In today’s briefing:
- Zhejiang Expressway (576 HK): Life In The (Too) Fast Lane
- S&P/ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont
- Quiddity Leaderboard STAR 50 Mar 24: Three Changes; ~US$1bn One-Way; Some Trade Ideas
- L&F (066970 KS): Will the Stock Move Like PoscoDX Following the KOSDAQ to KOSPI Transfer?
- A/H Premium Tracker (To 12 Jan 2024): STAY Long Hs Vs As: Premia Still Wide, Huge High-Div SOE Perf
- TRYT Lock-Up – 60% of Outstanding to Be Released, Baring Would Have to Exit Sooner or Later
- Seven & I Spends Another $950mn on Acquisitions, A Possible Defense Against Investor Activism
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names
- Insiders Are Buying Shares In These Korean Companies in January 2024
- Deutsche Bank/Commerzbank: Quick Take on Merger Talks
Zhejiang Expressway (576 HK): Life In The (Too) Fast Lane
- On the 6 November 2023, Zhejiang Expressway Co H (576 HK) announced its rights offering on both its H-Shares and its A-Shares, previously mooted on 23 May.
- The rights were discussed by Travis Lundy in Zhejiang Expressway (576 HK) Rights Offering – The Dynamics May Be Interesting. He liked the stock. That was a good call.
- The current implied stub – net of Expressway’s 40.3% look-through stake in Zheshang Securities (601878 CH) – is back to pre-Covid levels. I’d be looking to unwind the stub here.
S&P/ASX Index Rebalance Preview: Lots of Changes; A$1bn to Sell in Newmont
- With over 80% of the review period complete, there could be 26 adds/deletes across the S&P/ASX family of indices in March.
- The largest flow will be on Newmont (NEM AU) due to the potential S&P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
- There will be 1.2-38 days of ADV to buy in the inclusions while the impact on the deletions will range between 1-21 days of ADV.
Quiddity Leaderboard STAR 50 Mar 24: Three Changes; ~US$1bn One-Way; Some Trade Ideas
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the March 2024 index rebal event.
- I currently expect three changes for the STAR 50 index in March 2024.
L&F (066970 KS): Will the Stock Move Like PoscoDX Following the KOSDAQ to KOSPI Transfer?
- Posco DX (022100 KS) rallied 50% following approval of its application to transfer from the KOSDAQ to the KOSPI market. Then the stock dropped 20% following completion of the transfer.
- With L&F Co Ltd (066970 KS) applying for a section transfer a couple of weeks after Posco DX (022100 KS), approval could be imminent.
- L&F Co Ltd (066970 KS) is up 46% since the start of November, but the stock has performed in line with the average of its peers.
A/H Premium Tracker (To 12 Jan 2024): STAY Long Hs Vs As: Premia Still Wide, Huge High-Div SOE Perf
- The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND flows were net negative (ETFs negative, high-div SOEs positive) and NORTHBOUND flows a small net sell. AH premia rose slightly on average. Especially at narrow premia.
- STILL time to go long Hs vs As for the new year. 52wk wide discounts were just four weeks ago. Wide A/H premia in renewables space look vulnerable.
TRYT Lock-Up – 60% of Outstanding to Be Released, Baring Would Have to Exit Sooner or Later
- TRYT (9164 JP) was listed on the TSE on 22nd July 2023. The IPO had been a 100% secondary offering.
- TRYT offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- Coming up for six-month lockup is the sole pre-IPO investor who had sold some of its stake earlier in the IPO.
Seven & I Spends Another $950mn on Acquisitions, A Possible Defense Against Investor Activism
- Alongside results broadly aligning with consensus expectations, Seven & I Holdings (3382 JP) announced yet another major acquisition.
- The company has agreed to acquire 204 convenience stores in the US for an acquisition price of $950m.
- It seems that through aggressive overseas expansion and share buybacks, Seven & I is aiming to retain its overseas investors and simultaneously ward off potential investor activism.
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: Double Impacts for Some Names
- The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
- The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
- In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.
Insiders Are Buying Shares In These Korean Companies in January 2024
- We provide a list of four companies including Fila Holdings, Kolmar BNH, KG Mobility, and Hanwha Galleria where the insiders have been buying shares of their own companies.
- These four stocks are up on average 5.6% in the past one month, outperforming KOSPI which is down 1.6% in the same period.
- Insiders at Fila Holdings are probably increasing their stakes to capitalize on the price discrepancy as Fila Holdings’ 51% stake in Acushnet is 39% more than its current market cap.
Deutsche Bank/Commerzbank: Quick Take on Merger Talks
- The German Government is planning to reduce its stake in private companies (100+), which is reviving the talk of a merger between Commerzbank (15.75% owned by Germany) and Deutsche Bank.
- In case of a (logical) all-share merger, the German Government would just exchange a 15.75% stake in Commerzbank for a smaller one in the New Deutsche Bank (estimated ~5.75%).
- The most likely outcome is an accelerated book build among institutional investors (as the British Government has done with Natwest, formerly RBS, in the past), in my view.
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