In today’s briefing:
- September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
- Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
- March 2024 Nikkei 225 Rebal – Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split
- Liontown Resources (LTR AU): Albemarle’s Final A$3.00 Offer
- Korea’s Latest IPO Rule Change: Daily Differential Allocation
- EQD | SP/ASX200 Index: Will It Break Out of Its Range?
September Nikkei 225 Review – Lasertec, Mercari, Nitori IN, Expected DELETEs Out (Matsui the Biggie)
- Today, somewhat earlier than expected), the Nikkei Index Team announced the changes to the Nikkei 225.
- Lasertec Corp (6920 JP), Mercari (4385 JP), and Nitori Holdings (9843 JP) are added. Nippon Sheet Glass (5202 JP), Mitsui E&S Holdings (7003 JP), and Matsui Securities (8628 JP) removed.
- That triggers flows of about ¥480bn a side, and some big, big changes. The announcement helps understand new process better.
Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
- Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
- As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
- Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.
March 2024 Nikkei 225 Rebal – Look for Zozo, Ryohin Keikaku, and Maybe a Socionext Split
- Now that the September 2023 Nikkei 225 Rebal is announced, we look at the March 2024 rebal and its possibilities.
- Socionext (6526 JP) is the only automatic ADD, but it might not be. ZOZO Inc (3092 JP) and Ryohin Keikaku (7453 JP) would be sector balance ADDs.
- Fast Retailing (9983 JP) could get capped if it outperforms Nikkei 225 by ~10%+ to 31Jan2024. And Nitori Holdings (9843 JP) will see an add of ~14 days of ADV.
Liontown Resources (LTR AU): Albemarle’s Final A$3.00 Offer
- Liontown Resources (LTR AU) has received a revised non-binding privatisation proposal from Albemarle Corp (ALB US) at A$3.00 per share, a 20.0% premium to the previously rejected offer of A$2.50.
- The revised offer is attractive compared to the Kathleen Valley Lithium Project’s NPV range, peer multiples and historical share prices. The offer price is final, barring a superior proposal.
- Liontown has granted Albemarle a limited period of exclusive due diligence. The Board intends to recommend a binding proposal at A$3.00 per share. The retail vote could be a risk.
Korea’s Latest IPO Rule Change: Daily Differential Allocation
- Korea FSS has provided guidelines to assign different weights to IPO orders from Day 1 to Day 5. Bookrunners should give higher weights to institutions that place their orders early.
- The question of whether this will deter the rush to place bulk orders close to the deadline and lead to a higher weighting of essential pricing is generating significant interest.
- The volume of orders and allocation by price range could serve as practical clues for assessing post-IPO pricing, making it a crucial factor in formulating post-IPO trading strategies.
EQD | SP/ASX200 Index: Will It Break Out of Its Range?
- The S&P/ASX 200 INDEX has been stuck in the 7000-7600 range for the past 2 years, with a brief dive to 6500 during the summer of 2022.
- If we consider the bottom at 6411 in October 2022, the index may have started to build an uptrend since then, but failed repeatedly to breach past the 7600 barrier.
- After a brief correction in August 2023, the index is currently rising, but soon it will encounter WEEKLY resistance that could hamper its chances of breaking out of its range.
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