In today’s briefing:
- Bain Bids Bigger, Goes Hard on Fuji Soft (9749); I’ve Got 🍿🍿🍿
- S&P/ASX Index Rebalance Preview (Dec 2024): Big Impact as Shorts Ramp Up
- China ETF Inflows & Implications: YTD Inflows Nearing US$150bn
- Fuji Soft (9749 JP): Bain’s Better Late than Never Competing Offer
- Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs
- Microsoft Eyes Strong Q1 FY2025 Earnings: Will AI Innovations Drive Performance?
Bain Bids Bigger, Goes Hard on Fuji Soft (9749); I’ve Got 🍿🍿🍿
- As they had announced was their intention, Bain has made a binding offer for Fuji Soft Inc (9749 JP), bidding ¥9,450 against KKR’s ¥8,800. They aim to launch late October.
- There is no minimum and no maximum. The Founding Nozawa family had thrown their lot in with Bain not KKR and that 18.5% is tied up.
- There are conditions, and those are ALL-important. And I expect we see in the next week or so how coercive KKR’s “non-coercive” scheme change was. I’ve got 🍿🍿🍿.
S&P/ASX Index Rebalance Preview (Dec 2024): Big Impact as Shorts Ramp Up
- With three quarters of the review period complete, there could be one change for the S&P/ASX 50 Index and two changes for the S&P/ASX 200 (AS51 INDEX) in December.
- There are two stocks that could be deleted from global indexes in November and that could keep those names under pressure for the next few weeks.
- Passive trackers will need to buy between 4-5x ADV in the forecast adds and sell between 2-8x ADV in the forecast deletes. Shorts have been building up in some names.
China ETF Inflows & Implications: YTD Inflows Nearing US$150bn
- Nearly US$140bn has flowed into mainland China listed ETFs year to date and there have been big creations in the last few weeks as stocks have surged.
- 97% of all inflows are in ETFs benchmarked to the CSI300, CSI1000, CSI500, SSE50, ChiNext and STAR50 indices. But over US$4bn has gone into other ETFs in the last week.
- The large ETF inflows over the last few weeks has led to index rebalance strategies underperforming in China. But that should reverse from now to rebalance implementation.
Fuji Soft (9749 JP): Bain’s Better Late than Never Competing Offer
- Bain’s pre-conditional tender offer for Fuji Soft Inc (9749 JP) is JPY9,450, a 7.4% premium to KKR’s JPY8,800 offer. There is no minimum or maximum acceptance condition.
- The preconditions relate to regulatory approval (Vietnam) and Board recommendation. Bain’s offer is designed to bring KKR to the negotiating table to find a solution to privatisation.
- KKR can 1) do nothing, 2) work with Bain on a solution, or 3) engage in a price war to prevent the satisfaction of Bain’s Board recommendation precondition.
Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs
- The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
- In this insight, we take a look at our capping flow expectations for the December 2024 index rebal event.
- We have also presented our index change expectations for the next semiannual index review which will take place in March 2025.
Microsoft Eyes Strong Q1 FY2025 Earnings: Will AI Innovations Drive Performance?
- Microsoft is projected to report an EPS of $3.10 for Q1 FY2025, reflecting a year-over-year increase, highlighting consistent growth amid evolving market dynamics.
- With a quarterly dividend increase of 10% and a $60 billion share repurchase program approved, Microsoft aims to enhance shareholder value while navigating competitive pressures.
- Amid concerns of slowing AI adoption, analysts are divided on Microsoft’s outlook, balancing high expectations against rising expenses, especially with its significant investments in AI and cloud infrastructure.
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