In today’s briefing:
- Asia Cement (743 HK): Parent’s Ready-Mixed Offer?
- TIP Customized Taiwan Select High Dividend Index Rebalance Preview: AUM Jump & HUGE Trade
- Asia Cement China (743 HK): Privatisation by Asia Cement?
- JAPAN ACTIVISM: Murakami-Père Ran Up Mitsui Matsushima (1518 JP), Now Murakami-Fille Selling Down
- Latest Info on Value-Up Index Involving KRX & NPS: Potential Flow Trading Patterns
- Block Deal Prospects Arising from SK Group’s Corporate Reshuffle
- NIFTY200 Momentum30 Index Rebalance Preview: 49% Turnover; US$850m Trade; Election Results Coming
- KFIN Tech: Block Deal Trade Special Situations and Tactical Trade Strategy
- C&F (9099) Pushes Back on AZ-Com Call for Transparency, Again. Still Not A Buy.
- RR Kabel: Block Deal Trade Special Situations and Tactical Trade Strategy
Asia Cement (743 HK): Parent’s Ready-Mixed Offer?
- Chinese cement play Asia Cement China (743 HK) (ACC) is currently suspended pursuant to the Takeovers Code.
- Asia Cement (1102 TT) has been ACC’s majority shareholder since its 2008 IPO. Asia Cement currently holds 73.07%.
- Shares gained ~50% this week. On serious volume. With net cash of US$1.03bn vs. a market cap of US$66mn, a privatisation should command a punchy premium to the last close.
TIP Customized Taiwan Select High Dividend Index Rebalance Preview: AUM Jump & HUGE Trade
- The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 209bn (US$6.5bn).
- There could be 14 changes for the ETF in June with an estimated one-way turnover of around 40% and a round-trip trade of around US$5bn.
- The potential adds have outperformed the potential deletes over the last couple of months and there could be more to go heading into announcement and implementation.
Asia Cement China (743 HK): Privatisation by Asia Cement?
- Asia Cement China (743 HK) entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. Bloomberg reports that Asia Cement (1102 TT) is considering a buyout.
- Privatisation interest is unsurprising, as ACC’s EV has been negative since 6 July 2022 due to headwinds from the weak Chinese property sector and uncertainty about cash use.
- An offer price of HK$5.18 would imply a zero EV. However, due to the difficult trading conditions, we think an offer would be around HK$4.00 per share.
JAPAN ACTIVISM: Murakami-Père Ran Up Mitsui Matsushima (1518 JP), Now Murakami-Fille Selling Down
- Colour me perplexed. Murakami Group ran up Mitsui Matsushima (1518 JP)‘s share price in acquiring 29%. The pattern was clear, but one assumes everyone in-group was on the same page.
- The earliest buyer was NOMURA Aya. She bought early, slowly, then aggressively, then onshore buyers bought aggressively at higher prices. But she has now sold 6 days straight.
- The pattern is confusing but it will become clearer in coming days.
Latest Info on Value-Up Index Involving KRX & NPS: Potential Flow Trading Patterns
- The value-up index aims to align closely with the KOSPI 200’s composition, adjusting stock weights based on factors from KRX Governance Leaders 100 and KRX ESG Dividend Opportunities Index.
- Insiders confirm NPS will create new funds to track the value-up index, needing SAA adjustments and Fund Management Committee approval. Despite hurdles, government backing suggests smooth NPS involvement.
- Buybacks could cause passive outflows in KOSPI 200 rebalancing and inflows in value-up index rebalancing. This timing discrepancy could create a consistent passive flow pattern for these stocks.
Block Deal Prospects Arising from SK Group’s Corporate Reshuffle
- The declining appeal of the separator business prompts SK to seek buyers for SKIET through block deals amid financial pressures. The first deal is anticipated despite recent stock price drops.
- SK Ecoplant looks to sell its 37.6% stake in SK Oceanplant. Negotiations stall over the former major shareholder’s 20% stake, prompting consideration of a block deal.
- SK Bioscience, under SK Discovery, faces possible sale amid SK’s bio company reshuffle. SK Chemicals may bring SK Biopharm under its wing to help SK Inc focus on semiconductors/batteries.
NIFTY200 Momentum30 Index Rebalance Preview: 49% Turnover; US$850m Trade; Election Results Coming
- There could be 13 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 27 June.
- If all changes are on expected lines, one-way turnover is estimated at 48.8% and that will result in a one-way trade of INR 35.5bn (US$426m).
- Since January, the potential adds to the index have outperformed the potential deletes by a big margin. Watch out for the general election results on 4 June for momentum change.
KFIN Tech: Block Deal Trade Special Situations and Tactical Trade Strategy
- Impending block deals which generally create supply over-hang on the stock leads to a negative impact on the stock
- These block deals generally include selling promoters and big funds at a price discount to its current market price
- Historically, such events suggest once the block deal is done; stock reacts positively creating a Special Situation Opportunity
C&F (9099) Pushes Back on AZ-Com Call for Transparency, Again. Still Not A Buy.
- Chilled & Frozen Logistics Holdings (9099 JP) asked AZ-Com Maruwa Holdings (9090 JP) repeatedly to respond to its entreaties, and delay the start of its tender offer until end-May.
- C&F was running a process and wanted to be transparent. When AZ-Com announced, C&F said “we have counter-bidders” and the stock went up. Then a Nikkei article propelled it higher.
- AZ-Com then asked, twice, for clarity from C&F, saying investors deserved more information. The shoe was on the other foot. Now C&F has responded. Again.
RR Kabel: Block Deal Trade Special Situations and Tactical Trade Strategy
- Impending block deals which generally create supply over-hang on the stock leads to a negative impact on the stock
- These block deals generally include selling promoters and big funds at a price discount to its current market price
- Historically, such events suggest once the block deal is done; stock reacts positively creating a Special Situation Opportunity
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