In today’s briefing:
- Korea’s Finalized Short-Selling Rules Include Limiting 90-Day Short Position Extensions
- Atour Lifestyle Holdings Placement – Well Flagged Deal, past Selldowns Have Done Well
- Daiwa to Buy More Aozora (8304) Shares – Murakami-San Escapes
- ASX200 Index Adhoc Rebalance: Judo Capital to Replace CSR; Positioning Appears Light
- Rakuten Bank (5838 JP) – The Bank in Current Form and the Promise of FinTech Reorganization
- CMCDI (133 HK): AGM Outcome May Provide Another Leg-Up
- AMFI Stock Reclassification Preview (June 2024): Potential Changes as Momentum Recovers
- ETF Flows Shine As BTC Flirts With Range Highs
- Bakkt Holdings Weighing A Potential Sale But Can It Get Acquired? At What Value? – Financial Forecasts
Korea’s Finalized Short-Selling Rules Include Limiting 90-Day Short Position Extensions
- The government will announce short selling improvements Thursday. A leaked detail includes limiting 90-day short position extensions.
- Limiting the 90-day short position holding period may ease local investor concerns, but it could shrink the short selling market, potentially affecting overseas fund outflows.
- Resuming short selling in early July may bring new flow patterns due to temporary distortions from mandatory repayment within 90 days and limitations on position extensions, increasing price impacts.
Atour Lifestyle Holdings Placement – Well Flagged Deal, past Selldowns Have Done Well
- Legend Capital (LC), one of the principal shareholders of Atour Lifestyle Holdings (ATAT US), is looking to raise around US$168m through a secondary selldown.
- This will be the third selldown by Legend Capital in just over a year’s time. Hence, the deal is well flagged.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Daiwa to Buy More Aozora (8304) Shares – Murakami-San Escapes
- In February, Aozora Bank Ltd (8304 JP) extended its writedowns and the shares fell sharply. By end-Feb, we found out Japanese activist Murakami-san had bought shares.
- I didn’t see the endgame. The pump worked, but he didn’t dump. Then Aozora got Daiwa to be a lead investor through a 3rd party share allotment, diluting Murakami-san.
- Last week we got news the FSA had approved the Daiwa transaction. Yesterday, we got news the Murakami Group would sell its whole stake to Daiwa.
ASX200 Index Adhoc Rebalance: Judo Capital to Replace CSR; Positioning Appears Light
- CSR Ltd (CSR AU) is expected to stop trading on 19 June following the acquisition by Cie De Saint-Gobain (SGO FP).
- Judo Capital (JDO AU) will be added to the S&P/ASX 200 (AS51 INDEX) at the close on 19 June to replace CSR Ltd (CSR AU).
- There has been short covering in Judo Capital over the last 3 months and there does not appear to be enough positioning for the index inclusion yet.
Rakuten Bank (5838 JP) – The Bank in Current Form and the Promise of FinTech Reorganization
- Rakuten Bank, in its present form, is positioned to benefit from rising interest rates in Japan, with its low LDR, high cash balances, growing loan book and healthy capital ratio
- The proposed FinTech reorganization of the group around the bank should drive further potential shareholder benefits; higher ROE, lower customer acquisition costs, increased active account penetration and lower operating costs
- We believe that there will be effective governance checks and balances in place to ensure fair valuations of the FinTech segments pre-reorganization; we include our base valuations in this report
CMCDI (133 HK): AGM Outcome May Provide Another Leg-Up
- Activist Argyle Street’s approach to closed-end investment company China Merchants China Direct Investments (133 HK) (CMCDI) has a certain David Webb-like quality.
- Apart from the deep value angle, the analysis of director Elizabeth Kan’s potential conflict of interest is particularly insightful. Argle will vote against Kan’s re-election at the 20th June AGM
- Given this upcoming vote, as I’ve done with Giordano (709 HK) and L’Occitane (973 HK) previously, it’s useful to investigate the lesser-known shareholder register, a byproduct of investigative disclosure reports.
AMFI Stock Reclassification Preview (June 2024): Potential Changes as Momentum Recovers
- We see 7 stocks moving from MidCap to LargeCap and vice versa, 17 stocks from SmallCap to MidCap, 19 stocks from MidCap to SmallCap and 2 new additions to MidCap.
- The expected migrations from SmallCap to MidCap have outperformed the other potential migrations with all stocks moving higher over the last six months.
- Momentum on the upward migrations could sustain as active managers reposition their portfolios. Some stocks will have passive flows over the next few months.
ETF Flows Shine As BTC Flirts With Range Highs
- BTC Spot ETFs see record inflows, signaling strong market interest despite flat prices.
- Market structure remains bullish as BTC consolidates near all-time highs, indicating potential breakout.
- Altcoins suffer double-digit drawdowns amid BTC’s resilience, highlighting market dispersion.
Bakkt Holdings Weighing A Potential Sale But Can It Get Acquired? At What Value? – Financial Forecasts
- Bakkt Holdings, a crypto platform company, has recently reported its financial results for the first quarter of 2024, showcasing various strengths and facing some challenges as it explores potential sale opportunities.
- The CEO emphasized the focus on growing the client network, enhancing the product portfolio, and aligning costs with strategic priorities.
- The CFO outlined financial details, stressing cost management and asset growth.
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