In today’s briefing:
- Weekly Deals Digest (10 Sep) – JMDC, Intage, Mason, Liontown, Newcrest, ARM, Integral, Doosan, VNG
- United Malt: Shareholder Vote On 12th Oct
- Merger Arb Mondays (11 Sep) – Eoflow, Mason, Liontown, Newcrest, United Malt, OreCorp, MPI
- KRX Sector Index Series Rebalancing: Heavy Shorting on SK Square Is Anticipated
- KOSPI Size Indices – Changes in September & Implications
- CSI500 Index Rebalance Preview: ETF Inflows Lead to Performance Skew
- Quiddity Mainland Connect NORTHBOUND Flows (Week to 8Sep23) : BYD, ZTE, Zhongji Innolight, Amperex
- EQD | Nikkei 225 (NKY) MONTHLY Trajectories Analysis
Weekly Deals Digest (10 Sep) – JMDC, Intage, Mason, Liontown, Newcrest, ARM, Integral, Doosan, VNG
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Doosan Robotics (454910 KS), ARM Holdings (1822695D US), VNG (VinaGame) (VNG US), Integral Corporation (5842 JP) IPOs and Aquila Acquisition Corporation (7836 HK) de-SPAC.
- Event-Driven developments – JMDC (4483 JP), Intage Holdings (4326 JP), Mason Group Holdings (273 HK), Liontown Resources (LTR AU), Newcrest Mining (NCM AU), Orecorp Ltd (ORR AU).
United Malt: Shareholder Vote On 12th Oct
- Back on the 3 July, United Malt Group Ltd (UMG AU) and Malteries Soufflet entered into a binding agreement of A$5.00/share, by way of a Scheme.
- The Scheme Booklet has now been lodged with ASIC. UMG shareholders vote on the transaction on the 12 October, with implementation on the 15 November.
- The Offer remains subject to FIRB and other regulatory approvals. Malteries Soufflet and UMG are the second and fourth-largest maltsters in the world.
Merger Arb Mondays (11 Sep) – Eoflow, Mason, Liontown, Newcrest, United Malt, OreCorp, MPI
- 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 – 111 Inc (YI US), Costa Group Holdings (CGC AU), Eoflow (294090 KS), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), Origin Energy (ORG AU).
- Lowest spreads – Healius (HLS AU), Toyo Construction (1890 JP), Yaizu Suisankagaku Industry (2812 JP), Liontown Resources (LTR AU), T&K Toka Co Ltd (4636 JP), Itochu Techno Solutions (4739 JP).
KRX Sector Index Series Rebalancing: Heavy Shorting on SK Square Is Anticipated
- The most noteworthy developments include Samsung Electronics being newly added to the Semicon sector, while SK Square has been removed.
- We must be mindful of the potential concentration of shorting flow on SK Square as most names expected to experience negative flows do not fall under the KS200/KQ150 membership.
- Our strategic approach can take three directions: 1. aim at only those receiving positive flows, 2. heavy shorting SK Square, and 3. long-short the four with the most flow size.
KOSPI Size Indices – Changes in September & Implications
- There are 8 migrations from MidCap to LargeCap, 7 LargeCap to MidCap, 8 new additions to MidCap, 17 SmallCap to MidCap, 23 MidCap to SmallCap, 5 new additions to SmallCap.
- The migrations from SmallCap to MidCap have outperformed the stocks migrating between other segments by a huge margin over the last few months.
- Given the huge outperformance and looking at how the migrations have performed historically, we’d expect the stocks migrating to MidCap to underperform post implementation of the changes.
CSI500 Index Rebalance Preview: ETF Inflows Lead to Performance Skew
- Over 85% of the way through the review period for the December rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 8 December.
- There is a big sector skew in the potential changes. We estimate a one-way turnover of 9.4% at the December rebalance resulting in a one-way trade of CNY 7.22bn.
- With the market being stabilised through the ETF route, the index constituents have outperformed the non-index constituents over the last 6-7 weeks. That could reverse over the near term.
Quiddity Mainland Connect NORTHBOUND Flows (Week to 8Sep23) : BYD, ZTE, Zhongji Innolight, Amperex
- This is the brand spanking new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
- The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
- We like the nifty interactive tables and charts. We welcome feedback on how to make it more useful going forward.
EQD | Nikkei 225 (NKY) MONTHLY Trajectories Analysis
- The Nikkei 225 INDEX fell -5.77% during July and August (CC=-2). Currently the index is down for September: this month’s negative Close would be = CC=-3, a strong LONG signal.
- The index reached a low = 31275.25 in August, right in the middle of the 32391-30600 support price band indicated in our previous MONTHLY Trajectories Analysis, 50%-75% reversal probability.
- LONG Support levels are confirmed, in this insight we will analyze the new, re-calculated Resistance levels, to evaluate how far/how long the index could rise, if it rallies.
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