In today’s briefing:
- Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: A Week to Go
- Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
- KOSPI Size Indices – Plenty of Migrations to Attract Active Flows
- Golden Eagle (3308 HK): 15th September Scheme Meeting
Quiddity Leaderboard-DAX Sep 23: No More Catalyst for the Short Sartorius – LONG Merck Trade
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
- Software AG (SOW GR) was deleted from the MDAX index triggering a couple of interim changes in the last week of July 2023.
- Currently, I do not expect any changes for the DAX or MDAX indices in September 2023 but I expect one change for the SDAX index.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: A Week to Go
- The changes for the next rebalance will use closing prices from 31 August, will be announced after the close on 8 September with implementation at the close on 15 September.
- One stock is very close to the 85% cumulative market cap inclusion threshold, while there are two stocks that are near the 98% cumulative market cap deletion threshold.
- With one inclusion and capping changes, estimated one-way turnover at the rebalance will be 3.5% resulting in a one-way trade of US$20m. That could change over the next week.
Hanwha Ocean: Potential Capital Raise of Nearly 2 Trillion Won
- Hanwha Ocean’s share price declined by 5% today, mainly due to local media reports about a potential capital raise of nearly 2 trillion won to 2.5 trillion won.
- Although the company has not officially announced a rights offering, we believe the probability of Hanwha Ocean announcing a major rights offering is relatively high in the next 3-6 months.
- We estimate this probability range is closer to about 60-70%. The company needs additional capital to improve its highly leveraged balance sheet and to make major investments.
KOSPI Size Indices – Plenty of Migrations to Attract Active Flows
- The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
- We see 7 migrations from MidCap to LargeCap, 6 migrations from LargeCap to MidCap, 7 new adds to MidCap, and 17 migrations from SmallCap to MidCap.
- Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.
Golden Eagle (3308 HK): 15th September Scheme Meeting
- On the 28th May, PRC department store play Golden Eagle Retail (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
- The Offeror is the Wang family, Together with concert parties, they control 80.29%. 7.18% of the remaining 19.71% of the disinterested stakeholders have given an irrevocable.
- The Scheme Doc was despatched this morning (23 August). The Scheme Meeting is September 15th with expected payment on (or before) the 17th of October. The Offer price is final.
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