In today’s briefing:
- JIC Deal For Shinko Electric Is LIGHT, and There’s Room To Complain, But Will Trade Wide
- NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade
- Recruit (6098 JP) Buyback – It’s Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple
- Hollysys (HOLI US): Merger Agreement Leaves the Door Ajar for a Higher Recco Offer
- Quiddity Leaderboard CSI 300/500 Jun 24: 109 Flow Names; US$2.3bn One-Way
- Toyota Cross-Shareholding – To Say a Whole Lot Is Left Would Be a US$26bn Understatement
- KOSDAQ150 Index Rebalance Preview: Posco DX Listing Transfer
- Quiddity Leaderboard SSE50/180 Jun 24: US$1bn+ Index Flows Possible
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Early Preview; US$863mn One-Way Index Flows
JIC Deal For Shinko Electric Is LIGHT, and There’s Room To Complain, But Will Trade Wide
- 29 minutes after I published a long, musing piece on the possibilities of structure and announcement later this week, JIC and Shinko Electric announced 5 minutes before midnight.
- A warning for the future: The Nikkei and every other media outlet got the number wrong. It is NOT a total acquisition cost of “around ¥800bn”. It is under ¥700bn.
- It IS a split deal. And if JIC won with that price, it tells you something about the state of the market and future deals in the space.
NASDAQ 100 Index Rebalance: 6 Regular Changes + 1 Adhoc Change; US$37bn to Trade
- There were 6 inclusions and 6 exclusions for the Nasdaq-100 Stock Index (NDX INDEX) at the annual December reconstitution. Then another ad hoc change was added on top of that.
- Impact on the inclusions ranges from 1-8 days of ADV to buy, while the impact on the deletions varies from 0.7-2.6 days of ADV to sell.
- Apart from the constituent changes, there are expected to be inflows in Tesla Motors and Broadcom and outflows from Apple, Microsoft, Amazon.com and NVIDIA.
Recruit (6098 JP) Buyback – It’s Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple
- Last month, Reuters reported that activist-ish investor Value Act Capital Management had bought a stake in Recruit Holdings (6098 JP) and separately in Expedia Group, Inc. (EXPE US)).
- It was “revealed” in a letter to its clients. And there were reasons stated why Value Act thought Recruit was worth a lot more than it was trading for.
- Today, Recruit announced an on-market buyback for ¥200bn. That’s nice. But it is not enormous, and it may signal other info, and it is worth understanding details and context.
Hollysys (HOLI US): Merger Agreement Leaves the Door Ajar for a Higher Recco Offer
- Bloomberg reports that the Recco consortium is considering “a significantly higher” Hollysys Automation Technologies (HOLI US) offer than Ascendent’s US$26.50 binding offer.
- The Hollysys 6-K filling outlines the closing conditions – a simple majority YES vote, regulatory approvals, minimum net cash (waivable) and a 10% maximum dissent condition (waivable).
- Recco is a committed suitor and will not easily give up. The merger agreement clauses point to a Recco offer floor of US$27.03 and a ceiling of US$30.48.
Quiddity Leaderboard CSI 300/500 Jun 24: 109 Flow Names; US$2.3bn One-Way
- CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
- In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
- At present, I see 10 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.
Toyota Cross-Shareholding – To Say a Whole Lot Is Left Would Be a US$26bn Understatement
- With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
- Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
KOSDAQ150 Index Rebalance Preview: Posco DX Listing Transfer
- The KRX has preliminarily approved Posco DX (022100 KS)‘s listing transfer from the KOSDAQ Market to the KOSPI Market.
- Posco DX (022100 KS) has announced that its stock will start trading on the KOSPI Market from the open on 2 January.
- We expect Temc (425040 KS) to replace Posco DX (022100 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 28 December.
Quiddity Leaderboard SSE50/180 Jun 24: US$1bn+ Index Flows Possible
- SSE 50 and SSE180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the June 2024 index rebal event.
- There could be five changes for the SSE 50 index and 18 changes for the SSE 180 index in June 2024.
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Early Preview; US$863mn One-Way Index Flows
- The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.
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