In today’s briefing:
- Korea Zinc’s Latest Shareholder Roll & MBK’s Triggers to Sweeten Tender Price
- KOSDAQ150 Index Adhoc Rebalance: HLB Therapeutics Replaces Jeisys Medical
- Merger Arb Mondays (23 Sep) – Henlius, GA Pack, China TCM, Canvest, Trancom, Fuji Soft, Platinum
- STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?
- PKSHA Tech (3993 JP) – TOPIX Inclusion in October 2024
- Tech M&A: Qualcomm for Intel? No Chance. Here’s Why.
- CELSYS (3663 JP) Finally Makes It to Prime Time (TOPIX Inclusion Next Month)
- EQD / NSE Vol Update / IVs Ride the Fed Seesaw
- Quiddity Leaderboard CSI Medical Dec 24: 5 Changes Possible; Exp ADDs yet to Outperform Exp DELs
- Ain Shifts Focus with FrancFranc Acquisition
Korea Zinc’s Latest Shareholder Roll & MBK’s Triggers to Sweeten Tender Price
- MBK is watching for a 1 million share trading volume, as that may prompt neutral institutional investors to sell rather than participate in the tender, triggering a price hike.
- MBK may raise the tender price to ₩900,000, a 35% jump, with a local pension fund CIO suggesting it’s the sweet spot for participation.
- MBK believes securing the minimum target would give them 44% voting rights, enough to push their proposals, indicating they’ll go all-in for that 7% stake in this first attempt.
KOSDAQ150 Index Adhoc Rebalance: HLB Therapeutics Replaces Jeisys Medical
- HLB Therapeutics (115450 KS) will replace Jeisys Medical (287410 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) next week.
- Passive trackers will need to buy 1.8 days of ADV in HLB Therapeutics (115450 KS) and sell over 4 days of ADV in Jeisys Medical (287410 KS).
- Recent ad hoc inclusions to the KOSDAQ 150 Index (KOSDQ150 INDEX) have jumped post announcement of index inclusion but have sold off after the inclusion.
Merger Arb Mondays (23 Sep) – Henlius, GA Pack, China TCM, Canvest, Trancom, Fuji Soft, Platinum
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Canvest Environmental Protection Group (1381 HK), Shinko Electric Industries (6967 JP), Greatview Aseptic Packaging (468 HK), Shanghai Henlius Biotech (2696 HK), China Traditional Chinese Medicine (570 HK).
- Lowest spreads: Tohokushinsha Film (2329 JP), Dyna Mac Holdings (DMHL SP), Fuji Soft Inc (9749 JP), Trancom Co Ltd (9058 JP), Seven & I Holdings (3382 JP).
STAR50/STAR100 Index Rebalance Preview: Massive Outperformance in Last Two Months; Time to Unwind?
- 90% of the way through the review period, there could be 1 change for the SSE STAR50 (STAR50 INDEX) and 5 changes for the STAR100 Index.
- We estimate turnover of 1% for the STAR50 INDEX and 5.5% for the STAR100 Index. The net round-trip trade is CNY 3.2bn (US$453m).
- The forecast add to the SSE STAR50 (STAR50 INDEX) has massively outperformed the forecast deletion from the index over the last two months.
PKSHA Tech (3993 JP) – TOPIX Inclusion in October 2024
- PKSHA is an AI company. It was before this year, and got a boost this past spring. The stock price rose 60% in two weeks in February and March 2024.
- Then it fell more than 50%. Back to late 2023 levels. High growth, growing into its valuations. Now moving to TSE Prime this week, TOPIX next month.
- Impact in days of ADV is lower than impact in Real World Float metrics. There are lots of day-traders. This probably has legs.
Tech M&A: Qualcomm for Intel? No Chance. Here’s Why.
- SAMR would draw out review process for too long for a deal to be approved
- Intel faces an existential crisis and even the new Foundry division has issues
- A theoretical deal would have little financial synergy and destroy Qualcomm’s gross margins
CELSYS (3663 JP) Finally Makes It to Prime Time (TOPIX Inclusion Next Month)
- 12 days ago, Janaghan Jeyakumar, CFA published his September version of TOPIX Inclusions: Who Is Ready (September 2024). His chosen name was CELSYS (3663 JP), a long-time TSE-Prime inclusion bet.
- This week on the 18th, they announced they were going to enter TSE Prime on 25 September. This was a somewhat well-known known. They were interested and had been.
- The stock popped 15% the next day. It’s a small cap, but there is a lot of float.
EQD / NSE Vol Update / IVs Ride the Fed Seesaw
- IVs seesawed through the week on account of the Fed meeting. Trading up to 12.7% going into the meeting & selling-off to 11.4% thereafter.
- Vol-Curve Term-structure in Contango post Fed meeting – Nifty50 vol curve sheds its inversion & BankNifty vol curve loses its kinked-shape
- BankNifty Smile & Skew characteristics extend relative to previous weeks – despite falling IVs & strengthening index.
Quiddity Leaderboard CSI Medical Dec 24: 5 Changes Possible; Exp ADDs yet to Outperform Exp DELs
- CSI Medical Service represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization, and other medical theme from the Shanghai, Shenzhen and Beijing Exchanges.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2024.
- We expect up to five ADDs and five DELs for the CSI Medical Service index during this index review event based on the latest available data.
Ain Shifts Focus with FrancFranc Acquisition
- Ain is best known for running prescription pharmacies but also has a lifestyle-oriented cosmetics chain called Ainz & Tulpe.
- Without this, the acquisition of FrancFranc would look odd, but the merger of the two will create genuine synergies and a lifestyle business targeting women in their 20s and 30s.
- The move makes sense given the pressure on margins in drug dispensing, Ain’s main business.
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