In today’s briefing:
- Index Rebalance & ETF Flow Recap: S&P/ASX, CH50/A50, TW50/Div+, NIFTY50/100, STI, EPRA, Sensex
- KOSPI 200 December Rebalancing Safe Play
- Yamada Denki (9831) Buyback Progress Strong But Big Impact To Come
- Weekly Deals Digest (04 Sep) – Giordano, BYD, Link Net, MACA, Nitro, Nearmap, Leapmotor, Onewo
- Nikkei 225 Sep 2022 Review Update
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Nitro Software, MACA, Giordano, Link Net
- Last Week in Event SPACE: Kyocera, Hang Lung Group, CSRC/PCAOB Audit Terms, MACA, Nitro Software
- FTSE TWSE Sep 22 Rebal: 100% Hit Rate, Elan Deletion Confirmed, Significant Flows from Div+ Capping
Index Rebalance & ETF Flow Recap: S&P/ASX, CH50/A50, TW50/Div+, NIFTY50/100, STI, EPRA, Sensex
- There were a bunch of rebalance announcements last week from FTSE and Nifty, and implementation of changes to the MSCI, JPXNK400 and Hang Seng indexes.
- The changes to the Nikkei 225 (NKY INDEX) should be announced early in the coming week and the changes to the SSE STAR50 (STAR50 INDEX) will be implemented on Friday.
- There were large inflows to China and Hong Kong focused ETFs during the week.
KOSPI 200 December Rebalancing Safe Play
- Although not many, there are strong candidates for a safe play aimed at constituent change. Inclusion: Lotte Confectionery & Exclusion: Samyang Holdings
- Lotte Confectionery’s average daily market cap must fall by more than 30% to be pushed out of the borderline. Samyang Holdings’s market cap gap to the second-lowest one is 17%.
- The trading volume of these two is so small that a significant passive impact (relative to DTV) will likely occur. We should consider a little more aggressive approach, timing-wise.
Yamada Denki (9831) Buyback Progress Strong But Big Impact To Come
- In early May 2022, Yamada Denki (9831 JP) launched a GINORMOUS buyback program. I wrote about it suggesting the company meant business. The stock popped outright and vs Peers.
- Then it fell back, and has only recently started moving back up. Surprising given buyback dynamics but it may have been overhang. If so, that overhang should be gone now.
- And the stock is cheap, a chunk of the register is sticky, so this could get squeezier now.
Weekly Deals Digest (04 Sep) – Giordano, BYD, Link Net, MACA, Nitro, Nearmap, Leapmotor, Onewo
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Leapmotor (2007699D HK) and Onewo Space-Tech (ONEWO HK) are pre-marketing a US$1.5 billion and US$2.0 billion HKEx IPO, respectively.
- Event-Driven developments – BYD (1211 HK), Giordano International (709 HK), MACA Ltd (MLD AU), Nitro Software Ltd (NTO AU), Link Net (LINK IJ).
Nikkei 225 Sep 2022 Review Update
- The Nikkei 225 rebalance will likely be announced this week. I continue to be slightly off-kilter, expecting Nidec, SMC, and Oriental Land to replace Unitika, Oki Electric, and Toho Zinc.
- Others would expect Hoya to replace Maruha Nichiro instead of Oriental Land replacing Toho Zinc, but I think it Nikkei Sector balance may matter. It could go either way.
- Tactically speaking, cumulative volumes and Real World Float tell you how you might trade this.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Nitro Software, MACA, Giordano, Link Net
- There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deal was discussed this week: Potentia’s rejected proposal for Nitro Software Ltd (NTO AU).
- Key updates took place for MACA Ltd (MLD AU), Giordano International (709 HK), and Link Net (LINK IJ).
Last Week in Event SPACE: Kyocera, Hang Lung Group, CSRC/PCAOB Audit Terms, MACA, Nitro Software
- Kyocera (6971 JP) is not blowing out the lights versus peers, but it’s relatively inexpensive to its history and peers. If Kazuo Inamori’s shares are sold, Kyocera can buy them.
- Hang Lung (10 HK) currently trades at a 62% discount to NAV, a level last seen around the Covid lows in May 2020.
- Washington and Beijing reach an agreement allowing US regulators access to audits of Chinese companies listed on American exchanges. However, US regulators remain cautious about the success of the deal.
FTSE TWSE Sep 22 Rebal: 100% Hit Rate, Elan Deletion Confirmed, Significant Flows from Div+ Capping
- The index changes for the FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 indices for the September 2022 Rebalance were announced after the close on Friday.
- There will be one change for the Taiwan 50 Index and five changes for the Taiwan Mid-Cap 100 Index. All changes are exactly in line with our expectations.
- In this insight, we take a closer look at our index flow expectations for this Rebalance event and for the Taiwan Dividend + Index Capping Event.
💡 Before it’s here, it’s on Smartkarma
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