Category

Event-Driven

Daily Brief Event-Driven: KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing
  • VCredit (2003 HK): Offer Now Open. IFA Says Not Fair. Not Even Close
  • GJS/Haitong Merger: One Formality Reg To Go
  • [Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way
  • EQD| SPX Volatility During the Trump Years (2017-2020)
  • Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder
  • BBVA’s Bid for Sabadell: A Tough Road Ahead
  • Weekly Update: January 10, 2025
  • A Strategic Pivot: Adani Enterprises Exits Adani Wilmar for $2B
  • Destination XL Group Faces Potential Buyout: Fund 1 Investments Considers Raising Initial $3/Share Offer


KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing

By Sanghyun Park

  • KRX confirmed no immediate changes on KRX Semicon and KRX Autos. The universe will switch from BMI to TMI large and mid-caps, with constituent updates happening in the September rebalancing.
  • TMI rebalances quarterly, while KRX Semicon and Autos rebalance annually in September. KRX confirmed these indices will use the September TMI rebalancing results.
  • TMI rebalances quarterly, likely releasing results before KRX Sector Indices, giving a window to predict shifts in KRX Semicon and Autos stocks and position ahead of the sector rebalancing.

VCredit (2003 HK): Offer Now Open. IFA Says Not Fair. Not Even Close

By David Blennerhassett

  • Back on the 20 December, VCredit Holdings (2003 HK), a provider of consumer financial services in China, announced a unconditional MGO from Ma Ting Hung, VCredit’s chairman. and concert parties.
  • The catch? The Offer Price of HK$1.80/share was a 9.09% discount to undisturbed. It will not be increased. 
  • VCredit’s Composite Doc is now out, with the Offer open for tendering, with a 3rd February first close. The IFA says “not fair and not reasonable. Trading 45% through terms.

GJS/Haitong Merger: One Formality Reg To Go

By David Blennerhassett

  • Back on the 9th October, China’s leading state-backed brokerages Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK) announced a scrip merger, with GJS the surviving entity.
  • Barring a China Traditional Chinese Medicine (570 HK)-like obstacle/debacle, this transaction was a wrap. Fortunately, key regulatory approvals (SAMR and SASAC) have been ticked off.
  • Approval from the Shanghai Stock Exchange was secured overnight. That was a formality. One approval remains – CSRC. Expect that condition to be satisfied shortly. GJS is no longer shortable.

[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way

By Travis Lundy

  • In December, I thought the March 2025 Nikkei 225 Rebalance was going to be 2 ADDs 2 DELETEs and a double-capping for Fast Retailing. 
  • Fast Retailing has fallen sharply vs Nikkei 225, and another stock has announced a large-multiple share split, making it a strong candidate for Nikkei 225 ADDITION in March 2025.
  • There is short-term path risk on all three ADDs, but they are definitely worth watching. Keep an eye out for separate insights on two of these names.

EQD| SPX Volatility During the Trump Years (2017-2020)

By John Ley

  • Common perception is that Trump = Volatility. We look at average monthly historic volatility and returns across 2017-2020 and compare with prior 19 years.
  • Trumps term in office included “Volmageddon”, the Christmas Massacre and Covid but we still find that the returns and historic volatility were not out of line.
  • Although a small sample size, we see a pattern to how historic volatility deviated from the average over his last term in office. 

Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder

By Douglas Kim

  • E Mart’s Chairman Chung Yong-Jin will receive the entire 10% shares of E Mart held by his mum Lee Myung-Hee.
  • After this transaction, Chung Yong-Jin will become the largest shareholder in E Mart with a 28.6% stake in the company.
  • This is likely to positively impact E Mart. In Korea, when the final major ownership stake is transferred, there is often a positive boost to the share price.

BBVA’s Bid for Sabadell: A Tough Road Ahead

By Jesus Rodriguez Aguilar

  • Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.
  • Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.
  • Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer’s likelihood of success.

Weekly Update: January 10, 2025

By Richard Howe

  • Galapagos NV (GLPG), a Belgian biotechnology company, announced on January 8, 2025, its plan to split into two publicly traded entities by mid-2025.
  • Vivendi (VIV), the French media conglomerate, has recently undergone a significant restructuring by spinning off several of its key divisions into independent entities.
  • On December 30, 2024, Lions Gate Entertainment (LGFA/LGFB) filed its latest proxy related to the spin-off of Lionsgate Studios (LION). You can read it here.

A Strategic Pivot: Adani Enterprises Exits Adani Wilmar for $2B

By Nimish Maheshwari

  • Adani Enterprises (ADE IN) exits Adani Wilmar (AWLTD IN), selling its entire 44% stake for over $2 billion, redirecting funds toward core infrastructure ambitions.
  • The exit frees capital for energy, transport, and logistics projects, showcasing Adani’s commitment to strategic resource deployment and robust corporate governance.
  • Adani’s strategic divestment highlights its focus on infrastructure-driven growth, underscoring the potential for shareholder value creation through timely exits from non-core businesses.

Destination XL Group Faces Potential Buyout: Fund 1 Investments Considers Raising Initial $3/Share Offer

By Dalius Tauraitis

  • Destination XL Group received a non-binding $3/share proposal from Fund 1 Investments, holding a 21% stake.
  • Fund 1’s offer values DXLG at 6.1x EBITDA, with potential for a higher bid if additional value is identified.
  • DXLG repurchased 6.6% of shares in Q3 2024 at an average price of $2.80/share, totaling $10 million.

