In today’s briefing:
- Teijin (3401 JP): Alternative Play on the Potential Infocom Tender
- CSI300/CSI500 Index Rebalance: Big Flows and US$5bn Round-Trip Trade
Teijin (3401 JP): Alternative Play on the Potential Infocom Tender
- Blackstone (BX US) is widely reported to have agreed to acquire Teijin Ltd (3401 JP)’s 55% stake in Infocom Corp (4348 JP) at a valuation of JPY260 billion.
- If the valuation refers to market cap and Teijin shares its tax benefits, Teijin’s sale proceeds are around JPY128 billion, which is 42% of its market cap.
- However, since 9 May, Teijin shares have been flat vs. Infocom shares are up 63%. Teijin’s medium-term plan suggests that the Infocom proceeds could result in substantial share buybacks.
CSI300/CSI500 Index Rebalance: Big Flows and US$5bn Round-Trip Trade
- There are 12 changes for the CSI 300 Index (SHSZ300 INDEX) and 50 changes for the CSI Smallcap 500 Index (SH000905 INDEX) in June. Most changes were expected.
- There are a lot of stocks with over 1 day of ADV to trade. The round-trip trade in June is estimated to be US$5bn.
- The adds have outperformed the deletes for both indices but the return profile of a long adds/ short deletes trade for the CSI500 Index is a lot smoother.
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