In today’s briefing:
- Kansai Electric Power (9503 JP) – Huge Offering Is Smaller Now; Reward/Risk Skews Upwards
- Keisei Electric Jumps 14% on Reports of Murakami Stake
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Shift in Divs Leads to Last Minute Changes
- GQG Remains Bullish on Adani Despite US Indictment
- Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)
- SG Fleet (SGF AU): Pacific Equity Partners’ Indicative Offer at A$3.50
- Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc
- EQD | Hong Kong Single Stock Options Weekly
- Quiddity Leaderboard T50/100 Dec 24: TDIV Exp ADD/DEL In the Money; Strong Trade Performance
- SG Fleet (SGF AU): PEP’s A$3.50/Share NBIO
Kansai Electric Power (9503 JP) – Huge Offering Is Smaller Now; Reward/Risk Skews Upwards
- On 13 November, Kansai Electric Power (9503 JP) announced an equity offering to raise capital for capex expenditures over the next several years. It is significantly dilutive.
- The shares responded by falling 23% to 8-months lows of ¥1,850 last Thursday and Friday. That puts the stock at the same forward PER post-offering as it was pre-offering.
- That’s probably not an awful place to own now that the stock will have been slightly de-risked/de-levered.
Keisei Electric Jumps 14% on Reports of Murakami Stake
- Keisei Electric Railway Co (9009 JP) rose 14% after reports that a fund linked to activist investor Murakami bought a stake, while Oriental Land also gained 2.9% in a volatile market.
- Down 50% since February 2024, Keisei Electric seems to have limited downside risks. We believe its valuation could increase if Murakami’s stake leads to activism.
- The long Keisei Electric, short Oriental Land (4661 JP) trade could work well too, especially if Murakami’s activism and the risks to Oriental Land’s guidance materialize.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Shift in Divs Leads to Last Minute Changes
- Using data from the close on 25 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
- There will also be capping and funding flows that will lead to a one-way turnover of 17.3% and a one-way trade of TWD 60.6bn (US$1.86bn).
- On average, the forecast adds have started to outperform the forecast deletes. Positioning should continue in stocks that have large flow/impact or have recently joined the list of forecast adds/deletes.
GQG Remains Bullish on Adani Despite US Indictment
- GQG acknowledges the seriousness of the charges, but maintains its confidence in the Adani Group companies.
- GQG sees a distinction between the allegations against the individuals and the operational strength of the businesses.
- The firm believes that the fundamentals of the companies remain strong. GQG will continue to monitor the situation closely.
Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)
- Yang Ming Marine Transport (2609 TT) is forecast to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in December, replacing Airtac International (1590 TT).
- Yang Ming Marine Transport (2609 TT) is also expected to be added to the Yuanta/P-shares Dividend Plus ETF in December, so there will be buying from multiple trackers.
- Shorts are near their lows in Yang Ming Marine Transport (2609 TT) while there has been covering in Airtac International (1590 TT) after an increase in the last few months.
SG Fleet (SGF AU): Pacific Equity Partners’ Indicative Offer at A$3.50
- Sg Fleet (SGF AU) confirmed it received a non-binding indicative proposal from Pacific Equity Partners at A$3.50 per share, a 31.1% premium to the undisturbed price.
- In consultation with Bluefin Investments, the largest shareholder, PEP has been granted exclusive due diligence access, which ends on November 29.
- The offer is attractive compared to peer multiples and represents an all-time high. The talks are in the final stages, as due diligence ends at the end of the week.
Figuring Out the Right Entry Point to Go Outright Short on Korea Zinc
- The 5% voting gap between Choi and MBK leaves NPS and sideline minority players as key swing factors, with NPS’s stake potentially closing the gap for Choi.
- If NPS sold half its stake in the tenders, it’s down to 4%, not enough to close the gap, likely giving MBK the win and triggering a post-meeting price drop.
- The key to our outright short is NPS’s January 10 disclosure, with market chatter suggesting NPS has likely sold about half its holdings in the two tenders.
EQD | Hong Kong Single Stock Options Weekly
- Implied vols were lower across all sectors on the week with option volumes peaking on Friday.
- Post-Earnings vol crush helped push vols lower for key names.
- Tencent stands out with low implied vols over the past year, high liquidity and is trading almost 17% below its 52 week high.
Quiddity Leaderboard T50/100 Dec 24: TDIV Exp ADD/DEL In the Money; Strong Trade Performance
- The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
- Today is the base date for the final ranks for the December 2024 index rebal event.
- In this insight, we take a look at our final expectations for ADDs/DELs and their flow implications for the TDIV index which will also have a rebalance event in December.
SG Fleet (SGF AU): PEP’s A$3.50/Share NBIO
- SG Fleet (SGF AU), an Aussie provider of fleet leasing services, has announced a A$3.50/share non-binding and indicative proposal from Sydney PE outfit Pacific Equity Partners (PEP).
- SGF’s board, in consultation with South Africa’s Super Group (SPG SJ), its largest shareholder, has granted PEP exclusive due diligence.
- A$3.50/Share is a 31% premium to undisturbed. The exclusivity period expires on the 29th November 2024. That short timeframe suggests a firm Offer is imminent.
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