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Daily Brief Event-Driven: 7&I (3382 JP) – Dippity Doo Dah – Irrational Fears and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • 7&I (3382 JP) – Dippity Doo Dah – Irrational Fears, Earnings Vol, But Restructuring Proceeding Apace
  • Haitong Securities (6837 HK)/GTJA (2611 HK) Merger: The Home Stretch
  • Bloks (325 HK): Global Index Inclusion Following IPO Lock-Up Expiry
  • [Quiddity Index Jan25] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible
  • Suntec REIT (SUN SP): Tang’s Curious Bump
  • Fuji Soft (9749 JP): KKR Extends Again, Delaying the Inevitable Bump
  • Quiddity Leaderboard SET50 Jun 25: One Change Possible; Delta on Thin Ice Again
  • IDT 2024 Annual Meeting Summary
  • Shift Up IPO Lockup – US$1.2bn Lockup Release of Strategic, Employees and IPO Investors
  • Brookfield/Neoen: Close to Completion


7&I (3382 JP) – Dippity Doo Dah – Irrational Fears, Earnings Vol, But Restructuring Proceeding Apace

By Travis Lundy

  • Recent news on the Seven & I Holdings (3382 JP) situation includes better-than-expected possible sale of the SST business, a little headline fear-mongering on national security, and earnings.
  • Earnings this year will be volatile vs expectations. Timing (and magnitude) of kitchen-sinking matters. But neither ACT nor you should be buying it based on trough earnings expectations.
  • The call transcript is worth listening to. The math on the takeover maths well. This is a buy on dip. Again. 

Haitong Securities (6837 HK)/GTJA (2611 HK) Merger: The Home Stretch

By Arun George

  • The exchange ratio for the merger between Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) is 0.62x. 
  • The merger closing is subject to several effectiveness and implementation conditions. The latest update suggests that the remaining conditions are CSRC and HKEx approvals.
  • The satisfaction of the remaining conditions is a formality. At the last close and for an end February payment, the gross/annualised spread is 3.2%/26.4%. 

Bloks (325 HK): Global Index Inclusion Following IPO Lock-Up Expiry

By Dimitris Ioannidis

  • Bloks (325 HK)  is expected to be assigned an index nationality of Hong Kong instead of China due to its incorporation in the Cayman Islands.
  • The security is expected to be added at the September 2025 review following the 6-month IPO lock-up expiry which increases the fcap above the APAC threshold.
  • The security is ineligible for the other global index until January 2026 because of the free float being below the minimum threshold of 15%.

[Quiddity Index Jan25] KOSPI 200 Leaderboard Jun25: Up to 6 Changes Possible

By Travis Lundy

  • 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 six ADDs and six DELs for the KOSPI 200 index during this index rebal event based on the latest available data.

Suntec REIT (SUN SP): Tang’s Curious Bump

By David Blennerhassett

  • Back on the 5th December, Gordan Tang (& his wife Celine) acquired a 2.14% stake in Suntec REIT (SUN SP), lifting their stake to 31.45% from 29.31%, triggering a MGO.
  • This had all the hallmarks of a technical Offer. The Offer price was S$1.16/share compared to the S$1.17/share undisturbed price. The IFA opined the Offer was not fair nor reasonable. 
  • The Tangs have now bumped to S$1.19/share. Terms are not final. The IFA viewpoint won’t budge. This is an opportunistic move from the Tangs. But why not roll the dice?

Fuji Soft (9749 JP): KKR Extends Again, Delaying the Inevitable Bump

By Arun George

  • KKR has extended the close date of the Fuji Soft Inc (9749 JP) second tender offer period from 9 to 24 January. All other terms remain unchanged. 
  • KKR unconvincingly tries to criticize the Bain offer and unsurprisingly believes there will not be a tender offer by Bain that investors can tender into. 
  • Despite KKR’s gamesmanship, it has not declared its offer final. A bump remains necessary as Bain remains resolute in launching its offer. The final winning offer could be around JPY10,000. 

Quiddity Leaderboard SET50 Jun 25: One Change Possible; Delta on Thin Ice Again

By Janaghan Jeyakumar, CFA

  • The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
  • In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in June 2025.
  • Currently, we see one expected change, but since the market cap reference period is yet to start, the rankings can fluctuate significantly before the base date.

IDT 2024 Annual Meeting Summary

By Richard Howe

  • An accelerated return of capital looks unavoidable. IDT has a net cash balance sheet yet generates substantial cash every quarter.
  • Traditional business is “adding” ice. Investors (including me) view the traditional telecom business as a “melting ice cube,” but IDT’s CFO says the business might start “adding ice.” Key areas of strength include IDT Digital and Mobile Top Up.
  • Spin-offs aren’t imminent. NRS is performing incredibly well, but IDT’s CEO doesn’t see a spin-off happening until the business is generating $100MM of EBITDA.

Shift Up IPO Lockup – US$1.2bn Lockup Release of Strategic, Employees and IPO Investors

By Sumeet Singh

  • Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top. Around US$1.2bn worth of shares will be released from their lockup soon.
  • Shift Up is a South Korean games developer, which as released three games so far for the global markets.
  • In this note, we will talk about the lockup dynamics and possible placement.

Brookfield/Neoen: Close to Completion

By Jesus Rodriguez Aguilar

  • Brookfield acquired a 53.12% stake in Neoen for €39.85/share, triggering a mandatory tender offer for remaining shares and bonds, aiming for a squeeze-out and delisting Neoen.
  • Regulatory approvals were secured from the EU, France, the US, and Australia, addressing antitrust, foreign investment laws, and energy security concerns.
  • My PT remains €39.85, in line with the price offered by Brookfield and its partners, which I believe is fair. Completion is expected in Q1 2025. Gross spread is 0.33%.Tender.

