In today’s briefing:
- SK Telecom (017670 KS): Foreign Room Increase Has Implications
- Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
- Lutronic Tender Offer by Hahn & Company: 2nd Round
- Quiddity Leaderboard ASX Sep 23: Intra-Review Replacement for BKL and Many Other Expected Changes
- EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?
- EQD | Nikkei 225 (NKY) WEEKLY Falling: Support (Short-Term)
- Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report
SK Telecom (017670 KS): Foreign Room Increase Has Implications
- Foreign investors have been selling SK Telecom (017670 KS) for over a year now. That has taken foreign room from near zero to close to 15% now.
- That could mean index inclusion for SK Telecom (017670 KS) with timing dependent on when the 15% foreign room threshold is crossed.
- SK Telecom (017670 KS) has performed in line with KT Corp (030200 KS) but trades at higher valuations on most parameters.
Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 111 Inc (YI US), Chindata Group (CD US), ENM Holdings (128 HK), Estia Health (EHE AU), Poly Culture Group Corp H (3636 HK), Costa Group Holdings (CGC AU).
- Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Kenedix Residential Investment (3278 JP), Penguin International (PBS SP), Challenger Technologies (CHLG SP).
Lutronic Tender Offer by Hahn & Company: 2nd Round
- According to local media (Seoul Economic Daily), Hahn & Company plans to make a second round of tender offer for Lutronic Corp, in order to meet the delisting requirements.
- The tender offer price is 36,700 won, the same as the first tender offer price.
- We believe that Hahn & Co is likely to successfully complete this second round of tender offer of Lutronic and it is likely to be delisted in the coming months.
Quiddity Leaderboard ASX Sep 23: Intra-Review Replacement for BKL and Many Other Expected Changes
- In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run up to the September 2023 Rebalance.
- Blackmores Ltd (BKL AU) could get deleted from the index family, triggering intra-review changes in the next few days.
- Including the intra-review changes, ASX 300 could see 12 ADDs and 10 DELs, ASX 200 could see 4 changes, and ASX 100 could see one change between now and September.
EQD | KOSPI 200 Index WEEKLY Rising: How Far Can It Go?
- A previously published insight correctly highlighted an high-probability opportunity to go LONG and join the KOSPI 200‘s current multi-month Bull run.
- The index closed the week strongly up, now we want to evaluate how far this new leg up could go: a total of +3/+4 weeks up, price targets =359-385.
- Holders of KOSPI 200 LONG positions: Covered Calls can be written at Strikes between 346 and 360, expiry August 10th (4 weeks). A pullback is highly probable from 360.
EQD | Nikkei 225 (NKY) WEEKLY Falling: Support (Short-Term)
- Nikkei 225 (NKY INDEX) has pulled back from its peak. Direction currently unclear but last week’s positive Close was super weak (+0.1%) , may lead to lower prices this week.
- If the index falls this week, a -1 or -2 weeks down is the most common pattern, followed by a rebound. Reversal probability is =75% for -2 weeks down.
- Valid support levels for buy-the-dips are between 32067 and 31554. If lower, up to -3 weeks down this pattern is still bullish, from -4 weeks it turns bearish.
Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report
- Since mid-June, spreads have generally widened across our liquid universe (10 have widened, 8 widened, 1 at same level).
- Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, Schindler, SSAB Svenska Stal.
- Recommended trades long preferred / short ordinary shares: Carlsberg, Ericsson, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.
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