In today’s briefing:
- Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open
- HSCI Index Rebalance Preview and Stock Connect: A Lot of Change
- (Mostly) Asia M&A 2022 Roundup: Bigtincan, St Barbara/Genesis, Acotec, Conexio, ENEOS, Nidec OKK
- CSI300 Index Rebalance Preview: Early Look at Potential Changes in June
- SENSEX Index Rebalance Preview: Adani Enterprises Could Replace Wipro
Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Now Open
- Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now open. The IFA opines it to be fair and reasonable.
- The partial offer is conditional on the offeror hitting 50.01% voting rights. Irrevocables ensure that it will be declared unconditional on or before the first closing date (26 January).
- Based on a minimum proration of 71.31% and at the current share price of HK$17.20 per share, the estimated breakeven price is HK$10.38 per share.
HSCI Index Rebalance Preview and Stock Connect: A Lot of Change
- We see 44 potential adds (including plenty of new listings) and 19 potential deletes (on market cap, liquidity and suspension) for the Hang Seng Composite Index in March.
- We expect 37 stocks to be added to Southbound Stock Connect following the rebalance while 37 stocks could be deleted from the trading link and become Sell-only.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
(Mostly) Asia M&A 2022 Roundup: Bigtincan, St Barbara/Genesis, Acotec, Conexio, ENEOS, Nidec OKK
- For the month of December, 10 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.
- The average premium for the new deals announced (or first discussed) in December was ~46%, giving an average for 2022 of 41%.
- This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.
CSI300 Index Rebalance Preview: Early Look at Potential Changes in June
- Two thirds of the way through the review period, we see 15 potential index changes at the June rebalance that will be implemented at the close on 9 June.
- We estimate a one-way turnover of 2.35% at the June rebalance leading to a one-way trade of CNY 5.57bn.
- The potential adds have outperformed the potential deletes and the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) over the last six months, though there is some near-term deterioration.
SENSEX Index Rebalance Preview: Adani Enterprises Could Replace Wipro
- A third of the way through the review period of the June rebalance, we see one potential index change with Adani Enterprises (ADE IN) replacing Wipro Ltd (WPRO IN).
- Adani Enterprises (ADE IN) could move lower in the short-term due to the public issue of shares but should find support from passive buying from local and global index trackers.
- Wipro Ltd (WPRO IN) has underperformed most of its peers by a wide margin over the last year and the passive selling could provide an entry point.
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