Event-Driven

The FTSE EPRA Nareit Index June rebalance will use data from 23 May. The changes will be announced on 1 June and implemented at the close on 17 June.
Potential inclusions at the review include Ichigo Inc (2337 JP) and LOTTE Reit Co Ltd (330590 KS) while there is a possibility of Digital Core REIT (DCREIT SP) being added.
Mapletree North Asia Commercial Trust‘s NPI from Developed Markets is 72% making it ineligible for index inclusion, while Frasers Hospitality Trust‘s drop has taken it out of the inclusion list.

Tabcorp Spinoff (TLC/TAH) & S&P/ASX: Where They Stay and Where They Go

The Lottery Corp (TLC AU) and new Tabcorp Ltd (TAH AU) have commenced trading today as standalone entities following their demerger.
We expect Tabcorp Ltd (TAH AU) to be deleted from the S&P/ASX50 and S&P/ASX100 indices at the June rebalance, while it would remain in the S&P/ASX 200 (AS51 INDEX).
Given Crown Resorts (CWN AU) has delayed the second court hearing, there should be an extra deletion from the S&P/ASX 200 (AS51 INDEX) in June.

KOSPI200 Index Rebalance: Se7en Changes

There will be 7 additions and 7 deletions for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the June rebalance that will be implemented on 9 June.
We got all 7 inclusions right and 5 of the 7 deletions right. The adds have 3-6 days ADV to buy, while the deletes have 4-12 days ADV to sell.
Short interest on the deletions is a significant portion of the estimated passive selling and there could be short covering in the week leading up to implementation of the changes.

Marking Post-WPL-Spin BHP to Market and Model

BHP goes ex-WPL at the open of 25 May 2022. The ex-WPL price is A$5.24 lower than Tuesday’s close and there is another A$2.20 of franking credits on top.
Historically, the BHP/RIO ratio has traded within a relatively defined range. It moves, then after a while it tends to revert. I present a trading model.
And grids. I present spinoff grids with live tracking of the BHP ex-WPL/RIO Ratio within its last 6- and 12-month (div-adjusted) ratios.

Shh! SAIC’s Unconditional Offer For Dongzheng (2718 HK)

On the 19 May, SAIC Motor (600104 CH) acquired China Zhengtong Auto Services Hldg (1728 HK)‘s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction.
Reportedly SAIC was the only bidder. The price paid appears to be at the minimum bid price of HK$1.294/share.
The acquisition will trigger an unconditional Offer for the H shares. SAIC and ZhengTong have announced the outcome of the auction. But still no word from Dongzheng.

Toyo Construction Comes Out Fighting Against YFO, But Sincerely.

As discussed in the last insight, there was the possibility that YFO was jumping the gun. From the near 100+ pages released by Toyo Construction (1890 JP) today, they did.
TC accused YFO of being “dishonest” in its attitude and actions, from the “reasons” stated in its Large Shareholder Report and market purchases to YFO’s Murakami-san’s previous interactions.
What TC doesn’t yet understand is that when a company is in play, if a “market check” comes in, that’s OK. Investors are not hurt by a higher bid.

Explosive Demerger For Incitec Pivot

Fourteen years after its acquisition, Incitec Pivot (IPL AU) plans to demerge Dyno Nobel from its fertilizer ops.
The split has been a long time coming. A strategic review of its fertilizer segments dates back to at least September 2019.
If the demerger is approved, IPL shareholders will receive shares in Incitec Pivot Fertilisers Limited in proportion to their existing shareholding in IPL, which will be rebranded Dyno Nobel Limited.

KOSDAQ150 Index Rebalance Preview: A Dozen Changes in June

There are 12 inclusions and 12 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance to be implemented at the close on 9 June.
Most of the inclusions were expected, but there are quite a few surprises among the deletions. The impact on the deletions will be higher than that on the inclusions.
The adds have outperformed the deletes and there has been another leg up in the last couple of weeks. Expect the trend to continue till implementation week.

Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free

By Sumeet Singh

Grab raised around US$4.5bn in its de-SPAC listing in Dec 2021. The shares are now trading around 68% below the listing price.
At the time of listing, all of its top investors were locked up for six months. The lock-up expires on 30th May 2022.
In this note, we will talk about the lock-up dynamics and updates since our last note.

KOSPI 200 Rebalancing: Noteworthy Names for Passive, Shorting, & Short Covering Flows

SD Biosensor leads the addition group with an estimated inflow of 4.59x ADTV. SK Discovery and Yungjin Pharmaceutical have the most substantial outflow at 7.23x and 6.07x ADTVs, respectively.
For short-covering, CJ CGV stands out the most at this point. Its short interest is 4.57% of SO, and the short interest has increased the most of late.
For short resumption, two names stand out: Meritz Fire and Hana Tour.

Before it’s here, it’s on Smartkarma

May 24

Event-Driven: Woodside Petroleum, Tongwei Co Ltd A, Sunny Optical, MFE-Media for Europe NV, Mapletree Commercial Trust, Mindtree Ltd, SK REITs and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

BHP Woodside Distribution – Could Be a Large Block (~US$1bn) In Early June
FTSE China A50 Index Rebalance Preview: Three Potential Adds/Deletes Due to Ground Rule Change
FTSE China 50 Index Rebalance Preview: Adds, Deletes & Capping Changes
Liquid Universe of European Ordinary and Preferred Shares: May ’22 Report
MCT and MNACT Unitholders Approve Merger To Become MPACT
S&P BSE Indices: No Changes for SENSEX; 7 ADDs/DELs for BSE 100 in June 2022
Launch of Two New REIT Indices by KRX and Two New REIT ETFs in Korea

BHP Woodside Distribution – Could Be a Large Block (~US$1bn) In Early June

By Sumeet Singh

BHP shareholders will receive US$18bn worth of Woodside petroleum shares on 1st Jun 2022, post the completion of the merger. Block, worth US$1.5bn, could be sold in early June.
As a part of the distribution, some shares belonging to ineligible and other small shareholders will have to be sold by the sales agent, JPM.
In this note, we will look at the possible deal dynamics and the overall background of the deal.

