In today’s briefing:
- SciClone Pharma (6600 HK): Scheme Vote on 19 June
- KOSPI200 June ’24 Rebalance: Index Changes Released, 6 Additions & 6 Deletions
- Unexpected Inclusion of Cosmo AM&T in KOSPI 200 Sparks Notable One-Day Flow Via KOSPI 200 IT
- EQD | Hang Seng Down: How Low Can the Pullback Go?
- Iberdrola/Avangrid: Spread
SciClone Pharma (6600 HK): Scheme Vote on 19 June
- Sciclone Pharmaceuticals (6600 HK)‘s scheme document is out, and the court meeting is scheduled for 19 June. The IFA considers the HK$18.80 per share offer fair and reasonable.
- The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). No independent shareholder holds a blocking stake.
- This is a done deal. At the last close and for the 12 July payment, the gross and annualised spread is 2.2% and 17.3%, respectively.
KOSPI200 June ’24 Rebalance: Index Changes Released, 6 Additions & 6 Deletions
- The KRX have announced the index changes for the KOSPI200 June review.
- The index will be rebalanced in the closing auction on Thursday the 13th of June.
- There will be 6 additions to the index and 6 deletions.
Unexpected Inclusion of Cosmo AM&T in KOSPI 200 Sparks Notable One-Day Flow Via KOSPI 200 IT
- Unexpectedly, KRX included Cosmo AM&T (005070 KS) despite not meeting the market cap cutoff and excluded DB Hitek (000990 KS) and Lotte Energy Materials (020150 KS).
- Cosmo AM&T’s unexpected inclusion triggers a significant one-day passive flow event through the KOSPI 200 IT, the sector index with the largest AUM.
- Sector index rebalancing, a single-day event managed by one ETF operator, more significantly correlates flow direction with price impact. We should consider a long-short setup for these on June 13th.
EQD | Hang Seng Down: How Low Can the Pullback Go?
- The Hang Seng Index has been rallying for 3 weeks but then last week the rise was halted and the index gave up a good chunk of the gains.
- It seems the index has become quite volatile but this week it could go up again, or otherwise next week, the reversal is imminent given its oversold condition.
- It’s hard to predict if the rally can continue after the bounce, the index seems a bit long-term overbought, albeit short-term oversold. A contradiction, but that is the situation now.
Iberdrola/Avangrid: Spread
- Post-March announcement, investors bought shares of Avangrid (AGR US) in the hope of an offer sweetening, which was flagged here, as Iberdrola got $6 billion from its Mexico exit.
- The improved $35.75/shareoffer was made in response to potential resistance from prospective minority shareholders, as the deal needs the approval of a majority of these non-Iberdrola stakeholders.
- Spread is 3.2%/5.55% (gross/annualised) assuming $1.4667 in dividend payments (three dividends of $0.44 and a prorated dividend of $0.1467) and settlement on 30 December. Long.
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