In today’s briefing:
- S&P/ASX Index Rebalance Preview: Regular & Ad Hoc Changes in June
- PNB Housing: Block Deal Trade Special Situations and Tactical Trade Strategy
- QV Equities (QVE AU): 28th June Shareholder Vote
- DS Dansuk: Block Deal Sale by Stonebridge Capital
- JSE June ‘24 Rebalance Rankings: No Changes Expected + NPN X PRX Discount Update
- Quiddity Leaderboard SE600 Jun 24: Potential ADDs Could Continue to Outperform Potential DELs
- BBVA Files Hostile Offer: Conditions, Defences and Probabilities
S&P/ASX Index Rebalance Preview: Regular & Ad Hoc Changes in June
- With the review period complete, we take a look at the potential index changes at the June rebalance as well as potential index inclusions due to M&A.
- Timing is key for the ad hoc inclusions to the S&P/ASX 200 (AS51 INDEX) with an ad hoc inclusion being announced prior to the regular announcement.
- Passive trackers will need to buy 1.3-27x ADV on the expected adds and have 0.8-4.7x ADV to sell on the expected deletes. Shorts have built up on the potential deletes.
PNB Housing: Block Deal Trade Special Situations and Tactical Trade Strategy
- Impending block deals which generally create supply over-hang on the stock leads to a negative impact on the stock.
- These block deals generally include selling promoters and big funds at a price discount to its current market price.
- Historically, such events suggest once the block deal is done; stock reacts positively creating a Special Situation Opportunity
QV Equities (QVE AU): 28th June Shareholder Vote
- On the 12th March, Aussie-based investment plays QV Equities Ltd (QVE AU) and WAM Leaders Ltd (WLE AU) entered into a Scheme.
- The current scrip terms are 0.739 new WAM shares per QVE share; OR A$0.989/share cash. Terms will be adjusted for updated pre-tax NTA/shares of both companies after the Scheme Meeting.
- The Scheme Booklet is now out, with a Scheme Meeting to be held on the 28th June. Expected implementation on the 15 July. The IE says fair & reasonable.
DS Dansuk: Block Deal Sale by Stonebridge Capital
- After the market close on 28 May, it was announced that Stonebridge Capital plans to conduct a block deal sale of a portion of its stake in DS Dansuk.
- This deal involves 210,000 to 290,000 shares of DS Dansuk. The block deal price range is from 99,800 won to 101,400 won, which represents 7.06% to 8.52% discount.
- After this second block deal, there will be further overhang concerns about additional sales of DS Dansuk by Stonebridge Capital in the coming months.
JSE June ‘24 Rebalance Rankings: No Changes Expected + NPN X PRX Discount Update
Last night, the price snapshot was taken for the JSE June rebalance.
We do not anticipate any index changes for the Top 40, FINDI, FINI, INDI or RESI.
There are several noteworthy free float changes across ALSI constituents, particularly amongst foreign counters (detail below).
Quiddity Leaderboard SE600 Jun 24: Potential ADDs Could Continue to Outperform Potential DELs
- The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
- The base date for rankings for the June 2024 index rebal event is 31st May 2024. In this insight, we take a look at the latest list of potential ADDs/DELs.
- Currently, I see 7 ADDs and 7 DELs for the SE600 index. There are more names just outside the border requiring small price changes to get involved in index changes.
BBVA Files Hostile Offer: Conditions, Defences and Probabilities
- On 24 May, Banco Bilbao Vizcaya Argentari (BBVA SM) submitted the authorisation request for its all-stock offer for Banco De Sabadell SA (SAB SM). Closing expected to take 6-8 months.
- Gross spread (CSP 27 May) is 7.6%, which This translates in a 52% implied probability of deal success. The fixed income market appears to share this view.
- Nevertheless, from a long-only perspective, the risk/reward of Sabadell is interesting. The deal values Sabadell’s shares at €2.07 each, an implied equity value of €11,187 million, for a 0.92 P/TBV.
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