FTSE China A50 Index Rebalance Preview: Three Potential Adds/Deletes Due to Ground Rule Change

We expect PetroChina (601857 CH) and Gree Electric Appliances (000651) to be deleted following a Ground Rule change. Chongqing Zhifei Biological Products (300122 CH) should be deleted on market cap.
Potential inclusions are Tongwei Co Ltd A (600438 CH), China Citic Bank Corp (601998 CH) and Anhui Conch Cement (600585 CH).
One-Way turnover at the FTSE China A50 Index (XIN9I INDEX) June rebalance is estimated at 2.91% and will result in a one-way trade of CNY 1,420m.

FTSE China 50 Index Rebalance Preview: Adds, Deletes & Capping Changes

We expect China Railway Group Ltd H (390 HK) and Yanzhou Coal Mining (1171 HK) to replace Smoore International (6969 HK) and Sunny Optical (2382 HK) in the FTSE China50 Index.
There are capping changes that have a reasonable large impact on a couple of stocks. One-way turnover is estimated at 3.97% and will result in a one-way trade of HK$1,912m.
FTSE has increased the investability weight for Li Auto (2015 HK) / Li Auto Inc. (LI US) and this leads to the stock failing the median liquidity test.

Liquid Universe of European Ordinary and Preferred Shares: May ’22 Report

Spreads have generally tightened across our liquid universe, in line with the recent market gains.
Recommendations long ords / short prefs: Fuchs Petrolub, Investor AB, SSAB.
Recommendations long prefs / short ords: Sixt, VW, Danieli, MFE, Grifols, Atlas Copco, Ericsson Handelsbanken, Roche, Schroders.

MCT and MNACT Unitholders Approve Merger To Become MPACT

The merger between Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) (a.k.a. “MNACT”) was approved by both sets of unitholders today.
MCT unitholders offered 85.7-92.1% approval rates for the four measures. MNACT unitholders offered 98-99% approval rates (but high 80s in terms of unitholder count).
Now we move forward, with the election of terms and

S&P BSE Indices: No Changes for SENSEX; 7 ADDs/DELs for BSE 100 in June 2022

By Janaghan Jeyakumar, CFA

After market close on Friday 20th May 2022, the constituency changes for S&P BSE 100, SENSEX 50, and SENSEX Next 50 Indices were announced.
There will be no changes for S&P BSE SENSEX and S&P BSE BANKEX Indices in the June 2022 Rebalance.
These changes will become effective at the open of Monday 20th June 2022. Below is a closer look at each of the names involved in the June 2022 Rebalance.

Launch of Two New REIT Indices by KRX and Two New REIT ETFs in Korea

On 23 March, Korea Exchange launched two Korean REITs related indices, including KRX REITs TOP 10 Index and KRX REITs TOP 10 Leverage Index.
Korea Exchange will list two more REITs related ETFs in KOSPI on 24 May including Arirang Fn KREIT ETF (429740 KS) and HEROES REITs IGIS Active ETF (429870 KS).
The launch of the two new REIT indices by the Korea Exchange and two new REIT ETFs are likely to accelerate higher demand for high quality REITs in Korea.

Before it’s here, it’s on Smartkarma

May 23

Event-Driven: LG Energy Solution, SPH REIT, LG Chem Ltd, SK Telecom Co Ltd (Adr), Total Access Communication, Siemens Gamesa Renewable Energy, S.A. and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

FTSE All-World/All-Cap Index Rebalance: Inclusions, Deletions & Other Changes
SPH Offer Open – Starts to Look Interesting
LG Chem & LG Energy LONG/SHORT Pair Trading on a Massive NAV Discount
SK Telecom Multi-Step Trading Scenario for Underlying & ADR Amid Zero Foreign Room
Merger Arb Mondays (23 May) – True Corp, DTAC, Ramsay, VNET, Link Admin, Alliance Aviation, Yashili
Siemens Energy Finally Drops the Bomb

FTSE All-World/All-Cap Index Rebalance: Inclusions, Deletions & Other Changes

For Asia Pacific, there are 8 inclusions each to the All-World Index and the All-Cap Index at the June QIR. Quite a few have over 3 days ADV to buy.
There are also changes to the NOS and investability weights that will require passive funds to buy/sell a lot of stocks. Some have a reasonably large impact/flow.
A lot of the IPOs are trading below their offering prices and investors could be looking to sell into any rallies that take the stocks close to their IPO prices.

SPH Offer Open – Starts to Look Interesting

The SPH REIT (SPHREIT SP) Chain Offer was launched on Thursday 19 May.
The Chain Offer Price has been revised lower from the original level to be S$0.9372/unit, as discussed a few times in these pages.
The units have underperformed Peer Baskets for the last few months and have now fallen to the Chain Offer Price. That presents opportunities

LG Chem & LG Energy LONG/SHORT Pair Trading on a Massive NAV Discount

The LG Chem/LG Energy pair has been getting much attention lately. Its stakeholding value in LG Energy amounts to ₩83.1T, more than twice its own market value.
Given LG Chem’s solid operating business value, only the likes of SK Square is worse in terms of NAV discount, as LG Chem’s NAV discount is nearing 70%.
With the LG Chem OUT/LG Energy IN passive play pretty much completed, we should aim at an entry point for LG Chem’s massive discount to its LG Energy shareholding value.

SK Telecom Multi-Step Trading Scenario for Underlying & ADR Amid Zero Foreign Room

We first consider a currency hedging setup to target an ADR premium surge before SKT reaches zero foreign room. We close this position as the MSCI special deletion is announced.
We then move onto an outright long position on the SKT underlying shares to capitalize on potential share recall.
Lastly, I would quickly jump onto a KT LONG/SKT SHORT position to target potential alternative trading flow.

Merger Arb Mondays (23 May) – True Corp, DTAC, Ramsay, VNET, Link Admin, Alliance Aviation, Yashili

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Thailand and Chinese ADRs.
This week, the highest gross spreads are Sezzle Inc (SZL AU), 21Vianet Group (VNET US), Dongzheng Automotive Finance (2718 HK), Link Administration Holdings (LNK AU), Alliance Aviation Services (AQZ AU).
The lowest gross spreads are Hwa Hong Corp (HWAH SP), Virtus Health (VRT AU), Uniti Group Ltd (UWL AU), Mapletree North Asia Commercial Trust (MAGIC SP), Excelpoint Technology (EXLP SP).

