In today’s briefing:
- FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Market Consultation Results Announced; BIG Trade
- StubWorld: Macau Plays Need To Up Non-Gaming Game
- Elmo Software Confirms Takeover Interest from Various Parties
- ELMO Software (ELO AU): KKR Returns To The Well
- S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
- Becketts/Euromoney Institutional Investor: Spread
FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: Market Consultation Results Announced; BIG Trade
- The number of FTSE TWSE Taiwan Dividend+ Index constituents will be increased from 30 to 50 in one step at the December rebalance.
- There are a few other changes to the index methodology, mainly around the cutoff ranks for inclusion/exclusion with a few additional constraints.
- We forecast 25 adds and 4 deletes to the index with one-way trade over US$2.2bn and big impact on many stocks due to inclusion, exclusion, capping and funding.
StubWorld: Macau Plays Need To Up Non-Gaming Game
- Reportedly Macau authorities are not satisfied with some concessionaire proposals from gaming firms and require them to increase investment into non-gaming facilities under a concession retendering process
- Preceding my comments on some of the gaming plays such as Melco International Development (200 HK) and Genting Bhd (GENT MK) 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%.
Elmo Software Confirms Takeover Interest from Various Parties
- Elmo Software (ELO AU) confirmed takeover interest from several parties, including Accel-KKR. Elmo previously disclosed on 14 June that it had discussions on a non-binding offer at A$6.10 per share.
- The previous talks ended because the bidder (Accel-KKR) could not progress to a binding offer due to changing tech valuations. Elmo has materially underperformed ASX SaaS peers since 14 June.
- The current conditions suggest a higher risk that the talks will fizzle out. Despite today’s 28% pop, the shares remain undemanding compared to peer multiples providing support to the shares.
ELMO Software (ELO AU): KKR Returns To The Well
- Cloud-Based solutions provider Elmo Software (ELO AU) has confirmed it has received multiple expressions of interest from various parties, including Accel-KKR.
- No agreement has been reached with any parties, no pricing mentioned, nor whether data room access has been afforded.
- Earlier this year ELMO held discussions with Accel-KKR in regard to a change of control proposal at $6.10/share. That figure is a stretch in this market.
S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
- The reference period for the trading data used for the index selection ends on 31st October 2022.
- At present, I see one change for SENSEX, three changes for BSE 100, and six changes for BSE 200.
Becketts/Euromoney Institutional Investor: Spread
- The scheme is just pending court sanction and the remaining regulatory approval, with closing reasonably expected to happen in Q4 2022.
- I believe Euromoney is going cheap, but the current debt markets make it harder to raise money/counterbid. Euromoney is trading at 16.3x EV/Fwd EBIT vs. RELX at 17.3x.
- The shares are liquid. Gross spread is 1.3%, with estimated annual return of 7.9% assuming settlement by 15 December. Long.
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