Most Read

JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.

[Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy, Cotton…

Late on the 17th, Proto Corp (4298 JP) released a filing to the TSE saying activist-ish investor and objector to the current MBO, Kaname Capital, had filed an injunction.
The injunction suit against two directors says procedures were unfair and the decision violated the duty of due care. They ask the Court to rule the directors halt support and…
…that the MBO actor YOKOYAMA Hiroichi not terminate the offer on 21 March 2025. Injunction filings against directors for Tender Offers are rare for a reason.

JX Advance Metals IPO Trading – Demand Wasn’t Great

JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), raised around US$2.5bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

UK Inflation Excess Survives Reweighting

By Phil Rush

Updated inflation basket weightings can shift the inflation outlook without any new fundamental shock. The seasonal and trend outlook is unaffected by the 2025 update.
Although our forecast is broadly unchanged, this still mitigates the risk that reduced weights on energy and sanitation utilities dampen the surge in April and July forecasts.
This outcome further emboldens our confidence in our above-consensus forecast. We also note that the average import intensity is now weighted near historic lows.

DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

DN Solutions (298440 KS) is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.
The highest probability of DN Solutions being added to the KOSPI200 Index is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.
Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.

EcoNavista (5585 JP) – Takeover By Eisai (4523)

EcoNaviSta (5585 JP) has a couple of interesting product lines and platforms. That makes it attractive, and scalable. Synergies to a big buyer are reasonably obvious.
Eisai Co Ltd (4523 JP) is that big buyer, having decided to be interested last summer. I could imagine others could be interested too. The tech has uses.
For the moment, it is a high EV/Revenue bid on an interesting small company. The chairman, cross-holders, directors, and a couple of financial institutions own 66+%. But…

JX Advanced Metals (5016 JP) IPO: Trading Debut

JX Advanced Metals (5016 JP) priced its IPO at JPY820 per share to raise gross proceeds of US$2.5 billion. The shares will start trading on 19 March.
Relevant notes: JX Advanced Metals (5016 JP) IPO: The Bull Case, JX Advanced Metals (5016 JP) IPO: The Bear Case, JX Advanced Metals (5016 JP) IPO: Price Range Is Fair.
Since the price range was announced, the peers have modestly re-rated. My SoTP valuation of JPY859 is slightly above the IPO price, suggesting the price is fair.

JX Advanced Metals IPO Trading

JX Advanced Metals raised 438.6 billion yen (US$3 billion) on its IPO offering after pricing the IPO at 820 yen per share, valuing the company at 761.3 billion yen.
Our base case valuation of JX Advanced Metals is price per share of 863 yen, based on P/E of 9.9x using our estimated net profit of 81 billion yen (2026E).
Therefore, we would sell into strength if the share price of JX Advanced Metals rises to the 863 yen to 1,044 yen per share.

Canvest (1381 HK): Get Involved

By Special Situation Investments

After SAFE gave the green light on the 19th Feb, I estimated only a week was required to secure the (strangely) outstanding internal guarantees. It took a frustrating three-and-a-half weeks.
Nevertheless, all pre-cons are now done. Canvest Environmental (1381 HK)‘s Scheme Document is expected to be dispatched or before the 25th April.
Assuming the Scheme gets up – and it will – expect payment around the 20th June. This is done.

Ping An’s Strategic Buyout of OneConnect: Navigating Shareholder Approval and Financial Implications Amidst Declining Performance

OneConnect received a non-binding acquisition proposal from Ping An Group at $7.98/ADS, requiring 75% shareholder approval.
Ping An acquired OneConnect’s virtual banking division for $119m and terminated its cloud services contract in 2024.
The buyout is financially attractive for Ping An, acquiring OCFT at net cash levels, with a US$100m consideration.

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Mar 18

Most Read: JX Advanced Metals, Sumitomo Corp, Rio Tinto Ltd, HKBN Ltd, Daishi Hokuetsu Financial Group, Spartan Resources /Australi, Samsung Electronics, Shandong Fengxiang and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

JX Advance Metals Pre-IPO – The Positives – Transforming
Warren Buffett and the Japanese Trading Houses I
Rio Tinto (RIO LN/RIO AU): Thinking About Unification
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
Gunma Bank (8334) And DHFG (7327) In Integration Talks – ‘Guess The Ratio’ Is ‘Efficiency Vs Value’
MV Global Junior Gold Miners Index Rebalance: 7 Adds & Other Changes Lead to US$610m Trade
Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion
HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion
The Backdrop Behind Today’s Pivot in Samsung’s Playbook
Fengxiang (9977 HK): Privatisation by PAG?

JX Advance Metals Pre-IPO – The Positives – Transforming

JX Advance Metal’s (JXAM) parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
In this note, we talk about the positive aspects of the deal.

Warren Buffett and the Japanese Trading Houses I

The Berkshire Hathaway Annual Shareholder Letter for 2024 was released this weekend. Much was made in Japanese twitter-space of the comments he made on the Japanese trading houses.
He said Berkshire Hathaway’s admiration of these companies “has consistently grown” and Berkshire likes their capital deployment, managements, and their attitude in respect to investors. They also pay themselves reasonably.
He mentioned Berkshire will increase their stakes somewhat in the trading houses “over time.” That comment deserves some exploration, as does the comment about yen funding.

Rio Tinto (RIO LN/RIO AU): Thinking About Unification

Rio Tinto Ltd (RIO AU) shareholders will vote on Palliser’s AGM resolution to conduct an independent review on whether the potential unification is in the best interests of shareholders.
Palliser and the Board’s arguments for and against unification focus on five factors: tax costs, post-unification share price, lack of scrip M&A, wastage of franking credits, and shareholder support.
A Grant Thornton report supports unification. The board’s case is strong primarily on tax costs, while Palliser’s case is strong on post-unification share price, M&A, and franking credits.