Siemens Energy Finally Drops the Bomb

Siemens Energy hasn’t expected to its CMD and instead announced on Saturday late evening an €18.05/share voluntary cash tender offer for the remaining 32.9% of Siemens Gamesa it doesn’t own.
The consideration represents a 27.7% premium and 23.1x EV/Fwd EBITDA. It seems fair and higher than that initially expected. Siemens Energy is likely to issue a convertible.
Upon market open on 23 May, expect the shares to close most of the gap with the offer price. Siemens Gamesa will likely exit the Ibex 35 in H2 2022.

Before it’s here, it’s on Smartkarma

May 22

Event-Driven: NIO Inc, Lenovo, Kakao Pay, HKBN Ltd, Japan Post Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Hang Seng TECH Index Rebalance: NIO (9866 HK) To Replace ASM Pacific (522 HK)
HSCEI Index Rebalance: Lenovo In, Hansoh Out; Sunac Survives (For Now)
KOSPI 200 IT Sector Index Rebalancing Flow: Watch Kakao Pay & LG Corp
Index Rebalance & ETF Flow Recap: MSCI, ASX, NIFTY, KRX, PCOMP, HSI, HSCEI, HSTECH, SK Tel, GoTo
Asia-Pac Weekly Risk Arb Wrap: Kinetsu World, Hwa Hong, MyDeal, Kito, Virtus Health, Irongate, HKBN
Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan

Hang Seng TECH Index Rebalance: NIO (9866 HK) To Replace ASM Pacific (522 HK)

As expected, NIO Inc (9866 HK) will be added to the Hang Seng Tech Index (HSTECH INDEX) at the close on 10 June replacing ASM Pacific Technology (522 HK).
We estimate passive trackers will need to buy over 9 days of ADV on NIO Inc (9866 HK) while selling 11 days of ADV on ASM Pacific Technology (522 HK).
NIO Inc (9866 HK)‘s inclusion in the Hang Seng Tech Index (HSTECH INDEX) could create significant arb opportunities versus NIO Inc (NIO US) on 10 June.

HSCEI Index Rebalance: Lenovo In, Hansoh Out; Sunac Survives (For Now)

As expected, Lenovo (992 HK) will replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) after the close of trading on 10 June.
Sunac China Holdings (1918 HK) has been kept in the index for now, though suspension till 30 June will see it deleted early July.
Changes to the stocks, number of shares, float and capping results in an estimated one-way turnover of 3.7% and will result in a one-way trade of HK$2,977m.

KOSPI 200 IT Sector Index Rebalancing Flow: Watch Kakao Pay & LG Corp

We should focus on the weight changes of the existing constituents. For this, two names really stand out: Kakao Pay (+0.44x ADTV) and LG Corp (+0.37x ADTV).
It is because Kakao Pay and LG Corp will undergo an increase in their float rate in the KOSPI 200 rebalancing, and these up-weights will also affect this sector index.
Their combined inflow size (KOSPI 200 & KOSPI 200 IT) will be 1.41x and 1.16x ADTVs. This will be the most substantial, except for Kakao Bank and the new additions.

Index Rebalance & ETF Flow Recap: MSCI, ASX, NIFTY, KRX, PCOMP, HSI, HSCEI, HSTECH, SK Tel, GoTo

Plenty of review announcements after the close on Friday – HSI, HSCEI, HSTECH, FTSE AW/AC, Sensex. Most changes were as expected.
There are a lot of review cutoffs on Monday and announcements expected later in the week (KOSPI200, KOSDAQ150, CSI300, STAR50).
There were inflows to Hong Kong, Taiwan, Korea and Australia focused ETFs during the week, while there were outflows from China, Japan and India focused ETFs.

Asia-Pac Weekly Risk Arb Wrap: Kinetsu World, Hwa Hong, MyDeal, Kito, Virtus Health, Irongate, HKBN

There are 41 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three news deals this week: Kintetsu World Express (9375 JP)‘s Tender Offer, Woolies tilt for MyDeal.com (MYD AU), Hwa Hong (HWAH SP)‘s MBO, & KKR’s bid for Kito (6409 JP)
Key updates took place for: Virtus Health (VRT AU) &Irongate Group (IAP AU)

Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan

The downside to Woodside Petroleum (WPL AU) remains, but the reasoned downside is smaller than it was before.
CVC walks, but it doesn’t stop Brambles Ltd (BXB AU) privatisation speculation.
If Tabcorp and The Lottery Corp are seen as low volatility growth properties, then the stability of cashflow puts it into rarified air among “growth bias” which has gotten trashed.

Before it’s here, it’s on Smartkarma

May 21

Event-Driven: Celltrion Inc, MyDeal.com.au Ltd, Irongate Group, Orient Overseas International, SK Telecom, HomeServe PLC and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time
Woolies Moves On MyDeal (MYD AU)
Irongate (IAP AU): 29th June Shareholder Vote On Charter Hall/PGGM Offer
HSI Index Rebalance: Four Weddings & A Funeral
MyDeal.com.au Gets a A$1.05 Offer from Woolworths
SK Telecom: Historical Price Analysis of Reaching 100% Foreign Ownership Limit
Brookfield/HomeServe: Agreed 1200p Offer
Irongate’s Scheme Meeting on 29 June, IE’s Opinion

FnGuide Top 10 Rebalancing on June 10: More Substantial Flow Impact than Last Time

Celltrion Inc (068270 KS)’s deletion seems pretty much a foregone conclusion as its average float-adjusted market cap on May 3-19 is way below the next one in line.
Shinhan Financial (055550 KS) is the one to replace Celltrion based on the numbers so far. There is close to a ₩1T gap with the next one, POSCO (005490 KS).
In this rebalancing, the flow impact of the addition/deletion is even more significant. So, their share price fluctuations on June 10 will likely be more substantial than last time.

Woolies Moves On MyDeal (MYD AU)

Woolworths Ltd (WOW AU) proposes to acquire all shares in MyDeal.com.au Ltd (MYD AU) other than those held by Sean Senvirtne and other key management personnel.
MyDeal shareholders will receive $1.05/share in cash, a punchy 62.8% premium to last close, but just 5% above its 2020 IPO price.
This proposal is being done by way of a Scheme with expected completion in Q3/Q4 2022.

