In today’s briefing:
- MVIS Australia Equal Weight Index Rebalance: One Deletion & Other Changes
- Japan Post Bank – Estimating Foreign Ownership and Deal Flowback
- MVIS Australia A-REITs Index Rebalance: Float/Capping Changes
- MVIS US Listed Semiconductor 25 Index Rebalance: Big Flow, Small Impact
- Japan Post Bank Placement – Still Misbehaving – Post-Pricing Performance of Some More Deals
- HYBE Gives Up the M&A Fight for SM Entertainment: Impact on Kakao’s Tender Offer
- STAR50 Index Rebalance Preview: Two Changes in June (Possibly)
- Halcyon Agri (HACL SP): Board Recommends Conditional MGO
- ThaiBev To Take Oishi Group Private
- Merger Arb Mondays (13 Mar) – InvoCare, Origin, Tyro, Toyo, Oishi, AAG Energy, Yashili, Halcyon
MVIS Australia Equal Weight Index Rebalance: One Deletion & Other Changes
- Harvey Norman Holdings (HVN AU) will be deleted from the MVIS Australia Equal Weight Index at the close of trading on 17 March.
- One way turnover is 3.9% resulting in a one-way trade of A$68m. Only Harvey Norman Holdings (HVN AU) has more than 1 day of ADV to sell from passive trackers.
- Harvey Norman Holdings (HVN AU) has underperformed Myer Holdings (MYR AU) significantly over the recent past and the index deletion could provide an entry point into a trade.
Japan Post Bank – Estimating Foreign Ownership and Deal Flowback
- The word floating around late Friday as books closed was that foreigners had bid strongly. More than the entire Japan Post Bank (7182 JP) offering size in fact.
- The offering is an interesting problem, as discussed before. Different people are going to buy it for different reasons.
- This insight looks at the breakdown of ratios and the resultant foreign ownership, along with post-offer supply/demand balance.
MVIS Australia A-REITs Index Rebalance: Float/Capping Changes
- The upcoming rebalance of the MVIS Australia A-REIT Index will be implemented at the close on 17 March. There are no constituent changes, but there are float and capping changes.
- Estimated one-way turnover at the rebalance is 1.8% resulting in a one-way trade of A$11.1m. There is limited impact on the index constituents.
- The largest inflows are on Stockland, HomeCo Daily Needs REIT, Gpt Group and Charter Hall, while the largest outflows are on Goodman Group, Vicinity Centres, Dexus Property and Scentre Group.
MVIS US Listed Semiconductor 25 Index Rebalance: Big Flow, Small Impact
- The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 17 March. There are no constituent changes, but there are float and capping changes.
- The VanEck Vectors Semiconductor (SMH US) ETF tracks the index and has an AUM of US$7.2bn.
- Estimated one-way turnover is 4.8% resulting in a one-way trade of US$356m. The stocks are extremely liquid, the impact on the stocks in terms of ADV to trade is small.
Japan Post Bank Placement – Still Misbehaving – Post-Pricing Performance of Some More Deals
- Japan Post Holdings (6178 JP) aims to sell around US$9bn worth of Japan Post Bank (7182 JP), trimming its stake by a third.
- We have looked at the deal in our previous notes, Japan Post Bank Placement – Deal Structure, past Deals, Index, Buyback and Japan Post Bank Placement – Misbehaving.
- In this note, we talk about the updates since our last note and have a look at the post pricing performance of a few more deals.
HYBE Gives Up the M&A Fight for SM Entertainment: Impact on Kakao’s Tender Offer
- On 12 March, HYBE (352820 KS) announced that it is no longer pursuing S.M.Entertainment Co (041510 KS) in an M&A battle with Kakao Corp (035720 KS).
- This will result in a very high probability of Kakao winning the M&A battle of SM Entertainment.
- Many institutional investors are likely to have pushed back on HYBE’s capital raising efforts, which seems to have been the clincher of HYBE backing out of this M&A for SM.
STAR50 Index Rebalance Preview: Two Changes in June (Possibly)
- The review period for the June rebalance ends 30 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.
- We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.
- One way turnover is estimated at 1.6% resulting in a one-way trade of CNY 1,442m. The impact on the deletions will be larger than that on the inclusions.
Halcyon Agri (HACL SP): Board Recommends Conditional MGO
- The IFA opines that China Hainan Rubber Industry (601118 CH)‘s MGO at S$0.413 per share is fair and reasonable. The Halcyon Agri (HACL SP) Board recommends accepting the offer.
- Since the offer opened on 24 February, there have been no acceptances. Perhaps minorities held off until the full-year results and the IFA report. Board recommendation should drive acceptance.
- The 50%+ minimum acceptance condition requires around 40% of minorities acceptance rate (47% excluding the Gondobintoro Family). This remains achievable. At the last close, the gross spread is 2.0%.
ThaiBev To Take Oishi Group Private
- Thai Beverage (THBEV SP) is proposing to take 79.66%-held Oishi Group PCL (OISHI TB) private by a voluntary Delisting Offer.
- The Offer price is THB 59/share, a 26.9% premium to last close.
- This Delisting Offer requires a shareholder vote. Payment may occur sometime in August.
Merger Arb Mondays (13 Mar) – InvoCare, Origin, Tyro, Toyo, Oishi, AAG Energy, Yashili, Halcyon
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 21Vianet Group (VNET US), 111 Inc (YI US), Alliance Aviation Services (AQZ AU), Oishi Group PCL (OISHI TB), Toyo Construction (1890 JP), Aag Energy Holdings (2686 HK), Jiangnan.
- Lowest spreads – Norwest Energy NL (NWE AU), Genesis Minerals (GMD AU), GK Goh Holdings (GKG SP), Nitro Software Ltd (NTO AU), Boustead Projects (BOCJ SP), Nissin Electric (6641 JP).
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