In today’s briefing:
- The Japan March-End Rebal and Dividend Trade
- ENN Energy (2688 HK): ENN Natural Gas to Launch a Privatisation Offer?
- Quiddity Leaderboard CSI 300/500 Jun25: US$6bn+ One-Way Flows; One Intra-Review Addition Soon
- POSCO Holdings Is Selling Nippon Steel Shares Worth 468 Billion Won
- Makino Milling Machine (6135 JP): Proposes Countermeasures
- Quess Corp Demerger: Value Unlocking & Strategic Shift to Drive Growth
- Ramelius-Spartan Merger As Gold Ekes Out New Highs
The Japan March-End Rebal and Dividend Trade
- Every year it’s the same trade. But sometimes it is not. This year it is Thursday and Friday. Or not.
- The month-end and quarter-end bring big flows, or not, depending on how things have gone.
- Over the past 10 years or so, the two-day return on the March trade is pretty good. This year? Well read on!
ENN Energy (2688 HK): ENN Natural Gas to Launch a Privatisation Offer?
- ENN Energy (2688 HK) is in a trading halt “pending the issuance of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers containing inside information of the Company.”
- ENN Natural Gas (600803 CH), also in a trading halt, is likely seeking to privatise ENN through a Cayman scheme. A high AGM minority participation necessitates an attractive offer.
- I use several methods to triangulate the likely offer price, which suggests a price range of HK$66.50-85.01, with an average of HK$76.04, a 28% premium to the last close.
Quiddity Leaderboard CSI 300/500 Jun25: US$6bn+ One-Way Flows; One Intra-Review Addition Soon
- CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
- Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.
POSCO Holdings Is Selling Nippon Steel Shares Worth 468 Billion Won
- On 19 March, POSCO Holdings (005490 KS) announced that it is selling its stake in Nippon Steel Corporation (5401 JP) worth nearly 468 billion won (US$320 million).
- POSCO Holdings’ sale of nearly US$320 million worth of Nippon Steel would be about 1.3% of its market cap.
- POSCO Holdings’ sale of its stake in Nippon Steel is a positive move for POSCO Holdings as the company is continuing to execute its strategy of selling off non-core assets.
Makino Milling Machine (6135 JP): Proposes Countermeasures
- The Makino Milling Machine Co (6135 JP) Board has proposed introducing countermeasures to nudge Nidec Corp (6594 JP) to delay the start of the tender to 9 May.
- The countermeasure was likely needed to facilitate a competing offer rather than force Nidec to provide the required information and delay the start (Nidec is still evaluating the request).
- Nidec’s offer at current terms has a low chance of success, necessitating revised terms. The Board claims that there is a sufficient probability of a competing proposal.
Quess Corp Demerger: Value Unlocking & Strategic Shift to Drive Growth
- Quess Corp Ltd (QUESS IN) is strategically demerging into 3 distinct segments, enabling focused strategies and boosting growth potential for each, paving the way for greater success and innovation.
- Previously, the high-margin Global Technology Solutions segment contributed 12% of revenue, but its potential was overlooked within the larger company. Now, with demerging, it gains specialized focus and proper valuation.
- The demerger gives investors the flexibility to choose between cash-generating, high-margin, or moderate-margin businesses, with the added option of a platform for job hunting, all backed by focused, specialized management.
Ramelius-Spartan Merger As Gold Ekes Out New Highs
- After being outbid for Karora Resources (KRR CN) and rebuffed by Westgold Resources (WGX AU), Ramelius Resources (RMS AU)has inked a merger with Spartan Resources (SPR AU).
- The cash scrip merger – with Ramelius shareholders holding 60.5% of MergeCo – combines operations around the Mount Magnet and Dalgaranga region in Western Australia.
- Spartan shareholder will receive A$0.25/share in cash and 0.6957 new Ramelius, or an implied price of A$1.78/share at the time of the merger, and a 27.5% premium to 30-day VWAP.
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