In today’s briefing:
- Pasona: The Wrong Price
- New Phase in Korean Short Selling: Immediate Impact of MM and LP Short Selling Ban
- EOFlow Craters. Medtronic Stays Mum
- Asahi Group Holdings (2502) Offering – Some Index Demand But Needs Lots of Active Long-Onlies
- Asahi Group (2502 JP): Big Placement with Limited Index Buying; Timing Is Key
- Key Points We Should Know Regarding the Current Status of EOFlow
- Asahi Group (2502 JP): US$1.3bn Secondary Placement
- Quiddity Leaderboard ES50 Sep 24: The Race For Europe’s Multi-Billion Dollar Index Flows
- Hong Kong CEO/Director Dealings (17 Nov): ENN’s Controlling Shareholder Buying; Li Buys More PCCW
- DXN Holdings Lock-Up – PE Investor Could Sell Further Although Liquidity Is Weak
Pasona: The Wrong Price
- As discussed here in a piece about the Partial Tender Offer, Pasona Group (2168) has agreed to sell its controlling stake in Benefit One (2412) to M3 (2413).
- That will leave Pasona Group with a fair chunk of cash and possibly a residual stake in Benefit One, depending on the results.
- Though we don’t know what the future holds, Pasona now is the wrong price for its future.
New Phase in Korean Short Selling: Immediate Impact of MM and LP Short Selling Ban
- There is a prevailing sentiment in the local market that short selling by market makers (MM) and liquidity providers (LP) will effectively be prohibited very shortly.
- The widening of the futures basis extends the influence of futures on the spot market prices. This is precisely where trading opportunities that we should be keenly observing may arise.
- It also leads to a significant widening of ETF tracking errors due to the direct sell-off of underlying shares. We must capitalize on extreme spreads in ETFs.
EOFlow Craters. Medtronic Stays Mum
- Five weeks after shares were suspended, EOFlow (294090 KS) shares resumed trading this morning, the 16 November. Wording is sparse on the resumption.
- One small consolation was that EOFlow may benefit from the temporary ban on short selling. Irrespective, shares have declined ~27% at the open, as I type.
- Elsewhere, Medtronic Plc (MDT US) provides no guidance. The only other news of note are the various court filings in the District Court of Massachusetts.
Asahi Group Holdings (2502) Offering – Some Index Demand But Needs Lots of Active Long-Onlies
- Asahi Group Holdings (2502 JP) today announced a collection of 10 shareholders (mostly financial institutions) would sell a total of 33.48mm shares (6.6% of shares out) in Asahi Group.
- This will become more of a thing going forward. Cross-holders “want” to unwind. And in many cases, the cross-held want to buy back stock (reduce E, raise ROE).
- This deal is “good” in that it clears out a lot of the bank cross-holders in one fell swoop. But there are more crossholders behind.
Asahi Group (2502 JP): Big Placement with Limited Index Buying; Timing Is Key
- Nine shareholders are looking to sell 33.48m shares of Asahi Group Holdings (2502 JP). That is US$1.28bn, 24x ADV and 6.6% of shares outstanding.
- Given the recent run up in the stock, there could be downside over the next couple of weeks ahead of the pricing date.
- There will be buying from global trackers but nothing from TOPIX trackers, so not a lot of stock will be mopped up. Passive buying before settlement could create a squeeze.
Key Points We Should Know Regarding the Current Status of EOFlow
- It can be considered that the suspension of EOFlow’s trading and, furthermore, the risk of delisting have been completely eliminated at this point.
- EOFlow emphasizes the possibility of circumventing sales of EOPatch by supplying EOPump to a JV in China. The key factors that initially sparked Medtronic’s interest in EOFlow are still valid.
- If CEO Kim fails to repay a stock collateral loan of ₩20B or secure additional loans, approximately 4% of the total issued shares could be sold in the market.
Asahi Group (2502 JP): US$1.3bn Secondary Placement
- Asahi Group Holdings (2502 JP) announced a pure secondary offering of 33.5 million or 6.61% of outstanding shares. At the last close, the placement was worth JPY194 billion (US$1.3 billion).
- Notwithstanding Asahi’s explanation, the selling shareholders’ motivation for exiting their shareholding is likely to capitalise on the strong share price performance – Asahi shares are up 45% YTD.
- Looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 28 November and 1 December (likely 28 November).
Quiddity Leaderboard ES50 Sep 24: The Race For Europe’s Multi-Billion Dollar Index Flows
- The ES50 Index is one of the most highly-tracked indices in Europe and the annual index review takes place in September every year.
- This annual index review usually results in some of the most significant index flow events in Europe every year typically amounting to billions of dollars.
- In this insight, we take an early look the names leading the race to become ADDs/DELs for the upcoming index review in September 2024.
Hong Kong CEO/Director Dealings (17 Nov): ENN’s Controlling Shareholder Buying; Li Buys More PCCW
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
- The key stocks mentioned in this regular insight are ENN Energy (2688 HK), PCCW Ltd (8 HK) and Wuxi Biologics (2269 HK).
DXN Holdings Lock-Up – PE Investor Could Sell Further Although Liquidity Is Weak
- DXN Holdings (DXN MK) was listed on the Bursa Malaysia Exchange on 19th May 2023. Both promoters and Gano Global (KV Asia Capital), will come off lockup soon.
- DXN Holdings (DXN) is a global health-oriented and wellness direct selling company.
- Demand for the IPO was lukewarm and the shares had a turbulent debut. Aside from its weak momentum, liquidity on the stock is weak as well.
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