In today’s briefing:
- [JAPAN ACTIVISM] Keisei Elec (9009) – Murakami Stake Causes Pop But the Oppty Is Still Unconvincing
- Oriental Land ToSTNeT-3 Buyback From Keisei (9009) – It’s In the Plan And Looks Better Than It Is
- Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
- Hyundai Motor Securities Announces a Rights Offering Involving a 49% Shares Dilution
- DigiCo REIT (DGT AU) IPO: Offering Details & Index Implications
- Event Driven: Arbitrage Opportunity in Orient Cement Open Offer by Ambuja
- SET50 Index Rebalance Preview: 4 Changes Coming Up in December
- EQD | Nikkei 225 : State Of The Odds (WEEKLY)
[JAPAN ACTIVISM] Keisei Elec (9009) – Murakami Stake Causes Pop But the Oppty Is Still Unconvincing
- 13mos ago, activist investor Palliser Capital spoke at a conference about the value offered by Keisei Electric Railway Co (9009 JP) due to its large stake in Oriental Land (4661).
- Keisei outperformed OLC by 30% over 3.5mos. Then it fell all the way back, and more, over the next five months. Asset sale, buyback, AGM proposals. Meh.
- Nov 25th, Toyo Keizai wrote activist Murakami-san had acquired stakes of <5% in Keikyu Corp (9006 JP) and <1% in Keisei Electric Railway Co (9009 JP). Shares in both jumped.
Oriental Land ToSTNeT-3 Buyback From Keisei (9009) – It’s In the Plan And Looks Better Than It Is
- In October 2023 and then in early 2024, activist Palliser Capital demanded that Keisei Electric Railway Co (9009 JP) sell down its stake in Oriental Land (4661 JP) to sub-15%.
- Keisei in March sold 1% of OLC but in doing so, rejected the concept of removing equity affiliate status. They could go to a level just >15%, or just >20%.
- Today, OLC announced a ToSTNeT-3 buyback of 18mm shares – the total for the 2yrs to Mar-26 announced (p19) in April. Keisei will sell and will stay above 20%.
Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
- Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
- There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
- However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.
Hyundai Motor Securities Announces a Rights Offering Involving a 49% Shares Dilution
- Hyundai Motors Securities announced a rights offering worth nearly 200 billion won involving a 49% shares dilution.
- The amount of shares dilution is excessive which is likely to result in a share price weakness in Hyundai Motor Securities in the coming weeks.
- The expected rights offering price for now is 6,640 won per share which is 24.5% discount to the closing price on 26 November.
DigiCo REIT (DGT AU) IPO: Offering Details & Index Implications
- DigiCo REIT (DIGICO AU) is looking to raise nearly A$2bn in its IPO by selling 399.1m shares at A$5/share. Stock is expected to list on the ASX on 12 December.
- HMC Capital (HMC AU) will own 18.2% of DigiCo REIT (DIGICO AU) after the IPO while IPO investors will own 72.5% of the company.
- Subject to DigiCo REIT being an eligible stapled security, we expect the stock to be included in global and local indices between March and June mopping up 11.7% of float.
Event Driven: Arbitrage Opportunity in Orient Cement Open Offer by Ambuja
- In Oct-24, Ambuja Cements (ACEM IN) acquired 46.8% stake in Orient Cement (ORCMNT IN) at Rs. 396 per share.
- Now Orient cement is trading at 20% discount to open offer price.
- This process can take approx. 2 months and can generate ~10-15% risk adjusted return by Jan-25.
SET50 Index Rebalance Preview: 4 Changes Coming Up in December
- With 3 trading days left in the review period, we forecast 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the December rebalance.
- Passive trackers will need to buy between 1.2-3.6 days of ADV on the inclusions and sell between 0.3-3.1 days of ADV on the deletions.
- The forecast adds have continued to outperform the forecast deletes and there could be more movement in stocks with relatively high ADV to trade.
EQD | Nikkei 225 : State Of The Odds (WEEKLY)
- The Nikkei 225‘s trend is uncertain at the moment: the new N225 WEEKLY QUANTCHART presented here (freely accessible 24/7 clicking here) shows us the current MRM models’ support and resistance.
- In the last few months the index stalled, currently it is stuck in a range roughly between 37650 and 40250, and it has closed down for 2 consecutive weeks (CC=-2).
- At the moment we expect the index to fall maybe another week (closing this week down) and then a LONG reversal the following week.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
