In today’s briefing:
- Newcrest/Newmont – More Selling on the NCM Means More Buying on NEM, And Settlement Logistics Matter
- Keisei Electric: Activists Arrive As Expected
- Gina Can’t “Liontown” SQM’s Bid For Azure
- Key Points to Consider at This Stage Regarding the Year-End Ex-Dividend Play
- Ecopro Innovation Is Selling Ecopro BM Shares
- Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank
- What To Make Of Hollysys’ Latest Offer
- IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday
- Azure Minerals (AZS AU): SQM’s Rinehart-Proof Offer
- Quiddity Leaderboard NIFTY Mar 24: Bharat Electronics Vs L&T Might Be Interesting
Newcrest/Newmont – More Selling on the NCM Means More Buying on NEM, And Settlement Logistics Matter
- Today saw 65mm shares of Newcrest Mining (NCM AU) print at the close and 85+mm shares crossed in blocks post-close. There was another 15mm shares traded in additional excess volume.
- That suggests a certain lack of “risk taking” by passive managers, increasing today’s trade in NY.
- Furthermore, the settlement logistics appear to indicate an interesting trade to do 7 November (worth checking with your custodian/broker).
Keisei Electric: Activists Arrive As Expected
- Just as we suspected earlier in the year, there is now talk of an impending investor activism campaign targeting Keisei Electric Railway Co (9009 JP).
- The activist is Palliser Capital, a multi-strategy fund based in London and run by former employees of Elliott Management, a company well-known for its activist campaigns in Japan.
- Their proposal is simple and straightforward, requesting for a 35% reduction in Keisei Electric’s Oriental Land holding.
Gina Can’t “Liontown” SQM’s Bid For Azure
- When lithium mining play Azure Minerals (AZS AU) was halted this week “regarding a potential change of control transaction“, Sociedad Quimica y Minera (SQM/B CI) was the obvious suitor.
- This was confirmed this morning with a A$3.52/share Offer, a 44.3% premium to undisturbed, by way of a Scheme. A concurrent conditional off-market takeover at A$3.50/share is also present.
- $3.50 is locked in, no matter what. Gina may take her stake up to 19.9%, but it won’t affect the A$3.50 floor. But it may kickstart a competitive bidding situation.
Key Points to Consider at This Stage Regarding the Year-End Ex-Dividend Play
- The pivotal question now is the number of these companies that will effectively defer their year-end ex-dividend date to April next year.
- The most reliable way to accurately confirm this would be to check how many of them will publicly announce the dividend reference date two weeks before the December year-end deadline.
- This will serve as the most critical indicator in determining whether this year’s year-end flow trading event, the most significant in Korea, will recur.
Ecopro Innovation Is Selling Ecopro BM Shares
- On 26 October, it was announced that Ecopro Innovation is selling 160k shares of Ecopro BM shares (0.2% of outstanding shares), representing about 32 billion won.
- Although the percentage of shares is small relative to its outstanding shares, this additional selling is likely to further negatively impact Ecopro BM’s shares in the near term.
- Ecopro BM’s shares have seen a significant drop in price over the past few months, but its current P/E (87.3x in 2023) and EV/EBITDA (46.9x in 2023) multiples remain unattractive.
Increasing Probability of Kakao Corp Losing Its Controlling Shareholding of Kakao Bank
- In this insight, we discuss the increasing probability of Kakao Corp (035720 KS) losing its controlling shareholding of KakaoBank (323410 KS).
- The FSS Chairman Lee Bok-Hyun emphasized that the FSS may punish Kakao Corp for a potential stock manipulation of S.M.Entertainment amid the M&A tender offer process earlier this year.
- At this point, the higher probability event appears to be a combination of fine and Kakao Corp selling at least 10% of its stake in Kakao Bank to another company.
What To Make Of Hollysys’ Latest Offer
- Hollysys (HOLI US), a leading automation control system solutions provider in China, has been subject to at least six indicative Offers since December 2020, ranging from US$15.47/share to $US$25/share.
- Yue Xu and Lei Fang, the co-chief operating officers of Hollysys, who previously tabled a NBIO of US$23.00/share in August 2021, have now pitched a US$25/share proposal.
- What is different this time? >32% of the share registry has banded together to demand changes. That’s dramatically different vs previous Offers.
IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes on Tuesday
- Float and capping changes will require passive trackers to sell Bank Central Asia (BBCA) and Adaro Energy (ADRO) while buying Bank Rakyat Indonesia (BBRI) and GoTo Gojek Tokopedia (GOTO).
- There will be passive trading to other stocks too, though the impact and flow is not material on most of the stocks.
- Passive trackers will trade at the close on 31 October, so there are only 3 days to implementation of the changes.
Azure Minerals (AZS AU): SQM’s Rinehart-Proof Offer
- Azure Minerals (AZS AU) has entered a scheme implementation deed with Sociedad Quimica y Minera de Chile (SQM US) at A$3.52 per share, a 44.3% premium to the undisturbed price.
- To avoid a repeat of the Albemarle Corp (ALB US)/Liontown Resources (LTR AU) situation, if the scheme fails or is terminated, SQM will launch an off-market takeover offer at A$3.50.
- Gina Rinehart is rumoured to have built a 14.5% stake, suggesting the final offer is an off-market takeover. The offer is conditional on FIRB approval.
Quiddity Leaderboard NIFTY Mar 24: Bharat Electronics Vs L&T Might Be Interesting
- NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY Next 50 indices in the March 2024 rebalance.
- According to my latest estimates, there could be up to three changes or NIFTY 50 and five changes for NIFTY Next 50. The NIFTY 50 changes could have high impact.
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