In today’s briefing:
- Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
- The Olympus Peer-Relative Crash – Due to ADR Cancellation Overhang?
- MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI
- Norwest Backs MinRes’ Bumped Offer
- Toshiba – Preparing for 2QFY23
- Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today
- Origin Energy (ORG AU): Risk/Reward Profile
- Quiddity Leaderboard for Thailand SET50 Jun 23:Ramkhamhaeng Hospital Is an Interesting Case
- Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More
Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
- Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 6 adds and 5 deletes with implementation at the close on 31 January.
- Estimated one-way turnover is in excess of 12% and will result in a one-way trade of US$207m. There are 11 stocks with estimated passive flows greater than 5x ADV.
- Some of the inclusions have had BIG rallies over the last couple of months and there could be profit taking on those names in the next few days.
The Olympus Peer-Relative Crash – Due to ADR Cancellation Overhang?
- Olympus has been sold down relatively hard in the last couple of months. At the same time, we are at crunch time for the cancellation of the US ADR.
- This may create short-term overhang, but the medium-term overhang from substantial foreign net buying in H1 when USDJPY was going up may be larger.
- This insight looks at the relative performance vs Peers, vs forward earnings expectations, USDJPY, etc.
MBK/Unison Capital Korea Do a Deal for Osstem Implant (048260 KS) Thwarting Activist KCGI
- Just over a year ago, leading Korean dental implant and dentistry supply company Osstem Implant (048260 KS) announced the largest-ever embezzlement case in Korea. The stock was suspended.
- There were fears about forced selling by the founder, and PE funds circled. Activist KCGI probably bought in Q3 but built a 5+% stake by end-December 2022.
- Korean PE Firms MBK and Unison Capital have now launched an MBO-style Tender Offer to buy 2.4-11.2mm shares in the company at a sharp premium to the pre-activism undisturbed price.
Norwest Backs MinRes’ Bumped Offer
- Back on the 10 January, Norwest Energy NL (NWE AU) rejected Mineral Resources (MIN AU)‘s off-market scrip Offer.
- It was apparent what MinRes needed to bump. This was an easy win if they do. On cue, they have now increased the scrip terms and NWE’s directors are supportive.
- Scrip terms are now 1 MinRes for every 1,300 NWE shares – from 1,367. I think NWE could have held out for more, but it is what it is.
Toshiba – Preparing for 2QFY23
- We have turned slightly more bearish on Toshiba’s near term fundamental prospects as we now have concerns about the industrial side of its semiconductor business.
- The re-emergence of a WDC-Kioxia deal and the likelihood of a change in BOJ policy make us wonder whether bankers might want to wait a little on financing.
- As such, while recent weakness makes an aggressively negative view difficult we do not feel that upside risks are particularly threatening either.
Samsung Electronics 1P Pushed to a Substantial Diversion (Below -2σ) Today
- SamE PREF’s relative underperformance compared to ORD has been getting a bit worse lately. And finally, today, it went down below -2.0σ on a 20-day moving average.
- This much diversion is the first in recent months, and the pref discount is close to last year’s peak. The dividend yield difference is also the widest in recent years.
- The current diversion appears to be a byproduct of the SamE overbuying amid the recent market rally, and we should expect a quick reversion.
Origin Energy (ORG AU): Risk/Reward Profile
- Origin Energy (ORG AU)’s exclusivity agreement with Brookfield/EIG expired on 24 January. Brookfield/EIG is reportedly continuing its due diligence on its A$9.00 per share offer.
- Time often kills deals. There is speculation that recent price caps would result in Brookfield/EIG walking away or trying to recut the deal terms. ACCC approval is also an overhang.
- Peers’ share prices have risen despite the price cap which weakens the case for a recut to the deal terms. Brookfield/EIG clearly want Origin as it twice bid against itself.
Quiddity Leaderboard for Thailand SET50 Jun 23:Ramkhamhaeng Hospital Is an Interesting Case
- In this insight, we take a look at the potential ADDs/DELs for the SET50 index rebalance in June 2023.
- Based on the latest available data, I expect 3 ADDs/DELs but there are multiple names lurking close to the border.
- Srisawad (SAWAD TB) and Sansiri Public (SIRI TB) are leading the SET50 and SET100 Reserve Lists respectively and could become intra-review ADDs if the DTAC-TRUE merger closes in 1H 2023.
Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More
- Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). Bookbuild will begin tomorrow (27th Jan 23) and last till the end of the month.
- Adani Enterprises is the flagship company of the Adani Group. The group’s entities’ stock performance over the past few years has made the founder one of the richest persons globally.
- We have covered most aspects of the deal in our earlier note published. In this note, we talk about the recent updates and the deal pricing and structure.
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