Most Read

Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details.
“Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”.
Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).

Korea Zinc: Cross Shareholding Limitation System Loophole

The proxy battle at the EGM for the control of Korea Zinc (010130 KS) is scheduled for 23 January.
One day prior to the EGM, Korea Zinc’s Chairman Choi is trying to capitalize on the “cross-shareholding limitation system” in order to retain control of the company.
In our view, it appears that the legal case regarding the cross shareholding limitation system is in favor of MBK/Young Poong alliance.

Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
We have looked at the deal dynamics in our previous notes. In this note, we talk about updates and look at discounts vs performance for past secondary deals.

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Constituent changes to the S&P 500 INDEX (SPX INDEX), S&P Midcap400 Index and S&P SmallCap600 Index for the March rebalance will be announced after market close on Friday.
There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.
The largest inflows will be in Amazon.com, Tesla, Microsoft, NVIDIA, Alphabet (GOOGL US) and Electronic Arts. Largest outflows are from Broadcom, Meta Platforms, Linde, Mcdonald’s Corp and Take Two Interactive.

Japan Post Bank (7182 JP): The Current Playbook

Since the offer announcement, Japan Post Bank (7182 JP)/JPB’s shares have declined by 2.5%. On 3 March, JPB completed the ToSTNeT-3 buyback by acquiring 13.3 million shares for JPY20 billion.
To understand JPB’s trading pattern, it is instructive to examine its 2023 offering, Japan Post Insurance (7181 JP)/JPI’s 2019 offering, and Japan Post Holdings (6178 JP)/ JPH’s 2021 offering.
JPB’s shares follow the trading pattern playbook of its 2023 and JPH’s 2021 offerings, in which investors buying the offer were rewarded with positive returns at the payment date.

DN Solutions IPO Might Skip OC—A Unique Trading Opportunity

With cautious foreign interest, DN Solutions’ big IPO deal might skip the OC and go full local for bookbuilding, setting a new trend in Korean IPOs.
If foreign anchor orders drop, local players gain more negotiating power, leading to aggressive bidding and potentially a way more conservative IPO price.
Offshore funds passing investment review without an OC could grab more volume, benefiting from local-led down-pricing without lock-up restrictions.

ECB: Meaningfully Less Restrictive

The ECB’s sixth 25bp deposit rate cut to 2.5% was unsurprising, and its characterisation of policy as meaningfully less restrictive leaned towards our relatively hawkish view.
Policy rates may already be close to neutral. Looser fiscal policy plans also pressure monetary policy to follow a tighter path than would otherwise have been necessary.
We still expect the ECB to hold rates in April, which is no longer a controversial call. A final 25bp ECB cut in June remains in our outlook (BoE cuts in May and Fed on hold).

Coforge’s $1.56 Billion Bet: A Game-Changer or a Risky Move?

By Nimish Maheshwari

Coforge (COFORGE IN)‘s $1.56 billion deal with Sabre positions it as a major player in travel technology, but concerns over Sabre’s financial stability create potential risks for long-term execution.
Acquisitions of Rythmos and TMLabs align with Coforge’s strategy to enhance cloud, data, and enterprise IT capabilities, strengthening its market position in airline and ServiceNow implementation services.
While analysts recognize strong revenue visibility, Sabre’s $5.1 billion debt and negative net worth raise cash flow concerns, leading to a divided outlook on Coforge’s future profitability and risk exposure.

Naigai Trans Line (9384 JP): IA Partners’ JPY4,065 Tender Offer

Naigai Trans Line (9384 JP) has recommended a tender offer from IA Partners at JPY4,065 per share, a 62.3% premium to the last close.
Despite being below the midpoint of the target IFA’s DCF valuation range, the offer is attractive compared to historical trading ranges and represents an all-time high.
Given that the offer is reasonable, the required minority acceptance rate is attainable. The offer is from 10 March to 21 April, with payment on 28 April.

HEW: Political Blunderbuss

Shot from Trump’s blunderbuss is hitting sentiment and risk appetite yet the hard data remain resilient. Europe waking up on defence punched markets more in hope than reality, but hawkish inflation and ECB news helped create room to close our bullish call.
Next week’s US inflation data are the scheduled global highlight, along with the Bank of Canada likely pausing its cutting cycle. We also await UK GDP data confirming resilience inconsistent with the dovish panic at February’s BoE meeting.
Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).

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Mar 07

Most Read: Seven & I Holdings, Alibaba Group Holding , SUNeVision Holdings, Amazon.com Inc, Japan Post Bank, BayCurrent Consulting and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) Possibility of YUUUUUGE Buyback?
7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly
Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)
Sunevision (1686 HK): Data Center Rally Brings Passive Flows
Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure
Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA
Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade
Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Probable – Less Interesting Than Before

7&I (3382) Possibility of YUUUUUGE Buyback?

Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.

7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly

Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details.
“Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”.
Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).

Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec

In a big surprise, there is only one change for the Nikkei 225 (NKY INDEX) in March with BayCurrent Consulting (6532 JP) replacing Mitsubishi Logistics (9301 JP).
The non-inclusion of Kokusai Electric (6525 JP) is a big surprise given that the stock was ranked among the top 75 stocks by liquidity. There could be selling near-term.
BayCurrent Consulting (6532 JP) has been added at a 0.5 PAF and that will increase to 1 in September. Fast Retailing (9983 JP) could be capped yet again in September.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)

The March rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).
Meituan , JD.com, Baidu, Horizon Robotics, ICBC, BeiGene, Kuaishou Technology and China Construction Bank are the largest buys. Alibaba, Xiaomi, HSBC, ZhongAn Online and Tencent are the largest sells.