HKBN (1310 HK): MBK Ups Stake Via VLN Conversion

China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .

Gunma Bank (8334) And DHFG (7327) In Integration Talks – ‘Guess The Ratio’ Is ‘Efficiency Vs Value’

Nikkei Business reported Friday 14 March that Gunma Bank (8334 JP) and Daishi Hokuetsu Financial Group (7327 JP) (“DHFG”) were in talks to integrate to create a Super-Regional Bank
Gunma and Daishi-Hokuetsu are part of the same multiple-regional bank alliances, including the Gunma-Daishi Hokuetsu Alliance since 2021, in order to collaborate regionally, build scale, and lower service provision cost.
As Gunma and Daishi Hokuetsu serve adjacent jurisdictions, and they are already exploring sharing branches, this makes sense. The World with Interest (rates above zero) may cause more integration talk.

MV Global Junior Gold Miners Index Rebalance: 7 Adds & Other Changes Lead to US$610m Trade

There are 7 adds for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in March. There are plenty of float and capping changes too.
Estimated one-way turnover is 5.3% resulting in a round-trip trade of US$610m. There are 11 stocks with over 1x ADV to trade from passive trackers.
Spartan Resources /Australi (SPR AU) and Ora Banda Mining (OBM AU) will be added to some of the S&P/ASX indices at the same time, increasing flow and impact.

Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion

Ramelius Resources (RMS AU) and Spartan Resources /Australi (SPR AU) have signed a binding Transaction Implementation Deed to enter into a ‘Transformational Combination’.
For each share of Spartan Resources (SPR AU) held, shareholders will receive A$0.25 in cash and 0.6957 Ramelius Resources (RMS AU) shares, implying a value of A$1.78/share for Spartan Resources.
The merger is expected to complete late July/ early August, and the merged entity could be added to the S&P/ASX 100 Index in September.

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

A new Sing Tao Daily article on HKBN Ltd (1310 HK) claims that China Mobile (941 HK)’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges.
The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared.
Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent.

The Backdrop Behind Today’s Pivot in Samsung’s Playbook

Jay Lee flipping the switch signals Samsung’s pivot—no more playing defense, no more legal jitters. Market’s reading this as full send on the next phase.
Near-Term, Samsung’s pushing hard—NVIDIA’s HBM qual tests are in focus. With NVIDIA’s event this week, traders are watching for bullish signals after earlier cautious moves.
The real juice? Samsung might drop a bold value-up play and a no-nonsense shareholder message. The prime launchpad: AGM day, this Wednesday, 19th, 9 AM.

Fengxiang (9977 HK): Privatisation by PAG?

Shandong Fengxiang (9977 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” PAG, the controlling shareholder, likely aims to privatise Fengxiang.
The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection).
The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders’ backing.

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Mar 17

Most Read: Daishi Hokuetsu Financial Group, Hoa Phat Group Jsc, Pilbara Minerals, Broadcom , CK Hutchison Holdings, Tsuruha Holdings, Spartan Resources /Australi, HKBN Ltd, Technology One and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Gunma Bank (8334) And DHFG (7327) In Integration Talks – ‘Guess The Ratio’ Is ‘Efficiency Vs Value’
MarketVector Vietnam Local Index Rebalance: One Add, Capping & Float Changes
MV Global Rare Earth/Strategic Metals Index Rebalance: One Delete & Other Changes
MV US Listed Semiconductor 25 Index Rebalance: Round-Trip Trade Over US$1.2bn
CK Hutchison (1 HK): Political Turbulence
Tsuruha (3391) – Welcia (3141) – Tsuruha Earnings In a Week – Still Good To Be Long The Ratio
MV Global Junior Gold Miners Index Rebalance: 7 Adds & Other Changes Lead to US$610m Trade
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
MV Australia Equal Weight Index Rebalance: SIG, TNE Added; US$288m Trade
Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion

Gunma Bank (8334) And DHFG (7327) In Integration Talks – ‘Guess The Ratio’ Is ‘Efficiency Vs Value’

Nikkei Business reported Friday 14 March that Gunma Bank (8334 JP) and Daishi Hokuetsu Financial Group (7327 JP) (“DHFG”) were in talks to integrate to create a Super-Regional Bank
Gunma and Daishi-Hokuetsu are part of the same multiple-regional bank alliances, including the Gunma-Daishi Hokuetsu Alliance since 2021, in order to collaborate regionally, build scale, and lower service provision cost.
As Gunma and Daishi Hokuetsu serve adjacent jurisdictions, and they are already exploring sharing branches, this makes sense. The World with Interest (rates above zero) may cause more integration talk.

MarketVector Vietnam Local Index Rebalance: One Add, Capping & Float Changes

Nam A Commercial Joint Stock Bank (NAB VN) will be added to the MarketVector Vietnam Local Index at the close on 21 March.
Estimated one-way turnover is 3.1% and that results in a round-trip trade of US$26m. There are 3 stocks with more than 1x ADV to trade from passives.
Vietnam is on the watchlist of a global index provider for possible reclassification from Frontier to Secondary Emerging Market and that could lead to inflows to the stocks.

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

Standard Lithium (SLI US) will be deleted from the VanEck Rare Earth/Strategic Me (REMX US) at the close of trading on 21 March.
The constituent change, float changes and capping changes result in an estimated one-way turnover of 8.9% and in a round-trip trade of US$61m.
The largest inflows will be in Pilbara Minerals (PLS AU) and Albemarle (ALB US) while there will be outflows from MP Materials (MP US) and Lynas Corp (LYC AU).

