In today’s briefing:
- A Noteworthy Long Short Setup: Ecopro BM & Posco Future M
- Index Rebalance & ETF Flow Recap: KS200, KQ150, HSI, CSI300/500, STAR50, SSE50, ChiNext, PCOMP, HDFC
- Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash
- Last Week in Event SPACE: China Mobile, Fast Retailing, Yuexiu Property, Vinda, Tokyo Gas
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Sell in May and Go Away?
- (Mostly) Asia M&A, April 2023: Arcland Service, Lian Beng, Silk Laser, Breaker Resources, Blackmores
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Blackmores, Metro Pacific, Invocare, AAG Energy, Jiangnan
A Noteworthy Long Short Setup: Ecopro BM & Posco Future M
- Currently, the market cap of Ecopro BM surpassed Posco Future M. As a result, Ecopro BM is in a position to replace Posco Future M in the K-New Deal rebalancing.
- They are direct peers with a high price cointegration. We should consider using the rebalancing event of this index as an inflection point from a Long Short pair trading perspective.
- The likelihood of Ecopro BM being included in the Solactive Lithium Index in October could potentially increase the expected return of taking this Long Short position more preemptively.
Index Rebalance & ETF Flow Recap: KS200, KQ150, HSI, CSI300/500, STAR50, SSE50, ChiNext, PCOMP, HDFC
- Friday marked the end of the review cutoff for the MSCI, CSI300, CSI500, STAR50, SSE50, ChiNext and a bunch of other indices for the upcoming rebalances in May and June.
- There are no major index events coming up this week as a lot of markets are shut on different days.
- There were big inflows to mainland China ETFs during the week, while there was a big redemption from the iShares MSCI ACWI ETF (ACWI US).
Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash
- Key insiders at Seoul City Gas (017390 KS) and Daou Data Corp (032190 KS) sold their shares before the recent crash.
- On 28 April, it was reported that Kim Young-Min (Seoul City Gas Chairman) sold 2% of Seoul City Gas on 20 April, resulting in net sales of 45.7 billion won.
- These Korean companies are two of the eight stocks related to the CFD derivatives sell-down that have been crashing in the past week.
Last Week in Event SPACE: China Mobile, Fast Retailing, Yuexiu Property, Vinda, Tokyo Gas
- It is relatively low-hanging fruit to “further propel the renmimbi’s internationalisation” and for HKEX, it will “cement HK’s position as the premier offshore renmimbi financing center.”
- The Conundrum: the more active investors decide they like Fast Retailing (9983 JP), the more there is to sell. That creates interesting opportunities.
- Short Yuexiu Property (123 HK) now, or soon. The dynamics of this is that there WILL be selling when the rights come out.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Sell in May and Go Away?
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
(Mostly) Asia M&A, April 2023: Arcland Service, Lian Beng, Silk Laser, Breaker Resources, Blackmores
- For the month of April, 6 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
- The average premium for the new deals announced (or first discussed) in April was 23%.
- This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Blackmores, Metro Pacific, Invocare, AAG Energy, Jiangnan
- There are 39 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Two new deals were discussed on Smartkarma this past week: Kirin (2503 JP)‘s Offer for Blackmores (BKL AU); First Pacific (142 HK) & Co’s Offer for Metro Pacific (MPI PM).
- Key updates took place for Invocare Ltd (IVC AU), AAG Energy Holdings (2686 HK), and Jiangnan (1366 HK)
💡 Before it’s here, it’s on Smartkarma
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