In today’s briefing:
- FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: BIG Impact Changes
- United Tractors (UNTR IJ) Buyback – Sure to Be Impactful
- Offensively Cheap Homecoming For Glory Star New Media
- A Thorough Guide to KOSPI 200 & KOSDAQ 150 Rebalancing Calculations
- HFCAA, AHFCAA, China ADRs & FTSE Index Treatment: Speeding Up The Process & Implications
- WISE Theme Indexes Rebalancing Today: Names in Basket Trade Setup
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: BIG Impact Changes
- The FTSE TWSE Taiwan Dividend+ Index is a funky one that weights stocks by dividend yield. Given dependency on dividends and stock prices, the potential adds/deletes can change often.
- We currently see three changes to the index in December, with another stock very close to deletion zone. Given the difference in market cap and dividend yield, impacts are big.
- There will be large flows on the current index names at the September rebalance due to capping.
United Tractors (UNTR IJ) Buyback – Sure to Be Impactful
- Yesterday, United Tractors (UNTR IJ) announced a large share buyback. It’s a big buyback but perhaps not as big as the headlines (which say “up to 20%”).
- The buyback is for 5 trillion rupiah which is about 5% of market cap, and will be conducted on-market over the next three months.
- Looking at the early market reaction, my opinion is that the market does not seem to understand the consequences.
Offensively Cheap Homecoming For Glory Star New Media
- Glory Star New Media Group H (GSMG US) (GSMG), a leading digital media platform and content-driven e-commerce company in China, has entered a definitive privatisation transaction with Cheers Inc.
- Cheers is offering US$1.55/share, in cash, a 76% premium to GSMG’s undisturbed price, and a 22% premium to the US$1.27/share proposal from GSMG’s CEO Bing Zhang.
- The buyer consortium owns ~72.8% of shares out and this Offer requires a two-thirds vote from shareholders. This looks done with expected completion this year. But it’s a low-balled Offer.
A Thorough Guide to KOSPI 200 & KOSDAQ 150 Rebalancing Calculations
- This post explains how the rebalancing of the KOSPI 200 and KOSDAQ 150 is calculated. So, please note that this post does not have any investment recommendations.
- Both indices have the same calculation method. However, the thresholds are different. They screen stocks using the three metrics: Market Cap, ADTV, and Market Cap Ranking (buffer).
- The concept itself of these three metrics is not difficult. However, ranking it cumulatively often confuses us.
HFCAA, AHFCAA, China ADRs & FTSE Index Treatment: Speeding Up The Process & Implications
- The Holding Foreign Companies Accountable Act (HFCAA) could result in China ADRs being delisted in 2024. The Accelerated HFCAA, if passed, will bring that date ahead to 2023.
- FTSE has announced its implementation plan to migrate the China ADRs in its indices to the local listings using an accelerated schedule.
- Expect a lot more secondary listings/ dual primary listing in Hong Kong over the next few months. The increase free float market cap could keep a lid on prices.
WISE Theme Indexes Rebalancing Today: Names in Basket Trade Setup
- Today is the rebalancing trading day of WISE’s three major theme indexes. The ETF operator (TIGER) is expected to start rebalancing trading after 2 pm.
- The prediction accuracy of the top market cap stocks is relatively high. So, we should target these big boys with a flow at 0.2x or higher relative to ADTV.
- Names in a basket trade setup: Ecopro BM (247540 KS), SK IE Technology (361610 KS), Solus Advanced Materials (336370 KS), Hana Tour Service (039130 KS), & CJ ENM (035760 KS)
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