MV US Listed Semiconductor 25 Index Rebalance: Round-Trip Trade Over US$1.2bn

There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in March but there are a lot of float and capping changes.
Estimated one-way turnover is 3% resulting in a round-trip trade of US$1.2bn. Impact on the stocks is small given they are highly liquid.
There is expected to be US$600m to sell in Broadcom from the Technology Select Sector and Invesco S&P500 Equal Weight ETFs at the same time as the selling from VanEck Vectors Semiconductor.

CK Hutchison (1 HK): Political Turbulence

On 13 March, Ta Kung Pao, a Hong Kong newspaper owned by the Chinese government and Communist Party, denounced CK Hutchison Holdings (1 HK)’s planned port transaction.
The opinion piece is mainly political rhetoric, as even if China managed to block the deal, it would still not address the underlying concerns expressed in the article.
In the near term, the shares will likely be under pressure from a nationalistic backlash. Nevertheless, deal or no deal, the valuation remains undemanding.

Tsuruha (3391) – Welcia (3141) – Tsuruha Earnings In a Week – Still Good To Be Long The Ratio

Tsuruha and Welcia are on the road to a merger, where Tsuruha takes over Welcia but Aeon ends up owning “more than 50% but less than 51%” of Tsuruha.
The Price Ratio is now 4.24x. Trailing EPS ratios is >5. Forward EPS ratios are further above 5. BVPS ratio? Near 5. Welcia grows storecount. Tsuruha makes more money/store.
Tsuruha changed its FY-end to match that of Welcia/Aeon so both will report earnings/guidance in just over 3 weeks. That will likely influence the ratio.

MV Global Junior Gold Miners Index Rebalance: 7 Adds & Other Changes Lead to US$610m Trade

There are 7 adds for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in March. There are plenty of float and capping changes too.
Estimated one-way turnover is 5.3% resulting in a round-trip trade of US$610m. There are 11 stocks with over 1x ADV to trade from passive trackers.
Spartan Resources /Australi (SPR AU) and Ora Banda Mining (OBM AU) will be added to some of the S&P/ASX indices at the same time, increasing flow and impact.

HKBN (1310 HK): MBK Ups Stake Via VLN Conversion

China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .

MV Australia Equal Weight Index Rebalance: SIG, TNE Added; US$288m Trade

Sigma Healthcare (SIG AU) and Technology One (TNE AU) will be added to the VanEck Vectors Australian Equal Weight ETF (MVW AU) at the close on 21 March.
Surprisingly, there are no deletions from the index. The two inclusions, float changes and capping changes result in a one-way turnover of 5.6% leading to a round-trip trade of A$288m.
There will be huge buying of A$1.2bn in Sigma Healthcare (SIG AU) at the same time from S&P/ASX 200 (AS51 INDEX) and related index trackers.

Ramelius/Spartan Merger: MergeCo Close to ASX100 Index Inclusion

Ramelius Resources (RMS AU) and Spartan Resources /Australi (SPR AU) have signed a binding Transaction Implementation Deed to enter into a ‘Transformational Combination’.
For each share of Spartan Resources (SPR AU) held, shareholders will receive A$0.25 in cash and 0.6957 Ramelius Resources (RMS AU) shares, implying a value of A$1.78/share for Spartan Resources.
The merger is expected to complete late July/ early August, and the merged entity could be added to the S&P/ASX 100 Index in September.

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Mar 16

Most Read: Kuang-Chi Technologies , Samsung SDI, Xiangtan Electric Manufacturing Co,Ltd., Hoa Phat Group Jsc, SGX Rubber Future TSR20, DN Solutions, Waypoint REIT, Daishi Hokuetsu Financial Group, Kepco Plant Service & Engineering and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range
Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market
CSI 1000 Index Rebalance Preview: US$3.7bn Trade; Adds Outperform as ETFs Face Redemptions
MarketVector Vietnam Local Index Rebalance: One Add, Capping & Float Changes
Plant-based Butadiene Emerges, Thanks To Zeon And Yokohama
EUDR: EC Mandates Due Diligence For All In Rubber Supply Chain Except SMEs
DN Solutions IPO Preview
MV Australia A-REITs Index Rebalance: Waypoint REIT (WPR AU) Deleted
Gunma Bank (8334) And DHFG (7327) In Integration Talks – ‘Guess The Ratio’ Is ‘Efficiency Vs Value’
Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (17 March 2025)

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range

There could be 7 changes at the June rebalance with the Information Technology sector gaining 3 index spots and the Materials sector losing 3 spots.
We estimate one-way turnover of 1.45% at the rebalance leading to a round-trip trade of CNY 28.1bn (US$3.9bn). There are 6 stocks with over 2x ADV to trade.
There have been redemptions in mainland China ETFs over the last couple of months and that leads to a lower impact on the stocks compared to the last rebalance.

Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market

The discount’s tight, but this near-2-trillion-won raise is a rare mega-deal in Korea, despite the issuance ratio below 20%.
Samsung Electronics is in for 150 billion won, but plenty of supply remains. A smooth clearance? Unlikely. This could drive stock rights costs lower as price discovery unfolds.
The optimal approach is to wait for a decline in rights prices and assess hedge costs through single stock futures (or TRS, if doable), given the shorting restrictions.

CSI 1000 Index Rebalance Preview: US$3.7bn Trade; Adds Outperform as ETFs Face Redemptions

With over 85% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 June.
We estimate a one-way turnover of 11% at the rebalance resulting in a round-trip trade of CNY26.9bn (US$3.7bn). The Industrials sector could gain the most index spots.
The forecast adds have outperformed the forecast deletes this calendar year. Part of that can be attributed to the outflows from ETFs tracking the CSI1000 Index.

