In today’s briefing:
- HSCEI Index Rebalance: PICC P&C (2328 HK) Replaces Longfor (960 HK)
- (Mostly) Asia-Pac M&A: Sayona/Piedmont, I D & E Holdings, Arcadium, Pacific Smiles, HKBN, MAHB
- Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
- Last Week in Event SPACE: Seven & I, Amcor/Berry, WH Group/Smithfield, Tuya
- HSCI Index Rebalance: Midea (300 HK) And Black Sesame (2533 HK) Added
- Kioxia (285A JP): Early Christmas with IPO Approval, Grinch Steals Fast-Entry
- SENSEX Index Rebalance: F&O Inclusion Brings First of Many Index Inclusions for Zomato
HSCEI Index Rebalance: PICC P&C (2328 HK) Replaces Longfor (960 HK)
- PICC Property & Casualty H (2328 HK) will replace Longfor Properties (960 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 6 December.
- Estimated one-way turnover is 2.68% resulting in a round-trip trade of HK$2.84bn (US$365m). The final capping will use the close of trading on 3 December.
- There could be a move higher in PICC Property & Casualty over the next few days while any selling in Longfor Properties will be a covering opportunity for the shorts.
(Mostly) Asia-Pac M&A: Sayona/Piedmont, I D & E Holdings, Arcadium, Pacific Smiles, HKBN, MAHB
- I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Six new deals this week: Amcor (AMC AU)takes out Berry Global (BERY US);Sayona (SYA AU)and Piedmont (PLL AU) merge; and Integrated Design & Engineering (9161 JP)‘s TOB.
- Key updates/news took place on: Arcadium Lithium (LTM AU), Pacific Smiles (PSQ AU), Hotel Property Investments (HPI AU), HKBN (1310 HK), Xingda International (1899 HK), and Malaysia Airports Holdings (MAHB MK).
Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
- Meiji Holdings (2269 JP) on Friday announced 9 different banks would sell 4.7% of float in an equity offering to price in the first few days of December 2024.
- The shares closed Friday within 1.5% of a 52wk low. The shares are less than 9% off a 9-year low. The offering is about US$300mm and 15 days of ADV.
- Given the stock is under-levered, and structurally a low volatility name, a large move should encourage buying.
Last Week in Event SPACE: Seven & I, Amcor/Berry, WH Group/Smithfield, Tuya
- At equal price to ACT, Ito-san wins because of certainty/immediacy, but provided his price is above the bottom of the range and adequately compensates 7&i for “additional actionable avenues.”
- The Amcor Limited (AMC AU)/Berry Global Group (BERY US) merger looks clean. However, Berry’s % of earnings (revs, EBITDA, and profit), are higher than the % under the share split
- This Temasek-led development will have a marginal impact on Tuya Inc (TUYA US). Creating supply and demand is hard. And Temasek-held/backed vehicles on the SGX are already abundant.
HSCI Index Rebalance: Midea (300 HK) And Black Sesame (2533 HK) Added
- Midea Group (300 HK) and Black Sesame International Holding (2533 HK) will be added to the Hang Seng Composite Index (HSCI) after the close on 6 December.
- Midea Group (300 HK) is already in Southbound Stock Connect while Black Sesame International Holding (2533 HK) will be added from the open on 9 December.
- There is a huge lock-up expiry for Black Sesame International Holding (2533 HK) in February while the lock-up for Midea Group (300 HK) cornerstone investors ends in March.
Kioxia (285A JP): Early Christmas with IPO Approval, Grinch Steals Fast-Entry
- Kioxia Holdings (285A JP) is scheduled to be listed on 18 December 2024, at the prime market of TSE at an expected valuation of ~$4.9bn.
- The security’s low free float is the main cause of Fast-Entry rejection by both global indices and quarterly exclusion from the one global index.
- Quarterly inclusion to the other global index is forecasted for June 2025 following the 3-month minimum trading requirement.
SENSEX Index Rebalance: F&O Inclusion Brings First of Many Index Inclusions for Zomato
- Zomato (ZOMATO IN) will replace JSW Steel Ltd (JSTL IN) in the S&P BSE SENSEX Index (SENSEX INDEX) at the close on 20 December.
- This is the first of many potential inclusions for Zomato in local indices over the next few months and is due to inclusion of the stock in the F&O segment.
- Futures and options in Zomato (ZOMATO IN) start trading from the open on 29 November. Expect increased volatility in the short-term and an increase in traded volumes.
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