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Daily Brief Event-Driven: PA Gooddoctor (1833 HK)’s Unconditional MGO and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • PA Gooddoctor (1833 HK)’s Unconditional MGO
  • GAPack (468 HK): Additional Thoughts On Mengniu Selling
  • EQD | Tencent (700 HK) Option Strategy for Navigating a Volatile Market
  • The Unexpected Passive Trade from the LG CNS IPO: Short LG Corp
  • TOPIX Inclusions: Who Is Ready (Jan 2025)
  • Southeast Asia: The Passive Axe Hangs as Positioning Increases
  • Smart Share Global (EM US): Trustar Capital-Sponsored MBO’s US$1.25 Per ADS Non-Binding Offer
  • Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Up to 5 Changes in March
  • Rio Tinto/Arcadium: Home Straight After CFIUS Nod
  • Nippon Steel/US Steel: Deal Blocked but Offering Robust Standalone Value


PA Gooddoctor (1833 HK)’s Unconditional MGO

By David Blennerhassett

  • Back on the 14th November, Ping An Healthcare and Technology (1833 HK) (PA Gooddoctor announced a change in use of proceeds, including the payment of a punchy HK$9.70/share special dividend.
  • A scrip option was concurrently afforded. The results of that scrip election have now been announced, the completion of which, triggers an unconditional MGO from Ping An Insurance  (601318 CH).
  • The MGO price is HK$6.12/share, a price made public last month. For those investors trading the event and who bought PA Gooddoctor cum dividend, it has worked out well.

GAPack (468 HK): Additional Thoughts On Mengniu Selling

By David Blennerhassett

  • Following on from the surprise development that China Mengniu Dairy (2319 HK) had reduced its stake below 5%, I’ve had a few readers asking about hypothetical situations regarding its stake.
  • IF Mengniu is a seller, can’t Mengniu simply sell its entire stake to Shandong Xinjufeng Technology Packaging (301296 CH) (XJF)? Can Mengniu sell to XJF above the Offer Price?
  • Both questions are addressed in the Takeovers Code. But only one is permitted.

EQD | Tencent (700 HK) Option Strategy for Navigating a Volatile Market

By Gaudenz Schneider

  • Tencent (700 HK) shares fell 7.3% on 7 January, after being designated a Chinese Military Company by the U.S. Department of Defense, prompting volatility to spike.
  • Given the potential for further downside, or a relief rally, significant price movements and high volatility are to be expected.
  • A long straddle is detailed to capitalize on the anticipated volatility in Tencent (700 HK) .

The Unexpected Passive Trade from the LG CNS IPO: Short LG Corp

By Sanghyun Park

  • I’m focusing on the price action of LG Corp when LG CNS enters the KOSPI 200 IT sector, causing LG Corp to be removed from the index.
  • With LG Corp’s 6% weight, its removal could trigger ETF rebalancing (TIGER), leading to an outflow exceeding twice the usual daily trading volume.
  • If LG CNS misses Fast Entry, it’ll enter in December, not June. We’ll time our short position on LG Corp to align with passive outflows during that window.

TOPIX Inclusions: Who Is Ready (Jan 2025)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • Japan Eyewear Holdings (5889 JP) continues to be our top pre-event pick for TOPIX Inclusion.
  • Core Concept Technologies Inc (4371 JP) is another potential TOPIX Inclusion candidate but it is quite far away from being satisfy the main Section Transfer requirements.

Southeast Asia: The Passive Axe Hangs as Positioning Increases

By Brian Freitas

  • There are 8 stocks listed in Indonesia, Malaysia, Thailand and Philippines that could be deleted from passive portfolios in February.
  • There is a fair bit to sell in the stocks with over US$50m flow and between 3.5-64x ADV. Positioning is not very high in a lot of the stocks.
  • Stocks could avoid deletion if they move higher in the next week or two. But increased positioning could keep a lid on that.

Smart Share Global (EM US): Trustar Capital-Sponsored MBO’s US$1.25 Per ADS Non-Binding Offer

By Arun George

  • On 6 January, Smart Share Global (EM US) disclosed a non-binding proposal from a Trustar Capital-sponsored MBO at US$1.25 per ADS, a 74.8% premium to the undisturbed price of US$0.72.
  • The offer is unattractive to the IPO price (US$8.50), average sell-side price targets (US$1.87) and historical trading ranges. 
  • Despite the light offer, the shareholder vote is done (two-thirds voting threshold) as the buyer consortium represents 64.0% of the voting power. A binding proposal will be forthcoming.  

Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Up to 5 Changes in March

By Brian Freitas

  • The review cutoff date for the March rebalance of the HSIII was 31 December. The changes will be announced on 21 February and become effective after the close 7 March.
  • There could be 5 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.
  • Horizon Robotics (9660 HK) is a potential inclusion to the HSCI and the Hang Seng TECH Index (HSTECH INDEX) in March.

Rio Tinto/Arcadium: Home Straight After CFIUS Nod

By David Blennerhassett

  • Arcadium Lithium (LTM AU)‘s spread to Rio Tinto Ltd (RIO AU)‘s terms steadily increased subsequent to the US elections, ostensibly over Trump (Musk?) bluster, blowing out to 21% before Xmas.
  • Overnight, the transaction received the go ahead from CFIUS. Shares popped ~8.2% on the news. The transaction remains subject to investment screening approvals in Australia, Canada and Italy. 
  • Unlike Greenland and the Panama Canal, the takeover of Arcadium should complete “before mid-2025”; possibly this quarter.

Nippon Steel/US Steel: Deal Blocked but Offering Robust Standalone Value

By Jesus Rodriguez Aguilar

  • Nippon Steel’s $14.9 billion acquisition bid for U.S. Steel, announced in December 2023, faced regulatory resistance and was blocked by the Biden administration over national security concerns.
  • U.S. Steel’s Big River Steel 2 expansion will double capacity to 6.3 million tons by 2026, contributing over 50% of EBITDA and supporting enhanced free cash flow generation.
  • Despite the failed merger, U.S. Steel’s intrinsic value, supported by a $39.75 fair value estimate, easing capex, and reshoring tailwinds, offers a ~19% upside from the $33.30 closing price.

