Event-Driven

Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up.
An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.

GAPack (468 HK): XJF Satisfies Pre-Cons. Management Should Back Terms

During the lunch break, Greatview Aseptic Packaging (468 HK) announced that Shandong Xinjufeng Technology Packaging (301296 CH) (XJF) had satisfied all pre-conditions – the final approvals concerned outbound direct investments.
The Offer Document, including the IFA opinion, is expected to be dispatched in seven days – or 27th December, at which time, the Offer will be open to acceptances.
Evidently the Jeff Bi/Gong Hong MGO isn’t materialising any time soon. Provided the IFA is supportive – and that should now be known – management should unanimously back XJF’s Offer.

CPMC Holdings (906.HK) Update – The Critical Moment Has Arrived

By Xinyao (Criss) Wang

The First Huarui Offer Closing Date is Jan.10 2025. The latest time/date by which the Huarui Offer can become or be declared unconditional as to acceptances is 18 February 2025.
China Foods once chose to side with Baosteel – They are both SOEs.Although regulatory agencies have given the green light, it’s still unclear if China Foods will accept Huarui Offer.
The “key variable” is Zhang Wei’s attitude. Investors can choose bet on it.It would be wise for arbitrageurs to wait until Zhang Wei makes his move before making a decision.

High Conviction 2025: Porsche’s SE Discount to NAV Reduction

Porsche SE, a holding company, controls 53.3% of Volkswagen (VW) and 25% (+1 share) of Porsche AG, leveraging a dual-class share structure to consolidate control with minimal economic stakes.
Net debt of €5.16 billion, accrued from the Porsche AG stake acquisition, relies heavily on VW and Porsche AG dividends for debt servicing, with CF uncertainties tied to VW’s restructuring.
Porsche SE trades at a 31.8% discount to NAV, reflecting legal liabilities, debt reduction priorities, and holding structure complexities, but this discount could tighten to 20% as risks subside.

CHA Biotech Announces A Capital Raise of 41% of Outstanding Shares

By Douglas Kim

On 20 December, Chabiotech (085660 KS) announced that it plans to conduct a rights offering capital raise of 250 billion won.
The expected rights offering price is 10,800 won (27.3% lower than current price of 14,860 won). A total of 23.148 million new shares (41% of outstanding shares) will be issued.
This capital raise by CHA Biotech is likely to further negatively impact the company’s share price in the next several weeks as many investors are concerned about excessive shares dilution.

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Dec 20

Daily Brief Event-Driven: Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover
SET50 Index Rebalance: Four Changes; Cal Comp🚀
Henlius (2696 HK): This Should Trade Tighter. Get Involved
MPHB Capital (MPHB MK)’s Offer: Almost There As ISM Exhausts Options
LY Corp (4689) Announces Takeover of Beenos (3328) – Lightish at ¥4,000 But A Done Deal
Quiddity Leaderboard CSI 300/500 Jun 25: ~US$5.9bn Collective One-Way Flows
Korea FSC’s Stabilization Fund: Breaking Down the Buzz and Flow Impact
Quiddity Leaderboard STAR 50/100 Mar25: Multiple Changes, Large Flows; High-Impact Trade Idea
CPMC (906 HK): Tendering Now Open
LS Electric, Then Hyundai Rotem, Now Samyang Foods and Hyundai Mipo: Same Proactive Flow?

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
40% of proceeds is to “create and develop new IP”, 60% is to “enhance global IP distribution”; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason.
Kadokawa shares have gained 44% in a month since Reuters carried an “Exclusive” article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.

SET50 Index Rebalance: Four Changes; Cal Comp🚀

There will be 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 30 December.
All changes are in line with our forecasts and there appears to be positioning in all the stocks.
Cal Comp Electronics Thailand (CCET TB) will have the largest passive buying a percentage of free float and could be the stock to watch.

Henlius (2696 HK): This Should Trade Tighter. Get Involved

After the China Traditional Chinese Medicine (570 HK) fiasco back in October, Hong Kong M&As have received some welcome Xmas cheer of late.
Small-Cap CM Hi-Tech (2115 HK) secured reg approvals in record time. Then CPMC (906 HK)‘s pre-cons were satisfied on 13th December. Now Shanghai Henlius (2696 HK)‘s pre-cons are also fulfilled.
Henlius’ spread narrowed after securing NDRC approval on the 22nd Nov; and again after fulfilling pre-cons this week. A 3.1% gross spread is okay. This is done. Get involved.

MPHB Capital (MPHB MK)’s Offer: Almost There As ISM Exhausts Options

MPHB Capital (MPHB MK)‘s delisting Offer via a selective capital reduction (SCR) from controlling shareholder and chairman Tan Sri Surin Upatkoon appears to be in the home straight.
The completion of the Offer has been delayed as ISM Sdn Bhd, MPHB’s minority partner in six JVs, invokes various legal options in an ongoing dispute.
The High Court has now fixed 6 January 2025 as the hearing date for the SCR petition. Assuming that is granted, payment is likely mid-Feb.

LY Corp (4689) Announces Takeover of Beenos (3328) – Lightish at ¥4,000 But A Done Deal

Early today, the Nikkei had an article saying LY (4689 JP) would launch a takeover of Beenos Inc (3328 JP). The stock went limit up. Shorts are many times ADV.
Post-Close, we get a deal much as implied by the Nikkei article. It seems light to me but the top three holders have agreed to the deal.
Regulatory will take a couple of months. This will likely fall tomorrow. If you are a long-only fund holder, think about the alternatives (read the conclusions here).

Quiddity Leaderboard CSI 300/500 Jun 25: ~US$5.9bn Collective One-Way Flows

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

Korea FSC’s Stabilization Fund: Breaking Down the Buzz and Flow Impact

With the Fed shock pushing the won past 1,450 and the KOSPI down, it’s time to dig into the stabilization fund—its size, timing, and which stocks will catch the flow.
With ₩10T in play, even spread over 10 stages, it could drive significant price impact. NPS’s ₩1.5T injection in December shows how even smaller flows move the market.
The FSC plans to focus on KOSPI 200 and broad market ETFs, with new ETFs like the Value-Up Index likely getting more flow—target stocks in both for bigger impact.

