In today’s briefing:
- KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing
- VCredit (2003 HK): Offer Now Open. IFA Says Not Fair. Not Even Close
- GJS/Haitong Merger: One Formality Reg To Go
- [Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way
- EQD| SPX Volatility During the Trump Years (2017-2020)
- Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder
- BBVA’s Bid for Sabadell: A Tough Road Ahead
- Weekly Update: January 10, 2025
- A Strategic Pivot: Adani Enterprises Exits Adani Wilmar for $2B
- Destination XL Group Faces Potential Buyout: Fund 1 Investments Considers Raising Initial $3/Share Offer
KRX’s Responses to TMI-Related Confusions on KRX Semicon & Autos Rebalancing
- KRX confirmed no immediate changes on KRX Semicon and KRX Autos. The universe will switch from BMI to TMI large and mid-caps, with constituent updates happening in the September rebalancing.
- TMI rebalances quarterly, while KRX Semicon and Autos rebalance annually in September. KRX confirmed these indices will use the September TMI rebalancing results.
- TMI rebalances quarterly, likely releasing results before KRX Sector Indices, giving a window to predict shifts in KRX Semicon and Autos stocks and position ahead of the sector rebalancing.
VCredit (2003 HK): Offer Now Open. IFA Says Not Fair. Not Even Close
- Back on the 20 December, VCredit Holdings (2003 HK), a provider of consumer financial services in China, announced a unconditional MGO from Ma Ting Hung, VCredit’s chairman. and concert parties.
- The catch? The Offer Price of HK$1.80/share was a 9.09% discount to undisturbed. It will not be increased.
- VCredit’s Composite Doc is now out, with the Offer open for tendering, with a 3rd February first close. The IFA says “not fair and not reasonable“. Trading 45% through terms.
GJS/Haitong Merger: One Formality Reg To Go
- Back on the 9th October, China’s leading state-backed brokerages Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK) announced a scrip merger, with GJS the surviving entity.
- Barring a China Traditional Chinese Medicine (570 HK)-like obstacle/debacle, this transaction was a wrap. Fortunately, key regulatory approvals (SAMR and SASAC) have been ticked off.
- Approval from the Shanghai Stock Exchange was secured overnight. That was a formality. One approval remains – CSRC. Expect that condition to be satisfied shortly. GJS is no longer shortable.
[Quiddity Index Jan25] Nikkei 225 Mar Rebal: 3 IN, 3 OUT, $3bn One Way
- In December, I thought the March 2025 Nikkei 225 Rebalance was going to be 2 ADDs 2 DELETEs and a double-capping for Fast Retailing.
- Fast Retailing has fallen sharply vs Nikkei 225, and another stock has announced a large-multiple share split, making it a strong candidate for Nikkei 225 ADDITION in March 2025.
- There is short-term path risk on all three ADDs, but they are definitely worth watching. Keep an eye out for separate insights on two of these names.
EQD| SPX Volatility During the Trump Years (2017-2020)
- Common perception is that Trump = Volatility. We look at average monthly historic volatility and returns across 2017-2020 and compare with prior 19 years.
- Trumps term in office included “Volmageddon”, the Christmas Massacre and Covid but we still find that the returns and historic volatility were not out of line.
- Although a small sample size, we see a pattern to how historic volatility deviated from the average over his last term in office.
Chung Yong-Jin Will Receive 10% of E Mart Shares from His Mum to Become the Controlling Shareholder
- E Mart’s Chairman Chung Yong-Jin will receive the entire 10% shares of E Mart held by his mum Lee Myung-Hee.
- After this transaction, Chung Yong-Jin will become the largest shareholder in E Mart with a 28.6% stake in the company.
- This is likely to positively impact E Mart. In Korea, when the final major ownership stake is transferred, there is often a positive boost to the share price.
BBVA’s Bid for Sabadell: A Tough Road Ahead
- Lower Acceptance Threshold: BBVA reduced its tender offer threshold to 49.3%, excluding Sabadell’s 1.4% treasury shares to ensure voting rights focus on active shareholders.
- Shareholder and Regulatory Hurdles: Retail shareholder resistance, extended antitrust reviews, and opposition from Spanish and Catalonian governments complicate the takeover.
- Sabadell’s Defensive Moves: A €2.9 billion shareholder return plan, potential treasury share expansion to 10%, and Zurich’s 3% stake further reduce the offer’s likelihood of success.
Weekly Update: January 10, 2025
- Galapagos NV (GLPG), a Belgian biotechnology company, announced on January 8, 2025, its plan to split into two publicly traded entities by mid-2025.
- Vivendi (VIV), the French media conglomerate, has recently undergone a significant restructuring by spinning off several of its key divisions into independent entities.
- On December 30, 2024, Lions Gate Entertainment (LGFA/LGFB) filed its latest proxy related to the spin-off of Lionsgate Studios (LION). You can read it here.
A Strategic Pivot: Adani Enterprises Exits Adani Wilmar for $2B
- Adani Enterprises (ADE IN) exits Adani Wilmar (AWLTD IN), selling its entire 44% stake for over $2 billion, redirecting funds toward core infrastructure ambitions.
- The exit frees capital for energy, transport, and logistics projects, showcasing Adani’s commitment to strategic resource deployment and robust corporate governance.
- Adani’s strategic divestment highlights its focus on infrastructure-driven growth, underscoring the potential for shareholder value creation through timely exits from non-core businesses.
Destination XL Group Faces Potential Buyout: Fund 1 Investments Considers Raising Initial $3/Share Offer
- Destination XL Group received a non-binding $3/share proposal from Fund 1 Investments, holding a 21% stake.
- Fund 1’s offer values DXLG at 6.1x EBITDA, with potential for a higher bid if additional value is identified.
- DXLG repurchased 6.6% of shares in Q3 2024 at an average price of $2.80/share, totaling $10 million.
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