In today’s briefing:
- HSCEI Index Rebalance Preview: Could Be A BIG One
- SOHO China (410 HK): Blackstone Deal Potentially Back On As Pan Shiyi Goes “Altruistic”
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Couple of Potential Deletes
- Hitachi Transport (9086 JP) – Tender Launch Likely Soon But Watch for Flow
- KRX New Deal Index Rebalance: All Forecasts Right as KMW Soars and AfreecaTV Drops
- KRX K-New Deal Rebalancing: Official Results & Passive Flows
- DTAC/True Merger: NBTC Likely to Set Measures to Approve Merger
- Major Stock Swap Between Hyundai Motor Group and KT Corp
- Hong Kong CEO & Director Dealings – 1st Sept 2022: A8 New Media, China Fordoo
- Intention to Float Porsche AG: A Good Deal for Porsche Automobile Holding SE
HSCEI Index Rebalance Preview: Could Be A BIG One
- There could be up to 6 changes to the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance, mainly driven by the deletions.
- If there are six changes to the index, estimated one-way turnover is 6.47% and will result in a one-way trade of HK$4,124m.
- There is large short interest on quite a lot of stocks and will play an important role in the rebalance.
SOHO China (410 HK): Blackstone Deal Potentially Back On As Pan Shiyi Goes “Altruistic”
- Pan Shiyi and Pan Zhangxin – Chairman and CEO respectively of SOHO China (410 HK) – have tendered their resignations, with immediate effect.
- Both are resigning “to focus on supporting the arts and philanthropic pursuits“.
- That sounds like a “donation” is on the cards. And the Pans selling their stake in SOHO China would nicely fund that donation.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Couple of Potential Deletes
- Sierra Rutile Holdings (SRX AU) is a high probability delete from the index, while Australian Strategic Materials (ASM AU) is close to the deletion threshold.
- Sayona Mining (SYA AU) is the highest ranked non-constituent while Tianqi Lithium (9696 HK) only makes inclusion at the entire IPO raise.
- Deletion from the index will require passive trackers to sell over 5 days of ADV on Australian Strategic Materials (ASM AU).
Hitachi Transport (9086 JP) – Tender Launch Likely Soon But Watch for Flow
- Hitachi Transport System (9086 JP) has had a “long” wait to get its approvals, but EC and China are in, any remaining should be in shortly.
- Yesterday, as a footnote on the SG Holdings offering document, there was a comment about SG Holdings selling shares. This was likely more good corporate governance hygiene than warning.
- Shares are down this morning. I’d expect final approvals and launch quite soon. I would therefore look to buy the dip on flow – block or not.
KRX New Deal Index Rebalance: All Forecasts Right as KMW Soars and AfreecaTV Drops
- The KRX announced the changes to the KRX New Deal indices post market close on Friday. But the changes were not made public and are only available to subscribers.
- Intellian Technologies (189300) and Seojin System (178320) replace Danal (064260) and Kcp (060250) in the Internet Index, while KMW Co Ltd (032500 KS) replaces AfreecaTV (067160 KS) in BBIG.
- Since we published our last forecast on 21 July, KMW Co Ltd (032500 KS) is up 12% while AfreecaTV (067160 KS) has dropped 17%.
KRX K-New Deal Rebalancing: Official Results & Passive Flows
- KMW replaces AfreecaTV in BBIG. There is no constituent change for Battery and Bio. Seojin and Intellion replace NHN KCP and Danal in Internet. Nexon Games replaces Devsisters in Game.
- The effective date has been postponed to the 13th, and the ETF operators will conduct the rebalancing trading at the close tomorrow, the 8th.
- Regarding relative passive impact, KMW and AfreecaTV should receive the most attention, and this pattern is already appearing today.
DTAC/True Merger: NBTC Likely to Set Measures to Approve Merger
- The Bangkok Post reports that the Thai regulator (NBTC) will propose ten remedial measures to approve the Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB) merger.
- The NBTC board is not expected to issue a final decision as it waits for an interpretation by the Council of State if it can approve or reject the merger.
- The current share price ratio is 9.511x vs the swap ratio of 10.221x. At last close, DTAC and True’s gross spread to the VTO price is 9.2% and 10.7%, respectively.
Major Stock Swap Between Hyundai Motor Group and KT Corp
- On 7 September, Hyundai Motor (005380 KS) announced a major stock swap with KT Corp (030200 KS).
- KT will exchange about 750 billion won (7.7%) of KT’s treasury stock for 445.6 billion won (1.04%) of Hyundai Motor shares and 300.3 billion won (1.46%) of Hyundai Mobis shares.
- This stock swap is likely to have a bigger positive impact on KT versus Hyundai Motor and Hyundai Mobis.
Hong Kong CEO & Director Dealings – 1st Sept 2022: A8 New Media, China Fordoo
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
- These insights may also flag those companies where shares have been pledged, both recently and ongoing. Stocks mentioned include A8 New Media (800 HK) and China Fordoo Holdings (2399 HK).
Intention to Float Porsche AG: A Good Deal for Porsche Automobile Holding SE
- Volkswagen aims for an IPO of Porsche AG (operating company). 25% of preferreds will be placed and 25% of ords sold to Porsche Automobile Holding SE (combined, 25% equity capital).
- Thought a holding chain, the Pïech and Porsche families will directly control 25% of the votes of Porsche AG and 39.975% indirectly (total of 64.975%), with just a 24.275% economic interest.
- Porsche Automobile Holding SE will cover c.30% of the cost of its stake through the extraordinary dividend that Volkswagen will pay. It also gets the ords at a friendly price.
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