In today’s briefing:
- IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes
- ToyoKen (1890) – YFO Proposes ¥1,000/Share So Now We Need Discussions
- MSCI May 2022 Index Rebalance Preview: Changes from Week 1 in the Review Period
- Renault (RNO FP) To Sell Nissan (7201 JP) Shares? Not Yet, and Not Yet Positive Nissan.
- Merger Arb Mondays (25 Apr) – VNET, Yashili, Dongzheng AFC, Sezzle, Link, Razer, Ramsay Health
IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes
- Float and capping changes will require passive trackers to buy Bank Central Asia (BBCA IJ) and sell Bank Rakyat Indonesia Persero (BBRI IJ) at the close on 28 April.
- There will be passive changes to other stocks too, though the impact will not be material on most of the stocks.
- GoTo (GOTO IJ) could be added to the IDX30, LQ45 and IDX80 indices in May. With the oversubscription option nearly all used up, the stock should trade weak near-term.
ToyoKen (1890) – YFO Proposes ¥1,000/Share So Now We Need Discussions
- Yamauchi No10 Family Office (YFO) Friday declared a fourth buyer in its group and reached 26.28% as of the 19th.
- Toyo Construction revealed a back-and-forth between itself and YFO in which it was revealed It YFO had also proposed a Tender Offer at ¥1,000/Share subject to discussions and Board Agreement.
- This, and YFO’s position make Infroneer’s ¥770/share Tender Offer somewhat untenable. Shares could become more volatile.
MSCI May 2022 Index Rebalance Preview: Changes from Week 1 in the Review Period
- We have completed days 1-5 in the review period for the MSCI May SAIR. We see 52 potential adds and 80 potential deletes with most changes in China.
- The largest potential inclusions are Powerchip Semiconductor Manufacturing Corp, Tata Elxsi Ltd, Orient Overseas International, Walsin Lihwa, Jindal Steel & Power, Eva Airways, Pop Mart, Adani Power and China Airlines.
- Converge ICT Solutions (CNVRG) is a potential inclusion following an increase in foreign room above 25% while SK Telecom (017670) is a potential deletion with foreign room dropping below 3.75%.
Renault (RNO FP) To Sell Nissan (7201 JP) Shares? Not Yet, and Not Yet Positive Nissan.
- On Friday, a Bloomberg article suggested Renault SA (RNO FP) is considering selling some of its 43% stake in Nissan Motor (7201 JP) to help fund its efforts in EVs.
- Sources were “people familiar with the matter.” Since 2018, Bloomberg and Les Echos have been the outlets which do “scoops” on the Renault/Nissan relationship, but they are not always right.
- However, it raises some interesting questions and possibilities. And given the prices, it makes the decision somewhat uncomfortable for both.
Merger Arb Mondays (25 Apr) – VNET, Yashili, Dongzheng AFC, Sezzle, Link, Razer, Ramsay Health
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
- This week, the highest gross spreads are 21Vianet Group (VNET US), Yashili International Holdings (1230 HK), Dongzheng Automotive Finance (2718 HK), Sezzle Inc (SZL AU), Link Administration Holdings (LNK AU).
- The lowest gross spreads are Virtus Health (VRT AU), Uniti Group Ltd (UWL AU), 51 Job Inc Adr (JOBS US), China Logistics Property Holdings (1589 HK), Jin Jiang Capital.
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