more over the next week.

• Mediatek Top Performer; Showcasing New AI Capabilities at the Mobile World Congress in Barcelona
• Memory Monitor: Competition Is Hotting Up for Key Memory Chips Nvidia Depends On; Nanya Left Out?
• Novatek (3034.TT): It Has Been Qualified by the IPhone 16 for OLED Driver IC

• For the month of February 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$20bn.
• The average premium for the new transactions announced (or first discussed) in February was ~33%.
• This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

• Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
• Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
• NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

• During the last 3 weeks, Naspers and Prosus have come under pressure relative to their underlying portfolios.
• Since reaching a new all-time low on the 12th of February, Naspers’ discount has widened by 6 percentage points to 40.7%.
• Prosus’ discount has widened 5.7 percentage points to 35.4%. Naspers and Prosus are down 9% and 8% respectively, relative to a decline of 1.9% for Tencent in ZAR.