Sunevision (1686 HK): Data Center Rally Brings Passive Flows

The huge rally in SUNeVision Holdings (1686 HK) will bring passive inflows to the stock after being added to a global sector index.
Estimated passive buying is 19.4m shares (US$22m; 0.55x ADV) with implementation scheduled for the close of trading on 21 March.
Shorts have risen sharply in the last couple of weeks and cumulative excess volume has jumped too. But we see a similar pattern in a close peer.

Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure

The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback.
The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out.

Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA

The March 2025 Nikkei 225 Average Review was announced last night. Something of a disaster for Team Quiddity. I had expected 2-3 ADDs and 2-3 DELETEs.
We got only one change, and that was my second choice ADD and second choice DELETE. Top 75 name Kokusai Electric (6525 JP) was missing in action. BIG Disappointment.
BayCurrent Consulting (6532 JP) is in at a PAF of 0.5, with an upweight end-Sep. Mitsubishi Logistics (9301 JP) is OUT. Fast Retailing (9983 JP) will see US$2.3bn of sells.

Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade

Constituent changes to the S&P 500 INDEX (SPX INDEX), S&P Midcap400 Index and S&P SmallCap600 Index for the March rebalance will be announced after market close on Friday.
There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.
The largest inflows will be in Amazon.com, Tesla, Microsoft, NVIDIA, Alphabet (GOOGL US) and Electronic Arts. Largest outflows are from Broadcom, Meta Platforms, Linde, Mcdonald’s Corp and Take Two Interactive.

Japan Post Bank US$4bn Deal Updates – Needs to Correct More. Discount Vs Deal Performance Analysis

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
We have looked at the deal dynamics in our previous notes. In this note, we talk about updates and look at discounts vs performance for past secondary deals.

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Probable – Less Interesting Than Before

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
I see one ADD and one DELETE. Fast Retailing capping is right on the border. BayCurrent will see an upweight.
The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

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Mar 06

Most Read: Shift Inc, CK Hutchison Holdings, Korea Stock Exchange KOSPI 200, BayCurrent Consulting , Japan Post Bank, Kum Yang , SUNeVision Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock
Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders
Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec
Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison
KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)’s Designation Opens Up an Index Spot
StubWorld: Cheung Kong’s Geopolitics
Sunevision (1686 HK): Data Center Rally Brings Passive Flows
Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA
HEM: Pausing Policy Easing

Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning

The changes to the Nikkei 225 (NKY INDEX) as part of the March rebalance should be announced in just over 2 weeks. We expect 2-3 changes at the review.
The forecast adds have massively outperformed the forecast deletes and the Nikkei225 Index over every time period going back 3 months with the largest outperformance in the last month.
Positioning appears to be stretched in one forecast add while there appears to be under positioning in a couple of the forecast deletes.

Li Ka-Ching! Cheung Kong (1 HK) Offloads Panama Ports To Blackrock

As part of a US$22.8bn transaction, BlackRock, Global Infrastructure Partners and Terminal Investment, have agreed to buy two contentious Panama ports from Li Ka-shing’s CK Hutchison (1 HK) (CKH).
The transaction also includes an 80% stake in CKH’s ports subsidiaries, which operate 43 ports comprising 199 berths in 23 countries.
CKH expects cash proceeds in excess of US$19bn. CKH’s current market cap was – at the time of deal – also ~US$19bn.

Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders

This 40% rule will distort bookbuilding, force down-pricing, choke float post-listing, and amplify volatility.
Offshore investors like us benefit most—cheap IPO pricing with no lock-up. Local brokers see this as a giveaway to foreign funds and pushed back hard last Friday.
FSS won’t budge—40% lock-up is happening. If issues arise post-implementation, they might adjust later.

Nikkei 225 Index Rebalance: Baycurrent (6532) Replaces Mitsubishi Logistics (9301); Kokusai Elec

In a big surprise, there is only one change for the Nikkei 225 (NKY INDEX) in March with BayCurrent Consulting (6532 JP) replacing Mitsubishi Logistics (9301 JP).
The non-inclusion of Kokusai Electric (6525 JP) is a big surprise given that the stock was ranked among the top 75 stocks by liquidity. There could be selling near-term.
BayCurrent Consulting (6532 JP) has been added at a 0.5 PAF and that will increase to 1 in September. Fast Retailing (9983 JP) could be capped yet again in September.

Japan Post Bank US$4bn Placement Updates-Performing Similar to Its Last. Past Large Deals Comparison

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
We have looked at the deal dynamics in our previous note. In this note, we talk about the updates since then.

KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)’s Designation Opens Up an Index Spot

Kum Yang (001570 KS)‘s designation as an Administrative Issue should result in the deletion of the stock from the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) later this week.
Taekwang Industrial (003240 KS) could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.
Miwon Specialty Chemical (268280 KS) ranked higher than Taekwang Industrial (003240 KS) at the December rebalance but appears to fail the liquidity screen.