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Daily Brief Event-Driven: Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet
  • Shinko Electric (6967 JP) – SAMR Approved, Trading Tight, Done Deal
  • WH Group (288 HK): Smithfield’s IPO Doc Now Out
  • GAPack (468 HK): IFA Says “Reject”. But Mengniu Selling Down
  • Sigma Healthcare (SIG AU): Index Inclusions & Upweights Increase Passive Buying to A$2.7bn
  • Henlius (2696 HK): Anxiety Creeping Back Ahead of the 22 January Vote
  • US Defense Dept Designates Tencent and CATL as Military Companies – Impact on Korean Competitors
  • Jiangsu Hengrui Pharma (600276 CH): Index Inclusion Post H-Share Listing
  • LUNA Faces Nasdaq Delisting Amid Financial Restatement Delays and Strategic Review for Potential Sale
  • EQD | S&P 500 (SPX Index) – An Options Strategy for 2025


Tencent (700 HK): DoD Says Chinese Military Company; Not on NS-CMIC List Yet

By Brian Freitas

  • The U.S. Department of Defense has designated Tencent (700 HK) as a Chinese Military Company. Tencent Holdings (ADR) (TCEHY US) shares were down nearly 8% overnight.
  • There is no change to the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC) yet. But the overlap between the DoD list and the NS-CMIC list is high.
  • If added to the NS-CMIC list, Tencent (700 HK) will be deleted from global indexes and there will be HUGE passive selling from these trackers.

Shinko Electric (6967 JP) – SAMR Approved, Trading Tight, Done Deal

By Travis Lundy

  • Overnight, we got news that the JIC Consortium Deal for Shinko Electric Industries (6967 JP) was approved 27Dec2024. That was the last approval required (other than TSE TOB Launch approval).
  • This is “on schedule” or slightly early from the previously-announced expected launch date.
  • This morning, the stock is up sharply and is trading <0.75% from terms. Expect an announcement within two weeks. Current arb annualised at high 6% is OK. One could hold.

WH Group (288 HK): Smithfield’s IPO Doc Now Out

By David Blennerhassett

  • On 17 November 2024, WH Group (288 HK)  announced an EGM to approve the spin-off and separately list subsidiary Smithfield Foods on the NYSE or NASDAQ. 
  • WHG, the world’s largest pork producer, announced on the 6th December the spin-off overwhelmingly gained shareholder approval. 
  • Yesterday, the Smithfield NASDAQ IPO doc was made public. As per the filing: “the number and dollar amount of Smithfield Shares to be offered and sold have not been determined“.

GAPack (468 HK): IFA Says “Reject”. But Mengniu Selling Down

By David Blennerhassett

  • Quite a lot of new news to digest – GAPack (468 HK)‘s IFA, not altogether surprisingly, concluded that shareholders should not accept the Offer – in bold, red caps. 
  • But more surprisingly, is the disclosure announcement that China Mengniu Dairy Co (2319 HK) has reduced its stake below 5%.  
  • Evidently Mengniu is keeping its options open to tender – or not – and not have to make public disclosures. Keep an eye out on CCASS movements.

Sigma Healthcare (SIG AU): Index Inclusions & Upweights Increase Passive Buying to A$2.7bn

By Brian Freitas

  • SigmaHealthcare and ChemistWarehouse shareholders meet on 29 January. If the merger resolutions are approved, Second Court Hearing is on 3 February and the merger will be effective on 4 February.
  • Upward migration in one large global index could take place on 13 February while upweights and upward migrations in the S&P/ASX indices should be at the close on 21 March.
  • Upward migration in the other global index could take place in March or June. Total passive buying estimate is A$2.76bn. This will be offset by positioning and CWG shareholders selling.

Henlius (2696 HK): Anxiety Creeping Back Ahead of the 22 January Vote

By Arun George

  • The vote on Fosun Pharma’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) is on 22 January. The gross spread widened after the initial tightening due to the precondition satisfaction.
  • Several readers have enquired about my thoughts on the widening spread. Our conversations have raised several potential concerns that could explain it.
  • I think these concerns are unwarranted, and the vote should pass. At the last close and for a 15 February payment, the gross/annualised spread is 4.7%/55.0%.

US Defense Dept Designates Tencent and CATL as Military Companies – Impact on Korean Competitors

By Douglas Kim

  • The U.S. Department of Defense announced that it has added numerous Chinese companies including Tencent and CATL as companies that work with China’s military.
  • This is likely to negatively impact Tencent and CATL’s prices in the next several weeks but positively impact on some of the major Korean rechargeable battery and gaming stocks.
  • The higher probability scenario at this point is for Tencent and CATL to be officially included in the Chinese Military Industrial Complex list in the coming weeks. 

Jiangsu Hengrui Pharma (600276 CH): Index Inclusion Post H-Share Listing

By Brian Freitas


LUNA Faces Nasdaq Delisting Amid Financial Restatement Delays and Strategic Review for Potential Sale

By Dalius Tauraitis

  • LUNA stock faced a 57% decline due to Nasdaq delisting notice, with trading volume 25 times the average.
  • White Hat Capital Partners invested $50m in December 2023 and increased the loan facility to $30m in October 2024.
  • Luna Innovations specializes in fiber optic sensing solutions, with notable contracts in aerospace, automotive, and oil & gas industries.

EQD | S&P 500 (SPX Index) – An Options Strategy for 2025

By Gaudenz Schneider

  • The Insight presents two S&P 500 INDEX (SPX INDEX) options strategies for 2025. Call overwriting can generate premium income and potentially enhance returns in a choppy but mildly positive market.
  • The second strategy is a Risk Reversal, using the proceeds from a short call to buy a protective put option, providing downside protection while still allowing for some upside potential.
  • Both strategies are designed to align with the expected market conditions, considering factors such as inflation, economic growth, and market volatility.