Quiddity Leaderboard STAR 50/100 Mar25: Multiple Changes, Large Flows; High-Impact Trade Idea

STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
In this insight, we look at the potential ADDs/DELs for the STAR50/STAR100 indices for the March 2025 index rebal event and suggest a high impact trade idea.

CPMC (906 HK): Tendering Now Open

At a 1.5% gross spread to terms, CPMC Holdings (906 HK) is trading with completion is mind after the last pre-condition – SAFE – was satisfied on the 13th December.
The Offer Doc is now out and the transaction is open for acceptances. The First Close is the 10th January.
I’d expect this deal to turn unconditional on or before the First Close, with payment around the 20th January.

LS Electric, Then Hyundai Rotem, Now Samyang Foods and Hyundai Mipo: Same Proactive Flow?

Local hedge funds, mainly prop traders and PEs, drove the price action in LS Electric and Hyundai Rotem, and are now leading net buying in Samyang Foods and Hyundai Mipo.
Given the setup, it’s likely Samyang Foods and HD Hyundai Mipo will follow a similar move until mid-January when screening starts, so we should stay aware of this backdrop.
This gives us a chance to capture upside. Plus, since Samyang Foods and Hyundai Mipo may pull back 30-40% post-screening, there’s also a solid opportunity during that dip.

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Dec 19

Daily Brief Event-Driven: Heiwa (6412) Announces Game-Changing Acquisition and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Heiwa (6412) Announces Game-Changing Acquisition, Gets Very Heavily Levered (Termed Debt)
How Has the Index Rebalance Strategy Performed in 2024?
Insignia Financial (IFL AU): Bain Rejection Follows Tanarra’s Lead
EQD | NDX OVERSOLD: A High Probability LONG Trade Idea
EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop

Heiwa (6412) Announces Game-Changing Acquisition, Gets Very Heavily Levered (Termed Debt)

Heiwa Corp (6412 JP) got 99% of its revenue as a pachinko/pachislot machinery maker. In 2011, it bought one of Japan’s largest golf course operators, PGM Holdings, from Lone Star.
Golf course revenue is up 30% in 10yrs. Pachinko/Pachislot revenue is down by 60+% in the same period. Golf is the bulk of revenue and OP now.
Today, the company announced a stunning, even monumental acquisition to become the largest golf course operator in the world.

How Has the Index Rebalance Strategy Performed in 2024?

It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.
Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.
As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.

Insignia Financial (IFL AU): Bain Rejection Follows Tanarra’s Lead

After Tanarra Capital categorically refuted an Australian article alleging Tanarra was supportive of Bain’s Offer, Insignia Financial (IFL AU)‘s board’s response was all-but rubber stamped.
Insignia reckons Bain’s Offer does not represent fair value, and in the “context of a change of control transaction“.
What now – does Bain bump? Tough call in a space where one, possible two deals, may lapse in short succession.

EQD | NDX OVERSOLD: A High Probability LONG Trade Idea

By Nico Rosti

The Nasdaq 100 Index (NDX) selling lead the index straight into OVERSOLD territory on December 18th.
The sell off is overdone, our DAILY NDX model suggests a high probability LONG trade for Thursday.
High volatility may affect trades, triggering stops and making it difficult to hold without taking the risk of big losses, Vertical Spreads (Bull PUTs) are a better instrument choice.

EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop

By Nico Rosti

The Shanghai Shenzhen CSI 300 Index (SHSZ300 Index) exploded higher in mid-September 2024, then went flat in a range (still there as we write).
Our models currently see uptrend and downtrend targets positioned at an equal distance from the last WEEKLY CLose on December 13th.
In short this means that the index is “perfectly neutral” at the moment, a rare scenario that requires straddle and strangle-like strategies to be able to profit.

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Dec 18

Daily Brief Event-Driven: Activist Buys 7+% of Takeover Target Macromill (3978 JP) and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Activist Buys 7+% of Takeover Target Macromill (3978 JP)
A Passive Flow Trading Event that Sparked Wild Price Action in Korea Is Happening Again
TIP Customized Taiwan Select High Dividend Index Rebalance: US$3.2bn Trade with BIG Impact
Shin-Etsu Chemical (4063) – Small/Large Below-Market Tender Offer Buyback, Followed by Overhang
Goldlion Holdings (533 HK): Tsang Family’s Scheme
Lotte Shopping and Potentially Others Are Shaping up as Fresh Picks for Dividend Arbitrage Plays
EQD | S&P/ASX 200 Index Option Strategy -Combining Record Low Volatility with Buy-The-Dip
[Quiddity Index] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible
HK CEO & Director Dealings (17th Dec 2024): BeiGene, China Wantian, Super Hi Int’l/Haidilao
Green Light from British Government

Activist Buys 7+% of Takeover Target Macromill (3978 JP)

Today post-close, activist/engagement investor Oasis Management filed a new LSR on Macromill, Inc (3978 JP) owning 7.12% of shares as of 13-Dec-2024. Reason: Defend shareholder value, propose measures to management.
That is 7.56-7.65% of effective voting/tender rights. It’s big enough to matter. Of course, the stock has not traded below terms once since full trading started post-announcement.
And this was warned in CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid. Shareholder structure REALLY matters.

A Passive Flow Trading Event that Sparked Wild Price Action in Korea Is Happening Again

This event drew significant attention, causing unusual price action. From Sept 20 to Nov 29, corrections in the deletions far outpaced the KOSPI, with the trend holding across key checkpoints.
We’re watching 4 stocks: Kumho Petro, Lotte Chemical, Posco DX, and EcoPro Materials. SK Bioscience and Enchem are close, with small price moves likely pushing them out.
Based on past rebalancing patterns, proactive positions on these names could trigger strong price action. All except Enchem have listed futures and solid volume, making trading conditions favorable.

