In today’s briefing:
- Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma
- HK Connect SOUTHBOUND Flows (To 26 Apr 2024); Strong Net Buying on Banks/Energy Telco SOEs. Again.
- (Mostly) Asia-Pac M&A: Mimasu Semi, Tietto Minerals, CSR, CPMC, Roland DG, IClick Interactive
- A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As – Time To Get Long H/A
- Mainland Connect NORTHBOUND Flows (To 26 Apr 2024): Big NB Buy Friday
- EQD | Nikkei’s Downtrend Could Continue in May (But the Bottom Is Near)
- Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American
- CSR (CSR AU): 13th June Shareholder Vote
Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma
- Roland DG Corp (6789 JP) has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than Brother Industries (6448 JP)’s JPY5,200 offer.
- The Board articulates a compelling case on Brother’s offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price).
- Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board’s recommendation.
HK Connect SOUTHBOUND Flows (To 26 Apr 2024); Strong Net Buying on Banks/Energy Telco SOEs. Again.
- A shares were up small on the week, largely due to a big rally on Friday (led by record Northbound buying). HK Stocks had a HUGE week.
- Net SOUTHBOUND buying was +HK10.3bn. Net buys every day and now 20 days straight, but buying was foreign-led.
- Little market news. More geopolitical news. Big SOE bank H-shares see relentless buying. HSTECH +13.4%, HSI +8.8%, HSCEI +9.1%.
(Mostly) Asia-Pac M&A: Mimasu Semi, Tietto Minerals, CSR, CPMC, Roland DG, IClick Interactive
- Tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deals was discussed on Smartkarma this week, being Mimasu Semiconductor Industry (8155 JP)‘s Tender Offer. There’s also BHP Group (BHP AU)‘s unsolicited Offer for Anglo American (NGLOY US).
- Key updates took place on: Tietto Minerals Ltd (TIE AU), CSR Ltd (CSR AU), CPMC Holdings (906 HK), Roland DG Corp (6789 JP), and iClick Interactive Asia Group (ICLK US).
A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As – Time To Get Long H/A
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND’s consecutive buying streak ended on Monday 25-March, then started again. 20 days straight net buying. NORTHBOUND saw big inflows Friday. A record day I believe.
- HK stocks bounced VERY hard. Seemed like big allocation trade. HSCEI +8.7% vs CSI300 +1.2%. In H/A Pairs, liquid pairs saw Hs outperform their A by 4+% on average.
Mainland Connect NORTHBOUND Flows (To 26 Apr 2024): Big NB Buy Friday
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net BUY RMB 25+bn of A-shares on low gross volume but a huge Friday playing catchup to a massive up-week in HK shares.
- H outperformed As and it feels like the massive day Friday was just to play reversion on underperformance vs HK shares.
EQD | Nikkei’s Downtrend Could Continue in May (But the Bottom Is Near)
- The Nikkei 225 (NKY INDEX) is closing the month of April in negative territory, first month down after 3 months up.
- Our seasonal model indicates that May could also close down, but the index should find strong support in the 37770-36750 price area.
- The month of May is a coin flip: the index could close up or down, caution is advised.
Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American
- The CSRC has announced five capital market cooperation measures for the Hong Kong Southbound Connect programs including RMB dual counters and REITs.
- Jardine Cycle & Carriage (JCNC SP)‘s current implied stub value and simple ratio are both highly elevated.
- A simple Keisei Electric Railway Co (9009 JP)model says “this doesn’t present me with enough upside to warrant it unless I am also really bullish Oriental Land (4661 JP).”
CSR (CSR AU): 13th June Shareholder Vote
- After pitching an indicative Offer to CSR (CSR AU) shareholders of A$9/share by way of a Scheme on the 21st Feb, Saint-Gobain (SGO FP) firmed terms on the 26th Feb.
- $9.00 is a knockout Offer. The business combination has been unanimously approved by the boards of both companies. Conditions include CSR’s shareholder approval and FIRB signing off.
- The Scheme Booklet is now out, with a Scheme Meeting to be held on the 13th June. Expected implementation on the 9 July. IE says fair & reasonable.
💡 Before it’s here, it’s on Smartkarma
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