Daily Brief Financials: Hulic Co Ltd, Samsung KODEX 200 ETF, S&P 500 INDEX, KGI Financial Holding, Ally Financial and more

• Today, Hulic Co Ltd (3003 JP) announced a large secondary offering where about a quarter of the crossholdings will sell down holdings. Some exit entirely. Some partially. 
• After this selldown, there is a fair bit more to go later, but more of that will be corporate. It’s a BIG offering: 55d of ADV and 55% of MRWF. 
• It is “only” about $800mm and retail gets 80% of it. The high div yield will be a selling point but there is a lot of debt.

• For March KOSPI 200 futures, expect a 0.95% to 1% yield for spot-futures arbitrage, with contango depending on year-end ex-div trends and passive inflows.
• Passive inflows into the value-up index in January and spillover effects into K200 futures, potentially fueling year-end contango due to overlap with KOSPI 200.
• Prop trader dynamics are cooling off: Tax-driven buying in December, selling in January likely to ease, reducing the past backwardation. Without it, expect higher volatility in K200 futures.

• Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
• Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).

• A group of domestic financial institutions are looking to raise US$775m from trimming their stakes in Hulic Co Ltd (3003 JP).
• The deal will be a large one to digest at 48 days of the stock’s three month ADV, representing 11% of its shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
• There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
• A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.

• Quick trading idea:  S&P 500 INDEX DAILY is overbought. Has been closing up for 7 days in a row, soon there will be a DAILY reversal (lasting => 1 day).
• The ideal area to go short is the price area above yesterday’s Close (6021.63).
• Alternatively go SHORT today at the Close. The interactive chart for the SPX DAILY can be freely accessed here.

• With 42 years under its belt, ERA Asia Pacific, a wholly owned subsidiary by APAC Realty, embraces technology to empower agents in delivering elevated services with a personal touch.
• In recent years, APAC Realty – which operates a real estate brokerage in Singapore under the ERA brand – has embraced technology, viewing digital tools not as threats but assets to support its agents and enhance their work.
• Together, agents from ERA Asia Pacific account for 57.4% of ERA’s global network of real estate agents.

• SYF, DFS, and ALLY are spinoffs from larger companies in consumer finance and create shareholder value through focused strategies and good management culture.
• ALLY is particularly interesting due to rate-cycle dynamics and a shift from investing in competitive strength to harvesting from past investments.
• The onboarding of a new CEO at ALLY suggests potential developments in the company’s strategy, with a focus on management culture, competitive strength investment, and the impact of the current rate cycle on earnings power.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.