TIP Customized Taiwan Select High Dividend Index Rebalance: US$3.2bn Trade with BIG Impact

There are 8 changes a side for the TIP Customized Taiwan Select High Dividend Index in December. The TIP Taiwan Select High Dividend ETF (00919TW) has an AUM of US$9.3bn.
Estimated one-way turnover is 17.2% and that will result in a round-trip trade of US$3.2bn. All adds and deletes have over 5x ADV to trade from passive trackers.
The rebalance will be implemented over 8 trading days and the ETF started trading some stocks late last week and the rest from 17 December.

Shin-Etsu Chemical (4063) – Small/Large Below-Market Tender Offer Buyback, Followed by Overhang

Today, Shin Etsu Chemical (4063 JP) announced a second buyback this year (first ¥100bn was announced in May, buying back 16.695mm shs (0.83%). This time, ~¥94bn via Own-Share Tender Offer.
Three non-life insurers and two banks who together hold 6+% will sell a total of ~1.01% at ~10% below last. They will then sell the rest of their shares later.
Cute, but not enough. Shin-Etsu is cash-rich, securities-rich, receivables and inventory-rich. And nearly ¥1trln of EBITDA. They are a key part of the tech infrastructure. They can borrow.

Goldlion Holdings (533 HK): Tsang Family’s Scheme

After Goldlion Holdings (533 HK), an apparel manufacturer/distributor, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, from the Tsang family (63.09% stakeholder).
And that it’s exactly what unfolded. The Cancellation Price is $1.5232/share (declared final), a 24.85% premium to last price, but a punchy 71% premium to undisturbed.
The long stop is the 30th September 2025. This will probably be completed in less than half the time. There will be a question mark over the low price-to-book multiple.

Lotte Shopping and Potentially Others Are Shaping up as Fresh Picks for Dividend Arbitrage Plays

At today’s close, Lotte Shopping (023530 KS) shows solid contango for a basis trade, with LS Corp (006260 KS) next; the rest are too tight or dry.
Lotte Shopping surprised the market today, changing its dividend record date to a board-set day, wiping out the backwardation that matched its dividend yield until yesterday.
Lotte Shopping’s move could signal other stocks changing dividend dates, causing similar dislocations. With a 7% yield and solid SSF volume, it’s prime for aggressive dividend arbitrage.

EQD | S&P/ASX 200 Index Option Strategy -Combining Record Low Volatility with Buy-The-Dip

By Gaudenz Schneider

The S&P/ASX 200 (AS51 INDEX) has declined two weeks in a row. Quantitative analysis suggests that a trend reversal could occur soon.
This Insight provides an option strategy based on the resistance and support levels identified in the quantitative Insight EQD | ASX 200 Presents a High-Probability Buy-The-Dip Opportunity
Option liquidity and volatility analysis, including skew, term structure and put/call ratios are provided and used in strategy design.

[Quiddity Index] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible

KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2025.
We expect up to six ADDs and six DELs in the KOSPI 200 index during the June 2025 index rebal event based on the latest available data.

HK CEO & Director Dealings (17th Dec 2024): BeiGene, China Wantian, Super Hi Int’l/Haidilao

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular insight include: BeiGene (6160 HK), China Wantian Holdings (1854 HK), and Super Hi International Holding (9658 HK) / Haidilao International Holding (6862 HK).

Green Light from British Government

Approval and Safeguards: The UK government approved EP Group’s £5.3 billion acquisition of IDS, with legally binding commitments to retain Royal Mail’s headquarters, tax residence, and universal service obligations.
IDS faces declining mail volumes, delivery fines, and the need for operational reforms; EP Group aims to revitalize the company leveraging expertise in energy and logistics sectors.
A done deal, in my view. The acquisition is expected to close in Q1 2025.

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Dec 17

Daily Brief Event-Driven: KRX Value-Up Index Rebalance Results and Estimated Passive Impact and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

KRX Value-Up Index Rebalance Results and Estimated Passive Impact
Select Sector Indices and S&P Equal Weight Rebalance: US$17.7bn Round-Trip Trade Post Capping Cutoff
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025
PCOMP Index Rebalance Preview: Two Changes Likely in February
EQD | Hong Kong Single Stock Options Weekly December 09 – 13
EQD | Nikkei Index Options Weekly – December 09 – 13
EQD | Hong Kong Index Options Weekly – HSI and HSCEI December 09-13
EQD | ASX 200 Presents a High-Probability Buy-The-Dip Opportunity
EQD | Kospi Index Options Weekly – December 09 – 13

KRX Value-Up Index Rebalance Results and Estimated Passive Impact

KRX updated the Value-Up Index with five new names: KB Financial, Hana Financial, KT Corp, SK Telecom, and Hyundai Mobis, with Mobis replacing JB Financial, surprising the market.
This is the first rebalancing, packed into one day, so expect notable price action. Reverse moves could also follow Thursday as pre-positioned trades unwind, so monitor price action closely.
Even after Thursday’s rebalancing, half of the funds, especially from the National Pension Service, will flow into high-yield stocks, likely driving significant price moves through early next year.

Select Sector Indices and S&P Equal Weight Rebalance: US$17.7bn Round-Trip Trade Post Capping Cutoff

Constituent changes to the S&P 500 INDEX and capping changes will result in a round-trip trade of US$17.7bn across the Select Sector indices and the S&P500 Equal Weight Index.
There is over US$500m to trade in Broadcom (AVGO US), Tesla (TSLA US), Apollo Global Management (APO US), Amazon.com Inc (AMZN US) and Workday Inc Class A (WDAY US).
Broadcom (AVGO US) swings from a small net buy to a large net sell following the rally in the stock last week.

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025

We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

PCOMP Index Rebalance Preview: Two Changes Likely in February

The review period for the February rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) ends in two weeks.
There could be two changes for the index with passive trackers needing to trade between 23-64x ADV in the stocks.
The passive buying is a lot larger than the passive selling, there will be funding outflows for the other index constituents; some stocks will have over 1x ADV to trade.