StubWorld: Cheung Kong’s Geopolitics

CK Hutchison Holdings (1 HK) (CKH) is trading “cheap” as Panama’s Supreme Court agrees to consider a request to nullify CKH’s canal concessions.
Preceding my comments on CKH, CK Infrastructure Holdings (1038 HK) (coming up cheap on my monitor), and Power Assets Holdings (6 HK) are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Sunevision (1686 HK): Data Center Rally Brings Passive Flows

The huge rally in SUNeVision Holdings (1686 HK) will bring passive inflows to the stock after being added to a global sector index.
Estimated passive buying is 19.4m shares (US$22m; 0.55x ADV) with implementation scheduled for the close of trading on 21 March.
Shorts have risen sharply in the last couple of weeks and cumulative excess volume has jumped too. But we see a similar pattern in a close peer.

Nikkei 225 Mar25 Rebal: BayCurrent (6532) IN, Mitsubishi Logi (9301) OUT (Re-IPO). Kokusai MIA

The March 2025 Nikkei 225 Average Review was announced last night. Something of a disaster for Team Quiddity. I had expected 2-3 ADDs and 2-3 DELETEs.
We got only one change, and that was my second choice ADD and second choice DELETE. Top 75 name Kokusai Electric (6525 JP) was missing in action. BIG Disappointment.
BayCurrent Consulting (6532 JP) is in at a PAF of 0.5, with an upweight end-Sep. Mitsubishi Logistics (9301 JP) is OUT. Fast Retailing (9983 JP) will see US$2.3bn of sells.

HEM: Pausing Policy Easing

Central banks are advised to slow, pause, or stop reducing rates due to rising inflation and labour costs.
Inflation is unexpectedly increasing, and labour costs are exceeding target-consistent levels.
Monetary policy is almost neutral according to activity trends, but rate hikes in 2026 could counteract unnecessary easing.

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Mar 05

Most Read: BYD, Korea Stock Exchange KOSPI 200, Seven & I Holdings, Keisei Electric Railway Co, Gemvax & Kael, Alibaba Group Holding , Oneconnect Financial Technology, CK Hutchison Holdings, Kum Yang and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More
BYD (1211 HK) Placement: Continuing to Power Up
Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders
Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl
Keisei Railway (9009) Gets Bad Advice from Activists, Which Is Good for The Rest of US
FnGuide Semiconductor Top10 Index Rebalance Preview: Big Moves Lead to Changes in Forecast
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)
OneConnect Financial (6638 HK/OCFT US): Ping An’s Fair NBIO
StubWorld: Cheung Kong’s Geopolitics
KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)’s Designation Opens Up an Index Spot

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More

The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

BYD (1211 HK) Placement: Continuing to Power Up

Overnight, BYD (1211 HK) has announced a placement of 118m shares at a price range of HK$333-345/share that could raise up to HK$40.7bn (US$5.2bn).
The Pink Sheets listing for BYD (BYDDY.PK) closed at US$87.1/share and traded US$155m for the day. That close implies an open of HK$338.7/share for BYD, middle of the placement range.
There will be passive buying from global index trackers later this week while buying from Hang Seng Index and Hang Seng China Enterprises Index trackers will come in April.

Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders

This 40% rule will distort bookbuilding, force down-pricing, choke float post-listing, and amplify volatility.
Offshore investors like us benefit most—cheap IPO pricing with no lock-up. Local brokers see this as a giveaway to foreign funds and pushed back hard last Friday.
FSS won’t budge—40% lock-up is happening. If issues arise post-implementation, they might adjust later.

Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl

Seven & I Holdings (3382 JP) denied a Yomiuri article that the Board has decided not to accept an Alimentation Couche-Tard (ATD CN) bid in favour of the restructuring plan.
Despite the Board’s assertions that it is still having constructive discussions with Couche-Tard, its actions suggest otherwise.
Couche-Tard remains interested but faces increasing roadblocks. The valuation is undemanding but the news flow is unlikely to support a rerating in the near-term.

Keisei Railway (9009) Gets Bad Advice from Activists, Which Is Good for The Rest of US

By Michael Allen

Activist investors, confusing market price with intrinsic value, have shot themselves in the foot by offering terrible advice to Keisei Railway’s management.
When Keisei followed advice from the activist, selling just 1% of the shares of Oriental Land, Keisei’s share price collapsed, proving market price has nothing to do with intrinsic value.
Keisei’s revenue growth and return on investment are stronger than most of its peers, and the crash in its stock price caused by activists might create an opportunity for others.

FnGuide Semiconductor Top10 Index Rebalance Preview: Big Moves Lead to Changes in Forecast

With the averaging period for the April rebalance commencing today, we forecast 2 changes for the FnGuide Semiconductor Top10 Index at the upcoming rebalance.
Based on the passive assets tracking the index, there will be between 0.65-1x ADV to buy in the adds and between 0.5-1.7x ADV to sell in the deletes.
The big rally has taken Gemvax & Kael into inclusion zone while underperformance leads to ISC Co and Techwing dropping out of inclusion zone.

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)

The March rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).
Meituan , JD.com, Baidu, Horizon Robotics, ICBC, BeiGene, Kuaishou Technology and China Construction Bank are the largest buys. Alibaba, Xiaomi, HSBC, ZhongAn Online and Tencent are the largest sells.

