In today’s briefing:
- Bud APAC (1876 HK): Nursing a Hangover; Now Comes a Passive Overhang
- Spotting Position Patterns: TIGER Battery ETF January Review & KODEX ETF’s March Rebalancing
- IRC (1029 HK)’s MBO’s MGO: Still An Avoid
- Quiddity Leaderboard SE600 Mar 24: Two Intra-Review and 5 Regular Changes Likely
Bud APAC (1876 HK): Nursing a Hangover; Now Comes a Passive Overhang
- Budweiser Brewing APAC (1876 HK) has seen investors run for the hills over the last year. The halving of the stock price could mean deletion from passive portfolios.
- Other Hong Kong listed brewers, China Resources Beer Holdings (291 HK) and Tsingtao Brewery Co Ltd H (168 HK) have been beaten down too and have underperformed their Asian peers.
- The deletion from passive portfolios could provide a buying opportunity in Budweiser Brewing APAC (1876 HK) at the end of February (or earlier if the stock drops due to positioning).
Spotting Position Patterns: TIGER Battery ETF January Review & KODEX ETF’s March Rebalancing
- TIGER ETF (305540) rebalanced on January 11th, with Ecopro Materials correcting by 4%, contrasting a 20% surge from Jan 8-10. TIGER recorded net purchases aligning with a 2% inclusion weight.
- Preemptive positions by local hedge funds were observed from Jan 8-10, closing on the 11th. Despite a KOSPI decline and minimal sector movement, Ecopro Materials exhibited this unusual price pattern.
- Observing this pattern implies a potential recurrence during the March rebalancing of KODEX ETF. Notably, local hedge funds may initiate similar preemptive positions. We should consider this in position setup.
IRC (1029 HK)’s MBO’s MGO: Still An Avoid
- Back on the 1st November, Nikolai Levitskii, Russian iron-ore play IRC (1029 HK)‘s chairman and largest shareholder, acquired 4.72% of shares out, lifting his stake above 30%, triggering an MGO.
- The Offer is conditional on Levitskii holding more than 50% of shares out. His intention is to maintain IRC’s listing. At the first close, he held 35.77% (5.16% had tendered).
- The current spread is 9.2%. MIC, with 16.67% of shares out, has yet to tender. Nor do I expect them to. Plus IRC is on the OFAC sanction list. Avoid.
Quiddity Leaderboard SE600 Mar 24: Two Intra-Review and 5 Regular Changes Likely
- The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
- In this insight, we take a look at the potential index changes that could take place between now and the end of the March 2024 index rebal event.
- Based on the latest available data, I expect there to be up to seven index changes in the first quarter of 2024.
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