In today’s briefing:
- 5 Stocks in Korea Drop Limit Down – Caused by CFD Derivatives Related Margin Call Again?
- Yamauchi Family Office Buys More Toyo; Toyo Claims More Malfeasance, ISS Supports YFO
- StubWorld: Intouch Not As Attractive As At First Glance
- Abacus Property (ABP AU): Abacus Storage King De-Stapling to Unlock Value
- CPSE / CNXBANK Index Rebalance Preview: Capping Changes in June
- STAR50 Index Rebalance Preview: One High Probability Change; One ‘It Depends’
5 Stocks in Korea Drop Limit Down – Caused by CFD Derivatives Related Margin Call Again?
- There were five stocks in Korea that dropped limit down (30%) today. They included Pang Rim, Dongil Industries, Manho Rope & Wire, Taihan Textile, and Dongil Metal.
- The share price decline of these five stocks are similar to the crash in eight stocks in Korea in April which were related to CFD derivatives related margin call selling.
- Domestic securities firms in Korea have been trying to significantly reduce their exposure to CFD related trading and in this process, these sharp drops could be caused by this selling.
Yamauchi Family Office Buys More Toyo; Toyo Claims More Malfeasance, ISS Supports YFO
- Today, YFO (WK1 Limited) filed an amendment to its Large Shareholder Filing saying it had increased its stake from 27.19% to 28.51%. GK Yamauchi No10 Family Office bought 1.32%.
- Almost immediately, Toyo Construction (1890 JP) said YFO had likely conducted an illegal act according to US Securities Exchange Act of 1934, Rule 14e-5. This is likely hogwash.
- YFO is upping its stake for a zero premium tender and Toyo is fighting old battles. And the stock chugs higher.
StubWorld: Intouch Not As Attractive As At First Glance
- Intouch Holdings (INTUCH TB) is coming up cheap versus Advanced Info Service (ADVANC TB). Yet the longer-term view suggests otherwise.
- Preceding my comments on Intouch are the weekly setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn on a 90-day moving average, and a % market capitalisation threshold of at least 20%.
Abacus Property (ABP AU): Abacus Storage King De-Stapling to Unlock Value
- Abacus Property (ABP AU) has proposed the de-stapling of Abacus Storage King (ASK), the self-storage assets, along with the proposed A$225.0 million equity raising in ASK.
- A key logic of the de-stapling is the potential unlocking of the large, implied discount to NTA in the commercial portfolio. The EGM on the de-stapling proposal is in July.
- The equity raise is a key headwind to the rerating. Our SoTP valuation is A$3.10 per unit, which is a 20% upside to the last close price.
CPSE / CNXBANK Index Rebalance Preview: Capping Changes in June
- The CPSE ETF (CPSEBE IN) and Nifty Bank Index (NSEBANK INDEX) will have its quarterly rebalancing at the close on 29 June.
- There are no constituent changes for the indices in June but there will be capping and float changes for the stocks and there is a reasonable impact on many stocks.
- Both indices have performed well over the recent past and active investors can take advantage of the passive flows to increase or decrease existing positions.
STAR50 Index Rebalance Preview: One High Probability Change; One ‘It Depends’
- The review period for the September rebalance ends 31 July. We expect the changes to be announced 25 August with the implementation taking place after the close on 8 September.
- We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.
- One way turnover is estimated at 3.45% resulting in a one-way trade of CNY 3,675m. The impact on the deletions will be larger than that on the inclusions.
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