MarketVector Vietnam Local Index Rebalance: One Add, Capping & Float Changes

Nam A Commercial Joint Stock Bank (NAB VN) will be added to the MarketVector Vietnam Local Index at the close on 21 March.
Estimated one-way turnover is 3.1% and that results in a round-trip trade of US$26m. There are 3 stocks with more than 1x ADV to trade from passives.
Vietnam is on the watchlist of a global index provider for possible reclassification from Frontier to Secondary Emerging Market and that could lead to inflows to the stocks.

Plant-based Butadiene Emerges, Thanks To Zeon And Yokohama

By Vinod Nedumudy

Zeon will develop BR and Yokohama will make tires with it
Facility to be installed at Zeon’s Tokuyama Plant in Shunan City in Japan
Trial production scheduled for 2026 and mass production by 2030

EUDR: EC Mandates Due Diligence For All In Rubber Supply Chain Except SMEs

By Vinod Nedumudy

EC publishes 11 commodities’ scenarios including rubber
Non-SME operators, dealers tasked with due diligence onus
German Rubber Association criticism fails to make impact

DN Solutions IPO Preview

DN Solutions is getting ready to complete its IPO in Korea in May 2025. The IPO price range is from 65,000 won to 89,700 won.
The book building for the institutional investors will last from 22 to 28 April. The expected IPO offering amount is from 1.14 trillion won to 1.57 trillion won.
The IPO price range is based on DN Solutions’ net profit of 317.4 billion won, P/E of 25.2x, and IPO discount rates of 29.1% to 48.6%.

MV Australia A-REITs Index Rebalance: Waypoint REIT (WPR AU) Deleted

Waypoint REIT (WPR AU) will be deleted from the Vaneck Vectors Australian Property ETF (MVA AU) next week. There are float changes and capping changes too.
Estimated one-way turnover is 4.3% and will result in a round-trip trade of A$49m. There are 3 stocks with over 0.5x ADV to trade from passive trackers.
We had Waypoint REIT (WPR AU) as a delete in December, but the stock was not deleted from the index. We had it as a close delete this time.

Gunma Bank (8334) And DHFG (7327) In Integration Talks – ‘Guess The Ratio’ Is ‘Efficiency Vs Value’

Nikkei Business reported Friday 14 March that Gunma Bank (8334 JP) and Daishi Hokuetsu Financial Group (7327 JP) (“DHFG”) were in talks to integrate to create a Super-Regional Bank
Gunma and Daishi-Hokuetsu are part of the same multiple-regional bank alliances, including the Gunma-Daishi Hokuetsu Alliance since 2021, in order to collaborate regionally, build scale, and lower service provision cost.
As Gunma and Daishi Hokuetsu serve adjacent jurisdictions, and they are already exploring sharing branches, this makes sense. The World with Interest (rates above zero) may cause more integration talk.

Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (17 March 2025)

In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks starting 17 March.
Some of the top 10 Korean stock picks in the bi-weekly (starting 17 March) include Kepco Plant Service & Engineering, Hyundai Wia, Poongsan, and Doosan Enerbility.
The biggest near-term negative catalyst on the Korean stock market remains tariffs. The final legal outcome on President Yoon Seok-Yeol is expected to be made by the end of March.

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Mar 15

Most Read: Rio Tinto Ltd, Kuang-Chi Technologies , Nissan Tokyo Sales, Delta Electronics Thailand , Samsung SDI, CK Hutchison Holdings, Xiangtan Electric Manufacturing Co,Ltd., Tenma Corp, Bayerische Motoren Werke (BMW) (Pref) and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Rio Tinto (RIO AU/RIO LN): Unification Index Flows
CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range
[Activism Japan] Nissan Tokyo Sales (8291) Gets An ‘Outsourced Activist’ but the Value Prop Remains
SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)
Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market
CK Hutch (1 HK): Still Trading Cheap
CSI 1000 Index Rebalance Preview: US$3.7bn Trade; Adds Outperform as ETFs Face Redemptions
HEW: Payback In Trade And Pricing
Tenma (7958 JP) MBO at ¥3,580 – Finally (Wipes Brow), An Exit. ATH But Not Yet PBR1.
BMW Shifts into High Gear: A 10% Share Buyback to Drive Value

Rio Tinto (RIO AU/RIO LN): Unification Index Flows

At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range

There could be 7 changes at the June rebalance with the Information Technology sector gaining 3 index spots and the Materials sector losing 3 spots.
We estimate one-way turnover of 1.45% at the rebalance leading to a round-trip trade of CNY 28.1bn (US$3.9bn). There are 6 stocks with over 2x ADV to trade.
There have been redemptions in mainland China ETFs over the last couple of months and that leads to a lower impact on the stocks compared to the last rebalance.

[Activism Japan] Nissan Tokyo Sales (8291) Gets An ‘Outsourced Activist’ but the Value Prop Remains

On 12 March 2025, a minor Twitter account @nanahoshiuk started in January announced a website shiftnissantokyo.com where they point out the value proposition in Nissan Tokyo Sales (8291 JP).
The writeup is by a UK company led by a young man with an equity-investing career, some experience at an activist shop, who now runs a “Shareholder Activism Outsourcing Service.”
The content sounds familiar to my piece in December, has a few unpolished edges, but clearly points out the value proposition. The stock deserves a re-visit. My comments are below.

