In today’s briefing:
- Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside
- SSE50 Index Rebalance Preview: Potential Inclusions Continue to Outperform; Trim into Strength
- Taiwan Dual-Listings Monitor: TSMC Premium Remains Elevated; ASE Domestic Short Interest Hits Highs
Fuji Soft (9749 JP): The Board’s Unchanged Recommendation Caps the Upside
- The Fuji Soft Inc (9749 JP) Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors.
- Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible.
- KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside.
SSE50 Index Rebalance Preview: Potential Inclusions Continue to Outperform; Trim into Strength
- With over 95% of the review period complete, 4 non-constituents are in inclusion zone and 6 constituents are in deletion zone.
- We estimate one-way turnover of 6.5% at the December rebalance leading to a one-way trade of CNY 11.95bn (US$1.7bn). Index arb balances could increase the impact on the stocks.
- The potential adds have continued to outperform the potential deletes. There has been a big jump in the last few weeks as markets have rallied. Trim positions into strength.
Taiwan Dual-Listings Monitor: TSMC Premium Remains Elevated; ASE Domestic Short Interest Hits Highs
- TSMC: +18.7% Premium; Trading Range Sustaining at an Elevated Level
- UMC: -1.8% Discount; Good Level to Go Long the Spread
- ASE: 0.0% Premium; Good Level to Go Long the Spread
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