EQD | Hong Kong Single Stock Options Weekly December 09 – 13

Top Ten most active contracts for the week all traded on Monday. Most of the active contracts were Calls with December expiries.
Xiaomi Corp (1810 HK) makes the Top Ten non-Tencent most active contracts with both Puts and Call active – likely stock replacement and hedges following torrid run higher.
Tencent implied vols trading at their lowest levels of the past year.

EQD | Nikkei Index Options Weekly – December 09 – 13

A bid for out-of-the-money puts combined with positive change in Put open interest and Put volume totals argues that Puts and being bought.
70% of NKY open interest is below 38,000 with only 20% of the open interest above 40,000.
NKY nearing top of range while registering quiet historic volatility levels 4-5 points below implied vols.

EQD | Hong Kong Index Options Weekly – HSI and HSCEI December 09-13

Both HSI and HSCEI show characteristics of being short gamma at higher strikes highlighted by Mondays pop in spot and vol in both markets.
Implied vol did a complete round-trip closing virtually unchanged from last week despite spot holding on to modest gains on the week and large high – low range.
Up-Strike Calls look to have been added in both markets which will help maintain the positive spot vol correlation.

EQD | ASX 200 Presents a High-Probability Buy-The-Dip Opportunity

By Nico Rosti

The S&P/ASX 200 INDEX it’s currently trending up quite well, since October 2023. The current rally picked up some steam from July 2024 and is quite steady.
The index started to pull back 2 weeks ago and has closed 2 consecutive weeks down and this week started with a Monday down Close.
Our models show a clear opportunity to buy this dip and ride the index uptrend back to >3% profit target, roughly a 3-weeks movement according to our forecast.

EQD | Kospi Index Options Weekly – December 09 – 13

Risk reward for owning implied vol has shifted to the long side here given spot/vol dynamics and limited vol upside since market peaked 17% higher.
Strong price action after a soggy start to the week sees a significant portion of open interest cleared out.
Largest open interest is at the 300 strike with ~ 42k Put contracts outstanding.

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Dec 16

Daily Brief Event-Driven: MVIS Australia Resources Index Rebalance: 3 Adds and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

MVIS Australia Resources Index Rebalance: 3 Adds, Capping & Float Changes
MV Australia Equal Weight Index Rebalance: One Add & Capping Leads to A$290m Trade
MV Global Junior Gold Miners Index Rebalance: Big Flow in Some Stocks
Merger Arb Mondays (16 Dec) – ESR, CPMC, Fosun Tourism, Seven & I, Fuji Soft, NEC Networks
Korean Dems Push for Commercial Act Amendment by Year-End: Game-Changer for Value-Up Trade
MV US Listed Semiconductor 25 Index Rebalance: Round-Trip Trade Over US$2.2bn
MV Australia A-REITs Index Rebalance: Only Float & Capping Changes
[Quiddity Index] MarketVector US Semiconductor Index Dec24 Rebal Results: Flow Expectations
[Quiddity Index] MVIS Junior Gold Miners Index Dec24 Rebalance Results: Flow Expectations
[Quiddity Index] MVIS Global Defense Index Dec24 Rebalance Results: Flow Expectations

MVIS Australia Resources Index Rebalance: 3 Adds, Capping & Float Changes

De Grey Mining (DEG AU), Perseus Mining (PRU AU) and Sandfire Resources Limited (SFR AU) will be added to the Vaneck Vectors Australian Resources ETF (MVR AU) in December.
Constituent changes, float changes and capping changes result in an estimated one-way turnover of 7.4% and in a round-trip trade of A$63m.
De Grey Mining will be acquired by Northern Star Resources in the first half of 2025. The passive buying could push De Grey Mining higher in the short-term.

MV Australia Equal Weight Index Rebalance: One Add & Capping Leads to A$290m Trade

Telix Pharmaceuticals (TLX AU) is the sole (and somewhat surprising) inclusion for the VanEck Vectors Australian Equal Weight ETF (MVW AU) in December.
The one inclusion, float changes and capping changes result in a one-way turnover of 5.5% leading to a round-trip trade of A$290m.
Shorts have increased in Telix Pharmaceuticals (TLX AU) this year but there has been some covering in the stock recently.

MV Global Junior Gold Miners Index Rebalance: Big Flow in Some Stocks

No constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in December. But there are a lot of float and capping changes.
Estimated one-way turnover is 2.6% resulting in a round-trip trade of US$269m. There are 8 stocks with over 1x ADV to trade from passive trackers.
Stocks with the largest flows are Evolution Mining, Pan American Silver, Westgold Resources, B2Gold, Alamos Gold, Harmony Gold Mining, Eldorado Gold, K92 Mining, IAMGOLD, Endeavour Silver and Emerald Resources.

Merger Arb Mondays (16 Dec) – ESR, CPMC, Fosun Tourism, Seven & I, Fuji Soft, NEC Networks

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Arcadium Lithium (LTM AU), Seven & I Holdings (3382 JP), Insignia Financial (IFL AU), Shanghai Henlius Biotech (2696 HK), Get Nice Financial Group Ltd (1469 HK).
Lowest spreads: Renewable Japan (9522 JP), Lifestyle China (2136 HK), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Nishimoto (9260 JP).

Korean Dems Push for Commercial Act Amendment by Year-End: Game-Changer for Value-Up Trade

The Dems are serious about the Commercial Act amendment, with Lee Jae-myung personally attending the policy forum to pitch the change directly to key business players.
Key takeaways: expanding directors’ fiduciary duties to all shareholders and mandatory cumulative voting, which could empower minority shareholders and reignite value-up policies in Korean companies.
The Dems plan to fast-track the Commercial Act amendment by year-end, with implementation likely by Q2 next year, boosting market moves and reigniting the value-up trade ahead of May’s election.