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Daily Brief Event-Driven: Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal. and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.
  • Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer
  • Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene
  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Lots of Change; Could Be More with Sigma/CWG Merger
  • GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down
  • HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025
  • EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades
  • Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way
  • Insignia Financial (IFL AU): CC Capital’s Non-Binding Offer Could Spark a Bidding War
  • EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity


Fujitsu General (6755) – Long Sale Process Finally Over. Unexciting but Uncomplicated Deal.

By Travis Lundy

  • In December 2019, an article in slightly odd Japanese business magazine Sentaku (選択) suggested Fujitsu Ltd (6702 JP) would imminently seek to address dual listings of subs.
  • Some subs went early. The auction for Fujitsu General (6755 JP) started spring 2023, failed, started again, failed again, and the shares languished. 
  • Two years later we have a deal. Large privately-held company Paloma-Rheem Holdings is the buyer in a split-price deal which comes at a decent but not exorbitant premium.

Fujitsu General (6755 JP): Fujitsu (6702 JP) Supports a Light Tender Offer

By Arun George

  • Fujitsu General (6755 JP) announced a preconditional tender offer from Paloma Rheem Holdings Co at JPY2,808 per share, a 23.5% premium to the last close.
  • The offer, which is preconditional on regulatory approvals and will open in early July, is attractive compared to historical trading ranges and peer multiples.
  • The process is lacking as Fujitsu declined to conduct an auction. The offer is below the midpoint of the IFA DCF valuation range, and the Board requested price.

Korea Short Selling Comeback: How Pre-Registering Accounts Will Affect the Trading Scene

By Sanghyun Park

  • KRX and FSS confirmed the NSDS is ready and account registration numbers will be issued, confirming short selling will resume on April 1st, despite no official FSC statement yet.
  • Today’s buzz is about pre-registration for short selling, with FSS tracking accounts down to individual desks. This could limit short-selling flexibility, despite addressing the overseas lending issue.
  • Exposing too much info on short-selling accounts could shrink securities lending participants, causing supply-demand imbalances, spiking borrowing fees, and creating unique trading opportunities early on.

S&P/​​​​​​​​​ASX Index Rebalance Preview: Lots of Change; Could Be More with Sigma/CWG Merger

By Brian Freitas

  • Nearing the end of the review period, there could be 36 adds/deletes across the S&P/ASX family of indices in March.
  • Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
  • Completion of the merger with Chemist Warehouse in February will set off huge passive buying in Sigma Healthcare (SIG AU) over the February to June period.

GA Pack (468 HK): Shandong Xinjufeng’s Offer Gets a Boost as Mengniu Sells Down

By Arun George


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

By Brian Freitas

  • We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
  • There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
  • 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.

EQD | Meituan (3690 HK) In the Bear’s Grip – Popular Option Strategies and Top Trades

By Gaudenz Schneider

  • This Insight analyses Meituan (3690 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
  • The vast majority of traders opt for bearish strategies, but there are examples of contrarian trades.
  • Although one-month implied volatility is historically low in its 7th percentile, it is above realized volatility. With an implied just below 40%, option premiums are significant in absolute terms.

Quiddity Leaderboard HSTECH Mar 25: One High-Conviction Change; US$475mn One-Way

By Janaghan Jeyakumar, CFA

  • 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 final rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
  • We expect one change for the HSTECH index in March 2025 and combined with capping flows currently see US$475mn one-way flows.

Insignia Financial (IFL AU): CC Capital’s Non-Binding Offer Could Spark a Bidding War

By Arun George

  • Insignia Financial (IFL AU) disclosed a non-binding privatisation offer from CC Capital at A$4.30, a 7.5% premium to the rejected Bain non-binding proposal of A$4.00.
  • While the offer is attractive compared to historical trading ranges, it is light compared to peer and precedent transaction multiples. 
  • The presence of several substantial shareholders necessitates an attractive takeover premium. To facilitate better terms, the board should provide due diligence access. 

EQD | Tencent (700 HK) – Popular Option Strategies and Top Trades, Low Vola Presents Opportunity

By Gaudenz Schneider

  • This Insight analyzes Tencent (700 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility insights are provided.
  • Historically low implied volatility favors bullish or bearish long volatility strategies.
  • Calendar Spreads are a popular strategy. Bulls and bears are both very active in the market, expressing their views through trades.

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Daily Brief Event-Driven: Merger Arb Mondays (06 Jan) – Vesync and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Merger Arb Mondays (06 Jan) – Vesync, Canvest, Get Nice, Fosun Tourism, GAPack, HKBN, Seven & I
  • Weekly Deals Digest (05 Jan) – Canvest, Get Nice, CPMC, GAPack, Macromill, ACJennings, LG CNS
  • HSTECH Index Rebalance Preview: One Constituent Change & US$884m Trade
  • LQ45 Index Rebalance Preview (Jan 2025): Identifying Potential Index Changes
  • HK Connect SOUTHBOUND Flows (To 3 Jan 2025); SB Buys InfoTech, Financials, Energy, Telecoms
  • Insignia Financial (IFL AU): CC Capital Wades In With A $4.30/Share NBIO
  • NIFTY50 Index Rebalance Preview: Yuuge Flow & Impact; Positioning Mixed
  • Hang Seng (HSI Index) – This Butterfly Gives You Wings: Popular Option Strategies and Top Trades
  • EQD / NSE NIFTY50 Vol Update / High & Down Vol State Confirmed. Greenlight for Selling Smile/ Vega.
  • Selected European HoldCos and DLC: 2024 Report


Merger Arb Mondays (06 Jan) – Vesync, Canvest, Get Nice, Fosun Tourism, GAPack, HKBN, Seven & I

By Arun George


Weekly Deals Digest (05 Jan) – Canvest, Get Nice, CPMC, GAPack, Macromill, ACJennings, LG CNS

By Arun George


HSTECH Index Rebalance Preview: One Constituent Change & US$884m Trade

By Brian Freitas

  • The review period for the March rebalance of the Hang Seng TECH Index (HSTECH INDEX) ended on 31 December.
  • There could be one constituent change in March. With capping changes, that could lead to a one-way turnover of 2.6% resulting in a round-trip trade of HK$6.88bn (US$884m).
  • Horizon Robotics (9660 HK) is also a potential inclusion to the HSCI Index in March, though inclusion in Southbound Stock Connect will only come through in May.

