In today’s briefing:
- Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look
- Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns
- Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible
- Matheson To Exit Greatview Aseptic
- TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits
- STAR50 Index Rebalance Preview: 5 Changes Forecast as Review Period Ends
- JPX-Nikkei 400 Rebal 2023: End-Jan 2023
- HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force
- Greatview Aseptic (468 HK): Xinjufeng Technology Acquires Jardine Matheson’s Stake
- Osstem Implant: Details of Tender Offer & Chairman Choi’s Children Exchange CB Call Options for BWs
Adani Ent FPO – Early Demand Muted, Adani & Hindenburg Trade Barbs Again, But Not a Good Look
- The Adani Enterprises (ADE IN) FPO saw VERY muted demand (realtime available on NSE+BSE websites) on Day 1 Friday as the share price plummeted through the bottom of the range.
- The Adani Group responded to Hindenburg late Sunday with a 400-page rebuttal, cloaked in nationalistic terms. Hindenburg responded saying the company failed to answer 62 of 88 questions.
- This is not going away. They could lower the FPO price, or just pull the FPO. That won’t materially change the significant over-valuation of many Adani Group listco share prices.
Renault & Nissan “Agree” On New Terms – A Diet Nothing🍔, Exchangeable into Shaq Fingerguns
- Today, a Nikkei article suggested (after other media suggested last week) that Renault SA (RNO FP) and Nissan Motor (7201 JP) have come to agreement about their new deal.
- Post-Close, an announcement. Two striking things about this “agreement” a) it comes many months after they started negotiating, and b) we have few details, and c) we’re missing a bit.
- Renault agrees to cap voting rights in Nissan. Nissan agrees to invest in RNO’s EV spinoff, and so far, they agree to strengthen the Alliance. What’s missing is interesting/key.
Quiddity Flow Expectations HSTECH Mar 23: Two Index Changes Possible
- In this insight, we take a look at the potential index changes and the resultant capping flows for the Hang Seng Tech Index (HSTECH INDEX) in March 2023.
- According to our estimation, there could be two changes for the HSTECH in March 2023 and there could be one-way index flows of US$365mn.
- The final index changes along with indicative capping and index weights could be published in Mid/Late-February 2023 and implemented in early-March 2023.
Matheson To Exit Greatview Aseptic
- Shandong Xinjufeng Technology Packaging (301296 CH) is seeking to acquire Jardine Matheson Holdings (JM SP)‘s 28.22% stake in Greatview Aseptic Packaging (468 HK) at HK$2.65/share.
- Greatview is currently suspended “pending the release of an announcement which contains inside information“, suggesting there is no follow on Offer for remaining shares.
- Elsewhere, Matheson has resumed its share repurchase program, providing near-term support.
TOPIX Inclusion: AXXZIA Inc (4936 JP) – Time to Take Profits
- Japan-Based skincare and cosmetics maker AXXZIA Inc (4936 JP) announced on 9th November 2022 they were planning to move from TSE Growth to TSE Prime.
- Travis Lundy was Bullish on this name as he discussed in AXXZIA (4936 JP) – TOPIX Inclusion Is Likely In February and the stock has gained around 12% since then.
- Today after the close, AXXZIA Inc (4936 JP) announced they had received the approval for their Prime Market move in February which could lead to a TOPIX Inclusion in March.
STAR50 Index Rebalance Preview: 5 Changes Forecast as Review Period Ends
- The review period for the March rebalance ends today. We forecast 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
- We expect the index committee to continue using a 6-month minimum listing history. The impact on the potential deletes is a lot higher than the impact on the potential adds.
- With 5 changes to the index, estimated one-way turnover is 5.1% resulting in a one-way trade of CNY 4,549m. There is a reasonably large reverse funding trade.
JPX-Nikkei 400 Rebal 2023: End-Jan 2023
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-January 2023.
HMM Is Likely the First to Be Subject to the Mandatory Offer that Comes into Force
- KDB recently initiated the process of selecting an advisory firm to sell its stake in HMM, which will likely be the first to implement the mandatory offer rule.
- Potential bidders include Hyundai Glovis, LX Holdings, and Samsung SDS. As for POSCO Holdings, it recently said that it is not considering acquiring HMM.
- Given that HMM is the only national shipping company, there is a good chance that multiple bidders will appear, which will lead to a premium to the market price.
Greatview Aseptic (468 HK): Xinjufeng Technology Acquires Jardine Matheson’s Stake
- Shandong Xinjufeng Technology Packaging (301296 CH) agreed to acquire Jardine Matheson Holdings (JM SP)’s 28.22% stake in Greatview Aseptic Packaging (468 HK) at HK$2.65 per share.
- Post-Completion, Xinjufeng will be the largest shareholder. As Xinjufeng’s shareholding will remain below the 30% voting threshold, the transaction will NOT result in a mandatory general offer.
- The transaction price, which is a 22.7% premium to the last close, highlights Greatview’s value. Greatview’s forward P/E multiple is undemanding in comparison to peer P/E multiples.
Osstem Implant: Details of Tender Offer & Chairman Choi’s Children Exchange CB Call Options for BWs
- We provide details of the Osstem Implant tender offer as well as Chairman Choi’s children exchange of CB call options for BWs.
- We believe that the majority of the minority shareholders in Osstem Implant are not likely to sell their shares at 190,000 won per share but hold on to it.
- Over a longer time frame, Osstem’s share price could reach higher levels driven by its improving sales and profit growth, deep valuation discount to global peers, and further M&A fight.
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