Irongate (IAP AU): 29th June Shareholder Vote On Charter Hall/PGGM Offer

Irongate Group (IAP AU) has convened a Scheme Meeting on the 29 June to vote on the proposal from Charter Hall and PGGM.
The vote, for all intent and purposes, appears a formality. The Independent Expert considers the Offer to be fair and reasonable.
Trading at a gross/annualised spread of 2.1%/14.5%, assuming mid-July completion. Get involved.

HSI Index Rebalance: Four Weddings & A Funeral

The inclusion of Orient Overseas International, Zhongsheng Group, Semiconductor Manufacturing International Corp (SMIC) and China Hongqiao plus the deletion of AAC Technologies Holdings takes us to 69 index stocks.
Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover is 3.43% and will result in a one-way trade of HK$7,444m.
There is huge short interest on Zhongsheng Group (881 HK) and China Hongqiao (1378 HK) and there could be some short covering from now to implementation.

MyDeal.com.au Gets a A$1.05 Offer from Woolworths

MyDeal.com.au Ltd (MYD AU) entered a SID with Woolworths Ltd (WOW AU) to acquire an 80.2% interest. Shareholders will receive A$1.05 per share, a 62.8% premium to the unaffected price.
The three largest shareholders, representing 76.0% of outstanding shares, will vote in favour of the deal. The scheme meeting is set for 3Q.
This is a done deal. At the last close price, the gross and annualised spread for an October implementation date is 4.5% and 10.1% respectively.

SK Telecom: Historical Price Analysis of Reaching 100% Foreign Ownership Limit

In this insight, we analyzed the different share price movements of SK Telecom relative to KOSPI from 2005 to 2022 when foreign ownership remained above 99%.
Once MSCI announces the potential deletion of SK Telecom from MSCI Korea Index in the next several weeks, there could be some short term temporary weakness on SK Telecom.
Over a longer period, SK Telecom is well poised to outperform the market amid the market’s rotation into value stocks and the company’s strong earnings and cash flow growth.

Brookfield/HomeServe: Agreed 1200p Offer

HomeServe has reached an agreement on a 1,200p cash offer (vs. my 1,206 TP), 71% premium and an implied EV of £4,706 million; 13.3x EV/Fwd EBITDA, 25.7x Fwd P/E.
While the deal is highly likely to close (15.3% IRR by year 8) and the founder will bag £490 million, HomeServe could still attract interest from other parties.
Gross spread as of today’s close is 3.4% and the estimated annual return would be 7.9% assuming settlement on 30 October. Reiterate long HSV LN.

Irongate’s Scheme Meeting on 29 June, IE’s Opinion

Unsurprisingly, the independent expert (IE) considers the offer for Irongate Group (IAP AU) to be fair and reasonable. We think that IE’s valuation approach is sound.
The key condition is approval from shareholders and regulatory authorities (FIRB, OIO, SARB). The scheme meeting is scheduled for 29 June.
We continue to think that offer is attractive. At the last close price and for the 15 July implementation date, the gross and annualised spread is 1.4% and 9.2%, respectively.

Before it’s here, it’s on Smartkarma

May 20

Event-Driven: Core Lithium Ltd, SK Telecom, Woodside Petroleum, HKBN Ltd, Seiko Epson, Enchem, Siemens Gamesa Renewable Energy, S.A., Tencent and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

S&P/ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June
SK Telecom: MSCI Special Deletion & Immediate Price Spike on Share Recall
Woodside Shareholders Approve Deal but Not WPL’s Green Credentials; Now People Talk About Flows
SK Telecom (017670 KS): Implications of Zero Foreign Room
HKBN (1310 HK): KKR & PAG’s Pipe Dreams
Epson (6724) – A Big Buyback Amid Benign Backdrop
HKBN in the Crosshairs of KKR and PAG
KOSDAQ 150 Rebalancing: Complete List of Candidates, Including Enchem
Siemens Energy/Siemens Gamesa: Possible Delisting Offer
Shanghai/Shenzhen Southbound Connect: Weekly Moves (20 May 2022)

S&P/ASX Index Rebalance Preview: Tabcorp, Crown & Potential Changes in June

The Crown Resorts Scheme Meeting is scheduled for 20 May and the last trading day could be 24 May, while The Lottery Corp is expected to start trading 24 May.
The changes for the S&P/ASX 50 Index and S&P/ASX 100 Index will depend on the market cap of The Lottery Corp (TLC AU) and new Tabcorp Ltd (TAH AU).
The potential adds have outperformed the potential deletes over the last week and couple of months so there will be some pre-positions in there already.

SK Telecom: MSCI Special Deletion & Immediate Price Spike on Share Recall

Looking at these past similar cases, the MSCI will likely announce SKT’s special deletion within 2-3 days of reaching zero foreign room and rebalancing within 2-3 days after the announcement.
We will see a passive outflow of about 2M shares or about ₩115B, equivalent to 2.7x ADTV, which will likely lead to an immediate price spike.
ETF funds tracking the MSCI have a large proportion of loaning SKT shares. So, when an MSCI down-weight occurs to SKT, an immediate recall will push up the price.

Woodside Shareholders Approve Deal but Not WPL’s Green Credentials; Now People Talk About Flows

The EGM of Woodside Petroleum (WPL AU) today approved the BHP Petroleum merger in overwhelming fashion. 98.66% FOR.
They did not approve of the Climate Report the board submitted to vetting by shareholders for the first time. That got 51% “support.”
But now that’s done, people will talk about flows. So far the trade has worked but now time to think about how far to stretch it.

SK Telecom (017670 KS): Implications of Zero Foreign Room

Foreign investors hold 106.51m shares of SK Telecom (017670 KS) versus a limit of 107.23m shares. There are only 723k more shares (1 day of ADV) available for foreign buying.
MSCI will delete SK Telecom (017670 KS) from its indices once the foreign room reaches zero, while FTSE will likely reduce the investability weight in two tranches of 5% each.
SK Telecom (017670 KS) could continue underperforming KT Corp (030200 KS) in the short-term due to passive selling and inability of foreign investors to buy the stock.

