In today’s briefing:
- Adani Group – MSCI’s Special Treatment Gets More Special, and Partially Delayed, and Possibly Worse
- Index Corporate Actions for Hanwha Solutions Split: Passive Flow Size & Schedule
- Jiangnan Group (1366 HK): Powering Up
- Mori Trust Sogo REIT (8961) Small Index Upweight on 27 Feb
- NIFTY NEXT50 / NIFTY100 Index Rebalance: 5 Changes + Capping = Big Turnover
- Jiangnan Group (1366 HK): Is the Chairman/CEO Reattempting Privatisation?
- SARIA/Devro: Increased and Final
Adani Group – MSCI’s Special Treatment Gets More Special, and Partially Delayed, and Possibly Worse
- On 8 February, MSCI announced special treatment for the Adani names in its indices, discussed in Adani Group – MSCI Will Treat Very Adani Funds as a Very Special Case.
- Late on 15 February they came out with a revision of their implementation – which was problematic because some stocks had gone limit down many days in a row.
- The stocks responded. But it clearly isn’t an easy implementation, and it clearly isn’t over.
Index Corporate Actions for Hanwha Solutions Split: Passive Flow Size & Schedule
- Hanwha Solutions received shareholder approval for its proposed demerger on February 13. The demerger will split Hanwha Solutions into two separate entities: Hanwha Galleria and Hanwha Solutions.
- Hanwha Solutions will experience a passive outflow of 0.92x ADTV at the closing price on February 24 for KOSPI 200. A similar passive inflow will occur on March 31.
- MSCI Standard will deliver an outflow of 0.43x ADTV at the close on March 31 as the weight of Hanwha Solutions, an existing constituent, will be reduced.
Jiangnan Group (1366 HK): Powering Up
- Jiangnan (1366 HK), a manufacturer of wires and cables for power transmission and distribution systems, was suspended yesterday at lunchtime pursuant to Hong Kong’s Code on Takeovers and Mergers.
- But not before the share price gained 63% on clear news leakage.
- Chu Hui, the chairman, CEO, and major shareholder, mulled taking the private six years ago.
Mori Trust Sogo REIT (8961) Small Index Upweight on 27 Feb
- Mori Trust Sogo Reit (8961 JP) and Mori Trust Hotel Reit (3478 JP) will merge at the end of this month.
- They pay divs, there is a unit split, then NEWCO.
- If you are in the biz and you care, there is a small index thing to do.
NIFTY NEXT50 / NIFTY100 Index Rebalance: 5 Changes + Capping = Big Turnover
- ABB India Ltd (ABB IN), Adani Wilmar (AWLTD IN), Canara Bank (CBK IN), Page Industries (PAG IN) and Varun Beverages Ltd (VBL IN) will be added to the index.
- Bandhan Bank Ltd (BANDHAN IN), Biocon Ltd (BIOS IN), Gland Pharma Ltd (GLAND IN), Mphasis Ltd (MPHL IN) and Paytm (PAYTM IN) will be deleted from the index.
- Given the large drop in the stock prices of the Adani Group companies, capping changes will result in buying on all non-F&O stocks in the index.
Jiangnan Group (1366 HK): Is the Chairman/CEO Reattempting Privatisation?
- Jiangnan (1366 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers on 16 February.
- It is likely that Mr Chu Hui (Chairman and CEO), the largest shareholder representing 34.99% of outstanding shares is reattempting to privatise Jiangnan.
- The 83.9% share price run prior to the trading halt suggests that the offeror is very close to finalising a formal proposal at a hefty premium to the undisturbed price.
SARIA/Devro: Increased and Final
- Shareholders have gently pressed. SARIA has upped by 4.4% (“increased and final”) its cash offer for casings manufacturer Devro to 320p+10p interim, which represents 10x EV/Fwd EBITDA and 17.1x Fwd P/E.
- The increased consideration puts the offer almost in line with market leader Viscofan’s multiples (10.2x EV/Fwd EBITDA). The initial offer was already generous, even more so now.
- The deal should complete. Spread (gross/annualised) is 1.06%/2.65%, assuming settlement by 14 July (settlement will happen the same day as the second permitted dividend payment).
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
