In today’s briefing:
- LG Energy IPO Lock-Up – Last of the Lockups at US$3bn
- HDFC/HDFC Bank Mega Merger: Foreign Holdings Move Lower; Foreign Room Higher
- StubWorld: CPALL Trading “Cheap” To MAKRO
- Hanwha Aerospace: A Surprise in MSCI’s February QCIR?
- Fengxiang (9977 HK): Delisting Resolution Fails, MGO Closes 1 February
- JAFCO (8595) Tender Offer Close Imminent – Decent Conviction to Not Be Long
- S&P BSE/Sensex Quiddity Leaderboard Jun 23: Adani Enterprises, Wipro, & The Usual F&O Questions
- KOSPI 200 Rebalance: JB Financial In & Meritz F&M Insurance Out
LG Energy IPO Lock-Up – Last of the Lockups at US$3bn
- LG Energy Solution (373220 KS) (LGES) raised US$10.8bn in its South Korea IPO, after pricing at the top-end of the IPO price range.
- The stock was listed on 27th Jan 22. Its one-year lockup is set to expire soon.
- In this note, we will talk about the lock-up dynamics and updates since our last note
HDFC/HDFC Bank Mega Merger: Foreign Holdings Move Lower; Foreign Room Higher
- Foreign shareholding in HDFC Limited (HDFC IN) and HDFC Bank (HDFCB IN) has dropped over the December quarter resulting in higher foreign room.
- The merger is expected to complete in Q2/Q3 when we expect there will be large buying from MSCI trackers.
- The merger (and the timing of implementation) will have implications for changes to the NIFTY Index (NIFTY INDEX) and S&P BSE SENSEX Index (SENSEX INDEX) at the forthcoming rebalances.
StubWorld: CPALL Trading “Cheap” To MAKRO
- 7-11 play CP ALL PCL (CPALL TB) is coming up “cheap” on my monitor versus cash & carry subsidiary Siam Makro Public (MAKRO TB).
- Preceding my comments on CPALL/MAKRO are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Hanwha Aerospace: A Surprise in MSCI’s February QCIR?
- Hanwha Aerospace is still narrowly across the borderline. It is especially painful that the share price was corrected by more than 4% today.
- But suppose the cutoff MC is set at less than ₩2.7T, and Aerospace succeeds in recovering slightly. In that case, it will likely manage to come within the borderline.
- Given that the preemptive flow must not have been significant and the profit forecast has been upwards until recently, a price shooting may appear at the time of the announcement.
Fengxiang (9977 HK): Delisting Resolution Fails, MGO Closes 1 February
- Shandong Fengxiang (9977 HK)‘s delisting resolution was overwhelmingly voted against by independent H Shareholders. The results were not helped by the poor turnout.
- PAG’s MGO at HK$1.5132 per H Share is not conditional on the approval of the delisting resolution. The MGO remains open with a final closing date of 1 February.
- PAG currently holds 85.44% of the outstanding shares. At the last close and for a 10 February payment, the gross and annualised spread is 1.6% and 28.9%, respectively.
JAFCO (8595) Tender Offer Close Imminent – Decent Conviction to Not Be Long
- The Jafco Co Ltd (8595 JP) Greenmail Tender Offer to take Murakami-san out of his position is nearing its close.
- Investors should make a decision imminently about where they believe the stock should trade in Price/NAV terms after the buyback is complete, once management is “stabilised.”
- My earlier piece written on the day of the announcement needs a few corrections. Those are below.
S&P BSE/Sensex Quiddity Leaderboard Jun 23: Adani Enterprises, Wipro, & The Usual F&O Questions
- In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the June 2023 Rebalance.
- Adani Enterprises (ADE IN) could be added and Wipro Ltd (WPRO IN) could be deleted from the SENSEX Index. There could be multiple changes for BSE 100, 200, and 500.
- Below is a look at our estimated rankings for potential ADDs/DELs, their recent price performance vs peers, and potential trading opportunities.
KOSPI 200 Rebalance: JB Financial In & Meritz F&M Insurance Out
- On 18 January, the KRX announced rebalance to KOSPI 200 index. The new addition to KOSPI 200 is JB Financial Group and the deletion is Meritz Fire & Marine Insurance.
- We expect JB Financial to continue to outperform the market in the first half of this year.
- However, we do not expect the sharp appreciation of JB Financial versus the other leading Korean banking stocks post JB Financial’s inclusion in KOSPI 200 on 30 January.
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