In today’s briefing:
- BHP Group – A Tale of Two Rebals? Maybe… But Maybe Not
- DTAC/TRUE Merger: Stocks Trading Near Their VTO Prices
- MSCI Korea 10-Day Review Period Done: Screened Results
- Link Net’s MTO from Axiata Investments and XL Axiata
- Korea Large-Cap Prefs: Pref-Ord YTD Yield Difference & 20-Day MA Sigma
- (Mostly) Asia M&A: January 2022 Roundup
- CPI/Immofinanz: Raised Offer
BHP Group – A Tale of Two Rebals? Maybe… But Maybe Not
- The BHP Group index rebal on the S&P/ASX was bigger than most thought.
- The BHP Group index rebal on the PLC line in the UK on the FTSE UK series, MSCI and FTSE Europe, and Stoxx indices was smaller than most expected.
- But the funding and reverse funding excess volume tells a different story.
DTAC/TRUE Merger: Stocks Trading Near Their VTO Prices
- Total Access Communication (DTAC TB) and True Corp Pcl (TRUE TB) have moved up over the last 8 trading session to trade at or closer to their VTO prices.
- Trading at the VTO price, we recommend selling Total Access Communication (DTAC TB) rather than run the risk of deal break or waiting 3-5 months to be paid out.
- A safer trade is to buy True Corp Pcl (TRUE TB) and sell Total Access Communication (DTAC TB). There will be index trades to do if the merger is approved.
MSCI Korea 10-Day Review Period Done: Screened Results
- MSCI Korea’s February index review period ended last Friday because next Monday is Korea’s Lunar New Year holiday.
- Meritz Financial Group and Meritz Fire stayed above the full MCs and float MCs without missing a single day during the 10-day review period.
- Shinpoong‘s MC was below the lower buffer throughout the review period. Douzone stayed above the lower buffer, but the odds of its exclusion are high as we have two additions.
Link Net’s MTO from Axiata Investments and XL Axiata
- Link Net (LINK IJ)’s two largest shareholders (66.03% of the outstanding shares) have signed a SPA to sell their stakes to Axiata Investments and XL Axiata (EXCL IJ) at IDR4,800.
- Post-Completion, Axiata Investments and XL Axiata will then be required to launch a mandatory tender offer to acquire the remaining 33.97% Link Net shares at IDR4,800 per share
- The tender offer is expected to be completed in 3Q2022. At the last close price of IDR4,430, the shares are trading at an 8.4% gross spread to the offer.
Korea Large-Cap Prefs: Pref-Ord YTD Yield Difference & 20-Day MA Sigma
- Korean prefs have outperformed ords on a YTD basis, probably due to the LG Energy listing. Many of KOSPI’s large-cap stocks have seen an outflow to make room for LGES.
- Samsung Electronics 1P and Mirae Asset 2PB have a negative pref-ord YTD yield difference and are currently below-1.0σ on a 20-day MA.
- Mirae widened the pref-ord spread by announcing an ord-only share buyback. So it should be seen as an outlier. Then, virtually all that remains is the Samsung Electronics 1P.
(Mostly) Asia M&A: January 2022 Roundup
- For the month of January, 6 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$9bn.
- The average premium for the new deals announced (or first discussed) in January was ~18%.
- This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.
CPI/Immofinanz: Raised Offer
- Immofinanz recommends shareholders neither accept S Immo’s €23/share partial offer, nor CPI’s €22.7/share for the whole share capital (both cum dividend). CPI controls (pending approvals) 35.5% of Immofinanz.
- Crossed shareholdings and poor use of capital among Austrian real estate players put a lid on their stock market performance, nevertheless Immofinanz’s discount to NAV is steadily approaching pre-Covid levels.
- The shares of Immofinanz look good value in my view, at 4.3% 22e FFO yield, 21% discount to EPRA NTA, with the potential upside from an improved CPI’s offer.
Before it’s here, it’s on Smartkarma