HKBN (1310 HK): KKR & PAG’s Pipe Dreams

According to Bloomberg, KKR and PAG are considering bids for Hong Kong broadband play HKBN Ltd (1310 HK).
Private equity firms, possibly including Stonepeak, are understood to be conducting due diligence on HKBN, which has a current market cap of ~US$1.6bn.
Increased broadband usage became a Covid trend. That looks set to continue. This is a steady business, with an attractive yield.

Epson (6724) – A Big Buyback Amid Benign Backdrop

Seiko Epson (6724 JP) announces the first special div for the 2023 Nikkei 225 dividend futures.
And it also announces a VERY big buyback. The headlines say 9.5%. The reality is more like 4.0-4.4%, but that is still going to be 15-20% of Real World Float.
Given mildly positive backdrop, a net cash position, low multiples, and lack of major Real World Float active investor, this could go up.

HKBN in the Crosshairs of KKR and PAG

Bloomberg reported KKR & Co Inc (KKR US) and PAG are carrying out due diligence on HKBN Ltd (1310 HK), with a view to launching a privatisation bid.
HKBN has a relatively concentrated shareholder register which suggests a requirement for a high takeover premium.
Precedent transactions suggest a privatisation forward EV/EBITDA multiple of at least 10x, implying a minimum offer price of HK$11.80 per share, a 23% premium to the last close.

KOSDAQ 150 Rebalancing: Complete List of Candidates, Including Enchem

Enchem (348370 KS) is in a bit tricky situation. Applying the KRX’s review period calculation criterion to Enchem satisfies the minimum listing requirement.
So, we should consider Enchem’s addition odds quite high. Enchem’s inclusion will pave the way for Sungwoo Hitech (015750 KS) to leave the Index.
We have ten adds/deletes, and WYSIWYG Studios (299900 KS) leads the adds for the passive impact, whereas JNTC Co Ltd (204270 KS) will suffer the most relative to ADTV.

Siemens Energy/Siemens Gamesa: Possible Delisting Offer

Siemens Energy is considering a cash offer for the 32.9% of Siemens Gamesa it does not own. Group simplification and major restructuring would make sense.
Applying the 6-month VWAP rule, the offer price could reach c. €18.1/share. Takeover regulation says the offer must be in cash and the price equitable, allowing for other calculation methods.
Siemens Energy does not need to offer a high premium and could make an announcement on 24 May (CMD). Recommendation is long.

Shanghai/Shenzhen Southbound Connect: Weekly Moves (20 May 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, the total value increased US$12.5bn in the past week, with Shanghai accounting for US$5.7bn and Shenzhen US$6.8bn. Tencent (700 HK) is the dominant holding across both programs
Glory Sun Financial Group Limited (1282 HK) saw the biggest upward movement as the chairman sold to pay off debt. China South City (1668 HK) was reduced by both programs.

Before it’s here, it’s on Smartkarma

May 19

Event-Driven: JD.com Inc (ADR), GoTo, Semirara Mining And Power Corp, Woori Financial Group , Toyo Construction, Humm Group, True Corp Pcl, Dongwon Industries, OCI NV and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

JD.com Tencent Distribution – All Prosus Stock Worth US$3.5bn Could Be in CCASS Now
GoTo Gojek Tokopedia: Turning Tide with Index Inclusion?
PCOMP Index Rebalance Preview Aug 22: One Set of Potential Changes
Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying
Yamauchi No.10 Announces Its Offer (If Toyo Accepts)
Humm’s Rump Diminished Amid Proxy War
DTAC/True Merger VTO Risk/Reward
Dongwon Industries Listens to Minority Shareholders and Changes Merger Ratio with Dongwon Enterprise
STOXX Europe Indices: Quiddity Leaderboard for June 2022 2.0

JD.com Tencent Distribution – All Prosus Stock Worth US$3.5bn Could Be in CCASS Now

By Sumeet Singh

On 23rd Dec 2021, Tencent declared a special dividend in the form of distribution in specie of shares of JD.com, making Prosus the third largest shareholder with a 4.2% stake.
The actual settlement only happened on 25th Mar. On that day, the bulk of the stock that Tencent distributed moved into CCASS with the exception of shares held by Prosus.
In this note, we talk about the shareholding pattern and increase in shares held in CCASS.

GoTo Gojek Tokopedia: Turning Tide with Index Inclusion?

GoTo (GOTO IJ) completes 20 trading days today. Based on the average price over the period and the last close, the stock meets the Fast Entry criteria for IDX30/LQ45/IDX80 inclusion.
Using a free float of 66%, we estimate passive trackers buying 5.42bn shares (US$74m) of GoTo (GOTO IJ). Announcement could come in a few days with implementation at month-end.
With the real float close to 4%, passive trackers will need to buy 11.6% of the real float and the stock could move higher in the short-term.

PCOMP Index Rebalance Preview Aug 22: One Set of Potential Changes

With just over a month to go in the review period for the August rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX), we expect one potential change.
Security Bank (SECB PM) is a potential deletion. Semirara Mining And Power Corp (SCC PM) has a higher inclusion probability as compared to UnionBank of the Philippines (UBP PM).
Passive funds will need to trade quite a few days of ADV on the stocks. Historically, the adds have outperformed the deletes in the last leg of the review period.

Woori Financial Block Deals: Another Shares Let-Go Event for Passive Buying

The KDIC sold a 2.33% stake in Woori Financial through an after-hours block sale. From a passive flow perspective, this is quite similar to KSOE’s HHI block deals yesterday.
Woori is likely to show a similar share price movement as HHI. Expectations for the passive inflow effect must have dissipated, and a short-term share price correction is now inevitable.
However, the passive inflow sizes are still too substantial. With this in mind, we need to consider a strategy that approaches this price correction as a re-entry opportunity.

Yamauchi No.10 Announces Its Offer (If Toyo Accepts)

Yamauchi No.10 Family Office and Toyo Construction (1890 JP) have been going back and forth in the last few weeks, with TC trying to figure out if it accepts YFO.
The Infroneer Tender Offer ends today, and with that – perhaps coincidental timing and perhaps not – YFO has formally announced an intention to launch a Tender Offer.
That puts the ball back in Toyo Construction’s court. The deal would be at ¥1,000/share and would launch in late June… if TC is ready and willing.

