In today’s briefing:
- Index Rebalance & ETF Flow Recap: STAR50, PCOMP, SET50, AMFI, ALX
- Merger Arb Mondays (19 Sep) – Link Admin, Ramsay, Alliance, Genex, Moya, Singapore Medical, VNET
- FTSE Straits Times Index (STI): Quiddity Primer
- 3Q Dividend Estimates of Those with SSF for Cash & Carry Arb in Korea
- OZ Minerals Could Get an Improved Offer from BHP
- That’s It Then As Link Admin Rejects D&D’s Revised Terms
Index Rebalance & ETF Flow Recap: STAR50, PCOMP, SET50, AMFI, ALX
- It was a busy week with a bunch of index rebalances being implemented at the close of trading on Friday.
- We list out potential changes to the STAR50 INDEX, Philippines Stock Exchange PSEi Index (PCOMP INDEX) and SET50 INDEX at the upcoming rebalances.
- There was a large outflow from the iShares MSCI ACWI ETF (ACWI US) for yet another week.
Merger Arb Mondays (19 Sep) – Link Admin, Ramsay, Alliance, Genex, Moya, Singapore Medical, VNET
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
- Highest spreads – Link Administration (LNK AU), Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Genex Power Ltd (GNX AU).
- Lowest spreads – Nitro Software Ltd (NTO AU), Tyro Payments (TYR AU), Nearmap Ltd (NEA AU), MACA Ltd (MLD AU), Xiamen International Port H (3378 HK), Link Net (LINK IJ).
FTSE Straits Times Index (STI): Quiddity Primer
- FTSE Straits Times Index (STI) (STI INDEX) consists of the 30 largest companies listed in the Singapore Stock Exchange (SGX).
- This is one of the well-known national blue-chip indices in the Asia-Pacific region.
- In this insight, we will have a look at the selection criteria and the historical price performance of past Rebalance Events.
3Q Dividend Estimates of Those with SSF for Cash & Carry Arb in Korea
- Juice for cash & carry arbitrage doesn’t seem like much. Several names in contango, but the basis widening isn’t at a sufficiently arb-tradable level.
- Reverse cash & carry isn’t all that attractive either, but it certainly does offer more juice, even with borrow fees. Ssangyong C&E, SKT, Shinhan, and KB deserve our attention.
- A bit uncertain is whether the pattern of “LONG Spot until ex-dividend and Conversion to Short” through cash & carry will repeat itself this time.
OZ Minerals Could Get an Improved Offer from BHP
- Bloomberg reported that BHP Group Ltd (BHP AU) has been considering raising its bid for OZ Minerals Ltd (OZL AU). OZ is pushing BHP to increase its offer to A$30.
- The OZ Board has a strong justification for a higher offer as BHP’s acquisition of OZ would tick the boxes of future-facing commodities and potential operational synergies.
- Rio Tinto Ltd (RIO AU) recently increased its bid to minority shareholders of Turquoise Hill Resources (TRQ CN). This increases the probability that BHP will return with a sweetened offer.
That’s It Then As Link Admin Rejects D&D’s Revised Terms
- After 23 months of negotiations, various bids from various parties, culminating in a protracted on-again, off-again, negotiation with Dye & Durham, Link Administration (LNK AU) has called it a day.
- D&D arguably did the right thing and tabled a revised proposal to account for any enforcement process after the UK’s FCA raised redress payments. Link has rejected the revised terms.
- Link will now pursue an in-specie distribution of a minimum of 80% of Link’s shareholding in PEXA Group (PXA AU).
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