In today’s briefing:
- WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: 45% Turnover & US$2.5bn to Trade
- Shinko Electric (6967) – Waiting for a Package
- WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week
- Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem
- NWS Holding (659 HK): Offer Opens with NWD Vote on 2 November
- Korea Finally Offers Reliable Data Channel on Companies with Improved Dividend Procedures
- Zomato Lock-Up – A US$240m+ Softbank Linked Lockup Release
- WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: 16% Turnover, US$660m Trade
- Estia & Bain: 15th Nov Shareholder Vote
- Quiddity Leaderboard CSI 300/500 Dec 23: Basket Trade Off to A Positive Start; US$2.8bn One-Way
WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: 45% Turnover & US$2.5bn to Trade
- The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.
- The October rebalance will result in a one-way turnover of ~45% and in a one-way trade of US$1.24bn. There are ~300 stocks with over 1 day of ADV to trade.
- With only 4 trading days to implementation, there could be large moves on stocks with large flows and impact over the next few days.
Shinko Electric (6967) – Waiting for a Package
- Shinko Electric Industries (6967 JP) has been on the block. 2nd Round Bids were apparently due last month, but with “Economic Security” considerations, one wonders if that stretches a bit.
- The stock is now at the low end of its range vs Ibiden, and the timing is right for a deal which could give it a pop.
- A “split price” takeover seems reasonable as a structure. I expect upside. Still.
WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week
- The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.
- The October rebalance will result in a one-way turnover of ~37% and in a one-way trade of US$926m. There are 92 stocks with over 1 day of ADV to trade.
- In Asia, the largest buy flows are expected on Astra International (ASII IJ) and the largest sell flows on POSCO Holdings (005490 KS).
Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem
- Fast Retailing (9983 JP) today announced better than guided results, and 10% revenue growth, 18% OP growth to August 2024. NP is light, but still well higher than street consensus.
- At 10.37% Nikkei 225 weight, it is still above the target for 31 July 2024. If it does not underperform Nikkei 225 between now and then, US$2bn to sell end-Sep24.
- If people like the growthiness, that can be absorbed. But if the stock were to go up 10% vs Nikkei, there’d be US$2bn, then maybe another US$2bn to sell.
NWS Holding (659 HK): Offer Opens with NWD Vote on 2 November
- Nws Holdings (659 HK)’s IFA opines that the conditional voluntary general offer from the Cheng family is fair and reasonable. The offer + 2H dividend is HK$9.46 per share.
- The key condition is (majority vote) approval by independent NWD shareholders (EGM on 2 November). The timetable is designed such that the shareholders will also receive the NWS final dividend.
- NWD has a high but declining AGM minority participation rate. Retail forums suggest support for the transaction. On balance, we believe that this deal gets up.
Korea Finally Offers Reliable Data Channel on Companies with Improved Dividend Procedures
- The Obligatory Corporate Governance Report Disclosure System will stand as the only source for furnishing trustworthy data on the proportion of listed companies that have genuinely adopted enhanced dividend procedures.
- From a dividend strategy perspective, the companies of primary interest for strategic trading are predominantly those falling under the scope of this disclosure obligation.
- Next year, it’s anticipated that with dependable data, we will have the means to craft dividend strategies aimed at this specific group.
Zomato Lock-Up – A US$240m+ Softbank Linked Lockup Release
- In Aug 2022, Zomato (ZOMATO IN) completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.
- Softbank then sold a part of its stake in Aug 2023, the rest of its stake will come out of lockup soon.
- In this note, we will talk about the lock-up dynamics and recent updates.
WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: 16% Turnover, US$660m Trade
- The WisdomTree Emerging Markets ex-State-Owned Enterprises Index measures the performance of emerging markets stocks that are not state-owned enterprises.
- The October rebalance will result in a one-way turnover of ~16% and in a one-way trade of US$329m. There are 16 stocks with over US$3m to trade.
- HDFC Bank (HDFCB IN) will be added to the index while there will be selling in Taiwan Semiconductor (TSMC) (2330 TT).
Estia & Bain: 15th Nov Shareholder Vote
- On the 7 August, aged care provider Estia Health (EHE AU) and Bain Capital entered into a Scheme Implementation Agreement at A$3.20/share (less any dividends), a 50% premium to undisturbed
- The Scheme Booklet is now out. A shareholder meeting will be held on the 15th of November with implementation expected on the 30th of November.
- Estia paid a fully franked dividend of A$0.12/share on the 15th of September. Currently trading tight to the adjusted terms of A$3.08/share. This still needs FIRB approval.
Quiddity Leaderboard CSI 300/500 Dec 23: Basket Trade Off to A Positive Start; US$2.8bn One-Way
- CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
- In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in December 2023.
- A couple of baskets I suggested in my last insight have both outperformed the CSI 300 index by more than 2% in less than a month.
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