MV US Listed Semiconductor 25 Index Rebalance: Round-Trip Trade Over US$2.2bn

There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in December but there are a lot of float and capping changes.
Estimated one-way turnover is 4.5% resulting in a one-way trade of US$1.1bn. Impact on the stocks is not big given they trade like water.
The selling in Broadcom and NVIDIA will be amplified by selling from the Technology Select Sector SPDR (XLK US) and Invesco S&P 500 Equal Weight E (RSP US) ETFs.

MV Australia A-REITs Index Rebalance: Only Float & Capping Changes

The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 20 December. There are no constituent changes, but there are float and capping changes.
Estimated one-way turnover at the rebalance is 2.9% resulting in a one-way trade of A$17m. There is limited impact on the index constituents.
The largest inflows are in Charter Hall, Gpt Group, Dexus Property and Region RE while the largest outflows will be from Goodman Group, Scentre Group and Vicinity Centres.

[Quiddity Index] MarketVector US Semiconductor Index Dec24 Rebal Results: Flow Expectations

The MV US Listed Semiconductor 25 index represents the performance of the biggest US-listed companies in the semiconductor industry.
There will be no index changes for the December 2024 rebal event.
We expect a one-way flow of US$1.3bn for December 2024, which translates to a turnover of 5.4%.

[Quiddity Index] MVIS Junior Gold Miners Index Dec24 Rebalance Results: Flow Expectations

The MV J-Gold Miners index represents the performance of small-cap and mid-cap gold and silver mining companies listed around the world.
There will be no index changes for the December 2024 rebal event.
We expect a one-way flow of US$168mm for December 2024, which translates to a turnover of 3.4%.

[Quiddity Index] MVIS Global Defense Index Dec24 Rebalance Results: Flow Expectations

The MV Global Defense Industry Index represents the performance of companies in national defense industries.
Amentum Holdings (AMTM US) is an ADD and Chemring Group PLC (CHG LN) is a DEL for the MV Global Defense Index in December 2024.
We expect a one-way flow of US$138mm for December 2024, which translates to a turnover of 8.6%.

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Dec 15

Daily Brief Event-Driven: Yoon’s Impeachment Passed: Upcoming Schedule and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Yoon’s Impeachment Passed: Upcoming Schedule, Procedures, and Market Impact
HK Connect SOUTHBOUND Flows (To 13 Dec 2024); Politburo Policy Change Bullish, Markets Wary, Buying
A/H Premium Tracker (To 13 Dec 2024): Pairwise Intracorrelation and Vol Way Up, Premia Down
CPMC (906 HK): Not A Shadow Of Doubt (!) As Pre-Cons Fulfilled
MV Global Rare Earth/Strategic Metals Index Rebalance: One Add, One Delete & Other Changes
China Healthcare Weekly (Dec.15) – 10th VBP Results, WuXi Shares Surge, Newjf Will Be Successful
Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely, Some Names Have High Impact
A Review of Major Equity Indices in Korea in 2024
Last Week in Event SPACE: NEC Network, SingPost, Seven & I, CPMC, Exedy
Quiddity Leaderboard HSCEI Mar 25: One Change Likely but More Names Lurking Close to the Border

Yoon’s Impeachment Passed: Upcoming Schedule, Procedures, and Market Impact

The impeachment motion against President Yoon passed in the South Korean National Assembly, clearing the two-thirds supermajority, and is now official.
For the impeachment to fail, four justices must oppose it—highly unlikely given the current setup. The odds are heavily in favor of the impeachment being upheld.
Corporate law reforms, driven by a likely Democratic Party takeover, could fuel value-up momentum and drive the local market, potentially sparking an unexpected rally through the May election.

HK Connect SOUTHBOUND Flows (To 13 Dec 2024); Politburo Policy Change Bullish, Markets Wary, Buying

SOUTHBOUND gross trading activity rebounded about 33% this week vs the previous week. Net buying was a little lower but still strong. Market volumes overall in HK rebounded.
Alibaba Group Holding (9988 HK) was again the top buy and Tencent (700 HK) and Meituan (3690 HK) the top two sells. Tech is having a mixed outing now.
Gross SOUTHBOUND volumes back up this week to levels seen just off the autumn peak. An interesting week as stocks popped Monday, opened high Tuesday, then fell all week.

A/H Premium Tracker (To 13 Dec 2024): Pairwise Intracorrelation and Vol Way Up, Premia Down

Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB volumes rebounded, tech saw limited net buying, BABA was bought but other major tech sold.
The first leg of China’s retaliatory acts against US trade measures appeared with export bans on gallium, germanium, antimony, graphite products, etc. These will not be lifted soon.
China is also retaliating against the Phils, Vietnam, Taiwan and changing tack in Europe. The next couple of years threatens to be “interesting times.

CPMC (906 HK): Not A Shadow Of Doubt (!) As Pre-Cons Fulfilled

My conversation with the FA earlier this week largely put to rest a number of concerns, specifically on regulatory approvals, surrounding the Offer for CPMC Holdings (906 HK).
As announced on the 13th December, the last pre-condition, SAFE, has been satisfied. All pre-cons have been fulfilled. The Offer Doc will be dispatched on or before the 20th December
This could turn unconditional before year-end, depending on whether Zhang Wei promptly tenders. Expect the share price to trade tight (er) to terms Monday morning.

MV Global Rare Earth/Strategic Metals Index Rebalance: One Add, One Delete & Other Changes

Vulcan Energy Resources (VUL AU) will be added to the VanEck Rare Earth/Strategic Me (REMX US) while Tianqi Lithium (9696 HK) will be deleted from the index.
Constituent changes, float changes and capping changes result in an estimated one-way turnover of 2.5% and in a round-trip trade of US$37m.
The largest inflows will be in Vulcan Energy Resources (VUL AU), Lynas Corp Ltd (LYC AU), Ganfeng Lithium (1772 HK) and Tronox Holdings (TROX US).