OneConnect Financial (6638 HK/OCFT US): Ping An’s Fair NBIO

Dual-Listed OneConnect Financial Technology (6638 HK/OCFT US), a digital retail banking/commercial banking/ digital insurance play, has announced a non-binding proposal from Ping An, OneConnect’s controlling shareholder with 32.12%.
Ping An is offering, by way of a Scheme, HK$2.068/share, or US$7.98/ADS, a 72.33% premium to last close, and a 131.66% premium to the 30-day average. The price is final.
What now? Back in OneConnect’s boards’ court whether to engage or not. Which they should. No competing Offer will emerge.

StubWorld: Cheung Kong’s Geopolitics

CK Hutchison Holdings (1 HK) (CKH) is trading “cheap” as Panama’s Supreme Court agrees to consider a request to nullify CKH’s canal concessions.
Preceding my comments on CKH, CK Infrastructure Holdings (1038 HK) (coming up cheap on my monitor), and Power Assets Holdings (6 HK) are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

KOSPI200 Index Adhoc Rebalance: Kumyang (001570 KS)’s Designation Opens Up an Index Spot

Kum Yang (001570 KS)‘s designation as an Administrative Issue should result in the deletion of the stock from the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) later this week.
Taekwang Industrial (003240 KS) could be added to the index as an ad hoc replacement. The stock was in line to be added to the index at the June rebalance.
Miwon Specialty Chemical (268280 KS) ranked higher than Taekwang Industrial (003240 KS) at the December rebalance but appears to fail the liquidity screen.

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Mar 04

Most Read: Seven & I Holdings, Xiamen Amoytop Biotech Co Ltd, BYD, Toyota Motor, Chifeng Jilong Gold Mining, Korea Stock Exchange Kospi Index, JX Advanced Metals, MS&AD Insurance, Tokyo Metro and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More
STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
BYD US$5.2bn Placement – Large Only in Absolute Size, past Deals Have Done Well
BYD (1211 HK) Placement: Continuing to Power Up
Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising
Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion
Biggest Gray Area in Korea’s Short-Selling Overhaul: What Should TRS Clients Do?
JX Advance Metals IPO – Digestable, but Not Really Attractive
Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Mar25), Read TSE Update Doc 3
TOPIX Index Upweights: Final Expectations For “The Big April Basket” 2025

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More

The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

BYD US$5.2bn Placement – Large Only in Absolute Size, past Deals Have Done Well

BYD (1211 HK) is looking to raise around US$5.2bn via selling 4% additional shares.
The company has undertaken a few deals before and they have ended up performing well.
In this note, we will talk about the placement and run the deal through our ECM framework.

BYD (1211 HK) Placement: Continuing to Power Up

Overnight, BYD (1211 HK) has announced a placement of 118m shares at a price range of HK$333-345/share that could raise up to HK$40.7bn (US$5.2bn).
The Pink Sheets listing for BYD (BYDDY.PK) closed at US$87.1/share and traded US$155m for the day. That close implies an open of HK$338.7/share for BYD, middle of the placement range.
There will be passive buying from global index trackers later this week while buying from Hang Seng Index and Hang Seng China Enterprises Index trackers will come in April.

Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising

Today, Toyota Motor (7203 JP) announced a new Shareholder Benefit Program (株主優待 or kabunushiyutai). Often these programs are designed to give small unknown companies a way to build shareholder awareness/loyalty.
Toyota, needless to say, is not a small, unknown company building awareness. So this is a bribe or inducement to own shares or get people to use higher value product.
This is not a great look, and not great for shareholders. It smells of Toyota trying to buy votes as crossholders sell. But below we look at the math.

Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion

Chifeng Jilong Gold Mining (600988 CH) has launched an H-share offering that could raise up to US$554m if the offer size adjustment option and overallocation option are both exercised.
The price range of HK$13.72-HK$15.83/share is a discount of 18.7-29.5% to the A-shares and between 17-26% of the offering will be allocated to cornerstone investors.
The small issue size will result in the stock staying out the global indices for the foreseeable future. Inclusion in Southbound Stock Connect will take place in April.

Biggest Gray Area in Korea’s Short-Selling Overhaul: What Should TRS Clients Do?

If brokers let shorts exceed borrow, TRS end investors risk getting caught in the legal crossfire.
Some TRS players are setting up short-book systems and reg numbers proactively, ensuring brokers share borrow data to stay ahead of any compliance risks.
With most illegal shorts tied to TRS, and TRS dominating the market, the FSS will likely introduce TRS-specific rules rather than granting exemptions.

JX Advance Metals IPO – Digestable, but Not Really Attractive

JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), is looking to raise 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 IPO pricing.

Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Mar25), Read TSE Update Doc 3

TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
161 new CGRs were filed in February 2025. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
THE BIG NEWS: The “Document 3” (linked below) of the TSE’s 20th Council Meeting 18 Feb is worth reading carefully. This will set the stage for more takeover fun.

TOPIX Index Upweights: Final Expectations For “The Big April Basket” 2025

By Janaghan Jeyakumar, CFA

In the TOPIX Index, some “low liquidity” names carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will see index inflows from passive trackers of TOPIX.
In this insight, we take a look at Quiddity’s final predictions for the names that are likely to see their Liquidity Factors removed in April 2025 and their flow implications.

