In today’s briefing:
- ENEOS Extends Tatsuta Electric (5809) Tender Offer Means They Don’t Have The Shares
- HK Connect SOUTHBOUND Flows (To 19 Jul 2024); Tencent the Big Buy, but Few Banks and a Long Tail
- NIFTY MIDCAP150 Index Rebalance Preview: 14 Changes & Good Performance as Actives Start Trading
- Arwana Citramulia (ARNA IJ) – Top Notch Industrial with a Catalyst
ENEOS Extends Tatsuta Electric (5809) Tender Offer Means They Don’t Have The Shares
- ENEOS Holdings (5020 JP) announced its deal for affiliate Tatsuta Electric Wire & Cable (5809 JP) 18-plus months ago. China approvals held it up more than a year.
- Last month, they launched. The sector was up a lot. TOPIX was up a lot. The stock had recently been trading through terms. But ENEOS didn’t bump the price.
- A month later, and the tender was supposed to have closed Friday 19 July. It didn’t. ENEOS extended, for no reason, which suggests they don’t have the shares.
HK Connect SOUTHBOUND Flows (To 19 Jul 2024); Tencent the Big Buy, but Few Banks and a Long Tail
- SOUTHBOUND was again a net buyer, for HK$19.2bn this week, on smallish two-way volumes. Tencent and ETFs stood out as large net buys.
- I’ve thought national team was buying banks for months. This week, no banks showed in the top five net buys, and only 1 in the top ten.
- It is somewhat perplexing that the flows just stopped. But that may be a sign of things to come. Confirmation may require a week or two.
NIFTY MIDCAP150 Index Rebalance Preview: 14 Changes & Good Performance as Actives Start Trading
- With the review period nearing completion, there could be 14/15 changes for the NIFTY Midcap 150 Index at the September rebalance.
- Estimated one-way turnover is 8.2% resulting in a one-way trade of INR 6.6bn (US$79m). With US$38bn tracking the index actively, the impact on the stocks will be much larger.
- Performance of a long adds/short deletes trade was very good in March, and we could see a repeat over the next couple of months.
Arwana Citramulia (ARNA IJ) – Top Notch Industrial with a Catalyst
- Arwana Citramulia (ARNA IJ) is Indonesia’s leading ceramic tile producer catering to the mass market but expanding into the higher-end porcelain tile space competing with Chinese imports at lower costs.
- The recent move by the government to extend the gas subsidy for the industry bodes well for Arwana given the strides it has already made in reducing gas consumption.
- Arwana continues to expand its capacity, especially in higher-margin porcelain tiles, which will help to drive future growth and profitability. Valuations are attractive as capacity-driven growth kicks in.
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