In today’s briefing:
- Heiwa (6412) Announces Game-Changing Acquisition, Gets Very Heavily Levered (Termed Debt)
- How Has the Index Rebalance Strategy Performed in 2024?
- Insignia Financial (IFL AU): Bain Rejection Follows Tanarra’s Lead
- EQD | NDX OVERSOLD: A High Probability LONG Trade Idea
- EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop
Heiwa (6412) Announces Game-Changing Acquisition, Gets Very Heavily Levered (Termed Debt)
- Heiwa Corp (6412 JP) got 99% of its revenue as a pachinko/pachislot machinery maker. In 2011, it bought one of Japan’s largest golf course operators, PGM Holdings, from Lone Star.
- Golf course revenue is up 30% in 10yrs. Pachinko/Pachislot revenue is down by 60+% in the same period. Golf is the bulk of revenue and OP now.
- Today, the company announced a stunning, even monumental acquisition to become the largest golf course operator in the world.
How Has the Index Rebalance Strategy Performed in 2024?
- It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.
- Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.
- As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.
Insignia Financial (IFL AU): Bain Rejection Follows Tanarra’s Lead
- After Tanarra Capital categorically refuted an Australian article alleging Tanarra was supportive of Bain’s Offer, Insignia Financial (IFL AU)‘s board’s response was all-but rubber stamped.
- Insignia reckons Bain’s Offer does not represent fair value, and in the “context of a change of control transaction“.
- What now – does Bain bump? Tough call in a space where one, possible two deals, may lapse in short succession.
EQD | NDX OVERSOLD: A High Probability LONG Trade Idea
- The Nasdaq 100 Index (NDX) selling lead the index straight into OVERSOLD territory on December 18th.
- The sell off is overdone, our DAILY NDX model suggests a high probability LONG trade for Thursday.
- High volatility may affect trades, triggering stops and making it difficult to hold without taking the risk of big losses, Vertical Spreads (Bull PUTs) are a better instrument choice.
EQD | CSI 300 Stuck in Neutral: Equal Chances to Rally or Drop
- The Shanghai Shenzhen CSI 300 Index (SHSZ300 Index) exploded higher in mid-September 2024, then went flat in a range (still there as we write).
- Our models currently see uptrend and downtrend targets positioned at an equal distance from the last WEEKLY CLose on December 13th.
- In short this means that the index is “perfectly neutral” at the moment, a rare scenario that requires straddle and strangle-like strategies to be able to profit.
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