In today’s briefing:
- Yamada Denki (9831) – GINORMOUS Buyback 2/3 Done. Stock Price Reaction Limited.
- PEXA (PXA) Replaces Pendal (PDL) In the S&P ASX 200, Getting into the Distro Mix
- Sun* (Sun Asterisk – 4053 JP) TOPIX Inclusion Event
- Merger Arb Mondays (09 Jan) – Origin Energy, Warrego, Nitro, Norwest, Halcyon, Kingston
- Dissecting KRX Annual ETF Market Report & Noteworthy Trends for ETF Arbitrages
- Essential Metals (ESS AU): Scheme With Tianqi/IGO
Yamada Denki (9831) – GINORMOUS Buyback 2/3 Done. Stock Price Reaction Limited.
- Yamada Denki (9831 JP) has bought back nearly 16% of shares out ex-Treasury in the 7.5 months since last fiscal year earnings were announced. It went limit up on Day1.
- Then it stopped – despite the buyback being 15% of expected volume every day for a year and a HUGE piece of Real World Float.
- There is 8% left to buy at current prices – 16-18% of volume the next 4.5mos. And it is still a dirt cheap capital structure and somewhat sticky shareholder structure.
PEXA (PXA) Replaces Pendal (PDL) In the S&P ASX 200, Getting into the Distro Mix
- On Friday after the close, S&P DJI Indices announced that PEXA Group (PXA AU) would replace Pendal Group (PDL AU) in the S&P ASX 200 on 12 January at close.
- This is unsurprising. Pendal was scheduled to exit in January due to takeover. PEXA was already an interim S&P ASX 200 member after the distribution by Link Administration (LNK AU).
- The timing is conveniently in the timeframe for the LNK distribution of PXA shares to its shareholders implemented on the 10th.
Sun* (Sun Asterisk – 4053 JP) TOPIX Inclusion Event
- In mid-December, digital UX creation agency (90% of revenues) and “talent agency” (10%) announced it would move from TSE Growth to TSE Prime mid-December 2022.
- This was in Janaghan’s “Not Ready” list in TOPIX Inclusions: Who Is Ready (Dec 2022) because it did not meet two of the requirements. But it turns out it did.
- This is therefore a TOPIX inclusion event at end-January 2023.
Merger Arb Mondays (09 Jan) – Origin Energy, Warrego, Nitro, Norwest, Halcyon, Kingston
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – Alliance Aviation Services (AQZ AU), Genesis Minerals (GMD AU), 21Vianet Group (VNET US), Golden Energy & Resources (GER SP), Tyro Payments (TYR AU), Origin Energy (ORG AU).
- Lowest spreads – Norwest Energy NL (NWE AU), Nitro Software Ltd (NTO AU), Chip Eng Seng Corp (CHIP SP), Conexio Corp (9422 JP), Nippon Steel Trading Corporation (9810 JP).
Dissecting KRX Annual ETF Market Report & Noteworthy Trends for ETF Arbitrages
- Korea’s ETF market achieved top-line growth last year as well. AUM increased by 7% YoY, a significant achievement considering that global ETF AUM has shrunk by 8%.
- Since one-third of local ACTIVE ETFs are equity types (particularly SECTOR), we can conclude that the local equity ETF market has not shrunk but has migrated to ACTIVE.
- Recently listed sector ETFs are expected to play an accelerating role in expanding the scope of these arb opportunities as they expand beyond electric vehicles/secondary batteries to groups/defense.
Essential Metals (ESS AU): Scheme With Tianqi/IGO
- Small lithium player Essential Metals (ESS AU) has entered into a Scheme with the Tianqi Lithium JV, comprising Tianqi Lithium (9696 HK) (51%) and IGO Ltd (IGO AU) (49%).
- The Scheme Consideration of A$0.50/share is a 45% premium to last close, and a 36.3% premium to the 30-day VWAP.
- Standard Scheme conditions apply. FIRB required. The Scheme Booklet is due out in March, with a shareholder meeting expected in April 2023. Possible implementation in May 2023.
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