In today’s briefing:
- TOPIX “Big April Basket” 2024 Expectations: More High-Conviction Names; Better Trade Ideas
- Clearing up Confusion About Bringing Back Short Selling in Korea
- Sankei Real Estate (2972) Sponsor Buy Now On And It Isn’t Small (Even if the REIT Is)
- FXI Rebalance: Three Buys. Three Sells
- Block Deal Sale of 1.7% Stake of Woori Financial by IMM Private Equity
- End of Mandatory Lock-Up Periods for 51 Companies in Korea in March 2024
- (Mostly) Asia M&A, Feb 2024: Lawson, Altium, CSR, TCM, Boral, APM, Roland DG, Ssangyong Cement
TOPIX “Big April Basket” 2024 Expectations: More High-Conviction Names; Better Trade Ideas
- The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
- For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
- Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2024.
Clearing up Confusion About Bringing Back Short Selling in Korea
- Government sees foreign investors as key for Corporate Value-Up success, considering reinstating short selling.
- Planning to expand short selling beyond 350 stocks, but anticipating pushback from retail investors, likely capping additional stocks around 100.
- The head of the Financial Supervisory Service will formally disclose these plans during the upcoming short selling conference scheduled for March 13th.
Sankei Real Estate (2972) Sponsor Buy Now On And It Isn’t Small (Even if the REIT Is)
- Last October, I wrote about the plan the sponsor of Sankei Real Estate (2972 JP) had to exchange buildings with the REIT to clean it up, then buy more units.
- Today they announced the completion of the Portfolio Rebalancing Plan started in March 2023. And the plan to buy more units. The assets transferred out were gone at end Jan-2024.
- Now that’s done, and there are units to buy. Maximum 46,652 units over maximum 220 days.
FXI Rebalance: Three Buys. Three Sells
- Yankuang Energy, CGN Power and China Coal Energy are buys, China Resources Beer, China Vanke and Wuxi Biologics are sells for the iShares China Large-Cap (FXI) (FXI US) in March.
- Shorts have been spiking in China Vanke (2202 HK) while there has been covering in Yankuang Energy (1171 HK), China Resources Beer Holdings (291 HK) and Wuxi Biologics (2269 HK).
- There has been an increase in cumulative excess volume on all the adds and deletes over the last few months. There could be more over the next week.
Block Deal Sale of 1.7% Stake of Woori Financial by IMM Private Equity
- IMM Private Equity announced that it is selling a 1.7% stake in Woori Financial Group (316140 KS) in a block deal sale.
- The number of shares subject to sale is 12.56 million, or 177.7 billion won to 181.5 billion won.
- Block deal sale discount range is reasonable, valuation multiples are low, and we expect continued positive capital inflow into stocks related to Corporate Value Up in the next 12 months.
End of Mandatory Lock-Up Periods for 51 Companies in Korea in March 2024
- We discuss the end of the mandatory lock-up periods for 51 stocks in Korea in March 2024, among which 5 are in KOSPI and 46 are in KOSDAQ.
- These 51 stocks on average could be subject to further selling pressures in March and could underperform relative to the market.
- The top five market cap stocks including those of which at least 1% of outstanding shares could be sold include APR, WCP, DS Dansuk, GI Innovation, and Geolit Energy.
(Mostly) Asia M&A, Feb 2024: Lawson, Altium, CSR, TCM, Boral, APM, Roland DG, Ssangyong Cement
- For the month of February 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$20bn.
- The average premium for the new transactions announced (or first discussed) in February was ~33%.
- This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
