Daily Brief Event-Driven: Cromwell Prop (CMW AU): ESR Exit Post-Privatization? and more

• Back in August 2021, ESR Group (1821 HK) acquired unlisted ARA Asset Management for US$5.2bn. This was discussed in ESR Cayman (1821 HK) Takes Out ARA Asset Management. 
• Included in the transaction (completed early-2022) was ARA’s ~30.7% stake in office play Cromwell Property (CMW AU). 
• ESR has in the past said Cromwell was a non-core holding. With ESR now expected to be privatized by Warburg/Starwood, does this accelerate the narrative?

• A Nikkei article this morning several hours pre-open said that Mitsubishi Heavy Industries (7011 JP) was preparing to sell its listed forklift subsidiary Mitsubishi Logisnext Co., Ltd. (7105 JP). 
• The story says “Investors had been pressuring Mitsubishi Heavy to spin off or delist Logisnext” and we know the TSE dislikes dual listings. I would have expected a buy-in but…
• There are a number of reasons why a buyer could find this asset attractive. I suggest reading all the way through and the tone of the Conclusions.

• The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 6th December 2024.
• There will be one ADD/DEL for T50, five ADDs/DELs for T100, and 8 ADDs/7 DELs for TDIV. All of these are perfectly in line with our final expectations. 
• In this insight, we take a look at Quiddity’s final flow expectations for the December 2024 index rebal event and potential trade ideas based on the flow dynamics.

• Rio Tinto sold 30% of its Winu project to Sumitomo for $400 million, surprising many with the valuation
• Expecting a PFS in 2025 for a 10 million tonne per annum scenario for the Winu project
• The partnership with Sumitomo signifies the rise of Japan and South Korea in the mining industry and may benefit Rio Tinto in terms of capital allocation and project development.

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• Korea Zinc’s free float is dropping from 52% to 31%, a 21%p cut.
• Despite rising volume, retail still dominates. With this trend continuing, the 80,000-share sell volume is unlikely to get buried without triggering noticeable price moves.
• Ahead of big one-day flow events, shorts are loaded, causing a dip. On rebalance day, traders buy back, triggering a bounce. This event is likely to follow the same pattern.

• On Wednesday, after the close, the JSE released index changes scheduled for the December rebalance (Friday, 20 Dec).
• OUT will enter the Top 40, with NPH falling out. AMS will enter the RESI 10 and EXX will fall out.
• Naspers and Prosus released 1H results on Monday. The discounts have narrowed through the last 3 trading days, Naspers and Prosus are up 6% and 3.1%, respectively.

• Our previously posted view on an upcoming KOSPI 200‘s rally has not been changed by the attempted political coup. The market pulled back a bit, no big deal.
• The index is in the process of bottoming, as we will see from the analysis of our QUANTCHARTS / models.
• Even if the index suddenly crashes, we have identified an area for support in that event (keep reading).