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

On 4 February, the SET floated a consultation paper on capping stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at 10%.
The move was aimed at Delta Electronics Thailand (DELTA TB) since it was the only stock with an index weight higher than 10%.
Delta Electronics Thailand (DELTA TB) has slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.

Samsung SDI Capital Raise: A Mega Deal Rarely Seen in the Local Market

The discount’s tight, but this near-2-trillion-won raise is a rare mega-deal in Korea, despite the issuance ratio below 20%.
Samsung Electronics is in for 150 billion won, but plenty of supply remains. A smooth clearance? Unlikely. This could drive stock rights costs lower as price discovery unfolds.
The optimal approach is to wait for a decline in rights prices and assess hedge costs through single stock futures (or TRS, if doable), given the shorting restrictions.

CK Hutch (1 HK): Still Trading Cheap

To avoid a political landmine, on the 4th March CK Hutchison Holdings (1 HK) announced a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.
It’s an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.
The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it’s a complex deal, which will take time to work through the system.

CSI 1000 Index Rebalance Preview: US$3.7bn Trade; Adds Outperform as ETFs Face Redemptions

With over 85% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 June.
We estimate a one-way turnover of 11% at the rebalance resulting in a round-trip trade of CNY26.9bn (US$3.7bn). The Industrials sector could gain the most index spots.
The forecast adds have outperformed the forecast deletes this calendar year. Part of that can be attributed to the outflows from ETFs tracking the CSI1000 Index.

HEW: Payback In Trade And Pricing

By Phil Rush

Equities are facing difficulties due to unpredictable trade policies and retaliations, which are affecting profit forecasts. Despite this, hard data remains strong, although low airfares are impacting the US CPI. There has been a decrease in optimism about Europe.
The Federal Reserve and the Bank of England are likely to maintain current interest rates in the coming week as there are no clear signs of a downturn. Two MPC members are expected to dissent for a 25bp cut to avoid acknowledging a previous error.
Other upcoming announcements include those from the Bank of Japan, the Swiss National Bank, and the Riksbank.

Tenma (7958 JP) MBO at ¥3,580 – Finally (Wipes Brow), An Exit. ATH But Not Yet PBR1.

Plastic household goods maker Tenma Corp (7958 JP) has been “undervalued” for decades. A variety of activish/activist holders have come and gone. Dalton went substantial in 2016, is 18% now.
The family has always controlled the company, and in the last decade, the company has bought back shares, raising the family stake. Now they are buying out minorities.
The deal is at 4.1x Adjusted EV/EBITDA for March 2026 (adjusted for securities sales, etc) and 0.82x book for the non-cash/securities portion of the business. But Dalton has thrown in.

BMW Shifts into High Gear: A 10% Share Buyback to Drive Value

By Jesus Rodriguez Aguilar

BMW plans to repurchase 10% of its share capital over five years, likely replacing the previous buy-back program to optimize capital efficiency.
The share buy-back is expected to boost EPS and support stock prices, with a stronger impact on preferred shares due to lower liquidity.
The Quandt family’s ownership stake could increase to approximately 54.36%, further solidifying their control over BMW.

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Mar 14

Most Read: Rio Tinto Ltd, JX Advanced Metals, Proto Corp, Nissan Tokyo Sales, Tencent, Bestechnic Shanghai , Seven & I Holdings, Recruit Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Rio Tinto (RIO AU/RIO LN): Unification Index Flows
JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry
Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?
[Activism Japan] Nissan Tokyo Sales (8291) Gets An ‘Outsourced Activist’ but the Value Prop Remains
Asian Equities: Valuation Mean Reversion – The Winners and Losers
CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade
US Lands Some Disinflation In Feb-25
Seven & I Holdings (3382 JP): Awaiting the Board’s Response as Couche-Tard Goes on a Charm Offensive
Recruit Holdings Placement – Relatively Small US$520m Deal but Momentum Is Weak
Rio Tinto (RIO LN/RIO AU): Thinking About Unification

Rio Tinto (RIO AU/RIO LN): Unification Index Flows

At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry

JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.

Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?

The MBO for Proto Corp (4298 JP) where the founder/chair is buying out from minorities is being done at the wrong price. His reasons are good, but not for minorities.
One large foreign shareholder – the second largest shareholder of the firm – has offered substantial pushback in the form of a letter asking for discussions. That went nowhere.
So now they have come out harder. The solution here is a really big bump or a broken deal if investors keep the share price above the TOB price.

[Activism Japan] Nissan Tokyo Sales (8291) Gets An ‘Outsourced Activist’ but the Value Prop Remains

On 12 March 2025, a minor Twitter account @nanahoshiuk started in January announced a website shiftnissantokyo.com where they point out the value proposition in Nissan Tokyo Sales (8291 JP).
The writeup is by a UK company led by a young man with an equity-investing career, some experience at an activist shop, who now runs a “Shareholder Activism Outsourcing Service.”
The content sounds familiar to my piece in December, has a few unpolished edges, but clearly points out the value proposition. The stock deserves a re-visit. My comments are below.

Asian Equities: Valuation Mean Reversion – The Winners and Losers

By Manishi Raychaudhuri

Valuations across Asia are mean reverting – expensive markets derating and the cheap ones rerating. We think this is likely to continue somewhat longer.
We think HK/China could rerate more; India and Taiwan could derate slightly further. India looks interesting. Valuation range has structurally shifted upwards. But another 5-10% relative valuation correction is warranted.
Principal stock choices in HK/China, Korea and India pertain to themes of domestic consumption, AI resilience and unloved sectors. Some of the companies have mitigating strategies for the tariff war.

CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade

With 85% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 June.
We estimate a one-way turnover of 10% at the rebalance resulting in a round-trip trade of CNY26.4bn (US$3.6bn). The Information Technology gains at the expense of Healthcare and Consumer Staples.
The forecast adds have outperformed the forecast deletes and the CSI Smallcap500 Index over the last 6 months. The best part is that the volatility of the trade is very low.

US Lands Some Disinflation In Feb-25

By Phil Rush

The upwards trend in monthly US inflation of the past several months broke in February with a surprisingly steep slowing to 0.2% m-o-m, although airfares drove the downside.
Drift in consensus expectations is not yet obviously broken, with this outcome 0.2pp above forecasts from a month ago. A rebound after Easter remains likely.
Disinflation is unlikely to dissuade the Fed from holding rates in March. We doubt soft surveys will translate to recessionary conditions, so we still see no more Fed cuts.

Seven & I Holdings (3382 JP): Awaiting the Board’s Response as Couche-Tard Goes on a Charm Offensive

On 13 March, Alimentation Couche-Tard (ATD CN)’s management held its first press conference in Japan since it disclosed its Seven & I Holdings (3382 JP) offer.
The Couche-Tard charm offensive was designed to pressure the Board to engage and facilitate a definite agreement. The press conference provided incremental new information.
The Board’s next move will likely provide limited due diligence, partly to avoid a protest vote at the May AGM. However, the prospect of a Board-recommended binding proposal remains low.

Recruit Holdings Placement – Relatively Small US$520m Deal but Momentum Is Weak

An undisclosed seller is looking to raise around US$520m via selling 0.5% of its stake in Recruit Holdings (6098 JP) .
We have covered a number of placements in the stock over the past few years, most of which have ended up doing well.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Rio Tinto (RIO LN/RIO AU): Thinking About Unification

Rio Tinto Ltd (RIO AU) shareholders will vote on Palliser’s AGM resolution to conduct an independent review on whether the potential unification is in the best interests of shareholders.
Palliser and the Board’s arguments for and against unification focus on five factors: tax costs, post-unification share price, lack of scrip M&A, wastage of franking credits, and shareholder support.
A Grant Thornton report supports unification. The board’s case is strong primarily on tax costs, while Palliser’s case is strong on post-unification share price, M&A, and franking credits.

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Mar 13

Most Read: Seven & I Holdings, Rio Tinto Ltd, JX Advanced Metals, Indusind Bank, Korea Stock Exchange Kospi Index, Proto Corp, Changyou.com, Bestechnic Shanghai , Korea Zinc and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) Update – Couche-Tard Responds
Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification
JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry
IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next
Properly Interpreting Korea’s Stock Borrow Data for Short Selling
Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?
Rio Tinto (RIO AU/RIO LN): Unification Index Flows
Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted
CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade
Is Homeplus Debacle a Key Negative Tipping Point for MBK?

7&I (3382) Update – Couche-Tard Responds

On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly.
Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

Rio Tinto (RIO AU/LN): Shareholders To Vote On Merits Of Unification

Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
Palliser’s reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
Shareholders will vote on the resolution on 3rd April for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.

JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry

JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.

IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next

The Indusind Bank (IIB IN) stock was down 27% yesterday following the announcement of Derivatives Portfolio losses that have wiped out 2.35% of equity.
Foreign investors were big sellers in the last 3 months of 2024. That led to increased foreign room, leading to an index upweight in February and index inclusion in March.
The drop in market cap and free float market cap will see Indusind Bank (IIB IN) deleted from the S&P BSE SENSEX Index in June and the NIFTY Index in September.

Properly Interpreting Korea’s Stock Borrow Data for Short Selling

Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?

The MBO for Proto Corp (4298 JP) where the founder/chair is buying out from minorities is being done at the wrong price. His reasons are good, but not for minorities.
One large foreign shareholder – the second largest shareholder of the firm – has offered substantial pushback in the form of a letter asking for discussions. That went nowhere.
So now they have come out harder. The solution here is a really big bump or a broken deal if investors keep the share price above the TOB price.

Rio Tinto (RIO AU/RIO LN): Unification Index Flows

At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted

In a long-form merger for Cayman incorporated companies, dissenters can petition the Grand Court for determination of fair value. For short form merges, that avenue of dissent was not available.
But on the 28 January 2021, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a ‘short-form’ merger were entitled to dissent.
Changyou.com (CYOU US) appealed this decision in the Court of Appeal, and was dismissed. Then appealed to the Privy Council. In a judgement handed down yesterday, this was also dismissed.

CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade

With 85% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 June.
We estimate a one-way turnover of 10% at the rebalance resulting in a round-trip trade of CNY26.4bn (US$3.6bn). The Information Technology gains at the expense of Healthcare and Consumer Staples.
The forecast adds have outperformed the forecast deletes and the CSI Smallcap500 Index over the last 6 months. The best part is that the volatility of the trade is very low.

Is Homeplus Debacle a Key Negative Tipping Point for MBK?

In this insight, we discuss how the Homeplus debacle is causing a major negative sentiment on MBK Partners from both the Korean government and the media.
This negative sentiment has grown so much that it could have a legitimate negative impact in the upcoming proxy vote for the control of Korea Zinc.
The Korean government has targeted MBK for tax probe. Plus, a coalition of securities firms is expected to file a lawsuit against Homeplus and MBK.