Humm’s Rump Diminished Amid Proxy War

Humm Group (HUM AU) shareholders will vote on the sale of the HCF business to Latitude Group (LFS AU) on the 23 June.
If the sale is approved, Humm will retain the commercial business and remain listed. However major shareholder/founder Andrew Abercrombie rejects the deal.
Since the Latitude transaction was announced on the 28 February, the market is assigning the lowest implied value for the remaining ops, ex-HCF.

DTAC/True Merger VTO Risk/Reward

At the last close prices, Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB)’s gross spread to the dividend-adjusted VTO price is 5.6% and 11.1%, respectively.
The merger has received DTAC and True shareholder approvals. The merger hinges on regulatory approval.
The LONG True and SHORT DTAC trade is attractive, with the current spread of 5.5% trading above the average spread since the merger announcement of 3.4% (ex. transaction costs).

Dongwon Industries Listens to Minority Shareholders and Changes Merger Ratio with Dongwon Enterprise

In a surprising move, Dongwon Industries announced that it will listen to the demands of the minority shareholders and change the merger ratio with Dongwon Enterprise.
This is likely to have a positive impact on Dongwon Industries since it boosts the value of Dongwon Industries’ minority shareholders at the expense of controlling shareholders of Dongwon Enterprise.
The merger price of Dongwon Industries will be raised from 248,961 won to 384,140 won (reflecting net asset value). The merger ratio will be adjusted from 1:3.8385530 to 1:2.7023475.

STOXX Europe Indices: Quiddity Leaderboard for June 2022 2.0

By Janaghan Jeyakumar, CFA

The STOXX Europe 600 Index is a benchmark index with a fixed number of 600 components representing large, mid and small capitalization companies across 17 countries of the European region.
The EURO STOXX Index is a subset of the STOXX Europe 600 Index and is also the parent index for the widely-tracked EURO STOXX 50 Index.
This is a follow-up insight to STOXX Europe Indices: Quiddity Leaderboard for June 2022 Rebalance with an updated look at potential index changes in June 2022.

Before it’s here, it’s on Smartkarma

May 18

Event-Driven: Ryohin Keikaku, Tabcorp Ltd, Faith Inc, Hwa Hong Corp, Virtus Health, Woori Financial Group , SAMPYO Cement, John Laing Environmental Ass, Turkiye Garanti Bankasi As and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

MSCI Japan Index Rebalance: Covering to Come After Large Short Buildup
Tabcorp & The Lottery Co Spin-Off – Valuation Grids and Index Treatment
Ya Gotta Have Faith (4295). Or Not. Chance for Someone To Get A Big Position in a Net Cash Co
Hwa Hong’s Conditional Offer Amid Family Tussle
Virtus Health & BGH: Truth in Takeovers
Hwa Hong’s Voluntary Conditional Offer at S$0.370
Block Deal Sale of Woori Financial Group
Sampyo Cement: Likely Exit from KOSDAQ150 & Move to KOSPI
FTSE UK: Quiddity Leaderboard for June 2022 2.0
BBVA/Garanti: End of Offer Period

MSCI Japan Index Rebalance: Covering to Come After Large Short Buildup

There are 22 deletions for the MSCI Japan Index at the May SAIR. The changes were expected and there is large short buildup on quite a few of the stocks.
Over the last month, the largest increase in shorts as a percentage of passive selling was on Mercari Inc, Ryohin Keikaku, Tokyo Century Corp, Sohgo Security Services, Pola Orbis Holdings.
The deletions have underperformed the TOPIX by 22% over the last 6 months and by 10% over the last two months. Position for a bounce post implementation.

Tabcorp & The Lottery Co Spin-Off – Valuation Grids and Index Treatment

Tabcorp Ltd (TAH AU) will soon spin out its Lottery and Keno business, to be called The Lottery Corp (TLC AU). TAH shares go ex-TLC on 24 May.
The question is where do they trade. What is in the price? What is not? What are the potential index implications?
This insight provides a grid of index implications and pro-forma valuations (EV/EBITDA, PER, Dividend Yield) for each and both and the combined entity.

Ya Gotta Have Faith (4295). Or Not. Chance for Someone To Get A Big Position in a Net Cash Co

Faith Inc (4295 JP) is a very smallcap contents management and platform business. As a business, one could give it a miss forever, but it is cash-rich.
The company is doing a very large buyback, and for someone who decided they’d be interested, there is a large block for sale.
The thing is… one would have to act quickly and aggressively.

Hwa Hong’s Conditional Offer Amid Family Tussle

Ong Choo Eng and his son Ong Eng Yaw, together with Roswell Assets, Dymon Asia Private Equity, and Crytalic Star have launched a voluntary Offer for Hwa Hong (HWAH SP).
The S$0.37/share Offer is a nine-year high and a 27.6% premium to last close. It has not been declared final.
However, it appears not all of the founding members of the company are on the same page. The family fissure became public after the last independent director resigned this month.

Virtus Health & BGH: Truth in Takeovers

With under three weeks until Virtus Health (VRT AU) shareholders vote on CapVest’s Offer, BGH continues to gradually push out the tendering period for its own Offer.
The outcome of the Scheme Meeting is all but a foregone conclusion assuming BGH sticks to its guns and is not supportive; which then potentially rekindles this competitive bidding situation.
This insight discusses the constraints BGH needs to adhere to in “truth in takeover” statements. There are still a handful of moving parts to unfold in this transaction.

Hwa Hong’s Voluntary Conditional Offer at S$0.370

Hwa Hong Corp (HWAH SP) announced a voluntary conditional cash offer from Mr Ong Choo and partners at S$0.370 per share, a 27.6% premium to the last close.
The offer is the culmination of a brewing family feud which pits Mr Ong Choo against the families of his five brothers.
The offer price is a 9-year share price high. We estimate around 60% of the public float needs to accept the offer to meet the 50%+ minimum acceptance condition.

Block Deal Sale of Woori Financial Group

After the market close today, it was announced that KDIC will sell its 1.81% stake of Woori Financial Group.
The block deal price will range from 15,229 won to 15,700 won (0 to 3% discount) and we would take the deal even at little discount.
Woori Financial Group’s share price continues to trade at deep valuation multiples as it is trading at P/B of 0.4x and P/E of 3.9x (using 2022 consensus earnings estimates).

