In today’s briefing:
- Nikkei 225 Sep 2023 PREVIEW – Lasertec, Toshiba, Nitori, Maybe Zozo
- Index Rebalance & ETF Flow Recap: NKY, HSCEI, HSTECH, STAR50, MVIS, Japan Post Bank, Adani, KRX BBIG
- CPSE / BHARAT22 / CNXBANK Index Rebalance Preview: Capping Changes in March
- Golden Energy (GER SP): The Disconnect Between the Offer and Underlying Assets
- Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy
- Korean Court Rules Against SM Entertainment From Issuing New Shares to Kakao
- OZ Minerals (OZL AU): Scheme Meeting on 13 April
- S&P/ASX Index Rebalance (Mar 2023): Big Impact Changes as Adds Outperform Deletes
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Slater & Gordon; SHL Japan, GK Goh, Nitro Software, Yashili
- Quiddity Flow Expectations for DAX Mar 23 Rebal: WUW GR Vs SDAX Seems Interesting
Nikkei 225 Sep 2023 PREVIEW – Lasertec, Toshiba, Nitori, Maybe Zozo
- The March 2023 Nikkei 225 Review was announced Friday. Discussion is in Nikkei 225 March 2023 Review – OLC, JAL, Renesas IN.
- That means a Sep-2023 preview. ADDs: Lasertec (6920), Toshiba (6502), and Nitori (9843). DELETEs: Nippon Sheet Glass (5202), Mitsui E&S (7003), and Matsui Securities (8628).
- Zozo (3092) is a possible alternate add to Toshiba on a sector balance basis if Toshiba’s disposition changes in the interim.
Index Rebalance & ETF Flow Recap: NKY, HSCEI, HSTECH, STAR50, MVIS, Japan Post Bank, Adani, KRX BBIG
- The MSCI Feb QCIR was implemented on Tuesday and there were a bunch of announcements for other indices from Wednesday to Friday.
- The implementation of the March rebalance for the Hang Seng family of indices and the SSE STAR50 (STAR50 INDEX) take place at the close on Friday.
- Redemptions continue on IShares Edge MSCI Min Vol Emerging Markets ETF (EEMV US) and KraneShares CSI China Internet ETF (KWEB US).
CPSE / BHARAT22 / CNXBANK Index Rebalance Preview: Capping Changes in March
- The BHARAT 22 ETF (ICICIB22 IN) will rebalance on 17 March while the CPSE ETF (CPSEBE IN) and Nifty Bank Index (NSEBANK INDEX) will rebalance on 29 March.
- There are no constituent changes for the indices in March but there will be capping changes for the stocks and there is a reasonable impact on some stocks.
- There are stocks that will have opposing flows on the two days, while there are some stocks that will have same way flows from passive trackers.
Golden Energy (GER SP): The Disconnect Between the Offer and Underlying Assets
- Golden Energy & Resources (GER SP)’s update notes that the Widjaja family’s offer remains conditional on Indonesian regulatory, Dian Swastatika Sentosa (DSSA IJ) shareholder and SGX circular approval.
- There are four issues – an unattractive distribution cash alternative, a decline in Golden Energy Mines (GEMS IJ) shares, unfavourable FX and an increase in Stanmore Coal (SMR AU) shares.
- The offer remains light. A “fair” delisting price is around S$0.40 (vs S$0.16 current delisting price) and would imply an all-cash offer of S$1.074, 19% above the last close.
Last Week in Event SPACE: Japan Post/Japan Post Bank, Downer, HKBN, Golden Energy
- Big picture: Japan Post (6178 JP) selling 29% of Japan Post Bank (7182 JP) is a Very Big Offering at ¥1.236trln. 80/20 dom/international. A TOUGH sell. 1.089bn shares is 4x float.
- Downer EDI (DOW AU)‘s CEO resigned ahead of announcing accounting irregularities last December. The CFO resigned this week after Downer announced another profit downgrade. Now the chairman is exiting.
- Hong Kong broadband play HKBN Ltd (1310 HK)said it has been approached by I Squares’ HGC. No pricing announced, but talks continue.
Korean Court Rules Against SM Entertainment From Issuing New Shares to Kakao
- On 3 March, it was announced that a Korean court has ruled against SM Entertainment from issuing new shares and CB to Kakao Corp (035720 KS).
- HYBE’s tender offer period ended on 1 March. It is highly unlikely for HYBE to have successfully completed the tender offer reaching the entire 25% of outstanding shares.
- We maintain our position of a high probability of Kakao initiating its own tender offer of SM Entertainment shares in the coming weeks at about 140,000/150,000 won or more.
OZ Minerals (OZL AU): Scheme Meeting on 13 April
- The IE considers BHP Group Ltd (BHP AU)’s A$28.25 offer for OZ Minerals Ltd (OZL AU) to be fair and reasonable as it is within its valuation range of A$27.37-30.47.
- Copper prices and peers’ share prices have risen since the deal announcement. The IFA address perky copper prices by using reasonable long-term copper prices to value the assets.
- This is done with no hint of a competing bid. At last close price and for the 2 May payment, the gross and annualised spread is 0.9% and 6.1%, respectively.
S&P/ASX Index Rebalance (Mar 2023): Big Impact Changes as Adds Outperform Deletes
- There is one change for the ASX20, two for the ASX100, four for the S&P/ASX 200 INDEX and 12 adds/ 9 deletes for the ASX300 Index at the March rebalance.
- There will be between 7-20 days of ADV to trade on the ASX100 and ASX200 adds while the impact on the deletions is between 1-11 days of ADV.
- The adds have outperformed the deletes on all indices over the last few months. Short interest has jumped on a lot of the large deletes.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Slater & Gordon; SHL Japan, GK Goh, Nitro Software, Yashili
- There are 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three new deals were discussed on Smartkarma this past week: Slater & Gordon (SGH AU)‘s off-market Offer; SHL Japan Ltd (4327 JP)‘s MBO/LBO; and GK Goh Holdings (GKG SP)‘s MBO.
- Key updates took place for Nitro Software Ltd (NTO AU), Yashili International Holdings (1230 HK), Halcyon Agri (HACL SP), and Golden Energy & Resources (GER SP).
Quiddity Flow Expectations for DAX Mar 23 Rebal: WUW GR Vs SDAX Seems Interesting
- The March 2023 index changes for the DAX index family were confirmed after the close on Friday 3rd March 2023.
- There will be one change for DAX, two for MDAX, and two for SDAX mostly in line with our expectations. Separately, there is also a change in TecDAX.
- In this insight, we take a closer look at our expectations for index flows and the recent price and volume performance of the names involved in the index rebalance event.
💡 Before it’s here, it’s on Smartkarma
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