In today’s briefing:
- OZ Minerals – Circumstances May Merit a Revised Tilt
- MSCI Korea Rebalance: Bottom 5% Continue to Underperform
- Jasmine International: Last Minute Wrinkle To Broadband Sale
- CSC/Intertrust: End of Offer Period
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (21 October 2022)
- Kotak Mahindra Bank (KMB IN): Foreign Room >20% Should See Staggered FTSE Inclusion Starting March
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (21 October 2022)
OZ Minerals – Circumstances May Merit a Revised Tilt
- Copper is widely recognised to be in somewhat short supply, and EV/electrification would increase demand going forward (though slower Chinese homebuilding would soften it).
- A number of developments suggest a further squeeze in prices could be near and copper price strength along with AUD weakness makes an AUD-denominated OZL Takeover Price easier to raise.
- Short-Term positioning and longer-term supply constraints are currently battling for near-term import, but medium-term, there’s no escaping the imbalance. Looks like a buy now.
MSCI Korea Rebalance: Bottom 5% Continue to Underperform
- In this insight, we provide a ranking system for targeting the bottom 5% of potential exclusion candidates in the upcoming MSCI Korea index rebalance in November.
- The ranking system is based on a combined weighted rankings based on MSCI weight, market cap, and ADTV.
- The six stocks that have received lowest weights include Meritz Financial Group, S 1 Corp, Amorepacific Group, CJ Corp, Green Cross Corp, and LG Household & Health Care-Pref.
Jasmine International: Last Minute Wrinkle To Broadband Sale
- Jasmine International (JAS TB) is looking to sell its 99.8% interest in Triple T Broadband (TTTBB), and 19% stake in Jasmine Broadband (JASIF TB) to Advanced Info Service (ADVANC TB).
- The sale required JASIF shareholder approval, but not all resolutions were approved at an EGM this week.
- This is a setback. However, the transaction remains on track.
CSC/Intertrust: End of Offer Period
- CSC and Intertrust have already obtained clearances from all different 13 required regulators. After several extensions, the Offer Period will now end on 31 October.
- Intertrust has had a far from stellar performance on the stock market. Hence, I believe acceptances will be over 80%. The offer will be declared unconditional and the shares delisted.
- Gross spread is 0.3% and the estimated annual return is 6.99% (settlement will be on or before 7 November. Long and tender/accept the offer.
Shanghai/Shenzhen Northbound Connect: Weekly Moves (21 October 2022)
- Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
- Overall, net outflow over the past week was ~US$1.8bn, split between Shanghai (-US$1.2bn) and Shenzhen (-US$0.6bn).
- The largest inflows were into WuXi AppTec (603259 CH) and BOE Technology (000725 CH). The largest outflows were in Kweichow Moutai (600519 CH) and Inner Mongolia Yili Industrial (600887 CH).
Kotak Mahindra Bank (KMB IN): Foreign Room >20% Should See Staggered FTSE Inclusion Starting March
- Foreign investor selling has taken the foreign headroom on Kotak Mahindra Bank (KMB) to 22%. That should result in the stock being added to the FTSE All-World Index in March.
- The stock will initially be added to the index at an investability weight of 5%. Subject to >20% foreign headroom, the investability weight will increase by 5% at subsequent rebalances.
- Continued foreign selling could result in an MSCI weight increase if the headroom increases above 25%. That could still be some time away though.
Shanghai/Shenzhen Southbound Connect: Weekly Moves (21 October 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, the net inflow over the past week was ~US$2.7bn, split (+US$1.38bn) for Shanghai and (+US$1.36bn) for Shenzhen.
- The largest inflows were into Tencent (700 HK) and Wuxi (2269 HK). The largest outflows Tracker Fund of Hong Kong (2800 HK) and Hang Seng H Share Index (2828 HK).
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