LQ45 Index Rebalance Preview (Jan 2025): Identifying Potential Index Changes

By Brian Freitas

  • The review period for the LQ45 Index January rebalance ended 31 December. The changes should be announced the last week of January, becoming effective after the close on 31 January.
  • We highlight 4 potential inclusions and 4 potential exclusions for the index at the rebalance. The actual number of changes could be lower at 2-3 a side.
  • Nearly all stocks will have over 1x ADV to trade from passive trackers if they are added to or deleted from the index.

HK Connect SOUTHBOUND Flows (To 3 Jan 2025); SB Buys InfoTech, Financials, Energy, Telecoms

By Travis Lundy

  • SOUTHBOUND gross trading activity was quite light the last two weeks of the year. Non-SB trading of HK was even lighter. Net buying was strong.
  • Net buying on tech was VERY big but not on Alibaba Group Holding (BABA US) (small positive) or Meituan (3690 HK) (largest outflow). 
  • Financials and High Div SOEs are back on the menu. SOUTHBOUND has been a Very Big Percentage of traded volume. 

Insignia Financial (IFL AU): CC Capital Wades In With A $4.30/Share NBIO

By David Blennerhassett

  • Last month, wealth manager Insignia Financial (IFL AU)  announced – and subsequently rejected – a A$4.00/share non-binding and indicative proposal from PE outfit Bain Capital.
  • The question was whether Bain returned to the well, in a space where Regal (RPL AU) recently binned its Platinum (PTM AU) tie-in; and Perpetual (PPT AU)‘s carve-out has hit a snag. 
  • Roughly two weeks after that Bain rejection, US-based asset investment manager CC Capital Partners has now tabled a A$4.30/share, in cash, non-binding Offer. That’s probably enough for Insignia to engage. 

NIFTY50 Index Rebalance Preview: Yuuge Flow & Impact; Positioning Mixed

By Brian Freitas


Hang Seng (HSI Index) – This Butterfly Gives You Wings: Popular Option Strategies and Top Trades

By Gaudenz Schneider

  • This Insight analyzes Hang Seng Index (HSI INDEX) tailor-made option strategies over the last five trading days, providing strategy analysis, trends, highlights, and volatility context.
  • Despite the holidays and generally low volume, last week saw some interesting strategies traded.
  • The highest premium earned was for a January ’25 Butterfly. The largest trade was a January ’25 Bull Call Spread, reflecting the popularity of long volatility strategies and spreads.

EQD / NSE NIFTY50 Vol Update / High & Down Vol State Confirmed. Greenlight for Selling Smile/ Vega.

By Sankalp Singh

  • IVs higher alongside the underlying index. Weekly expiry (02.01.2025) served as the inflection point sending IVs back down. Monthly IVs: 12.7% (Open) -> 14.4% (02.01.2025) -> 13.3% (Close).
  • Vol Term-structure swung between Contango & Backwardation around expiry date. Skew in Monthly contracts compressed as IVs moved higher. Smile unchanged. 
  • Trading Strategy Implications: Reengage Smile/ Vega harvesting structures. Abandon wait-and-watch stance – “High & Down” vol state confirmed. 

Selected European HoldCos and DLC: 2024 Report

By Jesus Rodriguez Aguilar

  • Discounts to NAV of covered holdcos mainly tightened during 2024. Discounts to NAV: C.F.Alba, 11.8% (vs. 50.8% as of Y/E 2023); GBL, 40.9% (vs. 37.4%); Heineken Holding, 15.8% (vs. 16.7%);
  • Industrivärden C, 5.5% (vs. 5.5%); Investor B, 4.5% (vs. 12.8%); Porsche Automobile Holding, 32.2% (vs. 36.6%). Rio DLC spread tightened to 23% (vs. 24.2%).
  • What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).

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Daily Brief Event-Driven: Quiddity Leaderboard ASX Mar 25: Several Changes Likely; Major Inflows for Sigma Healthcare and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Quiddity Leaderboard ASX Mar 25: Several Changes Likely; Major Inflows for Sigma Healthcare
  • Get Nice Financial (1469 HK): Attractive Spread Ahead of Get Nice Holdings (64 HK)’s EGM Vote
  • 2025 Essential Calendar for Option Traders in Asia: Key Dates & Insights
  • Quiddity Leaderboard TDIV Mar 25: US$208mn Capping Flows One-Way; New Trade Idea
  • (Mostly) Asia-Pac M&A: Sun Art Retail, AVJennings, Shandong Hi-Speed New Energy, Boqi, Get Nice
  • Quiddity Leaderboard T50/​​​100 Mar 25: Tung Ho Steel TDIV Deletion Very Close
  • Last Week in Event SPACE: Tsuruha/Welcia, GAPack, Canvest, HKBN


Quiddity Leaderboard ASX Mar 25: Several Changes Likely; Major Inflows for Sigma Healthcare

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2025 index rebal event.
  • We expect two changes for ASX 50, one change for ASX 100, and seven changes for ASX 200. Separately we see 10 ADDs and 8 DELs for ASX 300.
  • Sigma Healthcare (SIG AU) is likely to experience major index inflows in March 2025 if the merger completes as planned.

