In today’s briefing:
- Cosmo Energy (5021) In a Display of Stunningly Bad Governance; If You Disagree, You Can’t Vote
- HDFC/HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications
- Early Targetable Names in KOSPI 200 December Rebalancing
- StubWorld: Swire Drifts Lower As Cathay Faces Discrimination Claim
- EQD | Asian Derivative YTD Range Trade Ideas
Cosmo Energy (5021) In a Display of Stunningly Bad Governance; If You Disagree, You Can’t Vote
- Cosmo Energy Holdings (5021 JP) and noted Japanese activist Yoshiaki Murakami and affiliates/companies have been duking it out for the better part of a year.
- Now Cosmo is putting a Poison Pill to an AGM vote. And it has decided to not allow Murakami-san to vote his shares. Because he is an interested party.
- INVESTORS NEED TO BE AWARE. This is the second time a company has sought to deny a shareholder its voting rights without legal basis. The last time the court agreed.
HDFC/HDFC Bank Mega Merger Expected to Complete in a Few Weeks: Index Implications
- Media reports indicate that the HDFC Bank (HDFCB IN) merger with HDFC Limited (HDFC IN) is expected to complete in 4-5 weeks.
- There will be inclusions to the NIFTY Index, Nifty Next 50 Index and S&P BSE SENSEX Index and capping changes to the Nifty Bank Index apart from changes to global indices.
- While the impact on the merging entities is not big, there will be fairly large flows on some stocks that are index inclusions or affected by capping changes.
Early Targetable Names in KOSPI 200 December Rebalancing
- Based on the average daily full market cap up until the last close, the following additions have been identified as high-probability candidates: Sam A Aluminum, Dentium, and Dongwon Industries.
- Three constituents will likely leave as they rank at the bottom in descending order of full market cap among those failing the screening: Cuckoo Homesys, Zinus, and Hyundai Home Shopping.
- Dongwon Industries seems to be the most attractive, but given the uncertainty surrounding its inclusion, it may be more appropriate to target Dentium.
StubWorld: Swire Drifts Lower As Cathay Faces Discrimination Claim
- A double dose of StubWorld this week. Swire Pacific (A) (19 HK)‘s P/B is back down to 0.31x as Cathay Pacific (293 HK) tackles alleged language bias by flight attendants.
- Preceding my comments on Japan Post are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
EQD | Asian Derivative YTD Range Trade Ideas
- Hang Seng Index (HSI INDEX) Implieds are at Records Low, Cheap to Historic, Buy Options.
- Many Asian Indices have Tight Ranges, Flat Returns YTD, Options Expensive to the Range.
- HSBC Holdings (5 HK) and Citic Ltd (267 HK) are up than 23% YTD, (with the Hang Sang flat), hedge them with cheap options
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