In today’s briefing:
- July Short Selling Resumption in Korea: Local Market Info & Trading Considerations
- Chilled & Frozen Logistics (9099) Gone Ballistic – Reminder of Structure, Price, and Incentives
- Tax-Loss Selling in Australia 2024 – A Trade Basket [Updated]
- HKTV (1137 HK): Co-Founders’ Ruse to Increase Their Grip Through a Share Buyback at HK$2.15
- PropertyGuru (PGRU US): KKR/TPG Mulling a Buyout
- Quiddity Leaderboard F100/250 Jun 24: Names Lurking Close to The Border Should Be Monitored
- NIFTY50 Index Rebalance Preview: Two High Probability Changes in September; Adds Are Flying
- NIFTY100 Low Volatility 30 Index Rebalance Preview: Bharti Could Replace Power Grid
- TAQA & Criteria/Naturgy: Imminent Offer
July Short Selling Resumption in Korea: Local Market Info & Trading Considerations
- According to market information confirmed so far, the resumption is set for July 1st, and short selling will be restricted to the constituents of KOSPI 200 and KOSDAQ 150.
- The surge in trading volume likely stemmed from the return of long-short positions post-short-selling ban, leading to an overall market volume increase.
- Another critical factor is the buying pressure on value-up stocks resuming in early July. We should aim at the price impacts of intersecting long-short flows and value-up stock purchases.
Chilled & Frozen Logistics (9099) Gone Ballistic – Reminder of Structure, Price, and Incentives
- In late March, AZ-Com Maruwa Holdings (9090 JP) made an unsolicited (“hostile”) bid for Chilled & Frozen Logistics Holdings (9099 JP) at a near 50% premium at ¥3,000/share.
- It traded through, then C&F ran a bid solicitation process, got four bids. Since the day AFTER that announcement, the stock is up 56%. We approach Alps Logistics multiples.
- This deal doesn’t get the split price benefit that HTS and Alps Logistics did. And it is a fundamentally different logistics business. And target management dynamics are different.
Tax-Loss Selling in Australia 2024 – A Trade Basket [Updated]
- Three weeks after instantiation of Phase 1, the ASX200 vs LiquidBasket is +1.8% if you traded the basket VWAP the next day. vs LessLiquid it is +8.5%.
- Equal weight all names in the two is +3.1%. Trade VWAP over two days it is +0.7%, +7.6%, and +2.7%. So far things are OK.
- Next week one would add another basket, then in the last week of June, one would cover and reverse the trade and hold on for 30-40 trading days or so.
HKTV (1137 HK): Co-Founders’ Ruse to Increase Their Grip Through a Share Buyback at HK$2.15
- Hong Kong Television Network (1137 HK) has launched a share buyback to acquire a maximum of 100.0m shares (11.25% of shares) at HK$2.15, a 20.8% premium to the undisturbed price.
- The offer is conditional on approval by the requisite majority of shareholders and the approval of the whitewash waiver. There is no minimum acceptance condition, and the offer price is final.
- The offer is unattractive and is an inefficient use of cash to increase the co-founders’ grip on the shares. Nevertheless, the EGM vote is likely to get up.
PropertyGuru (PGRU US): KKR/TPG Mulling a Buyout
- Bloomberg reports that KKR and TPG are exploring options, including a buyout of PropertyGuru (PGRU US), and are gauging initial interest from other global investors.
- The favoured privatisation option for US ADRs with the Cayman Islands incorporation is a statutory merger requiring a two-thirds voting approval threshold.
- The concentrated shareholder register would suggest that TPG/KKR would aim for irrevocable from the other three substantial shareholders, facilitating a modest takeover premium.
Quiddity Leaderboard F100/250 Jun 24: Names Lurking Close to The Border Should Be Monitored
- In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the June 2024 index rebal event.
- Based on the current numbers, we see two F100 expected ADDs/DELs and three other F250 expected ADDs/DELs. The final changes will be decided based 4th June 2024 closing prices.
- There are several names just outside the border requiring small price changes to trigger more index changes. An intra-review change is also possible.
NIFTY50 Index Rebalance Preview: Two High Probability Changes in September; Adds Are Flying
- Trent Ltd (TRENT IN) and Bharat Electronics (BHE IN) should replace LTIMindtree (LTIM IN) and Divi’s Laboratories (DIVI IN) in the NIFTY Index (NIFTY INDEX) in September.
- Jio Financial Services (JIOFIN IN) and Zomato (ZOMATO IN) meet the free float market cap requirements but are not part of the F&O segment.
- Passive NIFTY Index (NIFTY INDEX) trackers will need to trade at least 3.8 days of ADV and 9 days of delivery volume on the index changes.
NIFTY100 Low Volatility 30 Index Rebalance Preview: Bharti Could Replace Power Grid
- With a week left in the review period, Bharti Airtel (BHARTI IN) could replace Power Grid Corporation Of India (PWGR IN) in the Nifty100 Low Volatility 30 Index in June.
- Constituent changes, volatility changes and capping changes will result in one-way turnover of 6.4% resulting in a one-way trade of INR 2.3bn.
- The flows on the stocks are not very large but there will be same side and offsetting flows from other index trackers at the same time.
TAQA & Criteria/Naturgy: Imminent Offer
- Press reports that CriteriaCaixa and TAQA will launch their takeover bid for Naturgy at €27/share imminently, with conversations between CriteriaCaixa and TAQA on the distribution of control practically finished.
- The offer will target approximately 54% of the share capital of Naturgy. TAQA must go through an exhaustive permit request process due to the highly regulated businesses of Naturgy.
- The shares look fairly priced vs. comparables. At the closing share price of 22 May of €24.92/share, I would be long Naturgy (gross spread to hypothetical offer is 7.7%).
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