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Mar 03

Most Read: Xiamen Amoytop Biotech Co Ltd, AEON Mall, Shenzhen Bluetrum Technology, Weichai Power Co Ltd H, JX Advanced Metals, Aeon Delight, Alibaba Group Holding , Snt Corp, JD.com , Japan Post Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade
STAR Chip Index Rebalance: Shenzhen Bluetrum (688332) Replaces JoulWatt (688141)
A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening
JX Advanced Metals IPO Preview
Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market
Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade

On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks.
While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.

STAR Chip Index Rebalance: Shenzhen Bluetrum (688332) Replaces JoulWatt (688141)

CSI announced the changes for the March rebalance after market close on 28 February and the changes will be effective after the close of trading on 14 March.
As expected, Shenzhen Bluetrum Technology (688332 CH) will be added to the index while JoulWatt Technology Co (688141 CH) will be deleted.
Shenzhen Bluetrum Technology (688332 CH) outperformed JoulWatt Technology Co (688141 CH) in the last quarter of 2024 and there has been a reversal of fortunes this calendar year.

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening

AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best.
Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

JX Advanced Metals IPO Preview

JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share

Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries.
Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now.

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

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market

By Gaudenz Schneider

Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Mixue Group (2097 HK) andJX Advanced Metals (5016 JP) IPOs. Japan Post Bank (7182 JP) placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Tonami Holdings (9070 JP), Sg Fleet (SGF AU).

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Mar 02

Most Read: Seven & I Holdings, Japan Post Bank, Cambricon Technologies Lt, Mesoblast Ltd, China Mobile, Seoul Guarantee Insurance, Aeon Delight, EcoPro Materials, AEON Mall and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More
Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed
China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away
ASX200 Index AdHoc Rebalance Preview: Mesoblast (MSB) Could Replace Arcadium Lithium (LTM) Next Week
China Mobile (941 HK) Pullback Offers a Tactical Re-Entry Opportunity
HEW: Tariffs Trumped Data
Seoul Guarantee Insurance IPO Bookbuilding Results Analysis
Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
Ecopro Materials: Seeking 300 Billion Won in Additional Capital Raise
Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More

The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed

Media reports indicate that Japan Post Holdings (6178 JP) could sell JPY 600bn (US$4.02bn) of Japan Post Bank (7182 JP) with the announcement coming as early as this week.
The selldown is driven by Japan Post Holdings (6178 JP) needing to reduce its holding in Japan Post Bank (7182 JP) to 50% or lower by March 2026.
Passive index trackers will buy around 11.4% of the offering at the time of settlement of the placement shares with the balance being bought in January 2026.

China A50 ETFs Rebalance Preview: China Rally Takes Cambricon Up, Up & Away

With the review cutoff done, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in March.
Cambricon Technologies, Guotai Junan Securities and China United Network could replace Inner Mongolia Yili Industrial Group, CGN Power and Luzhou Laojiao in the ETFs.
Guotai Junan Securities (2611 HK) is expected to be added to the iShares China Large-Cap (FXI) (FXI US) in March, so there should be inflows for the A-shares and H-shares.

ASX200 Index AdHoc Rebalance Preview: Mesoblast (MSB) Could Replace Arcadium Lithium (LTM) Next Week

There could be ad hoc change for the S&P/ASX 200 (AS51 INDEX) prior to the announcement of the changes at the March rebalance.
Arcadium Lithium (LTM AU) could stop trading next week following the acquisition by Rio Tinto Ltd (RIO AU). The Royal Court of Jersey could sanction the scheme on 5 March.
Mesoblast (MSB AU) is a high probability inclusion to the index, followed by DigiCo Infrastructure REIT (DGT AU). The stock that misses out will be added at the regular rebalance.

China Mobile (941 HK) Pullback Offers a Tactical Re-Entry Opportunity

By Nico Rosti

In our last insight covering China Mobile (941 HK) we said the stock was overbought. It made a sharp pullback last week that may turn into a good BUY opportunity.
Support levels to buy range from 79.1 to 76.4, assuming this pullback is a buy-the-dip scenario, something we will discuss in this insight.
If the stock resumes its rally, the next WEEKLY profit targets will be between 82.64 and 84.4.

HEW: Tariffs Trumped Data

Resilience in Euro area price and wage inflation, ESI surveys, and hawkish comments in the latest meeting accounts were trumped by US events. Renewed tariff threats and soft US surveys led a dovish repricing for the Fed that also dominated for the ECB.
Next week has more top tier releases, starting with flash EA inflation for February where we are still a tenth above consensus at 2.4%. That won’t stop the ECB cutting, but should encourage restraint for April. US payrolls and tariffs are the other highlights.
Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).

Seoul Guarantee Insurance IPO Bookbuilding Results Analysis

The majority of the investors placed orders at 26,000 won, which is the lower end of the IPO price range (26,000 won to 31,800 won).
SGIC held internal discussions to set the public offering price at 26,000 won. The final price (which is likely to be 26,000 won) will be revealed on 4 March.
Our updated base case valuation of SGIC is base case target price of 28,925 won per share. Given the lack of upside, we have a negative view of this deal.

Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share

Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries.
Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.

Ecopro Materials: Seeking 300 Billion Won in Additional Capital Raise

It has been reported in the local media that EcoPro Materials (450080 KS) is seeking about 300 billion won in additional capital which represents about 5% of its market cap.
There could be concerns about dilution associated with this capital raise which could result in share price decline. The company is currently considering on issuing RCPS for this capital raise.
There could be additional concerns about potential dilution associated with this capital raise which could result in further share price decline for Ecopro Materials.

Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade

On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks.
While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.

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Mar 01

Most Read: Seven & I Holdings, Sun Art Retail, Japan Post Bank, LG Chem Ltd, Mobvista, JX Advanced Metals, Tencent, Korea Stock Exchange KOSPI 200, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More
Sun Art Retail (6808 HK): BABA Takes Massive Hit After Inking SPA @ HK$1.38
Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed
Japan Post Bank (7182) – Missed Opportunity Leaves Likely Shadow Overhang
Korea FSS Shakes Up Rights Offerings – Special Review Rule Now Live
HK CEO & Director Dealings (28th Feb 2025): Mobvista, Xtep, Onewo, Bonny International
JX Advanced Metals (5016 JP): IPO Fast-Entry 30% Away; Index Review Inclusion in Aug & Sep 2025
Tencent (700 HK): Expiry-Day Recap; Intra-Day Swing of 4.1%.
Street Intel on NPS’s Buy Flow—the Key Swing Factor as Korea’s Short-Selling Comeback
Shareholder Benefits to Return Amid Rise in Foreign Ownership and Dissolution of Cross-Shareholdings

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More

The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

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

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

Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed

Media reports indicate that Japan Post Holdings (6178 JP) could sell JPY 600bn (US$4.02bn) of Japan Post Bank (7182 JP) with the announcement coming as early as this week.
The selldown is driven by Japan Post Holdings (6178 JP) needing to reduce its holding in Japan Post Bank (7182 JP) to 50% or lower by March 2026.
Passive index trackers will buy around 11.4% of the offering at the time of settlement of the placement shares with the balance being bought in January 2026.

Japan Post Bank (7182) – Missed Opportunity Leaves Likely Shadow Overhang

The Offering comes in lighter than expected. The buyback is smaller than expected. The resultant overhang is larger than expected.
The index flows around the delivery date are well-understood. They are what they are.
Shareholder structure is such that this is not quite a new IPO but needs a lot of new shareholders. BUT… there is one redeeming feature one should not ignore.

Korea FSS Shakes Up Rights Offerings – Special Review Rule Now Live

With this new rule, the FSS is flagging shaky rights offerings early, signaling a likely correction request—and often, the first step toward the deal getting axed.
Spot the red flags early and use the window before the FSS drops the hammer to position for a reversal play.
The FSS’s early notice makes a reversal likely as traders bet on the deal getting nuked after the initial disclosure drop.

HK CEO & Director Dealings (28th Feb 2025): Mobvista, Xtep, Onewo, Bonny International

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular series include: Mobvista (1860 HK), Xtep International (1368 HK), Onewo (2602 HK), and Bonny International Holding (1906 HK).

JX Advanced Metals (5016 JP): IPO Fast-Entry 30% Away; Index Review Inclusion in Aug & Sep 2025

By Dimitris Ioannidis

JX Advanced Metals (5016 JP) is scheduled to be listed on 19 March 2025, at the prime market of the Tokyo Stock Exchange at an expected valuation of ~$5.3bn.
Fast-Entry inclusion for the one global index can take place on 25 March if the stock price surges by ~30% or more on the first trading day.
Review inclusion given failed fast-entries for both global indices, is expected in August and September 2025.

Tencent (700 HK): Expiry-Day Recap; Intra-Day Swing of 4.1%.

By Gaudenz Schneider

During yesterday’s Option expiration day, Tencent (700 HK) experienced an intra-day swing of 4.1%.
Trading in the afternoon oscillated around the prominent 500 strike level. Around 66% of calls and 2% of puts expired in the money.
Volume was lower than in the preceding days; a total of 38 million shares were traded, with the morning session accounting for 53% of the volume.

Street Intel on NPS’s Buy Flow—the Key Swing Factor as Korea’s Short-Selling Comeback

NPS’s aggressive net buying over the past four months? Just a 3% buffer rebalance—not some structural bullish call on K-stocks.
Street intel points to NPS capping buys in the low-14% range, 1%p below target, only defending against dips. With short selling back on from March 31, further buying looks unlikely.
With NPS stepping back and retail still weak, no real size remains on the buy side. Short flow could hit harder than expected—time to price it in and adjust positioning.

Shareholder Benefits to Return Amid Rise in Foreign Ownership and Dissolution of Cross-Shareholdings

By Aki Matsumoto

Most shareholder benefits items can be used in Japan. There’s history of more companies abolishing shareholder benefits programs because they believed that shareholder returns should conducted rather than shareholder benefits.
Amid rising foreign ownership and the dissolution of cross-shareholdings, more companies have begun to reverse the trend toward companies approaching individual shareholders with shareholder benefits programs.
The fact that stock prices of companies offering shareholder benefits tended to fall lower during stock market plunges may be due to the fact that they were mostly defensive stocks.

