In today’s briefing:
- TOPIX Inclusions: Who Is Ready (Jan 2024)
- T&K TOKA (4636 JP): Expect ANOTHER Blandiloquent But Bletcherous Bump From Bain
- StubWorld: Wilmar’s All-Time High Implied Stub As Yihai Kerry Touches New Lows
- Offshore China ETFs Rebalance Preview: Two Changes Expected in March
- T&K Toka (4636 JP): Decisions, Decisions as Tender Start Targeted for Mid-January
- EQD | KOSPI 200 Readying for LONG Reversal
TOPIX Inclusions: Who Is Ready (Jan 2024)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Furuya Metal (7826 JP) and Visional (4194 JP) are expected to be included in the TOPIX index at the end of January 2024
- There are couple of other pre-event names that we have been tracking for the past few months.
T&K TOKA (4636 JP): Expect ANOTHER Blandiloquent But Bletcherous Bump From Bain
- In August when Bain announced that it would launch a Tender Offer for T&K Toka Co Ltd (4636 JP) I suggested in my first piece it was the wrong price.
- I suggested it needed another ¥1,000 added onto the price. If the ¥1,300 price Dalton initially indicated seemed low to T&K TOKA, another ¥100 doesn’t seem right.
- It took time. Now it looks like a tender offer launch is imminent. The stock has traded through terms for almost 5 months, but not by a lot.
StubWorld: Wilmar’s All-Time High Implied Stub As Yihai Kerry Touches New Lows
- Wilmar International (WIL SP)‘s current implied stub and simple ratio (Wilmar/Yihai Kerry Arawana Holdings C (300999 CH)) are both at all-time highs.
- Preceding my comments on Wilmar are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Offshore China ETFs Rebalance Preview: Two Changes Expected in March
- Based on the close of 8 January, there could be two changes for the iShares A50 China (2823 HK)/ CSOP A50 (HKD) (2822 HK) in March.
- Shaanxi Coal Industry (601225 CH) and China Everbright Bank Co A (601818 CH) could replace Bank Of Ningbo Co Ltd A (002142 CH) and Aier Eye Hospital Group (300015 CH).
- The impact of passive trading will be higher on the inclusions compared to the deletions. Then there are cash and carry positions that will be rebalanced, adding to flow.
T&K Toka (4636 JP): Decisions, Decisions as Tender Start Targeted for Mid-January
- T&K Toka Co Ltd (4636 JP) notes that Bain expects to satisfy the pre-condition and launch the JPY1,400 tender offer by mid-January.
- The shares have, on average, traded 1.9% above the offer due to Dalton’s stakebuilding. Bain has three options – unchanged terms, allowing Dalton to roll over its shares, or bumping.
- Bain is likely to bump as satisfying the minimum acceptance condition is challenging. A revised offer price of around JPY1,500 is possible.
EQD | KOSPI 200 Readying for LONG Reversal
- The KOSPI 200 INDEX is correcting after a long multi-week rally. Currently down for 2 weeks (to be confirmed this Friday at close), it’s becoming OVERSOLD.
- There is a risk of a large slide during this week, so LONG trades should be taken with a careful, hedged approach, but the LONG reversal is pending…
- The price area between 345 and 334 is where the index could stop its pullback and reverse.
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