Sampyo Cement: Likely Exit from KOSDAQ150 & Move to KOSPI

Sampyo Cement which is currently included in KOSDAQ150 is likely to be removed from this index in the coming months as the company wants to move to KOSPI.
If Sampyo Cement is excluded from KOSDAQ150, we estimate there could be about 9 billion won worth of passive funds which could exit the stock. ADTV is 1.6 billion won.
Therefore, we believe Sampyo Cement’s shares could face further weakness in the next several months. It will hold an EGM to vote on the move to KOSPI on 4 July.

FTSE UK: Quiddity Leaderboard for June 2022 2.0

By Janaghan Jeyakumar, CFA

The FTSE UK Index Series is a widely tracked family of indices representing the performance of the UK public equity market. These indices are reviewed on a quarterly basis.
In FTSE UK Index Series: Leaderboard for June 2022, I discussed the potential constituency changes for FTSE 100 and FTSE 250 for the upcoming June 2022 index review.
Below is an updated look at these potential index changes.

BBVA/Garanti: End of Offer Period

Until last week, BBVA had already secured a 71.1% stake in Garanti. The deadline to accept BBVA’s takeover bid ends on 18 May. Settlement will take place on 19 May.
Gross spread is 0.2%. Recently, the offer price has acted as a support for the share price, which may drop if BBVA doesn’t reach the squeeze-out threshold. Tender.
The squeeze-out threshold is 98% (95% for delisting). My understanding is that the squeeze-out price is arithmetic average of the daily VWAP in the 30 days before threshold disclosure.

Before it’s here, it’s on Smartkarma

May 17

Event-Driven: Kito Corporation, Bharat Electronics, Hyundai Heavy Industries, KT Corp, Brambles Ltd, KMW Co Ltd, HomeServe PLC and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Kito (6409) Goes Private. Again. This Time With KKR, But Watch the Register
NIFTY100 Index Rebalance Preview: Five Potential Changes in September
Block Deal Sale of Hyundai Heavy Industries
SK Telecom Nearing Zero Foreign Room & May Spark Alternative Trading for KT Corp
CVC Sizes Up Brambles (BXB AU)
Hyundai Heavy Liquidation by KSOE & Passive Flow Tightening Recalculations
CVC to Lob an Offer for Brambles?
KRX New Deal Index Rebalance Preview: Buying on KMW; Selling on AfreecaTV
Brookfield/HomeServe Close to Reaching an Agreement

Kito (6409) Goes Private. Again. This Time With KKR, But Watch the Register

Kito Corporation (6409 JP) was taken private in 2003. It was re-IPOed by Carlyle in 2007 but Konecranes stayed an investor until 2016. Then it unwound.
Today, Kito announced the best results since pre-covid and forecasts for growth. They also announced KKR unit Crosby would launch a Tender to buy them out at a 62% premium.
Shareholder structure is highly unusual, and interesting to boot, especially looking at the most recent arrival in the top two. The fact there is a break fee is… telling.

NIFTY100 Index Rebalance Preview: Five Potential Changes in September

We are past the halfway mark in the review period for the September rebalance of the NIFTY100 Index. We see five potential changes which should be announced end August.
There is a high probability of Tata Power (TPWR IN), Indian Railway Catering and Tourism (IRCTC IN), Bharat Electronics (BHE IN) and Mphasis Ltd (MPHL IN) being added to the index.
High probability deletions are Lupin Ltd (LPC IN), Jubilant Foodworks (JUBI IN), Zydus Lifesciences Ltd (ZYDUSLIF IN), Punjab National Bank (PNB IN) and Steel Authority of India (SAIL IN).

Block Deal Sale of Hyundai Heavy Industries

After the market close today, Korea Shipbuilding & Offshore Engineering announced that will sell 1.7% of its shares (1.5 million shares) in Hyundai Heavy Industries in a block deal.
The block deal sale is expected to take place on the morning of 17 May. The block deal price is expected to be 120,650 won.
We would take this deal as we believe this sale is likely to have a short term positive impact on HHI and increase the free float of HHI.

SK Telecom Nearing Zero Foreign Room & May Spark Alternative Trading for KT Corp

What immediate impact will SKT’s zero foreign room have? The recent trading theme that the local market is paying attention to is the alternative purchase of KT instead of SKT.
The recent driving force behind SKT’s foreign buying is the growing market preference for defensive stocks with high dividend yields. And KT also meets this condition.
However, SKT’s foreign room may turn around temporarily: 1. SKT’s deletion possibility from the MSCI through a special change and 2. the FTSE investability down-weight at the June QIR.

CVC Sizes Up Brambles (BXB AU)

Brambles Ltd (BXB AU) has confirmed that it has had a preliminary engagement with Luxembourg-based CVC in regard to an unsolicited proposal to acquire all of its shares.
No formal proposal has yet been received. No price was made public although various media reports indicate a A$20bn bid, which may or may not hinge off an EV figure.
In is 3Q22 trading update, Brambles upgraded its FY22 revenue and earnings guidance, despite ongoing cost inflation and pallet shortages.

Hyundai Heavy Liquidation by KSOE & Passive Flow Tightening Recalculations

KSOE will sell 1.5M shares, equivalent to 1.70% of SO, at an expected discount rate of 5%. After the disposal, KSOE’s stake will fall to 78.02%.
The need to increase float shares (and loan balance) due to the MSCI inclusion and the KOSPI 200 up-weight should be considered as the company’s pre-emptive response to the market.
But even with today’s disposal, the MAXIMUM real-world float will be 11.29%. An additional passive inflow equivalent to 1.73% of SO will occur until June 9th, 5.13x ADTV.

CVC to Lob an Offer for Brambles?

Brambles Ltd (BXB AU) responded to press speculation by stating it had preliminary discussions with CVC Capital on a privatisation proposal. The shares rose 11.2% to close at A$11.60.
The AFR’s rumour of “a bid valuing Brambles at more than $20 billion, including debt” would imply an offer price around A$11.50, a 10% premium to the undisturbed price.
As the Australian takeover premium ranges from 20% to 40%, we think that a bid of around A$13 per share (25% takeover premium) will be necessary for due diligence access.