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Feb 28

Most Read: Seven & I Holdings, Jio Financial Services, Tonami Holdings, Japan Post Bank, WeDoctor Holdings, Mesoblast Ltd, Wuhan Dameng Database and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More
The Beat Ideas: What Is Inside Jio Financial Services?
JPH Launches “MBO” (LBO with SARs for Family/Execs) For Trucker Tonami Holdings (9070). Too Cheap.
Japan Post Bank (7182) – Missed Opportunity Leaves Likely Shadow Overhang
Japan Post Bank (7182 JP): A US$4.2 Billion Secondary Offering
We Doctor Holdings IPO Preview: Explosive Growth and Narrowing Losses, The Right Time for an IPO
ASX200 Index AdHoc Rebalance Preview: Mesoblast (MSB) Could Replace Arcadium Lithium (LTM) Next Week
EA Resilience Is Perfunctory Problem
STAR 100: Quick Update to Expectations for Last-Minute Methodology Changes; Announcement Soon.
Japan Post Bank US$4bn Placement – Smaller Deal, Similar Structure, Might Yield Similar Results

7&I (3382) – MBO Off, SC “Engaging Constructively with ACT”, Skepticism Higher, Questions And More

The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

The Beat Ideas: What Is Inside Jio Financial Services?

By Sudarshan Bhandari

Jio Financial Services (JIOFIN IN) has launched a robust digital ecosystem with its flagship JioFinance app, enhancing its tech-driven financial service offerings.
The digital-first strategy minimizes legacy constraints, enabling personalized financial solutions that significantly boost efficiency and competitive advantage.
This evolution redefines traditional banking, positioning JFSL as a versatile, technology-led powerhouse for sustainable growth in India’s financial sector.

JPH Launches “MBO” (LBO with SARs for Family/Execs) For Trucker Tonami Holdings (9070). Too Cheap.

Yesterday, Japan Post Holdings (6178 JP) announced an MBO for Tonami Holdings (9070 JP) whereby the family/execs will stay on. JPH will own 99.97%, the execs/family 0.03%.
This deal is yet another in a line of logistics deals dating back the last 2+ years where the premium has been quite big. This time is +74%.
But this is not overly expensive. Makes me go hmmmm…

Japan Post Bank (7182) – Missed Opportunity Leaves Likely Shadow Overhang

The Offering comes in lighter than expected. The buyback is smaller than expected. The resultant overhang is larger than expected.
The index flows around the delivery date are well-understood. They are what they are.
Shareholder structure is such that this is not quite a new IPO but needs a lot of new shareholders. BUT… there is one redeeming feature one should not ignore.

Japan Post Bank (7182 JP): A US$4.2 Billion Secondary Offering

Japan Post Bank (7182 JP) has announced a secondary offering of up to 416.1 million shares (including overallotment), worth around US$4.2 billion.
The offering includes a ToSTNeT-3 and an on-market buyback. Including the overallotment, Japan Post Holdings (6178 JP) will reduce its stake from 61.50% to 50.00% of voting rights.
Understanding the potential offer price requires looking at JPH’s past sales and recent large Japanese placements. The pricing date is likely 10 March.

We Doctor Holdings IPO Preview: Explosive Growth and Narrowing Losses, The Right Time for an IPO

By Andrei Zakharov

We Doctor Holdings, a top-tier provider of AI-enabled medical services and digital platform which connects hospitals, doctors, and pharmacies, plans to go public in Hong Kong.
We Doctor Holdings has raised ~$1.5B to date from investors, including Tencent, 5Y Capital, Goldman Sachs, Hillhouse Capital, AIA, and Qiming Venture Partners, among others.
The Hangzhou-based healthtech company has delivered explosive revenue growth of 107% y/y for the six months ended Jun-24.

ASX200 Index AdHoc Rebalance Preview: Mesoblast (MSB) Could Replace Arcadium Lithium (LTM) Next Week

There could be ad hoc change for the S&P/ASX 200 (AS51 INDEX) prior to the announcement of the changes at the March rebalance.
Arcadium Lithium (LTM AU) could stop trading next week following the acquisition by Rio Tinto Ltd (RIO AU). The Royal Court of Jersey could sanction the scheme on 5 March.
Mesoblast (MSB AU) is a high probability inclusion to the index, followed by DigiCo Infrastructure REIT (DGT AU). The stock that misses out will be added at the regular rebalance.

EA Resilience Is Perfunctory Problem

Crashing US surveys in 2025 have looked idiosyncratic, as spurious exaggeration of exceptionalism ends. The ESI corroborates the PMI’s resilience in the euro area.
Price expectations have been trending further above long-run averages without a one-off shock, suggesting European policy is too loose for this stage of the economic cycle.
EA unemployment remains lower than a year ago, inconsistent with tight monetary conditions. We still see the ECB’s last cut in June, much sooner than the market prices.

STAR 100: Quick Update to Expectations for Last-Minute Methodology Changes; Announcement Soon.

By Janaghan Jeyakumar, CFA

STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
The methodology for constituent selection for this index was revised yesterday. These revisions will influence the ADDs/DELs for the March 2025 review which is to be announced soon.
In this insight, we have presented our updated expectations for the new methodology.