Get Nice Financial (1469 HK): Attractive Spread Ahead of Get Nice Holdings (64 HK)’s EGM Vote

By Arun George

  • The Get Nice Financial Group Ltd (1469 HK)/GNF offer is conditional on the approval by GNH/GNF shareholders. Get Nice Holdings (64 HK)/GNH’s shareholder vote is on 22 January. 
  • The GNH vote will comfortably pass as Mr Hung, the controlling shareholder, represents 66.11% of outstanding shares, just shy of the 66.67% required voting threshold.   
  • The implied offer value has declined by 10%, broadly in line with the median decline in peer share prices. Therefore, the scheme vote remains low-risk. 

2025 Essential Calendar for Option Traders in Asia: Key Dates & Insights

By Gaudenz Schneider

  • Timing expiration, assessing volatility, and managing event risk are crucial for effective option trades.
  • Exchange holidays, expiries, central bank rate decisions, and index changes can significantly impact volatility and market direction.
  • The attached document provides key dates to help navigate the complexities of option trading in Australia, Hong Kong, India, Japan, South Korea, and the USA.

Quiddity Leaderboard TDIV Mar 25: US$208mn Capping Flows One-Way; New Trade Idea

By Janaghan Jeyakumar, CFA

  • The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
  • In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the March 2025 index rebal event.
  • Currently, we expect no deletions (but one is pretty close) and we estimate the one-way capping flow to be US$208mn.

(Mostly) Asia-Pac M&A: Sun Art Retail, AVJennings, Shandong Hi-Speed New Energy, Boqi, Get Nice

By David Blennerhassett


Quiddity Leaderboard T50/​​​100 Mar 25: Tung Ho Steel TDIV Deletion Very Close

By Janaghan Jeyakumar, CFA

  • The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
  • In this insight, we take a look at the potential ADDs and DELs for the March 2025 index rebal event.
  • Currently, we see one change for T50 and one change for T100 but there are two more months to the base date and our expectations may change before then.

Last Week in Event SPACE: Tsuruha/Welcia, GAPack, Canvest, HKBN

By David Blennerhassett

  • Tsuruha (3391 JP) and Welcia (3141 JP) may merge quicker than expected. Meaning a one-year “guess the price” ratio. Expect Tsuruha to gain against Welcia from here.
  • PUSUs exist in Hong Kong. In its bid for GAPack (468 HK), XJF should sound out the SFC to put Bi/Hong on notice. 
  • Canvest Environmental (1381 HK) effectively ticks off another pre-con. This transaction continues to trade too wide to terms. 

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Daily Brief Event-Driven: Bossini (592 HK): 10th Feb Scheme Vote and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Bossini (592 HK): 10th Feb Scheme Vote
  • Get Nice Financial (1469 HK): EGM Set For Get Nice (64 HK)’s Scrip Offer
  • Samsung Group ETF Rebalancing Event to Watch for in June
  • SSI’s 2024 Review: Portfolio Underperformance, Event-Driven Strategies, and Lessons from Losses


Bossini (592 HK): 10th Feb Scheme Vote

By David Blennerhassett

  • On the 16th October, Li Ning-backed Viva Goods (933 HK)  announced a scrip Offer, by way of a Scheme, for 62.91%-held Bossini International Holdings (592 HK), a casual apparel play.
  • One new Viva share for five Bossini shares backed an implied scrip price of HK$0.108/share, a 12.2% discount to undisturbed. 
  • Bossini’s Scheme Doc is now out, with a Court Meeting on the 10th February, and expected  settlement on the 24th March. The IFA says “fair and reasonable”. 

Get Nice Financial (1469 HK): EGM Set For Get Nice (64 HK)’s Scrip Offer

By David Blennerhassett

  • On the 5th November, Get Nice Holdings (64 HK) (GNH) announced a scrip Offer, by way of a Scheme, for 72.99%-held Get Nice Financial Group Ltd (1469 HK) (GNF).
  • With an implied scrip price & divvy of HK$1.116/share, against a book value of HK1.736/share – and net cash of ~HK$1.00/share – this is probably being down too cheaply.
  • GNH’s Circular is now out, with an EGM to be held on the 22nd Jan. GNF’s Scheme Doc is expected to be dispatched one or before the 10th Feb. 

Samsung Group ETF Rebalancing Event to Watch for in June

By Sanghyun Park

  • With Samsung finalizing the call option on Rainbow Robotics in February, the FTC will add it to Samsung Group in March, ensuring its inclusion in the ETF by June.
  • With the market cap boost from the call option, Rainbow Robotics is set to easily exceed 2% weight in the ETF by June.
  • The rebalancing from June 2-9 will direct 30% of daily volume into Rainbow Robotics, likely enough to move the needle on price action, especially on the first day.

SSI’s 2024 Review: Portfolio Underperformance, Event-Driven Strategies, and Lessons from Losses

By Dalius Tauraitis

  • SSI’s Tracking Portfolio ended 2024 with a -1% return, hindered by cash holdings and significant losses in MSTR, BHIL, and BOOM.
  • SSI shared 85 investment ideas in 2024, including 14 Portfolio Ideas, 69 Quick Pitches, and 2 “Why I’m Not Involved” overviews.
  • Portfolio Ideas suffered losses over 50% due to ignored red flags, while Quick Pitches had a 60% win rate.

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Daily Brief Event-Driven: Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38 and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
  • Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction
  • NZ: Contact Energy (CEN NZ) Hotter Than Mercury (MCY NZ) As Catalyst Looms
  • EQD | KOSPI 200 Index – Buy January Straddle


Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38

By David Blennerhassett

  • HK$1.38/Share. That’s the takeaway as Alibaba Group (9988 HK) enters an SPA to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
  • The buyer, Paragon Shine, an entity under Chinese PE outfit DCP Capital, is paying ~HK$12.3bn compared to BABA’s HK$28.1bn purchase of a 51% stake in October 2020.
  • Should the SPA complete, an unconditional MGO is triggered. Minorities tendering can receive up to HK$1.58/share. But the question is: why would BABA be cashing out at this price?

