In today’s briefing:
- The New FEFTA List (With 7&I (3382) As “Core”) Is Not a Big Hurdle for Couche-Tard
- Quiddity Leaderboard HSTECH Dec 24: One Change Possible; US$538 Capping Flows One-Way
- MV Australia A-REITs Index Rebalance: Ingenia Communities Deleted
- Global Index Korea: Hyundai Rotem Is the Only One Screened. Watch for a Possible LS Electric Repeat
- Merger Arb Mondays (16 Sep) – China TCM, Canvest, GA Pack, Raysum, Seven & I, Fuji Soft, Dyna-Mac
- MV Australia Equal Weight Index Rebalance: One Add, Two Deletes, Capping to Drive Flow
- MV Global Rare Earth/Strategic Metals Index Rebalance: One Deletion & Other Changes
The New FEFTA List (With 7&I (3382) As “Core”) Is Not a Big Hurdle for Couche-Tard
- On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (Japanese, English) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)
- It appears 72 names were newly upgraded to “Core” (“3”), 21 newly listed companies (since the last list in Nov 2021) were labeled “3”, and six lost their Type3 designation.
- Seven & I Holdings (3382 JP) saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really.
Quiddity Leaderboard HSTECH Dec 24: One Change Possible; US$538 Capping Flows One-Way
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
- At present, we see one ADD and one DEL. If this index change takes place, there could be US$538mn capping flows one-way.
MV Australia A-REITs Index Rebalance: Ingenia Communities Deleted
- Ingenia Communities (INA AU) will be deleted from the Vaneck Vectors Australian Property ETF (MVA AU) in September. There are float changes and capping changes too.
- Estimated one-way turnover is 2.9% and will result in a one-way trade of A$19m.
- After declining over the last year, shorts have started to tick higher in Ingenia Communities (INA AU).
Global Index Korea: Hyundai Rotem Is the Only One Screened. Watch for a Possible LS Electric Repeat
- The cutoff market cap is around ₩3.6T, and Hyundai Rotem is the only stock that screens into the inclusion zone.
- Hyundai Rotem might see a repeat of LS Electric’s pattern: heavy chasing towards screening and a big dive at the decision. Watch for aggressive momentum trades starting late September.
- The stock with the lowest full market cap, Kum Yang, is at risk, but Celltrion Pharm is close behind. KT Corp’s exclusion might save Kum Yang or Celltrion Pharm.
Merger Arb Mondays (16 Sep) – China TCM, Canvest, GA Pack, Raysum, Seven & I, Fuji Soft, Dyna-Mac
- 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: Yichang HEC Changjiang Pharma (1558 HK), Raysum Co Ltd (8890 JP), Canvest Environmental Protection Group (1381 HK), Greatview Aseptic Packaging (468 HK), China Traditional Chinese Medicine (570 HK).
- Lowest spreads: Fuji Soft Inc (9749 JP), Dyna Mac Holdings (DMHL SP), Seven & I Holdings (3382 JP), Tohokushinsha Film (2329 JP), Alps Logistics (9055 JP).
MV Australia Equal Weight Index Rebalance: One Add, Two Deletes, Capping to Drive Flow
- Pro Medicus Ltd (PME AU) will be added to the MV Australia Equal Weight Index while IGO Ltd (IGO AU) and nib holdings (NHF AU) will be deleted.
- Constituent changes, float changes and capping changes result in a one-way turnover of 6.9% leading to a round-trip trade of A$330m.
- Shorts are pretty big in Pro Medicus Ltd (PME AU) while there has been a recent spike in short interest for IGO Ltd (IGO AU).
MV Global Rare Earth/Strategic Metals Index Rebalance: One Deletion & Other Changes
- Sayona Mining (SYA AU) will be deleted from the VanEck Rare Earth/Strategic Me (REMX US) at the close of trading on 20 September.
- Constituent changes, float changes and capping changes result in an estimated one-way turnover of 5.7% and in a round-trip trade of US$35m.
- The largest inflows will be in Eramet, Tronox and Lithium Americas Argentina while the largest outflows will be from Lynas Corp, Sayona Mining and MP Materials (MP US).
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