China Healthcare Weekly (Dec.15) – 10th VBP Results, WuXi Shares Surge, Newjf Will Be Successful

By Xinyao (Criss) Wang

The 10th national VBP released results. The average price reduction was about 70%. CSPC, Kelun, Fosun Pharma, Sino Biopharmaceutical are the “main force” and their performance would be affected.
WuXi Shares surge due to the absence of BIOSECURE Act from the proposed amendments to US NDAA. However, the rally could be short-term as the Bill may return next year.
Pre-Conditions of Newjf have been smooth so far. We think investors can directly consider Newjf’s Offer. Based on the current situation, we are optimistic that Newjf will finally be successful.

Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely, Some Names Have High Impact

The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
Based on the latest available data, we see four ADDs and four DELs for HSIII in March 2025.

A Review of Major Equity Indices in Korea in 2024

By Douglas Kim

In this insight, we review the major equity indices in Korea in 2024 including KOSPI 200 and Korea Value Up Index.
Some alpha generating performances continue in terms of adding stocks to be included in the KOSPI 200 and reducing stocks that could be excluded.
Korea Value Up Index has been heavily promoted by the Korean Exchange this year. Korea Exchange plans to make special changes to the Korea Value-Up Index constituents on 20 December.

Last Week in Event SPACE: NEC Network, SingPost, Seven & I, CPMC, Exedy

Nec Networks (1973 JP)‘s own FA didn’t include any measure of transaction synergies to be created about which NEC and NESIC were so sure. This is not being done right.
Singapore Post (SPOST SP)‘s muted price action after announcing the ~S$900mn FMH sale is illustrative. But expect more value to be unlocked from divesting non-core ops going forward.
The FTC’ blocking the giant grocery merger of Kroger Co (KR US) and Albertsons Cos (ACI US) spells trouble for ACT and Seven & I Holdings (3382 JP).

Quiddity Leaderboard HSCEI Mar 25: One Change Likely but More Names Lurking Close to the Border

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
In this insight, we take a look at the final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in March 2025.
At present, we see one change based on the 13th December 2024 data but the rankings can change until 31st December 2024.

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Dec 14

Daily Brief Event-Driven: [Japan Activism] Exedy (7278 JP) – Buying Back Bigly and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

[Japan Activism] Exedy (7278 JP) – Buying Back Bigly
Fuji Soft (9749 JP) – Bain Bumps UnBigly, and FSI Responds
Vesync (2148 HK): Expect The Yangs To Privatise
Blackstone Eyes Move On Dexus (DXS AU)
Delisting Offer for Alba at 79% Premium
CPMC Holdings (906 HK): Festive Cheer as Precondition Satisfied🎄
Macquarie’s £8.7/share Bid for Renewi Supported by Key Shareholders Amid 9% Spread and Due Diligence Completion
Aviva’s Acquisition of Direct Line: 9.5% Merger Arbitrage Opportunity Amid Regulatory Considerations and Shareholder Dynamics
Media Concierge’s Acquisition of National World: 9.5% Upside Amidst Complex Business Dynamics

[Japan Activism] Exedy (7278 JP) – Buying Back Bigly

Exedy Corp (7278 JP) announced an offering of 36% of its shares at end-May. Long-time “owner” Aisin (7259 JP) was getting out. Since then, the company has bought back shares.
Activist Murakami Group has bought 27% of the company. Between Murakami and the buyback, the public has net sold 5% of the company since end-March. Kinda shocking.
There is another 35% of Max Real World Float to buy back, and at current pace, they’ll be done by mid-March 2025. Then what? That’s the really big question.

Fuji Soft (9749 JP) – Bain Bumps UnBigly, and FSI Responds

~4 weeks ago, Fuji Soft Inc (9749 JP) responded to Bain’s Proposal to take over the company but got KKR to bid ¥1 more, then said that covered it.
The Special Committee then asked the FSI Board to halt further negotiations with Bain, and to ask Bain to destroy all confidential documentation.
Bain rejected saying it contravened METI Guidelines on Corporate Takeovers and reappeared 2 days ago with a ¥9,600 bid. The structure/details of Bain’s bid was probably a strategy mistake.

Vesync (2148 HK): Expect The Yangs To Privatise

Vesync (2148 HK), a manufacturer of small home appliance, is currently suspended pursuant to the Takeovers Code.
FY23 was Vesync’s best result since its December 2020 listing; and FY24E is on track to go one better. Yet the share price is 24% adrift of the IPO price.
The Yang family, led by chairman/CEO, control ~69.26% of Vesync. An Offer price around the IPO price may be enough to take Vesync private.

Blackstone Eyes Move On Dexus (DXS AU)

Reportedly, Blackstone is running a ruler over Dexus Property (DXS AU), one of Australia’s leading fully integrated real estate groups.
The Australian article flips flops: “Blackstone is understood to have been back on the scene“; but “cooled on the opportunity for now“.
Almost exactly four year ago, Blackstone paid A$2.1bn for a 49% stake in the Dexus Australian Logistics Trust, a prime logistics portfolio managed and jointly owned by Dexus.

Delisting Offer for Alba at 79% Premium

Christmas came early for Corp Financiera Alba Sa (ALB SM)‘s shareholders as a 79% premium delisting offer for a holding that was last trading at a whoping 50.7% discount/NAV.
For a while I had been saying that Alba was very cheap. Although it is difficult to disagree with such a premium, controling shareholders are buying at a 11.5% discount.
They are value investors after all. Settlement should happen around April 4. Spread is 1.9%/6.4% (gross/annualised). Long Alba shares (not the holding spread).

CPMC Holdings (906 HK): Festive Cheer as Precondition Satisfied🎄

ORG Technology Co., Ltd. A (002701 CH)’s offer for CPMC Holdings (906 HK) has received SAFE approval. Therefore, the precondition is satisfied.
The offer and response document will be despatched by 20 December and 3 January 2025, respectively. The Board will recommend the offer.
The offer should be declared unconditional by the first closing date. At the last close and late-January 2025 payment, the gross/annualized spread was 7.3%/88.0%.

