In today’s briefing:
- Nikkei 225 Index Rebalance: Mostly on Expected Lines
- Nikkei 225 Review Results: Nidec, SMC, Hoya IN
- Giordano’s Acceptances Just Short of the 50% Voting Threshold; Offer Period Extended
- KOSPI Size Index Migration: Official Results & Trading Approach Towards Implementation
- Giordano (709 HK): Cheng’s Have 44.98%. Offer Extended
Nikkei 225 Index Rebalance: Mostly on Expected Lines
- The Nikkei 225 (NKY INDEX) September rebalance will be done in three parts due to the delisting of Shizuoka Bank (8355 JP) and the relisting of Shizuoka Financial Group (5831).
- Nidec Corp (6594 JP), SMC Corp (6273 JP) and Hoya Corp (7741 JP) replace Unitika Ltd (3103 JP), Oki Electric Industry (6703 JP) and Maruha Nichiro (1333 JP).
- Passive trackers need to buy over 10 days ADV on the adds and there is a large impact of the funding trade given the add/delete size difference.
Nikkei 225 Review Results: Nidec, SMC, Hoya IN
- The Nikkei Index Team announced the Nikkei 225 Annual Review today, days earlier than I expected. Nidec Corp (6594 JP), SMC Corp (6273 JP), Hoya Corp (7741 JP) are IN.
- Unitika Ltd (3103 JP), Maruha Nichiro (1333 JP), and Oki Electric Industry (6703 JP) are OUT. They did not go for my subjective choices to improve sector balance. Next time.
- The inclusion/exclusion events are staggered over 3 days out of four because of the deletion and re-inclusion of Shizuoka Bank (8355 JP) due to its formation of a holding company.
Giordano’s Acceptances Just Short of the 50% Voting Threshold; Offer Period Extended
- The offeror and acceptances reached 44.98%, just short of the 50% minimum acceptance condition. The closing date has been extended to 13 September.
- If the offer is declared unconditional on or before 8 September, Giordano International (709 HK) shareholders who accept the offer will get HK$1.88 but not the dividend of HK$0.085.
- The offeror likely remains confident that it will hit the 50% threshold. At the last close, the gross and annualised spread for 17 Sep payment is 1.1% and 37.2%, respectively.
KOSPI Size Index Migration: Official Results & Trading Approach Towards Implementation
- The results are pretty much in line with the predictions, except for Hanwha Aerospace which made it to LARGE instead of Hyundai Marine & Fire Insurance.
- Assuming that ten names, including Hyundai Marine, were traded in a LONG/SHORT basket with equal weight, the yield from August 17 to the last close would have been 4.6%.
- I would still approach with an equal-weighted basket trading until this Thursday. This flow trading usually loses its effect rapidly after rebalancing. So, I wouldn’t carry it beyond this Thursday.
Giordano (709 HK): Cheng’s Have 44.98%. Offer Extended
- Late last night, Giordano International (709 HK) announced the Offeror – the Cheng Family – had 44.98% in the bag after 20.41% of shares out had been tendered.
- The Offer has been extended for one week, until the 13 September.
- Whether investors receive the Offer consideration AND the interim divided is still up for debate.
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