In today’s briefing:
- Sep24 Nikkei 225 Rebal – Last Minute Thoughts and Change in Predictions
- Midea A/H Listing – 1H24 Updates – Strong Growth, Margins Uptick Continues
- Today’s Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks
- India: Potential Adds/Deletes from F&O Segment
- China ETF Inflows & Implications: YTD Inflows Near US$100bn
- Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Sep24)
- POSCO Group Corporate Value Pre-Announcements: Trading Angle
- PSC Insurance (PSI AU): A Done Deal
- India: Index Implications of Additions to the F&O Segment
- PSC Insurance (PSI AU): 26th Sept Vote On Ardonagh Group’s Offer
Sep24 Nikkei 225 Rebal – Last Minute Thoughts and Change in Predictions
- The last two reviews have been announced on the second business day of the month of the review. The one before that on the third business day.
- The review could be announced today or tomorrow. Wednesday would seem to be “late.”
- There are still questions about implementation – thus “care” in previous insights. Here I explore the possibilities/probabilities/issues around the edges. And a Dark Horse which may be lighter than thought.
Midea A/H Listing – 1H24 Updates – Strong Growth, Margins Uptick Continues
- Midea Group Co Ltd A (000333 CH), recently filed its PHIP as it aims to raise up to US$3bn in its H-share listing, as per media reports.
- Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
- We have covered the company and deal background in our previous notes. In this note, we talk about the updates from its 1H24 results.
Today’s Battery Rally Offers a Great Angle for Sector Pair Trading with Value-Up Stocks
- Today’s surge in Korean battery stocks stems from sector rotation and improved fundamentals, with SK On’s healthier balance sheet and Samsung SDI’s new U.S. plant fueling optimism.
- But with POSCO affiliates showing standout performance relative to their peers., the value-up factor is once again shaking things up and driving those differences in relative performance.
- Today’s price action suggests using the value-up factor for long-short strategies, especially with KRX hinting at sector quotas in the value-up index.
India: Potential Adds/Deletes from F&O Segment
- Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.
- The new framework could lead to mechanical entry and exit of stocks in the F&O segment with minimal intervention from SEBI.
- The introduction of some large cap stocks in the F&O segment could lead to their inclusion in the NIFTY Index, SENSEX Index and other local indices.
China ETF Inflows & Implications: YTD Inflows Near US$100bn
- Nearly US$100bn has flowed into mainland China listed ETFs year to date and could be driven by the National Team led by Central Huijin supporting the market.
- Nearly all the net inflows have been focused on the CSI 300, CSI 1000, CSI 500, SSE50, ChiNext and STAR50 indices. Flows to sector ETFs have been mixed.
- Over 70% of the net inflows have gone to the CSI 300 Index with another 18% going to the CSI 500 Index and CSI 1000 Index.
Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Sep24)
- June/July/August saw 1,673/825/202 new Corporate Governance Reports filed and 8/5/9 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed, respectively. The TSE’s very simple tool comes in 15 days.
- Our tools show every report, links to every document, and now a new diff file tool. input a name, see the difference between the Old/New Reports. We hope it helps.
- This tool is designed to be a shelf reference. We update it once a month, and every CorpGovReport and new “Management Conscious” report updated since a CGR update is here.
POSCO Group Corporate Value Pre-Announcements: Trading Angle
- On 29 August, the three major POSCO Group companies including POSCO Holdings announced that they plan to provide detailed explanations of their Corporate Value Up plans in 4Q 2024.
- In general, the companies that have provided more detailed plans for their Corporate Value Up plans have done better recently.
- However, now there are cases such as the three main POSCO Group companies whose share prices are rising just by announcing that they will provide Corporate Value Up plans later.
PSC Insurance (PSI AU): A Done Deal
- On 22 August, the Psc Insurance (PSI AU) IE considered Ardonagh’s A$6.19 offer fair and reasonable as it is within the A$5.69 to A$6.65 valuation range.
- The offer is conditional on shareholder approval of the scheme. No disinterested shareholder holds the 25% blocking stake. The scheme meeting is on 26 September.
- The offer is attractive and represents an all-time high. At the last close and for the 11 October payment, the gross/annualised spread is 1.3%/12.1%.
India: Index Implications of Additions to the F&O Segment
- Following SEBI’s review of eligibility criteria for entry/exit of stocks in the derivatives segment, there could be 18 deletions/79 inclusions in the F&O segment over the next 6 months.
- The introduction of some stocks in the F&O segment could lead to their inclusion in the NIFTY, SENSEX, Nifty Bank and CNXIT indices and weight changes in the Nifty Next50.
- The inclusion of stocks in indices with a fixed number of constituents will result in deletion of some stocks from these indices. There should be methodology changes too.
PSC Insurance (PSI AU): 26th Sept Vote On Ardonagh Group’s Offer
- Back on the 8th May, PSC Insurance (PSI AU), a diversified insurance service provider, entered into a Scheme with Ardonagh Group, at A$6.19/share, in cash.
- That’s a 27.6% premium to undisturbed, and a lifetime high. Directors and key executives holding ~39.6% of shares out, are supportive.
- The Scheme Booklet is now out, with a Scheme Meeting to be held on the 26th September. Expected implementation on the 11 October. The IE says fair & reasonable.
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