Macquarie’s £8.7/share Bid for Renewi Supported by Key Shareholders Amid 9% Spread and Due Diligence Completion

By Dalius Tauraitis

Macquarie Asset Management’s final bid for Renewi is £8.7/share, with a current spread of 9% and a downside risk of 25%.
Three shareholders holding 15.1% of Renewi have signed irrevocable support agreements; confirmatory due diligence is ongoing.
Macquarie’s offer values Renewi at 6.7x TTM adj. EBITDA, aligning with European peers’ valuations, considering the control premium.

Aviva’s Acquisition of Direct Line: 9.5% Merger Arbitrage Opportunity Amid Regulatory Considerations and Shareholder Dynamics

By Dalius Tauraitis

Aviva is acquiring Direct Line for £1.297 cash, 0.2867 AV shares, and £0.05 dividend, totaling £2.70/share.
Direct Line’s board is prepared to recommend the offer; Aviva is conducting due diligence with a PUSU date set for December 25.
The offer values Direct Line at 1.6x BV and 2.6x TBV, with potential regulatory scrutiny due to market share.

Media Concierge’s Acquisition of National World: 9.5% Upside Amidst Complex Business Dynamics

By Dalius Tauraitis

Media Concierge’s £0.23/share offer for National World represents a 9.5% upside, with shareholder approval likely guaranteed.
Antitrust risk is negligible due to Media Concierge’s focus on Irish newspapers and NWOR’s exclusive UK operations.
NWOR’s valuation is challenging due to lack of local peers and varying global newspaper company valuation ranges.

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Dec 13

Daily Brief Event-Driven: Oji Paper (3861 JP) – Big New Buyback After Crossholding Sales And An Activist Peeking From Register and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Oji Paper (3861 JP) – Big New Buyback After Crossholding Sales And An Activist Peeking From Register
NEC Networks (1973 JP) Final Showdown II – Synergies Not Included, So Fair Value Not Offered
Vesync (2148 HK): The Yang Family to Launch a Privatisation Offer?
VCredit (2003 HK): Ma Makes His Move?
Insignia Financial (IFL AU): Bain Contemplating a Privatisation Bid
Lufax (6623 HK): On Ping An’s Stake Increases
FSS Puts a Break on Hyundai Motor Securities Rights Offering
Insignia Financial (IFL AU): Bain’s Indicative Proposal a Tad Light
EQD | Global Option Implied Volatility – From Nifty 50 to Bitcoin, Plus BTC-Bond Special
Grifols: Activism and Debt Refinancing

Oji Paper (3861 JP) – Big New Buyback After Crossholding Sales And An Activist Peeking From Register

Paper manufacturer Oji Holdings (3861 JP) has spent 25 years not going anywhere. Their current MTMP isn’t exciting. And it looks like they will fail worse than last time.
But an activist put their head above the parapet recently, and now the company has announced larger new cross-holding selldown targets, and a big 9% buyback, with a ToSTNeT-3 tomorrow.
The stock is at 0.47x book. They have nearly ¥400bn of financial assets which are non-core. They have land and property holdings. And they have lots of cross-holdings to repurchase.

NEC Networks (1973 JP) Final Showdown II – Synergies Not Included, So Fair Value Not Offered

Yesterday, NEC Corp (6701 JP) extended its Tender Offer to buy controlled subsidiary Nec Networks & System Integr (1973 JP) for another 10 days. It did not have enough shares.
As discussed here 4wks ago, then here yesterday, NEC might not get enough shares unless it offers a higher price. There’s a reason. It is not a high enough price.
METI Fair M&A Guidelines and Guidelines for Corporate Takeovers define fair. Guarantees of a floor price and a fair allocation of synergies. One is questionable. The other is not there.

Vesync (2148 HK): The Yang Family to Launch a Privatisation Offer?

Vesync (2148 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.”
The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.
We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.

VCredit (2003 HK): Ma Makes His Move?

VCredit Holdings Ltd (2003 HK), a provider of consumer financial services in China, was listed on the 21st June 2018 at HK$20/share. Shares are currently down 90%.
Ma Ting Hung, VCredit’s chairman, held 35.6% at the time of listing, and currently holds 39.85%.
VCredit was suspended this morning pursuant to the Takeovers Code. Now might be the time for Ma to take VCredit back into the fold.

Insignia Financial (IFL AU): Bain Contemplating a Privatisation Bid

IOOF Holdings (IFL AU) shares rose 11% in the final minutes of trade, fueled by media reports suggesting that Bain was in the advanced stages of making a buyout offer.
The presence of several substantial shareholders necessitates an attractive takeover premium. Takeover interest is unsurprising as Insignia trades at a material discount to peers.
We use several methods to triangulate the likely offer, which suggests a price range of A$3.44-5.50 per share, with an average of A$4.67, a 37.4% premium to the last close.

Lufax (6623 HK): On Ping An’s Stake Increases

As discussed in PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock, Ping An increased its stake in Lufax (6623 HK) to 56.82% via a scrip dividend.
This triggered a zero-premium MGO, which closed on the 28 October 2024 with negligible tendering.
Via an amendment to a tri-party agreement, Ping An subsequently lifted its stake to 66.85%. It’s worth understanding how Ping An has taken its stake >50% and beyond.

FSS Puts a Break on Hyundai Motor Securities Rights Offering

By Douglas Kim

After the market close on 12 December, the Financial Supervisory Service (FSS) put a break on Hyundai Motor Securities’ rights offering worth 200 billion won.
The proposed rights offering included issuing 30.1 million new shares, representing 95% of its current outstanding shares (31.7 million).
We would try to capitalize on the short term bullish upside on its shares of Hyundai Motor Securities and sell into strength.

Insignia Financial (IFL AU): Bain’s Indicative Proposal a Tad Light

IOOF Holdings (IFL AU) has received an indicative proposal from Bain Capital to acquire all of its shares at A$4/share in cash.
The offer takes advantage of IOOF Holdings (IFL AU)‘s underperformance over the last couple of years and there could be competing offers from other investment managers.
Short interest in IOOF Holdings (IFL AU) is around 2% of shares out and 2.5% of float. There could be short covering in the next few days.

