In today’s briefing:
- Alibaba (9988 HK/BABA): Possible Softbank Sale and Passive Impact
- Solactive Global Lithium Index (LIT): Earlier Implementation Expected for LG Energy & LG Chem
- Nissan – Limited Upside Till Next FY Starts to Be Priced In
- Adani Wilmar IPO Trading – Listing Sentiment Isn’t the Greatest
- FTSE UK Index Series: Leaderboard for March 2022 (2.0)
- British American Tobacco (BATO.KL) – Recovery In Motion
Alibaba (9988 HK/BABA): Possible Softbank Sale and Passive Impact
- Alibaba Group (9988 HK) has filed a F-6EF Registration Statement to register an additional 1bn ADS. This will most likely be Softbank Group selling part (or all) of the stake.
- There is a possibility that Softbank Group (9984 JP) is looking to use the stock as collateral for a financing trade and moving their holdings to a more liquid market.
- If Softbank Group (9984 JP) sells some of their shares, there will be buying from MSCI and FTSE trackers. There will be minimal buying from HSI, HSCEI and HSTECH trackers.
Solactive Global Lithium Index (LIT): Earlier Implementation Expected for LG Energy & LG Chem
- As for LG Energy’s inclusion timing, Solactive made a rule change, presumably designed for LG Energy’s earlier entry on April 29.
- Since LG Chem also has a battery-related business, LG Chem may remain in this index. However, the possibility should be low because its battery business is small in total sales.
- LG Chem will experience an outflow of ₩250B (1.0x ADTV). And assuming that LG Energy receives 4.75%, a passive impact of 0.31x at a DTV of 1.5M shares is expected.
Nissan – Limited Upside Till Next FY Starts to Be Priced In
- Nissan generated total revenue of ¥2,207bn (+13.8% QoQ, -0.8% YoY) and OP of ¥52.2bn in 3QFY22.
- The reported revenue was 0.9% lower than consensus estimates, while operating profit was ¥15bn higher.
- The company revised revenue guidance to ¥8,710bn (-1.0%) while OP was increased by ¥30bn to ¥210bn (+16.7%) but our start of year estimate of ¥250bn OP is on the cards.
Adani Wilmar IPO Trading – Listing Sentiment Isn’t the Greatest
- Adani Wilmar (6596700Z IN) raised around US$500m in its India IPO.
- Anchor quality wasn’t the greatest, in our view, and were the firm to trade towards its peers’ trailing average, it would imply a 21.8% downside potential.
- In this note we will talk about the subscription levels and trading dynamics.
FTSE UK Index Series: Leaderboard for March 2022 (2.0)
- The FTSE UK Index Series is a widely tracked family of sub-indices representing the performance of the public equity market in the UK.
- These indices are reviewed on a quarterly basis in March, June, September, and December.
- In this insight, we take a look at the potential constituency changes that can happen in the March 2022 Rebalance for the FTSE 100 and FTSE 250 Indices.
British American Tobacco (BATO.KL) – Recovery In Motion
- Maintain BUY with unchanged DCF-TP of MYR15.20
- Within expectations
- Sales volume growth is recovering nicely…
- … but potential new industry regulations are a risk
Before it’s here, it’s on Smartkarma
