In today’s briefing:
- CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
- Merger Arb Mondays (31 Oct) – Jinke, Fengxiang, Lifestyle, Kingston, Pushpay, Nitro, Elmo, DTAC/True
- Fengxiang (9977 HK): PAG’s Unconditional MGO And Proposed Delisting
- Moya Holdings: 21 Nov EGM For Salim’s Exit Offer
- Ad Hoc S&P500 Change on Twitter Deletion
- LX Semicon KOSPI Migration & KOSDAQ 150 Special Change
- MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes
- Moya Holding’s EGM for S$0.092 Offer on 21 November
- Weekly Deals Digest (30 Oct) – Keppel, GoTo, Fengxiang, Lifestyle, Jinke Services, Kingston, Pushpay
- EQD | Volatility Update: Bi-Weekly Review of Vol Changes and Best Trades
CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
- With a day left in the review period, we forecast 50 changes (the maximum permitted) for the CSI500 Index at the close on 9 December.
- We estimate a one-way turnover of 13.53% at the December rebalance leading to a one-way trade of CNY 8.01bn. The Materials, Consumer Discretionary and Information Technology sectors are net gainers.
- The potential adds and potential deletes have performed in line over the last few weeks, and we’d look to position for outperformance post the end of the review period.
Merger Arb Mondays (31 Oct) – Jinke, Fengxiang, Lifestyle, Kingston, Pushpay, Nitro, Elmo, DTAC/True
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Genex Power Ltd (GNX AU), O2Micro International (OIIM US), Shandong Fengxiang (9977 HK).
- Lowest spreads – Tyro Payments (TYR AU), Tassal (TGR AU), China Vast Industrial Urban Development (6166 HK), Singapore Medical (SMG SP), PTB Group Ltd (PTB AU), Nearmap Ltd (NEA AU).
Fengxiang (9977 HK): PAG’s Unconditional MGO And Proposed Delisting
- PAG Capital has won the judicial auction to acquire 70.92% of Shandong Fengxiang (9977 HK).
- The acquisition remains subject to regulatory clearance (including SAMR). Once greenlit, PAG will be required to make an unconditional Offer for the H-shares at HK$1.5132/share.
- Separately, it is PAG’s intention to delist Fengxiang which involves Scheme-like delisting resolutions.
Moya Holdings: 21 Nov EGM For Salim’s Exit Offer
- On the 14 September, Indonesian water treatment play Moya Holdings Asia (MHAL SP) announced a S$0.092/share Exit Offer from an Anthoni Salim-controlled entity. The Offer price will not be increased.
- The Offer requires approval from 75% of disinterested shareholders. Tamaris and its concert parties hold 72.84%.
- The Circular is now out. The EGM takes place on the 21 November. The IFA reckons the Offer is fair and reasonable.
Ad Hoc S&P500 Change on Twitter Deletion
- S&P DJI announced late 27 October 2022 that Twitter Inc (TWTR US) would be deleted from the S&P500, replaced by Arch Capital (ACGL US).
- RXO would be added to the MidCap400 while Bread Financial Holdings (BFH) would move from MidCap400 to SmallCap600 and Unifi Inc (UFI US) would get deleted from the 600.
- This insight presents the issues and the flows, which are not to be separated.
LX Semicon KOSPI Migration & KOSDAQ 150 Special Change
- LX Semicon (108320 KS) will be traded on KOSPI from November 3rd. This event has no trade suspension. So, it will be traded on KOSDAQ until November 2nd.
- Nextin (348210 KS) will replace LX Semicon for KOSDAQ 150. Again, the effective date is November 3rd. So, the index trackers will rebalance-trade at the close on November 2nd.
- LX Semicon will see an outflow of -1.91x ADTV, whereas Nextin will enjoy an inflow of 3.93x ADTV. This Special Change will likely save AptaBio Therapeutics (293780 KS) from deletion.
MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes
- The NOC of MSCI Korea Standard is 111, and the market cap of the 111th-ranked company is ₩2.44T on Day 1 and ₩2.40T on Day 2.
- In addition to Hyundai Mipo, Ecopro passed the screening. On the other hand, only Meritz Securities and CJ ENM managed to stay inside the safe zone among the deletion candidates.
- The recently increased price fluctuations likely resulted in delaying the entry timing of flow trading. So, we should set the expected return of our basket trade a bit more aggressively.
Moya Holding’s EGM for S$0.092 Offer on 21 November
- Moya Holdings Asia (MHAL SP) released its delisting circular. The EGM to approve the delisting proposal from Tamaris Infrastructure (Anthoni Salim) at S$0.092 per share is on 21 November.
- The IFA says the offer is fair and reasonable. Gateway Partners, which holds a blocking stake, will likely use the offer as an opportunity to exit an underperforming investment.
- The offer price is attractive and will likely succeed. At the last close price, the gross and annualised spread for a 30 November payment is 3.4% and 45.8%, respectively.
Weekly Deals Digest (30 Oct) – Keppel, GoTo, Fengxiang, Lifestyle, Jinke Services, Kingston, Pushpay
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Blibli (1437710D IJ) priced at IDR450, Giant Biogene Holding (2367 HK) priced at the bottom of the range, GoTo (GOTO IJ)‘s upcoming lock-up expiry.
- Event-Driven developments – Keppel Corp (KEP SP), Shandong Fengxiang (9977 HK), Jinke Smart Services (9666 HK), Kingston Financial (1031 HK), Lifestyle International Holdings (1212 HK), Pushpay Holdings (PPH NZ), Nitro.
EQD | Volatility Update: Bi-Weekly Review of Vol Changes and Best Trades
- Two Week summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 10 days
- We suggest a few trades to take advantage of the implied vol surfaces
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