In today’s briefing:
- Japan Post Bank (7182) – The October TOPIX FFW Adjustment
- Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- Brilliance China (1114 HK): Driving Back Into Passive Portfolios
- [Update] Tax-Loss Selling In Australia – Closing the Circle on the Rebound Trade
- UnitedHealth/EMIS: Provisional Clearance, Estimated Timeline
- EQD | SPX MONTHLY Proxy Supports for APAC Markets
Japan Post Bank (7182) – The October TOPIX FFW Adjustment
- Japan Post Bank (7182 JP) was effectively re-IPOed in March when Japan Post Holdings (6178 JP) offered more than a BILLION shares against the 400mm shares then in float.
- It was a huge offering. A huge increase in float. Lots of immediate liquidity. A PERFECT opportunity for the TSE to do an ad hoc FFW change. But they didn’t.
- Then in June they lowered the FFW (on a technicality). That leaves a big upweight in October. In this insight we measure the opportunity.
Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- In March 2023, Japan Post Holdings (6178 JP) sold ¥1.1trln of shares in Japan Post Bank (7182 JP), lowering its stake considerably, raising float. There will be a TOPIX upweight.
- In May, with earnings, they announced their intention to buy back ¥300bn of shares or up to 10% of shares out. Today, they announced the details. ¥300bn through March end.
- In a ¥300bn ToSTNeT-3 tomorrow, the govt will sell back ¥105.7bn. That leaves a residual worth examining. So we examine.
Brilliance China (1114 HK): Driving Back Into Passive Portfolios
- Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
- Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
- The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.
[Update] Tax-Loss Selling In Australia – Closing the Circle on the Rebound Trade
- Originally, this was an analysis of tax-loss selling baskets over the years, and seasonal performance of baskets of stocks with certain attributes. On average, they fell vs index.
- Of course, on average, they also rose vs index after the selling was done.
- This insight puts a cap on the 2023 edition with results across the four baskets. The sell made 4.2% vs ASX200 in May, then is up
UnitedHealth/EMIS: Provisional Clearance, Estimated Timeline
- The CMA provisionally found that the acquisition of EMIS Group PLC (EMIS LN) may not result in a substantial lessening of competition. Final decision to be published on 5 October.
- The Court sanctioning could take place on 16 October. The scheme would become effective on 17 October. Assuming settlement by 31 October, spread is 0.99%/4.81% (gross/annualised).
- Assuming a break of 1,292p, the market is pricing a 97% probability of deal completion (vs. 6% by 15 June).
EQD | SPX MONTHLY Proxy Supports for APAC Markets
- The 2023 multi-month rally in APAC markets started roughly in autumn 2022, in sync with the US market rally, then stalled when the US market began to pull back.
- We propose an analysis of the S&P500 MONTHLY, to find support levels to be used as a proxy for predicting APAC bloc’s markets supports.
- Main forecast: August/September could be down, but the current MRM pattern reading is bullish – the correction (currently at Q2 supports) should not last beyond end of September.
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