In today’s briefing:
- Japan Post Bank (7182 JP): BIG Offering Supported by Buybacks & Passive Flow
- PCCW And HKT’s 2022 Results
- Shorting Entry Point on Ecopro BM with KODEX Battery ETF Rebalancing on March 10
- Slater & Gordon (SGH AU): Allegro’s Opening Salvo
- Quiddity Leaderboard JPX-Nikkei 400: End-Feb 2023
- EQD | SPX Vs SX5E: Trade a Relative Value Vol Spread
- G.K.Goh’s Voluntary MBO
Japan Post Bank (7182 JP): BIG Offering Supported by Buybacks & Passive Flow
- Japan Post Holdings (6178 JP) is looking to reduce its stake in Japan Post Bank (7182 JP) from 89% to 60%. That is over US$9bn at the last close.
- The placement is supported by buybacks (ToSTNeT-3 and on-market) that will absorb some of the offering. Then there is the passive buying that will absorb a third of the offering.
- One of the key short-term supports will be the exercise of the over-allotment of the Japan offering. But that will require persuading retail investors to buy into the offering.
PCCW And HKT’s 2022 Results
- PCCW Ltd (8 HK)‘s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn, HK$12.4bn, and HK$834mn.
- HKT Ltd (6823 HK)‘s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn, HK$13.1bn, and HK$4.7mn.
- The dividend pass-through is 100%. PCCW’s current discount to NAV is in line with its 52-week average.
Shorting Entry Point on Ecopro BM with KODEX Battery ETF Rebalancing on March 10
- Ecopro BM’s weight has expanded to 22%. Since the probability of receiving a 15% cap is virtually 100%, it will inevitably undergo a weight change of up to nearly 7%p.
- If the ongoing rally subsides before March 10th and returns to the January DTV level, the price impact could surge up to 0.3-0.4x daily for three trading days.
- This seems to be a sufficient level for a shorting entry point. It may be worth considering an outright short position on Ecopro BM or Long Short with SK Innovation.
Slater & Gordon (SGH AU): Allegro’s Opening Salvo
- Beleaguered law firm Slater & Gordon (SGH AU) has announced an A$0.55/share cash off-market Offer from Aussie PE outfit Allegro.
- The key condition is Allegro acquiring a a 50.1% interest. This condition may be waived.
- The Offer was more than welcome by S&G’s board. “We don’t belong on the stock exchange,” said CEO John Somerville.
Quiddity Leaderboard JPX-Nikkei 400: End-Feb 2023
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-February 2023.
EQD | SPX Vs SX5E: Trade a Relative Value Vol Spread
- European markets have begun to outperform their US peers over last few months
- The differences in market sentiment have driven both the implied and realised vol spread wider
- Trade a relative vol spread that should hold up in multiple market scenarios
G.K.Goh’s Voluntary MBO
- Verveine Pte. Ltd., a vehicle controlled by Goh Geok Khim (executive chairman) and Goh Yew Lin (MD), has made a voluntary offer for GK Goh Holdings (GKG SP).
- The Offer price of $1.26/share, which is final, is a 38.5% premium to last close. It is conditional on the Gohs holding 90%, which may be reduced to 50%.
- GKG Investment, with 62.89%, has given an irrevocable to tender.
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