In today’s briefing:
- Sep22 FTSE EPRA Nareit Index Rebalance – Big Impact on Sekisui House (1928 JP)
- Hang Lung Group Chips Away At Holding In Hang Lung Props
- STI Index Rebalance: Emperador IN, ComfortDelGro OUT
- Kadokawa – Investments From Sony and Tencent
- NIFTY NEXT50 Index Rebalance: Significant Impact for an Overlooked Index
- NIFTY50 Index Rebalance: Adani Enterprises Replaces Shree Cement
- FTSE UK Sep 2022 Rebal: Warehouse REIT (WHR) Sees HUGE Impact
- NIFTY Sep 2022 Rebal: Adani Enterprises and Adani Total Gas Are Top Positives
Sep22 FTSE EPRA Nareit Index Rebalance – Big Impact on Sekisui House (1928 JP)
- Yesterday FTSE Russell announced two Asian additions to its FTSE EPRA Nareit Global Developed Index – Sekisui House (1928 JP) and Healthcare & Medical Investment Corporation (3455 JP).
- Sekisui House is larger cap, and will see big dollars added. H&M IC is much smaller and will see less, but has had a huge run-up, outright and relative.
- Trading impact will be significant on both tickers in terms of days of ADV.
Hang Lung Group Chips Away At Holding In Hang Lung Props
- Hang Lung (10 HK) recently announced it had acquired 1.3% in Hang Lung Properties (101 HK) over a one-year period, increasing its holding to 59.5%.
- HLG currently trades at a 62% discount to NAV, a level last seen around the Covid lows in May 2020.
- HLG is the most basic of Holdco structures – there is almost a 100% overlap in the stub ops with HLP’s property investments.
STI Index Rebalance: Emperador IN, ComfortDelGro OUT
- Emperador (EMI SP) will replace Comfortdelgro Corp (CD SP) in the FTSE Straits Times Index (STI) (STI INDEX) at the close of trading on 16 September.
- Though the changes were expected, there is over 4 days of ADV to trade on both stocks and we do not feel there are a lot of pre-positions built up.
- There are some risks in the stocks, and we would look to close out positions prior to the implementation of the changes.
Kadokawa – Investments From Sony and Tencent
- Kadokawa announced yesterday that subsidiary From Software would conduct a third-party allocation of shares to Sony and Tencent.
- The allotment values From Software at about ¥120bn with Tencent acquiring 16.25% and Sony acquiring 14.09% of the company.
- This creates opportunities for both Sony and Tencent and likely puts Kadokawa on track to eventually be acquired though timing may be somewhat later than we had anticipated.
NIFTY NEXT50 Index Rebalance: Significant Impact for an Overlooked Index
- Adani Total Gas (ATGL IN), Bharat Electronics (BHE IN), Hindustan Aeronautics (HNAL IN), IRCTC (IRCTC IN), Mphasis (MPHL IN), Samvardhana Motherson (MSS IN) and Shree Cement (SRCM IN) are adds.
- Adani Enterprises (ADE IN), Jubilant Foodworks (JUBI IN), Lupin (LPC IN), Mindtree (MTCL IN), Punjab National Bank (PNB), Steel Authority of India (SAIL) and Zydus Lifesciences (ZYDUSLIF IN) are deletes.
- There is significant impact on a lot of the stocks in terms of days of delivery volume to trade. Given the index is overlooked, there could be significant price movements.
NIFTY50 Index Rebalance: Adani Enterprises Replaces Shree Cement
- Adani Enterprises (ADE IN) will replace Shree Cement (SRCM IN) in the NIFTY Index (NIFTY INDEX) at the close of trading on 29 September.
- We had forecast the change in April and Adani Enterprises (ADE IN) is up over 60% since then while Shree Cement (SRCM IN) is down a bit.
- Passive NIFTY Index (NIFTY INDEX) trackers will need to buy over 7% of the real float on Adani Enterprises (ADE IN). The stock could continue to move higher.
FTSE UK Sep 2022 Rebal: Warehouse REIT (WHR) Sees HUGE Impact
- The index changes for the FTSE UK Indices for the September 2022 Rebalance were announced yesterday. There will be 3 changes for FTSE 100 and 8 changes for FTSE 250.
- These index changes are mostly in line with our expectations in FTSE UK Quiddity Leaderboard Sep 2022: Avast, Meggitt, Brewin, and a Busy Rebalance Month.
- However, there a couple of surprises. In this insight, we take a closer look at our expectations for index flows and potential trading ideas
NIFTY Sep 2022 Rebal: Adani Enterprises and Adani Total Gas Are Top Positives
- The September 2022 Rebalance results for the NIFTY 50, 100, and 500 Indices were announced after the close on 1st September 2022.
- There will be one ADD/DEL for the NIFTY 50 Index and 6 ADDs/DELs for the NIFTY 100 Index, mostly in line with our expectations.
- In this insight, we take a closer look at our expectations for index flows and potential trading ideas.
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