In today’s briefing:
- Delta Electronics (DELTA TB): Potential SET50 Index Delete in December?
- Swire Coke Sale Special Div Impacts B/A Ratio
- Preemptive Short Position Buildup on SFA Engineering for Samsung’s Next Stake Sale
- AMFI Stock Reclassification Preview (June 2023): Outperformance Continues
- Quiddity Leaderboard NIFTY Sep 23: Non F&O Stocks Dilemma and Replacements for HDFC
- XxxLutz/Home24: Final Chance to Abandon the Boat
Delta Electronics (DELTA TB): Potential SET50 Index Delete in December?
- Delta Electronics Thai (DELTA TB) has been added to the Market Surveillance Measure List twice in the last few months. That increases the probability of index deletion in December.
- Given the big turnover every time Delta Electronics is added to and deleted from the index, there could be another go at weighting the SET50 Index by free-float market cap.
- Deletion from the index will have a big impact on Delta Electronics Thai (DELTA TB) and the passive selling could help narrow the gap with Delta Electronics (2308 TT).
Swire Coke Sale Special Div Impacts B/A Ratio
- Last night, Swire Pacific announced it planned to sell its US Coca Cola Distribution business to its parent company. That means a Circular, an IFA Opinion, and an EGM.
- I expect a September EGM and the Special Div to follow in Q4. While I find the price low, I expect the deal to be approved by Swire shareholders.
- This deal has an effect on the Swire B/A ratio. Some may get it. Some may not. Makes sense to be ready. Swire A is cheap. Swire B is cheaper.
Preemptive Short Position Buildup on SFA Engineering for Samsung’s Next Stake Sale
- Samsung Display still holds a 5.85% stake. Hankyung reported that this remaining stake would also be disposed of in the future.
- Then the key lies in timing. Considering the ongoing pattern of block deals being exposed during the pre-sounding phase, we may be able to capture clues for preemptive trading.
- As seen from the chart depicting SFA’s loan balance and the percentage of short-selling to daily TV, we can observe a significant increase in activity just before today’s sale event.
AMFI Stock Reclassification Preview (June 2023): Outperformance Continues
- We see 7 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 9 stocks from SmallCap to MidCap, and 10 stocks from MidCap to SmallCap.
- The expected migrations from SmallCap to MidCap have outperformed the other migrations and some stocks have seen large price moves over the last couple of weeks.
- Active managers would have started realigning their portfolios and that could continue for a couple of weeks. Unwind long positions into strength.
Quiddity Leaderboard NIFTY Sep 23: Non F&O Stocks Dilemma and Replacements for HDFC
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY 100 indices in the September 2023 rebalance.
- The NIFTY Next 50 methodology was supposed to change in June 2023 but this has been kept on hold for now. This change could still take place before September 2023.
- The HDFC/HDFC Bank Merger is expected to complete in the next few weeks and that could trigger intra-review index changes.
XxxLutz/Home24: Final Chance to Abandon the Boat
- Following the additional acceptance period and settlement, XXXLutz has increased its stake up to c.94.65% of Home24 (H24 GR).
- The Bidders, together with XXXLutz KG, have entered into a delisting agreement with home24, at the same time they will launching a delisting offer, at the prior offer price, €7.5/share.
- The offer price was fair in my view. Liquidity will become razor thin post offer and there will be no domination and P&L transfer agreement. Tender regardless of acquisition price.
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