EQD | Global Option Implied Volatility – From Nifty 50 to Bitcoin, Plus BTC-Bond Special

By Gaudenz Schneider

Cross-Market volatility snapshot highlighting option opportunities. Today’s opportunities are in the Nifty 50 and in Bitcoin
Nifty 50: The index crossed the 50-day moving average, signaling a bullish trend. Hedging gains is recommended due to expected macroeconomic uncertainty in Q1 2025.
Bitcoin: Surpassed $100,000, driven by positive sentiment towards the incoming US President’s crypto-friendly stance. Options strategies are suggested, plus how a synthetic Bitcoin bond compares to a corporate bond.

Grifols: Activism and Debt Refinancing

Debt Refinancing Achieved: Grifols issued €1.3 billion in bonds and extended its revolving credit facility, significantly improving liquidity to €1.7 billion proforma for Q3 2024 while addressing 2025 maturities.
Activist Shareholder Pressure: Hedge funds, including Flat Footed, continue to push for governance reforms, citing conflicts of interest and value destruction involving the Grifols family and board member Tomás Dagá.
Valuation Opportunity: Grifols trades at a high discount to peers, with upside potential based on its strong market position in plasma therapies, EBITDA recovery, and margin expansion post-COVID.

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Dec 12

Daily Brief Event-Driven: NEC Networks (1973 JP) Final Showdown I – Extendy-Extendy and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

NEC Networks (1973 JP) Final Showdown I – Extendy-Extendy, But Not Yet Bumpity Bumpity
7&I (3382JP) – Spanners in the Works: FTC Blocks Another US Retail Merger and 7-11 Japan Sales Slump
Topcon (7732 JP): Privatisation Auction Underscores Underlying Value
Quiddity Leaderboard HSTECH Mar 25: Two ADDs/DELs Likely but Different Conviction Levels
Fuji Soft (9749 JP): Bain Can’t Take No for an Answer and Returns with a JPY9,600 Offer
Nasdaq100 December 2024 Forecast (Final): Palantir’s Last-Minute Entry; Arm’s Subtle Retention
NIFTY200 Momentum30 Index Rebalance: 38 Changes; 65% Turnover; US$1.7bn Trade
LG Electronics India: IPO Details & Index Entry Timing
CPMC Holdings (906.HK) Update – It’s Time to Prepare for Different Scenarios
REPT BATTERO Energy IPO Lockup – US$1.2bn Lockup Release

NEC Networks (1973 JP) Final Showdown I – Extendy-Extendy, But Not Yet Bumpity Bumpity

Two days before the close of its TOB on subsidiary Nec Networks & System Integr (1973 JP), NEC Corp (6701 JP) announced it had no plans to raise the price.
The next day, the second largest shareholder reported a stake increase from 11.68% to 13.12%. That changes the dynamic further, and a change in terms was likely.
Today post-close, NEC extended the Tender Offer by 10 days. It is worthwhile understanding the likely current disposition of shares.

7&I (3382JP) – Spanners in the Works: FTC Blocks Another US Retail Merger and 7-11 Japan Sales Slump

By Michael Causton

Recent reports suggest an MBO if firming up, with partial sale of US to ACT and even the Japan CVS business so a big value solution for all concerned.
Not so fast: an ACT purchase of 7-11 US looks more likely to be blocked given yesterday’s ruling on the merger of grocery giants Kroger and Albertsons.
The valuation of the Japan business may need a correction too if the last six months of poor numbers continue – given this is because of price perception, they may.

Topcon (7732 JP): Privatisation Auction Underscores Underlying Value

Topcon Corp (7732 JP) shares rose 51% over two days, confirming a Bloomberg report that is conducting a privatisation auction. The process is in the second round of bids.
Exploring the privatisation process is unsurprising, as Topcon has materially underperformed the Nikkei 225 since its last medium-term management term plan was announced on 12 May 2023.
Despite the share price pop, Topcon trades at a discount to median peer multiples. At an offer of JPY3,000, Topcon would trade in line with median peer multiples.

Quiddity Leaderboard HSTECH Mar 25: Two ADDs/DELs Likely but Different Conviction Levels

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
We see two index changes based on the latest available data. However, the reference period is not complete which means our expectations can change over the next few weeks.

Fuji Soft (9749 JP): Bain Can’t Take No for an Answer and Returns with a JPY9,600 Offer

The battle for Fuji Soft Inc. (9749 JP) took an unexpected turn. Bain revised its offer to JPY9,600, a 1.6% premium to KKR’s JPY9,451 second tender offer.
Bain has introduced a minimum number of shares to be purchased criterion. Bain’s offer is structured to address most but not all of the special committee’s reasons for opposition.
The Board’s first reaction will be to ask KKR, its preferred bidder, to bump. Given the amount of time and effort KKR has put into this bid, it will bump.

Nasdaq100 December 2024 Forecast (Final): Palantir’s Last-Minute Entry; Arm’s Subtle Retention

By Dimitris Ioannidis

Palantir Technologies (PLTR US) is anticipated to be the largest addition following its eligibility, which was secured through a listing transfer from NYSE to Nasdaq just before the cut-off date.
Super Micro Computer (SMCI US) is projected to exit the index despite its recent entry in July 2024, as it has ranked above the exit threshold of 125.
ARM Holdings (ARM US) is not an expected deletion due to special ADR market cap treatment. Equinix Inc (EQIX US) is not an expected addition because it is a REIT.

NIFTY200 Momentum30 Index Rebalance: 38 Changes; 65% Turnover; US$1.7bn Trade

There are 19 changes a side for the Nifty200 Momentum30 Index that will be implemented at the close on 30 December. All names are exactly in line with our forecast.
Estimated one-way turnover is 64.9% resulting in a one-way trade of INR 72.7bn (US$857m). There are 18 stocks with over 1x ADV to trade.
The adds have continued to outperform the deletes even after the end of the review period. There could be further upside heading into year-end and implementation of the changes.

LG Electronics India: IPO Details & Index Entry Timing