In today’s briefing:
- SET50 Index Rebalance Preview: Three Potential Changes in June
- HSCI Index Rebalance Preview: Robosense (2498 HK) Could Be Added in June
- Korea Value-Up Guidelines Release Date Is Set for May 2nd
- Taiyo Pacific Overbids Brother for Roland DG (6789)
- Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma
- HK Connect SOUTHBOUND Flows (To 26 Apr 2024); Strong Net Buying on Banks/Energy Telco SOEs. Again.
- Memory Monitor: What SK Hynix Sees For PC and Server Markets Ahead; TSMC’s Strength Vs. Samsung
- (Mostly) Asia-Pac M&A: Mimasu Semi, Tietto Minerals, CSR, CPMC, Roland DG, IClick Interactive
- Fanuc (6954 JP): Guidance Points Down, but the Market Sees Recovery
- A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As – Time To Get Long H/A
SET50 Index Rebalance Preview: Three Potential Changes in June
- Nearing the halfway mark in the review period, we see 3 potential changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the June rebalance.
- Passive trackers will need to buy between 1.2-4.5 days of ADV on the inclusions and sell 0.9-1.3 days of ADV on the deletions.
- Berli Jucker (BJC TB) continues to be a close add on liquidity while Gulf Energy Development (GULF TB) and Intouch Holdings (INTUCH TB) continue to be close deletes.
HSCI Index Rebalance Preview: Robosense (2498 HK) Could Be Added in June
- There were only 12 new listings on the Main Board of the HKEX (388 HK) in the first quarter of the year. More than half the listings were in March.
- Of those stocks, we only see Robosense Technology (2498 HK) having a chance of being added to the HSCI in June and then into Southbound Stock Connect.
- There is a big lock-up expiry for Robosense Technology (2498 HK) in July and that should keep the stock under pressure.
Korea Value-Up Guidelines Release Date Is Set for May 2nd
- Chosun reports Korean financial authorities advance Value-up plan guidelines to May 2nd, citing momentum decline post-election. Chosun’s credibility enhances report validity.
- Companies will commence Value-up-related disclosures in alignment with the guidelines within May. A dedicated Value-up website is set to launch in May.
- The May 2nd guideline release date is crucial for Value-up momentum trading. Anticipate heightened volatility in Value-up stocks approaching this date.
Taiyo Pacific Overbids Brother for Roland DG (6789)
- Originally, Brother Industries (6448 JP) wanted to buy Roland DG Corp (6789 JP). Roland invited others to bid, didn’t tell Brother, then said Taiyo Pacific’s ¥5,035 bid won.
- That was low. Weeks later, Brother lobbed a ¥5,200 overbid. They are going through the approvals process but it isn’t clear Brother is negotiating.
- Taiyo has extended and extended and shown up in interviews. Now it has overbid at ¥5,370.
Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma
- Roland DG Corp (6789 JP) has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than Brother Industries (6448 JP)’s JPY5,200 offer.
- The Board articulates a compelling case on Brother’s offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price).
- Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board’s recommendation.
HK Connect SOUTHBOUND Flows (To 26 Apr 2024); Strong Net Buying on Banks/Energy Telco SOEs. Again.
- A shares were up small on the week, largely due to a big rally on Friday (led by record Northbound buying). HK Stocks had a HUGE week.
- Net SOUTHBOUND buying was +HK10.3bn. Net buys every day and now 20 days straight, but buying was foreign-led.
- Little market news. More geopolitical news. Big SOE bank H-shares see relentless buying. HSTECH +13.4%, HSI +8.8%, HSCEI +9.1%.
Memory Monitor: What SK Hynix Sees For PC and Server Markets Ahead; TSMC’s Strength Vs. Samsung
- SK Reports Massive Margin Rebound; Nanya Tech’s Financial Performance Appears Relatively Weak in Perspective
- AI Applications Now Translating Into Rising Solid-State Memory (SSD) Demand
- SK Povided Positive Color for Taiwan PC Names; New TSMC Collaboration Highlights TSMC Strength vs. Samsung
(Mostly) Asia-Pac M&A: Mimasu Semi, Tietto Minerals, CSR, CPMC, Roland DG, IClick Interactive
- Tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deals was discussed on Smartkarma this week, being Mimasu Semiconductor Industry (8155 JP)‘s Tender Offer. There’s also BHP Group (BHP AU)‘s unsolicited Offer for Anglo American (NGLOY US).
- Key updates took place on: Tietto Minerals Ltd (TIE AU), CSR Ltd (CSR AU), CPMC Holdings (906 HK), Roland DG Corp (6789 JP), and iClick Interactive Asia Group (ICLK US).
Fanuc (6954 JP): Guidance Points Down, but the Market Sees Recovery
- Fanuc was up 4.7% this past week as the market reacted to a slight uptick in orders and transparently conservative guidance.
- The book-to-bill ratio remained below 1.0 in 4Q of FY Mar-24, but was up from 3Q, which appears to have been the low point in the cycle.
- Inflation and ongoing inventory adjustments indicate a slow recovery, but demand for automation from traditional markets and new opportunities in aerospace and other industries should support long-term growth.
A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As – Time To Get Long H/A
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND’s consecutive buying streak ended on Monday 25-March, then started again. 20 days straight net buying. NORTHBOUND saw big inflows Friday. A record day I believe.
- HK stocks bounced VERY hard. Seemed like big allocation trade. HSCEI +8.7% vs CSI300 +1.2%. In H/A Pairs, liquid pairs saw Hs outperform their A by 4+% on average.
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