In today’s briefing:
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September
- Quiddity TDIV/50/100 Jun 23 Rebal: 15/18 as Expected; Some Surprises, US$1.1bn+ One Way
- Nexon Founder Family Hands Over 4.7 Trillion Won Worth of NXC to Korean Government
- ENM Holdings (128 HK): Privatisation Bid at HK$0.58 Per Share
- Merger Arb Mondays (05 Jun) – Golden Eagle Retail, ENM, AAG, Yashili, Golden Energy, Challenger Tech
- Weekly Deals Digest (04 Jun) – Golden Energy, Challenger, ENM, Golden Eagle Retail, Amman Mineral
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September
- Fenbi Ltd (2469 HK) was added to the Hang Seng Composite Index (HSCI) at the close Friday and will be added to Southbound Stock Connect from open of trading today.
- We see 22 potential adds, 19 potential deletes, couple of close deletes, 5 deletes on prolonged suspension and 4 close liquidity deletes for the HSCI in September.
- There are 11 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.
Quiddity TDIV/50/100 Jun 23 Rebal: 15/18 as Expected; Some Surprises, US$1.1bn+ One Way
- In this insight, we take a look at the final ADDs/DELs for the TDIV, T50, and T100 Indices for the June 2023 Rebalance.
- Across these three indices there will be 18 changes and 15 of them were in line with expectations.
- Our updated flow expectations show that there could be US$1.1bn one-way flow in the June 2023 rebalance.
Nexon Founder Family Hands Over 4.7 Trillion Won Worth of NXC to Korean Government
- The late Nexon founder Kim Jung-Ju’s family recently paid nearly 4.7 trillion won worth of inheritance taxes to the Korean government by handing over 29.3% stake (paid-in-kind) in NXC Corp.
- We view this handing over the 29.3% stake to the Korean government to be positive overall on Nexon in the near term.
- However, we do not expect this could bring about change in controlling ownership of the Nexon Group in the near term to result in re-rating of the Nexon Group shares.
ENM Holdings (128 HK): Privatisation Bid at HK$0.58 Per Share
- Enm Holdings (128 HK) announced a privatisation offer from Chime Corporation at HK$0.58 per scheme share, a 54.7% premium to the undisturbed price of HK$0.375 per share (24 May).
- The key condition is the scheme be approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). No shareholder holds a blocking stake. The offer price is final.
- Detractors will argue the offer is low due to ENM’s net cash (75% of the market cap). However, the offer is reasonable compared to historical multiples and share prices.
Merger Arb Mondays (05 Jun) – Golden Eagle Retail, ENM, AAG, Yashili, Golden Energy, Challenger Tech
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 111 Inc (YI US), Enm Holdings (128 HK), United Malt Group Ltd (UMG AU), Estia Health (EHE AU), HKBN Ltd (1310 HK), Hailan Holdings (2278 HK).
- Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Challenger Technologies (CHLG SP), Lian Beng (LBG SP), SBI Shinsei Bank (8303 JP), Newcrest Mining (NCM AU).
Weekly Deals Digest (04 Jun) – Golden Energy, Challenger, ENM, Golden Eagle Retail, Amman Mineral
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Amman Mineral Internasional (1416286D IJ), Tata Technologies (TATATECH IN), JD Industrials (2231713D CH) IPOs.
- Event-Driven developments – Golden Energy & Resources (GER SP), Challenger Technologies (CHLG SP), Enm Holdings (128 HK), Golden Eagle Retail (3308 HK), Metro Pacific Investments Co (MPI PM), Yashili.
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