KRX New Deal Index Rebalance Preview: Buying on KMW; Selling on AfreecaTV

The review period for the September rebalance of the KRX New Deal indices started on 1 May and will run till 31 July. Implementation is on 8 September.
Intellian Technologies (189300) could replace Danal Co Ltd (064260) in the Internet index, while KMW Co Ltd (032500 KS) could replace AfreecaTV (067160 KS) in the top 3 index stocks.
Nexon Games (225570 KS) could replace Devsisters (194480 KS) in the Game Index, though the flows are small on the stocks given the small benchmarked AUM.

Brookfield/HomeServe Close to Reaching an Agreement

Media reports that HomeServe and Brookfield are close to reaching an agreement. Since news of the approach broke, the share price of HomeServe has increased by c. 52%.
My fair value estimate (DCF based) is 1,206p, which could presumably be enough for the founder to sell its 12.1% stake (enough to prevent a squeeze-out).
At1,206p (71% premium to the price prior to disclosures), a financial buyer could obtain a 15.3% cumulative IRR by year 8. Long HSV LN.

Before it’s here, it’s on Smartkarma

May 16

Event-Driven: Japan Post Holdings, Adani Enterprises, Link Administration Holdings, Kintetsu World Express, Woori Financial Group , Yamaguchi Financial Group In, Brambles Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Japan Post Holdings (6178 JP) – Ugly Group Forecasts But a Very Bigly Buyback
NIFTY50 Index Rebalance Preview: High Probability Add; Impact Higher than the Headline Numbers
Merger Arb Mondays (16 May) – Link Admin, Infomedia, VNET, Alliance Aviation, Ramsay, Link Net
Japan Post Holdings – Silly Guidance And A Not So Silly Buyback
Kintetsu World Express (9375 JP) Tender Offer by Parent – Too Cheap But Tough To Block
MSCI Korea Standard: Constituents with Index Up/Down-Weight in May SAIR
Yamaguchi Financial (8418) – Big On-Market Buyback for Middling Not Too Expensive Regional Bank
Brambles (BXB AU): Where Could CVC’s Bid Come In?

Japan Post Holdings (6178 JP) – Ugly Group Forecasts But a Very Bigly Buyback

Japan Post Holdings (6178 JP) and its two main components Japan Post Insurance (7181 JP) and Japan Post Bank (7182 JP) reported excellent earnings for the year to March 2022…
….but not so excellent forecasts for the year to March 2023. Some of that is conservative. Some is “finger-in-the-air”, and some of it is the vagaries of insurance sales accounting.
But they all pay high dividends and Japan Post Holdings announced a ¥200bn buyback. And remember, there will likely Never Be Another JPH Equity Offering, Ever Again. Ever.

NIFTY50 Index Rebalance Preview: High Probability Add; Impact Higher than the Headline Numbers

We are past the halfway mark in the review period of the NIFTY Index (NIFTY INDEX) September rebalance. We see one potential change which should be announced end August.
There is a high probability of Adani Enterprises (ADE IN) being included in the index, while either Shree Cement (SRCM IN) or Hero Motocorp (HMCL IN) will be deleted.
The impact of passive fund trading on the stocks is high in terms of days of ADV, but very high in terms of delivery volume.

Merger Arb Mondays (16 May) – Link Admin, Infomedia, VNET, Alliance Aviation, Ramsay, Link Net

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia and the US (ADRs only).
This week, highest gross spreads are Dongzheng Automotive Finance (2718 HK), Sezzle Inc (SZL AU), 21Vianet Group (VNET US), Infomedia Ltd (IFM AU), Link Administration Holdings (LNK AU), Alliance Aviation.
Lowest gross spreads are Virtus Health (VRT AU), China Logistics Property Holdings (1589 HK), Uniti Group Ltd (UWL AU), Mapletree North Asia Commercial Trust (MAGIC SP), Irongate Group (IAP AU).

Japan Post Holdings – Silly Guidance And A Not So Silly Buyback

By Mio Kato

Japan Post Holdings beat by 1.5% at the revenue line and 1% at the NP line with each of the three major businesses beating guidance slightly.
Guidance was, as usual, for NP to decline YoY and at ¥400bn was slightly below consensus at ¥428bn.
The more important news was a buyback for ¥200bn or 7.6% of outstanding shares.

Kintetsu World Express (9375 JP) Tender Offer by Parent – Too Cheap But Tough To Block

Kintetsu Group Holdings Co L (9041 JP) has announced a Tender Offer to acquire the shares in Kintetsu World Express (9375 JP) that it doesn’t hold (it controls 47%)
This is not a done deal, but they only need about 20% of the remaining 53%.
At a 40% premium to last after a great year, this is still being done at the wrong price. But it will likely get done

MSCI Korea Standard: Constituents with Index Up/Down-Weight in May SAIR

Woori Financial has a 15%p upward adjustment in its float rate. The other 15 constituents will get a 5%p upward adjustment. We then have nine constituents suffering a 5%p drop.
We need to approach them with LONG/SHORT basket trading. However, some have recently shown excessive price volatility, so we should consider setting a basket excluding those with relatively large fluctuations
Another thing to consider is the coupling effect with the KOSPI 200 inflow. Since the lag gap between the two is not large, we expect a substantial coupling effect.

Yamaguchi Financial (8418) – Big On-Market Buyback for Middling Not Too Expensive Regional Bank

Yamaguchi Financial Group In (8418 JP) is the holding company for three western Japan regional banks. Cheapish/overcapitalised, restructuring painfully, but aimed at 5% ROE and capital efficiency.
To that end, it is buyback back a lot of stock.
Compared to its Real World Float, it really is a lot of stock, and it is on-market.

Brambles (BXB AU): Where Could CVC’s Bid Come In?

Brambles Ltd (BXB AU) is in preliminary discussions for CVC to acquire all shares in the company. Media speculation indicates the bid would be at an Enterprise Value > A$20bn.
Brambles Ltd (BXB AU) trades cheaper than its peers and a bid at an EV/EBITDA of 9x would imply a buyout price of A$12.84/share, a 23.1% premium to last close.
At the last traded price of A$11.58/share, there is upside. Especially if other private equity investors enter the fray. Buy on weakness; hedge market risk with ASX200 futures.

Before it’s here, it’s on Smartkarma