In today’s briefing:
- Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT
- Nikkei 225 March 2023 Review – OLC, JAL, Renesas IN.
- Yashili (1230 HK): Mengniu Offer Imminent As Key Sale Concludes
- Quiddity ASX Rebal Mar 23: Good Hit Rate, Some Short Buildup, Decent Impact
- Yashili (1230 HK): Pre-Condition Satisfaction Likely Within 5 Business Days
- UnitedHealth/EMIS: Estimated Calendar, Spread
Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT
- Oriental Land (4661), Renesas Electronics (6723) and Japan Airlines (9201) will replace Toyobo (3101), Nippon Light Metal (5703) and Toho Zinc (5707) in the Nikkei 225 (NKY INDEX).
- Oriental Land (4661 JP) has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.
- Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There’s a big funding trade too.
Nikkei 225 March 2023 Review – OLC, JAL, Renesas IN.
- As expected, Oriental Land (4661 JP), Renesas Electronics (6723 JP), Japan Airlines (9201 JP) IN, and Toyobo (3101 JP), Nippon Light Metal (5703 JP), Toho Zinc (5707 JP) OUT.
- The Nikkei implemented the “Tricky Twist” discussed. This lowers the total amount to buy on Oriental Land vs what many would have expected.
- That’s “disappointing” BUT… the behavioural aspects here are really interesting, and the timetable for the event is worth thinking about.
Yashili (1230 HK): Mengniu Offer Imminent As Key Sale Concludes
- Yashili International Holdings (1230 HK) has announced that the disposal of Dumex China to Danone SA (BN FP) has been completed.
- This satisfies the second of three SPAs announced last May, leaving the sale of Danone’s 25% stake in Yashili to China Mengniu Dairy Co (2319 HK) outstanding.
- This stake sale should conclude next week, to be followed by the launch of the Scheme later this month, early next.
Quiddity ASX Rebal Mar 23: Good Hit Rate, Some Short Buildup, Decent Impact
- The index changes for the ASX Index family for the March 2023 Rebalance were announced after the close on Friday 3rd March 2023.
- There will be one, two, and four changes for ASX 20, ASX 100, and ASX 200 indices, respectively. There will also be 12 ADDs and 9 DELs for ASX 300.
- In this insight, we take a closer look at our expectations for index flows, short interest, and recent price performance of the names involved in the rebalance event.
Yashili (1230 HK): Pre-Condition Satisfaction Likely Within 5 Business Days
- Yashili International Holdings (1230 HK) announced that the Dumex China Disposal was completed. The completion will result in the satisfaction of the last pre-condition, likely within five business days.
- China Mengniu Dairy Co (2319 HK)’s offer is HK$1.20 per share. Due to the upcoming release of full-year results, the scheme document will be likely despatched by early April.
- This is a done deal and timing is the key risk. At the current price and for a late-May payment, the gross and annualised spread is 2.6% and 11.3%, respectively.
UnitedHealth/EMIS: Estimated Calendar, Spread
- A CMA’s Phase One investigation period began on 23 January to investigate whether the deal may result in a substantial lessening of competition. Deadline for the decision is 17 March.
- EMIS anticipates closing late Q1/early Q2 2023. The Permitted Final Dividend amounts to 21.1p. No final dividend has yet been declared, although theoretically it could happen around 17 March.
- Spread is 2.96%/29.39% (gross/annualised), assuming settlement by 15 April, as good as it gets for a stock with an average daily turnover of c.GBP7 million in the European space.
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