In today’s briefing:
- Fuji Soft (9749) – Possible Issues with New KKR Amended Terms
- Lowdown from KRX’s Emergency Presser on the Value-Up Index Today
- A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
- Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers
- Nasdaq-100 December 2024 Forecasts: Monolithic Power & AppLovin It; Dollar Tree Needs Watering
- Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; Some Changes to Expectations
- Quiddity Leaderboard S&P 500 Dec 24: Two ADDs (One Biggie), Two DELs, Possible Big Intrareview Moves
- K Bank IPO (279570 KS): Index Inclusion Timeline
- Quiddity Leaderboard ASX Dec 24: Three Changes Possible; New Long-Short Ideas
- Prosus X Naspers: Discounts Catch Bid on China Stimulus, Trip.com Stake Fully Exited
Fuji Soft (9749) – Possible Issues with New KKR Amended Terms
- On 8 August, KKR and Fuji Soft Inc (9749 JP) announced a Tender Offer for the company. It was, at the time, an intention to do so. KKR needed approvals.
- Fuji Soft had KKR terms, and timing, and approved them. KKR then changed the terms and timing. Now on the 19th, they changed the terms again.
- This puts Fuji Soft in a kind of quandary. It’s important to think about why and what that leads to.
Lowdown from KRX’s Emergency Presser on the Value-Up Index Today
- KRX faces challenges balancing the Value-Up Index as a benchmark while ensuring real disclosures, but passive inflows remain steady with local pension funds still interested.
- KRX’s potential December mini rebalancing increases uncertainty but may just lead to minor tweaks, adding KB and Hana while removing a few stocks from Communication Services.
- The Value-Up Index resembles the KOSPI 200, using 30-40% GICS stocks and KOSDAQ 150, which may spark trading strategies focused on performance gaps within sectors.
A Special Rebalancing Of Korea Value-Up Index Is Likely in December 2024
- On 26 September, the Korea Exchange announced that it is considering a “special rebalancing” of the Korea Value-Up Index in December 2024.
- In our view, the probability of this special rebalancing occurring by the end of this year is high at about 85%+.
- If there is a special rebalancing, KB Financial, Hana Financial, Samsung Life Insurance, SK Telecom, and KT could be considered the top candidates for inclusion.
Fuji Soft (9749 JP): KKR on the Home Stretch as Bain Dithers
- The Fuji Soft Inc (9749 JP) Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch.
- The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon’s on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.
- Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon’s irrevocable.
Nasdaq-100 December 2024 Forecasts: Monolithic Power & AppLovin It; Dollar Tree Needs Watering
- Monolithic Power Systems (MPWR US) is a direct addition followed by AppLovin (APP US) which is a conditional addition but close to be direct. Demand is ~$1.8bn and ~3.5 ADV.
- Dollar Tree Inc (DLTR US) is a direct deletion with the highest exclusion probability as it is ranked above the exit rank of 125.
- Super Micro Computer (SMCI US) , ARM Holdings (ARM US) and Moderna (MRNA US) are amongst the prioritized constituents preventing eligible candidates from entering the index.
Quiddity Leaderboard SET50 Dec 24: 3 Changes Likely; Some Changes to Expectations
- The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
- In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.
- Currently, we see 3 expected ADDs/DELs and given that the 3-month reference period used for average market cap rankings have now started the rankings may be more stable.
Quiddity Leaderboard S&P 500 Dec 24: Two ADDs (One Biggie), Two DELs, Possible Big Intrareview Moves
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- In this insight, we take a look at the upcoming constituent changes in the run up to the December 2024 index rebal event.
- We expect two regular changes in December 2024. There are also several live spin-off and M&A events which could trigger intra-review index changes in the late-2024/early-2025.
K Bank IPO (279570 KS): Index Inclusion Timeline
- K Bank (279570 KS) is looking to raise up to KRW 984bn (US$738m), valuing the company at KRW 5tn (US$3.75bn) at the top end of the IPO price range.
- Close peer KakaoBank (323410 KS) and regional peer SBI Sumishin Net Bank (7163 JP) have been trading lower recently and the IPO could price lower than the top end.
- The change in KOSPI2 INDEX Fast Entry rules will leave the stock out of the index till June 2025. Inclusion in global indices will have to wait a while too.
Quiddity Leaderboard ASX Dec 24: Three Changes Possible; New Long-Short Ideas
- In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
- We currently do not see any index changes for ASX 20 and ASX 100.
- We see one change for ASX 100 and two changes for ASX 200 but the final result could depend on relative share price movements for the next two months.
Prosus X Naspers: Discounts Catch Bid on China Stimulus, Trip.com Stake Fully Exited
- On Tuesday, China announced fresh stimulus measures targeting the stock market and property sector.
- The PBoC reduced the main policy rate and cut the RRR, signaling that further cuts were on the cards for later this year.
- Further stimulus measures were announced today ahead of the Golden Week holiday. The discounts of Naspers and Prosus have rallied on the news, we see room for further upside.
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