Canvest (1381 HK): Attractive Spread with Steady Progress in Precondition Satisfaction

By Arun George

  • Grandblue Environment Co A (600323 CH) continues to make steady progress in satisfying the precondition for its HK$4.90 privatisation offer for Canvest Environmental Protection Group (1381 HK)
  • Two of the five preconditions are satisfied, and another will be satisfied by 20 January. The long stop date of 17 July provides ample time to satisfy the remaining two. 
  • Although the peers have materially re-rated, the offer implies a premium compared to peer multiples. Vote risk remains low, aided by selling by a shareholder with a blocking stake. 

NZ: Contact Energy (CEN NZ) Hotter Than Mercury (MCY NZ) As Catalyst Looms

By Brian Freitas


EQD | KOSPI 200 Index – Buy January Straddle

By John Ley

  • The implied move for January is less than what has been historically experienced. Sixteen of the last 26 years have had price movement > current implied move.
  • January punches above its weight in terms of both historic volatility (most volatile month) and the amount of price movement relative to that historic volatility.
  • Trades at the current implied move historically would have been winners 61.5% of the time with the average winner being more than double the average loser. 

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Daily Brief Event-Driven: ITC Hotels: Index Implications of Demerger from ITC Ltd (ITC IN) and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • ITC Hotels: Index Implications of Demerger from ITC Ltd (ITC IN)
  • Australia: Six Stocks in Passive Selling Crosshairs for February
  • ITC Hotels Demerger: Listing Anticipation and Index Implications
  • HSCEI Index Rebalance Preview: Increase in Velocity Could Lead to 3 Changes in March
  • Macromill (3978 JP): CVC Bumping Its Offer Is Inevitable
  • Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
  • (Mostly) Asia M&A, Dec 2024: De Grey, Insignia, ESR Group, Fosun Tourism, HKBN, Pentamaster, Beenos
  • ITC Hotels Demerger: An Emerging Behemoth & Hospitality Play
  • Quiddity JPX-Nikkei 400 Rebal 2025: End-Dec 2024 Ranks


ITC Hotels: Index Implications of Demerger from ITC Ltd (ITC IN)

By Brian Freitas

  • ITC Ltd (ITC IN) will demerge its Hotels business with the ex-date set as 6 January and shareholders receiving 1 share of ITC Hotels for 10 shares of ITC Ltd.
  • ITC Ltd (ITC IN) shareholders will own 100% of ITC Hotels – 60% will be owned directly and 40% will be owned through their shareholding in ITC Ltd (ITC IN).
  • There will be a lot of selling in ITC Hotels within a few days of listing from different passive index trackers and that could provide buying opportunities for those interested.

Australia: Six Stocks in Passive Selling Crosshairs for February

By Brian Freitas

  • Up to six Aussie stocks could be deleted from global passive portfolios in February. The final list of deletions depends on stock performance over the next 2-3 weeks.
  • If deleted, passive trackers will need to sell between A$370m-A$500m in the stocks. Impact is high at between 7-24 days of ADV.
  • The potential deletions have underperformed the S&P/ASX 200 (AS51 INDEX) over every time period from 1 week to 3 months. Positioning is still low in a few stocks.

ITC Hotels Demerger: Listing Anticipation and Index Implications

By Nimish Maheshwari


HSCEI Index Rebalance Preview: Increase in Velocity Could Lead to 3 Changes in March

By Brian Freitas


Macromill (3978 JP): CVC Bumping Its Offer Is Inevitable

By Arun George

  • On 26 December, CVC extended its Macromill, Inc. (3978 JP) offer period by 10 business days to 17 January. The offer price remained unchanged, but it was not declared final.
  • The extension is unsurprising as the shares have traded above terms for 30 out of 32 trading days. The emergence of Oasis as the largest shareholder is an added complication. 
  • Lowering the minimum acceptance condition is not a viable option. A bump is increasingly likely. Trading patterns suggest a minimum required revised offer of around JPY1,200.

Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38

By David Blennerhassett

  • HK$1.38/Share. That’s the key takeaway as Alibaba Group (9988 HK)  enters an SPA to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 14.13% discount to undisturbed. 
  • The buyer, Paragon Shine, an entity under Chinese PE outfit DCP Capital, is paying ~HK$12.3bn compared to BABA’s HK$28.1bn purchase of a 51% stake in October 2020. 
  • Should the SPA complete, an unconditional MGO is triggered.  But the question is: why would BABA be cashing out at this price? 

(Mostly) Asia M&A, Dec 2024: De Grey, Insignia, ESR Group, Fosun Tourism, HKBN, Pentamaster, Beenos

By David Blennerhassett

  • For the month of December 2024, 13 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$16bn.
  • The average premium for the new transactions announced (or first discussed) in December was ~46%. The average premium in 2024 was ~43%.
  • 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.

ITC Hotels Demerger: An Emerging Behemoth & Hospitality Play

By Nimish Maheshwari

  • ITC Ltd (ITC IN) Hotels demerger aims to unlock the intrinsic value of the hotels business and enable a sharper focus on growth.
  • ITC Hotels is aiming to reach a portfolio of 200+ hotels with 18,000+ keys by 2030 from a robust pipeline of 140 Hotels with about 13000 Keys in 2024.
  • ITC Hotels inheriting a strong balance sheet with zero debt and cash reserves may list around 113-170 per share.

Quiddity JPX-Nikkei 400 Rebal 2025: End-Dec 2024 Ranks

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
  • The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
  • Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-December 2024.

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