In today’s briefing:
- HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time
- Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM
- NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank
- Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value
- Selected European HoldCos and DLC: December’23 Report
HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time
- Zhongsheng Group (881 HK) pops up as a potential deletion yet again and a much lower rank raises the probability of deletion to just short of a near certainty.
- With BeiGene (6160 HK) failing the Velocity Test for Tradeable Indexes, Zhongsheng Group (881 HK)‘s deletion from the index should result in China Unicom Hong Kong (762 HK)‘s inclusion.
- Estimated one-way turnover at the rebalance is 1.47% resulting in a one-way trade of HK$946m. Passives will need to trade over 2.5x ADV on both stocks.
Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM
- On 29 December, Ecopro Group announced large selling of Ecopro Co Ltd (086520 KS) and Ecopro BM (247540 KS) by Daisy Partners worth 272 billion won in December.
- Daisy Partners is a company 100% owned by Chairman of Ecopro Group Lee Dong-Chae and his family members.
- Daisy Partners is likely to sell more shares in Ecopro Co and Ecopro BM in the next several years to increase the foundation’s capital to about 500 billion won.
NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank
- Canara Bank (CBK IN) could replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the March rebalance.
- Passive trackers will need to buy 2 days of ADV on Canara Bank (CBK IN) while selling over 1 day of ADV on Bandhan Bank Ltd (BANDHAN IN).
- The impact is even higher where passives will need to buy nearly 6x delivery volumes in Canara Bank and sell 3x delivery volumes in Bandhan Bank Ltd.
Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value
- Pyridam Farma (PYFA IJ) is acquiring Probiotec Ltd (PBP AU), a leading contract manufacturer and packer of prescription and OTC pharmaceuticals, complementary medicines, consumer health products, and FMCG.
- Under the terms of the scheme, Probiotec shareholders will receive cash consideration of A$3.00 per share. This implies an equity value of ~A$251M for Probiotec and enterprise value of ~A$326M.
- The acquisition will add an attractive high-margin revenue stream to Pyridam. Through the acquisition of Probiotec, Pyridam will be capable to reach a wider market, thereby increasing its market share.
Selected European HoldCos and DLC: December’23 Report
- The discounts to NAV of covered holdcos have mainly widened during December. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.1%); GBL, 36.6% (vs. 34.9%); Heineken Holding, 16.7% (vs. 14.5%);
- Industrivärden C, 5.4% (vs.4.9%); Investor B, 13.5% (vs. 14.6%); Porsche Automobile Holding, 37.1% (vs. 39.9%). The spread of Rio DLC widened to 24.2% (vs.17.2%).
- What seems interesting: in holding trades, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.
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