Japan Post Bank US$4bn Placement – Smaller Deal, Similar Structure, Might Yield Similar Results

Japan Post Holdings (6178 JP) (JPH) aims to sell around US$4bn worth of Japan Post Bank (7182 JP) (JPB), trimming its stake to below 50%.
JPH had last sold around US$9bn worth of JPB shares in Mar 2023. That deal had a similar structure and it didn’t end up performing well.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

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Feb 27

Most Read: Seven & I Holdings, Korea Stock Exchange KOSPI 200, Japan Post Bank, ZTO Express Cayman , China International Capital Corporation, Tonami Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – Bain Gets York Holdings with a Surprising Price, And We Approach Deal Deadlines
Seven & I Holdings (3382 JP): A Potential Derailing of the MBO
Korea: Short Selling Is Back in March; Trade Ideas
Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed
Japan Post Bank (7182) – Report of ¥600bn Offer Would Lead to Index Flows, and a New Future
ZTO Express (2057 HK): Not Delivering Despite Double Index Inclusion
CICC (3908 HK) & China Galaxy (6881 HK): The Next Mega Brokerage Merger
Japan Post Bank (7182 JP): Japan Post Holding (6178 JP)’s Rumoured Offering
Tonami Holdings (9070 JP): Japan Post Holdings’ (6178 JP) JPY10,200 Tender Offer
Korean IPOs: Cornerstone Bill Back in Play—This Time, It Might Stick

7&I (3382) – Bain Gets York Holdings with a Surprising Price, And We Approach Deal Deadlines

Over the weekend, the Nikkei and Jiji reported the 7&i Board met Saturday and decided Bain would have preferred negotiating rights to buy York Holdings. They bid “over ¥700bn.”
That’s a trifle lower than the ¥1.2trn Reuters reported (on Christmas Day) Bain bid but details aren’t known. Proper structuring would get the vast majority to 7&i in post-tax cash.
For 7&i to decide by the AGM (which could be contentious), they need time to debate. Bids are likely needed in 3wks. In the meantime, “Trump Risk” lurks.

Seven & I Holdings (3382 JP): A Potential Derailing of the MBO

Bloomberg reports that the MBO is stalling due to disagreements within the consortium over who will control Seven & I Holdings (3382 JP) after it is privatised.
The Nikkei reported that Itochu Corp (8001 JP) was set to withdraw from the MBO consortium. Along with CP ALL PCL (CPALL TB)’s non-participation, the MBO’s financing is in trouble.
An Alimentation Couche-Tard (ATD CN) bid remains in play but has issues. While progressing, the Board’s restructuring plan fails to prove a credible alternative.

Korea: Short Selling Is Back in March; Trade Ideas

Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though.
Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.

Japan Post Bank (7182 JP): Another BIG Offering of US$4bn Expected; Overhang Will Be Removed

Media reports indicate that Japan Post Holdings (6178 JP) could sell JPY 600bn (US$4.02bn) of Japan Post Bank (7182 JP) with the announcement coming as early as this week.
The selldown is driven by Japan Post Holdings (6178 JP) needing to reduce its holding in Japan Post Bank (7182 JP) to 50% or lower by March 2026.
Passive index trackers will buy around 11.4% of the offering at the time of settlement of the placement shares with the balance being bought in January 2026.

Japan Post Bank (7182) – Report of ¥600bn Offer Would Lead to Index Flows, and a New Future

On 22-February-2023 a Reuters suggested JPH (6178) had “started talks” to sell a big stake in JP Bank (7182). Five days later they announced a complicated deal discussed here.
Today, an article suggests Japan Post Holdings (6178 JP) will sell ¥600bn in Japan Post Bank (7182 JP) to get ownership below 50% (as with JPI). A buyback might appear.
JPB has issued a “there’s smoke” release. Like last time. Expected unwind of known overhang means minimal surprise here. The question is whether they could surprise (big buyback? capital plan?).

ZTO Express (2057 HK): Not Delivering Despite Double Index Inclusion

ZTO Express Cayman (2057 HK) will be added to the Hang Seng China Enterprises Index (HSCEI INDEX) next week and to a global index couple of weeks after that.
Despite passives needing to buy more than 5% of float inside a month, the stock has barely budged in a rallying China market.
The increase in cumulative excess volume has been very gradual, indicative of low positioning in the stock. With a lot to buy over the next few weeks, that could change.

CICC (3908 HK) & China Galaxy (6881 HK): The Next Mega Brokerage Merger

Reportedly, China International Capital Corporation (3908 HK) and China Galaxy Securities (6881 HK), two of China’s leading state-backed brokerages, intend to merge via a share swap, forming China’s third-largest broker.
This report/rumour arrives shortly after the successful merger of Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK).
As with GJS/Haitong, expect a Merger by Absorption structure, and that Galaxy (or CICC?) issue new A and H shares to the target. I’d be picking up CICC shares here.

Japan Post Bank (7182 JP): Japan Post Holding (6178 JP)’s Rumoured Offering

Reuters reports that Japan Post Holdings (6178 JP) (JPH) is planning to sell shares in Japan Post Bank (7182 JP) (JPB), which could total some JPY600 billion (US$4.0 billion).
The potential offering would align with JPH’s stated goal of reducing its equity interest in JPB to 50% or less by FY 2025.
The potential offering is relatively smaller than JPB’s 2023 offering. Compared to its peers, JPB’s valuation remains undemanding.

Tonami Holdings (9070 JP): Japan Post Holdings’ (6178 JP) JPY10,200 Tender Offer

Tonami Holdings (9070 JP) has recommended a Japan Post Holdings (6178 JP)-sponsored MBO at JPY10,200, a 73.8% premium to the last close.
The offer is attractive compared to historical trading ranges and peer multiples. The offer represents an all-time high.
The offer is above the midpoint of the special committee IFA’s DCF valuation range but below that of the target IFA. However, the required minority acceptance rate is not onerous.

Korean IPOs: Cornerstone Bill Back in Play—This Time, It Might Stick