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Mar 12

Most Read: Nikkei 225, Snt Corp, Seven & I Holdings, Kuang-Chi Technologies , JX Advanced Metals, Makino Milling Machine Co, Delta Electronics Thailand , ESR Group , Korea Stock Exchange Kospi Index and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia
7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now
Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
7&I (3382) Update – Couche-Tard Responds
CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range
JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry
Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging
SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)
ESR (1821 HK) Chips Away At Pre-Cons
Properly Interpreting Korea’s Stock Borrow Data for Short Selling

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia

We look at the performance of the index rebalance strategy over the year using weekly forecasts. In short, it has been a mixed bag for Asia.
India and China have been among the worst performing markets in the region while Australia and Korea have been among the better performers.
A lot of the outperformance appears to be front loaded, so getting the forecasts right early in the review period is of paramount importance.

7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now

On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.
It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update.
It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.
This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover

7&I (3382) Update – Couche-Tard Responds

On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly.
Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range

There could be 7 changes at the June rebalance with the Information Technology sector gaining 3 index spots and the Materials sector losing 3 spots.
We estimate one-way turnover of 1.45% at the rebalance leading to a round-trip trade of CNY 28.1bn (US$3.9bn). There are 6 stocks with over 2x ADV to trade.
There have been redemptions in mainland China ETFs over the last couple of months and that leads to a lower impact on the stocks compared to the last rebalance.

JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry

JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.

Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

On 4 February, the SET floated a consultation paper on capping stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at 10%.
The move was aimed at Delta Electronics Thailand (DELTA TB) since it was the only stock with an index weight higher than 10%.
Delta Electronics Thailand (DELTA TB) has slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.

ESR (1821 HK) Chips Away At Pre-Cons

When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions.
We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead.
Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.

Properly Interpreting Korea’s Stock Borrow Data for Short Selling

Local instos borrow from brokers or peers, KSD collects and cleans the data, then KOFIA reports stock borrow balances daily with a two-day lag.
Offshore borrows via EquiLend or PB deals don’t show up—KSD reporting only covers local institution-to-institution stock loans.
Assume 60% of reported borrow balance is real shortable ammo—adjusting for this helps filter out noise in short positioning.

Before it’s here, it’s on Smartkarma

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Mar 11

Most Read: Nikkei 225, Japan Post Bank, Sigma Healthcare, Seven & I Holdings, DoorDash , SK Innovation, TKO Group Holdings , BYD, Makino Milling Machine Co and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia
Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings
S&P/ASX Index Rebalance (Mar 2025): SIG Is the BIG One; Changes Galore Across Indices
7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now
S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility
Got the BBIG Rebalancing Results: SK Innovation Is the Trade This Week
Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO
Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter
ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food
Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia

We look at the performance of the index rebalance strategy over the year using weekly forecasts. In short, it has been a mixed bag for Asia.
India and China have been among the worst performing markets in the region while Australia and Korea have been among the better performers.
A lot of the outperformance appears to be front loaded, so getting the forecasts right early in the review period is of paramount importance.

Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings

The Offering of Japan Post Bank (7182 JP) is not taking place the way “the right pattern” would suggest, but last time was kind of special. This time is different.
Last time was a “second IPO” and coincided with a US regional bank crisis. This time the offering is smaller outright, and much smaller as a portion of float.
Pricing is Monday. It hasn’t moved much vs JPH. It needs to move more to be attractive. And there is still a bit of overhang to come.

S&P/ASX Index Rebalance (Mar 2025): SIG Is the BIG One; Changes Galore Across Indices

There are 2 changes for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, 7 changes for the S&P/ASX200 Index and 11 adds/ 7 deletes for the S&P/ASX300 Index.
There is a huge increase in the number of index shares for Sigma Healthcare (SIG AU), triggering passive buying of nearly A$1.4bn at the close on 21 March.
The adds have outperformed the deletes across all indices. Positioning varies across stocks and there could be some big movers over the next few days.

7&I (3382) – Artisan Writes (Again) And 7&I Updates (Again) – More Positive Outlook Now

On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.
It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update.
It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility

There are 4 changes for the S&P 500 INDEX, 6 changes for the S&P Midcap400 Index and 14 changes for the S&P SmallCap600 Index at the March rebalance.
DoorDash (DASH US) was newly eligible after meeting the profitability criterion, while AppLovin (APP US), Coinbase Global (COIN US) and Interactive Brokers Group, Inc (IBKR US) were overlooked again.
There will be more same-way flow for the S&P 500 INDEX (SPX INDEX) adds and deletes from the Select Sector index trackers.

Got the BBIG Rebalancing Results: SK Innovation Is the Trade This Week

Real alpha? Tight basket means outsized passive flows. The play? SK Innovation, no contest.
Samsung SDI faces -0.54x ADTV outflows. Other movers: Netmarble 0.68x, Wemade Max 0.54x, NHN -0.46x ADTV.
Net-Net? SK Innovation is the trade. Long here, hedge short on Samsung SDI or the broader Battery space.

Select Sector Indices and S&P Equal Weight Rebalance: US$16.3bn Trade; Big Impact for EXE, TKO

Constituent changes to the S&P500 INDEX and capping changes will result in a round-trip trade of US$16.3bn across the Select Sector indices and the S&P500 Equal Weight Index.
The Select Sector index trackers and S&P500 Equal Weight trackers will need to buy the adds to the S&P500 INDEX and sell the deletes, further increasing flow for the stocks.
The flows will change over the next week as stock prices move around, and final capping is done after the close on 14 March.

Seven & I Holdings (3382 JP): Reading Between the Lines of the Public Letter

The Seven & I Holdings (3382 JP) Board has released a public letter to address Artisan Partners’ letter and provide more details on the Alimentation Couche-Tard (ATD CN) constructive engagement.
The letter effectively addresses most of Artisan’s concerns. The Board is engaging with Couche-Tard, particularly by agreeing on a strategy to find a solution to secure antitrust approvals.
However, the statement suggests that the Board retains deep scepticism that the Couche-Tard is viable and is manoeuvring to shift the blame on a failed bid on a flawed proposal.

ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Mixue Group (2097 HK) provided some much needed relief to the HK tea chains, Seoul Guarantee Insurance (031210 KS) might not do the same this week.
On the placements front, BYD (1211 HK)‘s jumbo offering has been doing well, while Japan Post Bank (7182 JP) hasn’t been correcting much.

Makino Milling Machine (6135 JP): A White Knight Bidder Is Emerging

Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
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✓ Company Analytics and News
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Mar 10

Most Read: Japan Post Bank, Nikkei 225, A2 Milk Co Ltd, Sigma Healthcare, SK Innovation, Mitsui O.S.K. Lines, Daihatsu Diesel Mfg, DoorDash , China Vanke (H) and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings
Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia
S&P/NZX 10 Index Rebalance: A2 Milk (ATM NZ) Replaces Ryman Healthcare (RYM NZ)
S&P/ASX Index Rebalance (Mar 2025): SIG Is the BIG One; Changes Galore Across Indices
Quiddity ASX Mar25 Results: Multiple Surprises; High Short Buildup for DELs; Rare Successful Trade
Got the BBIG Rebalancing Results: SK Innovation Is the Trade This Week
The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors
Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity
S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility
A/H Premium Tracker (To 7 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

Japan Post Bank (7182 JP) – Not Cheap Enough Vs Others, or Holdings

The Offering of Japan Post Bank (7182 JP) is not taking place the way “the right pattern” would suggest, but last time was kind of special. This time is different.
Last time was a “second IPO” and coincided with a US regional bank crisis. This time the offering is smaller outright, and much smaller as a portion of float.
Pricing is Monday. It hasn’t moved much vs JPH. It needs to move more to be attractive. And there is still a bit of overhang to come.

Index Rebalance Strategy YTD Performance: Not Many Places to Hide in Asia

We look at the performance of the index rebalance strategy over the year using weekly forecasts. In short, it has been a mixed bag for Asia.
India and China have been among the worst performing markets in the region while Australia and Korea have been among the better performers.
A lot of the outperformance appears to be front loaded, so getting the forecasts right early in the review period is of paramount importance.

S&P/NZX 10 Index Rebalance: A2 Milk (ATM NZ) Replaces Ryman Healthcare (RYM NZ)

A2 Milk Co Ltd (ATM NZ) will replace Ryman Healthcare (RYM NZ) in the S&P/NZX 10 Index at the close of trading on 21 March.
Passive trackers will need to buy 0.8x ADV in A2 Milk Co Ltd (ATM NZ) and will need to sell 1.2x ADV in Ryman Healthcare (RYM NZ).
Importantly, A2 Milk Co Ltd (ATM NZ) is a deletion from a global index at the close on 21 March and the selling from those passive trackers is far larger.

S&P/ASX Index Rebalance (Mar 2025): SIG Is the BIG One; Changes Galore Across Indices

There are 2 changes for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, 7 changes for the S&P/ASX200 Index and 11 adds/ 7 deletes for the S&P/ASX300 Index.
There is a huge increase in the number of index shares for Sigma Healthcare (SIG AU), triggering passive buying of nearly A$1.4bn at the close on 21 March.
The adds have outperformed the deletes across all indices. Positioning varies across stocks and there could be some big movers over the next few days.

Quiddity ASX Mar25 Results: Multiple Surprises; High Short Buildup for DELs; Rare Successful Trade

By Janaghan Jeyakumar, CFA

The ADDs/DELs for the ASX index family for the March 2025 index rebal event were announced after market close on Friday 7th March 2025.
There are 22 ADDs and 18 DELs collectively for ASX 50, ASX 100, ASX 200, and ASX 300.
In this insight, we take a final look at the flow expectations for each of these index changes.

Got the BBIG Rebalancing Results: SK Innovation Is the Trade This Week

Real alpha? Tight basket means outsized passive flows. The play? SK Innovation, no contest.
Samsung SDI faces -0.54x ADTV outflows. Other movers: Netmarble 0.68x, Wemade Max 0.54x, NHN -0.46x ADTV.
Net-Net? SK Innovation is the trade. Long here, hedge short on Samsung SDI or the broader Battery space.

The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors

The USTR issued a Section 301 report in January 2025. The report suggests China has tried to achieve dominance in global shipping, to the detriment of US commerce.
The report is flawed, in data (it somehow manages to make up data which is otherwise available from MARAD), analytics, and conclusions, but the Trump administration has run with it.
In February, the USTR announced “Proposed Actions” – fees for Chinese liners and international liners with Chinese ships, and restrictions on future exports. US users lose. And there are loopholes.

Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity

In late January, Daihatsu Diesel Mfg (6023 JP) announced its once/former parent would sell all its shares; in part to a private company in the industry and a 20% buyback.
The buyback – a below-market own-share tender offer – was priced low enough to be a big win. Accretion added to that.
Buyback Tender Results and External Changes signal overhang and opportunity. Either way, it’s cheap, but good governance could make it even cheaper.

S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility

There are 4 changes for the S&P 500 INDEX, 6 changes for the S&P Midcap400 Index and 14 changes for the S&P SmallCap600 Index at the March rebalance.
DoorDash (DASH US) was newly eligible after meeting the profitability criterion, while AppLovin (APP US), Coinbase Global (COIN US) and Interactive Brokers Group, Inc (IBKR US) were overlooked again.
There will be more same-way flow for the S&P 500 INDEX (SPX INDEX) adds and deletes from the Select Sector index trackers.

A/H Premium Tracker (To 7 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening