In today’s briefing:
- MVIS US Listed Semiconductor 25 Index Rebalance: Chipping Away
- Taiwan Dual-Listings: TSMC Spread Opens Again for Opportunity; Others Have Swung Substantially
- Merger Arb Mondays (12 Jun) – Chindata, Mason, Yitai, Toshiba, Estia, Origin, Musgrave, Toyo
- Can AI Stocks Lead the Market to a New Bull?
MVIS US Listed Semiconductor 25 Index Rebalance: Chipping Away
- The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 16 June. There are no constituent changes, but there are float and capping changes.
- The VanEck Vectors Semiconductor (SMH US) ETF tracks the index and has an AUM of US$9.26bn.
- Estimated one-way turnover is 3.9% resulting in a one-way trade of US$358m. The stocks are extremely liquid, the impact on the stock in terms of ADV to trade is small.
Taiwan Dual-Listings: TSMC Spread Opens Again for Opportunity; Others Have Swung Substantially
- TSMC is back to an 11.8% ADR premium after dropping to 8%… potentially another good Long/Short point.
- UMC has flipped to a -0.6% ADR discount, from a 5.6% Premium. If the discount ticks slightly more negative then a good setup level will open up.
- ASE, ChipMOS, and CHT spreads have also experienced significant swings since our last dual-listings piece.
Merger Arb Mondays (12 Jun) – Chindata, Mason, Yitai, Toshiba, Estia, Origin, Musgrave, Toyo
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 111 Inc (YI US), Mason Group Holdings (273 HK), United Malt Group Ltd (UMG AU), HKBN Ltd (1310 HK), Silk Laser Australia (SLA AU), Chindata Group (CD US).
- Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Musgrave Minerals (MGV AU), Lian Beng (LBG SP), Toyo Construction (1890 JP), Mincor Resources NL (MCR AU).
Can AI Stocks Lead the Market to a New Bull?
- Can the AI frenzy, which appears to be in its early stages, carry the stock market to a new bull? An academic study indicates that’s the wrong question to ask.
- The right question is to determine whether we are in an equity bull so that AI stocks can take advantage of the bull trend. Breadth needs to broaden out.
- The other and more conventional explanation of market structure is an unhealthy advance against a backdrop of a market that’s positioning for a recession.
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