In today’s briefing:
- Midea Group (000333 CH): H-Share Listing & Index Implications
- Korea NPS’s Funds Influx into Local Stock Market Starting Next Year: What to Know
- Prosus/Naspers: Business As Usual As CEO Steps Down
- Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December
- Tata Motors (TTMT/A IN) – Index Inclusion & The DVR Arb
- Liquid Universe of European Ordinary and Preferred Shares: September‘23 Report
- CellSource (4880) TOPIX Inclusion Coming Up
- SBI Sumishin Net Bank IPO Lock-Up – A US$1bn Lockup Release, Will Sell a Little at Some Point
- EQD | NIFTY Index New WEEKLY Supports Analysis for LONG Trades
Midea Group (000333 CH): H-Share Listing & Index Implications
- Midea Group Co Ltd A (000333 CH) could raise between HK$35-54bn (US$4.5-6.9bn) in its H-share listing depending on the H-shares discount and exercise of the overallotment option.
- The H-shares could get Fast Entry to some global indices depending on the number of shares that are allotted to cornerstone and/or strategic investors.
- The H-shares will be added to Southbound Stock Connect following the end of the price stabilisation period. Inclusion in the Hang Seng Composite Index will come later.
Korea NPS’s Funds Influx into Local Stock Market Starting Next Year: What to Know
- The proposal to increase NPS’s annual target investment return rate by 1%p by 2028. A rough mathematical estimate suggests the necessity of an additional investment of nearly ₩60T until 2028.
- It augments the overall investment volume in local stocks to ₩200T. This projection implies an annual net purchase of approximately ₩12T from the forthcoming year through 2028.
- Consequently, this matter is currently among the most captivating topics in the Korean local market, and efforts are underway to identify the sectors and stocks that stand to benefit.
Prosus/Naspers: Business As Usual As CEO Steps Down
- Bob van Dijk, CEO of both Naspers (NPN SJ) and Prosus NV (PRX NA), has stepped down, effective 18 September.
- Van Dijk was instrumental in the 2019 listing of Prosus and the creation (and subsequent unwinding) of the highly-criticised Prosus/Naspers cross-holding structure.
- His departure should have minimal impact. Everything else basically stays the same. Continue to be long Prosus vs. NAV – that is, Prosus vs. Tencent (700 HK).
Hang Seng Index Rebalance Preview: Foreign Companies Eligible from December
- The move from 80 index constituents to 100 could take most of next year (and possibly even the year after that) to manage turnover and add profitable companies.
- Foreign companies will be eligible for inclusion in the index from the December rebalance. That makes Samsonite (1910 HK) a high probability inclusion candidate.
- We highlight 8 potential inclusions to the index with passive trading impact varying from 1.6-4.3 days of ADV. There are large shorts on some of the stocks.
Tata Motors (TTMT/A IN) – Index Inclusion & The DVR Arb
- Tata Motors DVR (TTMT/A IN) now trades at a 32.9% discount to Tata Motors Ltd (TTMT IN) and there is another 4.4% in the trade following the scheme of arrangement.
- Tata Motors DVR (TTMT/A IN) could be added to global indices in November and that will bring significant inflows to the stock.
- The pre-positioning and passive buying could lead to the DVR discount narrowing further and provide trading opportunities for the next few weeks.
Liquid Universe of European Ordinary and Preferred Shares: September‘23 Report
- Since mid-August, spreads have not followed a clear pattern across our European liquid universe of ordinary and preferred shares (10 have tightened, 9 widened).
- Recommended trades long preferred / short ordinary shares: Carlsberg, Media-for-Europe, Sixt, Volkswagen (probably the most interesting situation), Grifols, Atlas Copco.
- Possible trades long ordinary / short preferred shares: Fuchs, Henkel, Schindler, SSAB Svenska Stal.
CellSource (4880) TOPIX Inclusion Coming Up
- Today, regenerative medicine service provider CellSource (4880 JP) announced a forecast revision lower for the year ending 31 October. It also announced a new dividend policy and dividend payout.
- It also announced an equity offering of up to 3.542mm shares, increasing float by 60% followed by a move from the TSE Growth segment to TSE Prime.
- The dynamics of shareholder structure and flow mean one can wait this one out.
SBI Sumishin Net Bank IPO Lock-Up – A US$1bn Lockup Release, Will Sell a Little at Some Point
- SBI Sumishin Net Bank (7163 JP) raised around US$370m in its Japan IPO in Mar 2023. Its IPO linked lockup is set to expire on 24th Sep 2023.
- SBI Sumishin Net Bank is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
EQD | NIFTY Index New WEEKLY Supports Analysis for LONG Trades
- The NIFTY Index closed up 3 weeks in a row, then fell on Monday, but current pattern looks bullish according to MRM models, we expect a modest correction (if any).
- Usually (69% of the times) this pattern brings a pullback that does not last for more than 1 week, then the following week the index closes up.
- Broadly speaking buy-the-dips support for this week is found between 20050 and 19900. If the correction becomes multi-week, it can go much lower, we will re-assess in that case.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
