In today’s briefing:
- NPS Confirms Reference Portfolio & Risky Assets Upweight: Implications for Value-Up Stocks
- Austal (ASB AU): Spurned Suitor, Hanwha Ocean, Gets a Vote of Confidence
- Honasa Consumer IPO Lock-Up Expiry – US$500m+ Lockup Expiry with Everyone Well in the Money
- ASX200 Index Adhoc Rebalance: Sigma Healthcare (SIG) Replaces Boral (BLD)
- Jusung Engineering: Announces Equity Spin Off + Physical Division Split
NPS Confirms Reference Portfolio & Risky Assets Upweight: Implications for Value-Up Stocks
- Today, NPS made the final decision to introduce a reference portfolio. The critical point is the increase in risky assets from 56% to 65%, also decided at today’s meeting.
- Initially, overseas equity was prioritized, but recent forecasts suggest significant potential in increasing local equity, aligning with the value-up policy.
- Monitoring NPS’s execution plan, including allocation and timing by asset class, is vital to gauge inflow size, especially for Value-up beneficiaries.
Austal (ASB AU): Spurned Suitor, Hanwha Ocean, Gets a Vote of Confidence
- On 2 April, Austal Ltd (ASB AU) rejected a non-binding proposal from Hanwha Ocean (042660 KS) at A$2.825 due to concerns about obtaining Australian and US regulatory approvals.
- The Board’s claims are on shaky grounds. On 1 May, the AFR reported that Australian Defence Minister Richard Marles had no concerns with Hanwha’s privatisation bid.
- The Board’s rejection is a clumsy attempt to negotiate better terms, such as a bump, ticking fees, or significant break fees. At the last close, the gross spread was 21.8%.
Honasa Consumer IPO Lock-Up Expiry – US$500m+ Lockup Expiry with Everyone Well in the Money
- Honasa Consumer (HONASA IN) raised about US$200m in its India IPO. Its pre-IPO investors will be released from its IPO linked lockup soon.
- HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
- In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.
ASX200 Index Adhoc Rebalance: Sigma Healthcare (SIG) Replaces Boral (BLD)
- Seven Group Holdings (SVW AU) now holds 85.8% of Boral Ltd (BLD AU) and that will lead to deletion of Boral from the S&P/ASX 200 (AS51 INDEX).
- As expected, Sigma Healthcare (SIG AU) will be added to the S&P/ASX 200 (AS51 INDEX) at the close on 9 May.
- Sigma Healthcare (SIG AU) price movements will be largely influenced by its pending merger with Chemist Warehouse Group (CWG).
Jusung Engineering: Announces Equity Spin Off + Physical Division Split
- On 2 May, Jusung Engineering (036930 KS) announced an equity spin-off as well as a physical division split.
- We are negative on this combination of equity spin-off and physical division split of Jusung Engineering.
- After the two units are listed on 6 December 2024, it is likely that the semiconductor unit (Jusung Engineering Co) will rise while Jusung Holdings Co is likely to decline.
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