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In today’s briefing:
- Kito (6409) Shareholder Register Getting Interestinger
- Xiamen Port (3378 HK)’s Pre-Conditional Offer
- KOSPI 200 Official Announcement: Float Rate Changes (11 Up & 5 Down)
- S&P ASX June 2022 Rebalance: ADDs Are Mostly Mining Companies; DELs Are Mostly Tech/Financials
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (2 June 2022)
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (2 June 2022)
- Selected European Holdcos and DLCs: May ‘22 Report
- Shorting Entry Point Coming on Kakao Pay
Kito (6409) Shareholder Register Getting Interestinger
- In mid-May 2022, Kito Corporation (6409 JP) announced KKR would launch a Tender Offer to buy out the company at a big premium. I warned about the register.
- Two large shareholders were there prior to the bid – one “engagement-style” activist and one private company in a similar industry. Both had a 9+% holding visible.
- Both have now lifted their stakes above 10% post-announcement, at a small spread to terms. This makes things more interesting.
Xiamen Port (3378 HK)’s Pre-Conditional Offer
- SOE terminal operator Xiamen International Port (3378 HK) has announced a pre-conditional Offer from Xiamen Port Holding, a Fujian SASAC-controlled entity.
- The Offer price is HK$2.25 per H-share, a 55% premium to last close. The Offer price will NOT be increased. The final dividend will be added to the cancellation price.
- Pre-Conditions include approvals from NDRC, MoC, SAFE, and CSRC. There is no tendering condition. This deal mirrors Guodian Technology (1296 HK), BCL (2868 HK), and Jin Jiang Capital (2006 HK).
KOSPI 200 Official Announcement: Float Rate Changes (11 Up & 5 Down)
- The KRX officially announced the float rate changes of the KOSPI 200 constituents at this June rebalancing: 11 increases and 5 decreases.
- Kakao Bank has the most significant change of 43%p, followed by Krafton and Woori Financial. NH Investment and HD Infracore will suffer a drop of 9%p.
- As for passive flow x ADTV, Kakao Bank leads the pack at 2.95x, followed by Kakao Pay (1.15x). NH Investment and Korea Gas will face a noticeable outflow.
S&P ASX June 2022 Rebalance: ADDs Are Mostly Mining Companies; DELs Are Mostly Tech/Financials
- The index changes for the S&P ASX Index family for the June 2022 Rebalance were announced today.
- There will be 4 Adds and 5 Deletes for the ASX 200 Index, mostly in line with our expectations in S&P/ASX Indices: Quiddity Leaderboard for June 2022 Rebalance 2.0.
- There are also changes announced for ASX 50 and ASX 100. Below is a closer look at the details of the names involved in this Rebalance Event.
Shanghai/Shenzhen Northbound Connect: Weekly Moves (2 June 2022)
- Inside is a recap of movements in the last week relating to the Hong Kong Stock-Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
- Overall, net inflow was ~US$6.1bn, split between Shanghai (+US$3.5bn) and Shenzhen (+US$2.6bn)
- The largest inflows were into Shanghai Putailai (603659 CH) and Satelltte Chemical (002648 CH). The largest outflows were in Anhui Conch Cement (600585 CH) and Guangzhou Tinci Materials (002709 CH).
Shanghai/Shenzhen Southbound Connect: Weekly Moves (2 June 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, net inflow was ~US$0.8bn, split (roughly) US$0.2bn for Shanghai and US$0.6bn Shenzhen.
- The largest inflows were into CNOOC Ltd (883 HK), China Mobile (941 HK), and Kuaishou Technology (1024 HK). The largest outflows were in Tencent (700 HK) and ICBC (1398 HK).
Selected European Holdcos and DLCs: May ‘22 Report
- Discounts to NAV of covered holdcos have all widened during April: Alba, to 39%; GBL to 34.9%; Heineken Holdings to 21%; Industrivärden C to 15.4%; Investor B to 16%;
- Porsche Automobile Holding to 32%. Rio Tinto DLC widened to 13.3%. Spreads tend to widen in bear markets but short term recoveries provide opportunities to bet on tightening discounts.
- Recommended trades: GBL vs. listed assets, Industrivärden C vs. listed assets, Investor B vs. listed assets; Porsche vs. VW (long 1 PAH3 GR/short 0.5136 VOW GR), Rio Tinto (DLC).
Shorting Entry Point Coming on Kakao Pay
- Is Kakao Pay showing an upward trend after hitting bottom? It doesn’t seem to me yet. The NPS is the only buyer who has recently driven the share price up.
- I’d consider betting on the decline in Kakao Pay’s share price once this passive flow is completed. An ideal entry point? I would avoid the June 9 rebalancing trading day.
- However, it is unlikely that this passive flow factor will spill over after June 9. So I’d consider building up a short position from late June 9 towards the close.
Before it’s here, it’s on Smartkarma