In today’s briefing:
- Aquila Acquisition: The De-SPACed Arb
- Hana Micron’s Boost From Samsung/Nvidia Agreement
- Mason Group (273 HK): A Wide Spread with the Scheme Vote on 3 October
- Quiddity HSTECH Dec 23 Flow Expectations: One Low-Conviction Change, US$250mn One-Way
- Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More
- 3rd Oct Scheme Vote For Mason (273 HK)
Aquila Acquisition: The De-SPACed Arb
- SPACs – remember them? US offerings in 2021 topped ~US$150bn, falling to US$13bn in 2022. Singapore joined the bandwagon in January 2022 and Hong Kong two months later.
- That Hong Kong stock is Aquila Acquisition Corporation (7836 HK), and it recently announced a merger with ZG Group, a Chinese steel trading website.
- That’s positive. Less positive is how de-SPACed shares tend to trade in the US.
Hana Micron’s Boost From Samsung/Nvidia Agreement
- US graphics chip designer NVIDIA Corp (NVDA US) has, to date, sourced HBM3 chips exclusively from SK Hynix (000660 KS).
- Shares in Samsung Electronics (005930 KS) promptly popped ~6% last Friday on news it had been added as a supplier to NVIDIA.
- Hana Micron Inc (067310 KS), which boasts Samsung as its largest customer, similarly jumped, and is up 45% in the past week. Too much too quickly?
Mason Group (273 HK): A Wide Spread with the Scheme Vote on 3 October
- Mason Group Holdings (273 HK)‘s scheme document is out, with the vote scheduled for 3 October. The IFA considers Red Emerald Capital’s HK$0.0338 per share offer fair and reasonable.
- The key conditions are SFC approval and the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). Peer de-rating has helped the attractiveness of the offer.
- Shareholders with blocking stakes have provided irrevocables or will accept due to the attractive ROI. At the last close and for the 21 November payment, the gross/annualised spread is 9.0%/52.1%.
Quiddity HSTECH Dec 23 Flow Expectations: One Low-Conviction Change, US$250mn One-Way
- In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in December 2023.
- There could be one ADD and one DELETE for HSTECH in December 2023 but I would treat them as low-conviction changes.
- At present, I see one-way flows for the December 2023 rebalance to be around US$250mn but as prices change, our index change and flow expectations will change too.
Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More
- In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in December 2023.
- Based on the latest available data, I expect one ADD and one DEL for HSCEI in December 2023.
- There is more than one potential ADD in the top 40 according to my estimates but recent history tells us some of these names are not “index-provider-friendly.“
3rd Oct Scheme Vote For Mason (273 HK)
- On the 11 June, broker Mason Group (273 HK) announced a Scheme at HK$0.0338/share, a 20.7% premium to last close. Terms had not been declared final.
- The Offeror is Red Emerald. which holds no shares in Mason. Shareholders with 47.55% of shares out have given irrevocables in support of the Scheme.
- The Scheme Doc is now out. The EGM/Court Meeting will be held on the 3 Oct with expected payment around the 21 November. Trading wide to terms.
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