In today’s briefing:
- Japan Post Bank (7182 JP): Offering Price Decided; Buyback & Passive Flow Coming Up
- Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept
- Names for a Preemptive Long Short Setup for KOSPI 200 June Rebalancing
- Shorting Event on LX International’s Potential Rights Offer for HMM Takeover
- SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation
- MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility
- Quiddity Leaderboard for BSE/SENSEX Jun 23: NMDC Could Be a BSE 200 ADD
- G.K.Goh’s Offer Doc Out. No New News Otherwise
- FY2022 Results and Discount to NAV
Japan Post Bank (7182 JP): Offering Price Decided; Buyback & Passive Flow Coming Up
- Japan Post Bank (7182 JP) has announced that the offering price has been set at JPY 1131/share, a 2.08% discount to the closing price. Settlement is on 20 March.
- The buyback will run from 22 March to 12 May and at last prices will mop up 1.85% of shares outstanding or 4.62% of post-offering float.
- In the short-term, we expect buying from Topix (TPX INDEX), MSCI and other global trackers to support the stock price.
Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept
- Halcyon Agri (HACL SP) has issued the circular in response to China Hainan Rubber Industry (601118 CH)‘s conditional MGO.
- The IFA reckons the Offer is fair and reasonable. The Independent Directors recommend that shareholders accept the Offer.
- The first close is the 24 March. Hainan Rubber is under no obligation to extend the Offer beyond this date.
Names for a Preemptive Long Short Setup for KOSPI 200 June Rebalancing
- Kum Yang and Youlchon Chemical are within the borderline for inclusion, whereas Hwaseung Enterprise and K Car are in the deletion zone.
- Since the review period has reached 75%, it seems reasonable to consider a somewhat aggressive buildup for them.
- We can also consider setting up preemptive positions only for Kum Yang and Hwaseung Enterprise and then sequentially look for entry opportunities for Youlchon and K Car later on.
Shorting Event on LX International’s Potential Rights Offer for HMM Takeover
- The opinion rapidly spreading in the local market is that LX International is increasing its available shares by twice the amount to plan a paid-in increase for the HMM acquisition.
- The size of an offering is estimated at ₩1.2T to ₩1.5T. The short-term price impact will undoubtedly be significant for LX International having a market cap of ₩1.2T.
- The market has already witnessed a preemptive position buildup targeting this. However, since there is a time gap until the offering announcement, an entry point opportunity may still be available.
SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation
- SK Networks announced that it will repurchase 100 billion won in common shares and also cancel nearly 70 billion won of existing treasury shares.
- The combined share buyback and treasury shares cancellation will represent nearly 14% of the company’s total outstanding shares.
- The combined share buyback and treasury shares cancellation which will represent nearly 14% of the company’s total outstanding shares, will likely have a positive impact on SK Network’s share price.
MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility
- In this insight, we discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement in May 2023 amid heightened market volatility.
- The potential inclusions (high probability) in the MSCI Korea index in May are Hanwha Aerospace and Ecopro. Potential adds (low probability) include POSCO International, Cosmo AM&T, and SM Entertainment.
- The three most likely exclusions in the MSCI Korea index in May include Lotte Shopping, SD Biosensor, and S1 Corporation.
Quiddity Leaderboard for BSE/SENSEX Jun 23: NMDC Could Be a BSE 200 ADD
- In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the June 2023 Rebalance.
- The BSE AllCap March 2023 Rebalance results were announced and this changes the main universe from which SENSEX, BSE 100, and BSE 200 members are selected.
- In this insight, we take a look at the recent updates to my expectations and the price and volume performance of the candidates.
G.K.Goh’s Offer Doc Out. No New News Otherwise
- The Offer Document for GK Goh Holdings (GKG SP)‘s MBO has been dispatched. The Offer price of $1.26/share, which is final, is a 38.5% premium to last close.
- The Offer is conditional on the Goh family holding 90%, which may be reduced to 50%. GKG Investment, with 62.89%, has given an irrevocable to tender.
- There is no IFA opinion in the Offer Doc. This will be present in the Circular which is expected to be sent out by the 28th March, at the latest.
FY2022 Results and Discount to NAV
- NAV/Share down 19% for FY2022 in line with falls in the market. Private/alternative assets represented 36.3% of GAV and 39.86% of NAV. Discount to NAV was 35.8% as of YE2022.
- The discount to NAV was 36.7% as of 10 March. GBL is buying and cancelling its own shares, which creates value as it’s done at a deep discount to NAV.
- GBL has completed its transition towards a 40% of private/alternative assets in portfolio, but still needs to convince investors to lower its discount to levels closer to Investor AB.
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