In today’s briefing:
- S&P/ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes
- S&P500, S&PMid400, and S&PSmall600 Index Changes for June 2022 – More Interesting Than Usual
- Cocoaland (COLA MK): F&N Scheme At RM1.50/Share
- FnGuide Top 10 Rebalancing: How We Trade Shinhan IN/Celltrion OUT
- Cocoaland’s RM1.50 Per Share Privatisation Offer from Fraser & Neave
- Last Week in Event SPACE: Toshiba, Woodside, Genting Berhad, SPH REIT, Virtus Health, Xiamen Port
- Index Rebalance & ETF Flow Recap: NKY, CSI300, SSE, REMX, ASX, SET50, CH50/A50, EPRA, Mercari, GOTO
- Asia-Pac Weekly Risk Arb Wrap: Australian Unity Office, Nissui Pharma, Virtus, SPH REIT, Cocoaland
S&P/ASX Index Rebalance (June 2022): Mostly Expected, Some Surprises & Short Interest Spikes
- There is one set of changes to the S&P/ASX 50, one deletion for the S&P/ASX 100, and four adds/ five deletes for the S&P/ASX 200 (AS51 INDEX).
- Passive trackers will need to trade between 2-6 days of ADV on nearly all stocks. Short interest spikes in a few names indicate pre-positioning for the passive flow.
- Core Lithium Ltd (CXO AU) is a potential inclusion to the MVIS Global Rare Earth/Strategic Metals Index in June and that could add to the passive inflows on the stock.
S&P500, S&PMid400, and S&PSmall600 Index Changes for June 2022 – More Interesting Than Usual
- On 3 June 2022, the S&P DJI Global Index team announced changes to the S&P500, S&P Midcap 400, and S&P SmallCap 600 indices (and a number of other smaller indices).
- VICI Properties (VICI) will replace Cerner (CERN) in S&P500 at close of 7 June. Keurig DrPepper and ON Semiconductor will replace UnderArmour and IPG Photonics at close 17 June.
- This set of rebalances is particularly interesting in terms of non-offsetting flows, unlike many rebals which are just a game of musical shares between the three top indices.
Cocoaland (COLA MK): F&N Scheme At RM1.50/Share
- Fraser & Neave Holdings (FNH MK) is proposing to privatise 27.66%-held Cocoaland Holdings (COLA MK) at RM1.50/share by way of a Scheme.
- The Offer price is a 26.1% premium to last close. Leverage Success, the largest shareholder with 40.65% stake has given an irrevocable undertaking to vote for the Scheme.
- The board of Cocoaland has until the 17 June to respond.
FnGuide Top 10 Rebalancing: How We Trade Shinhan IN/Celltrion OUT
- With the screening period over (May 3-31), Shinhan IN/Celltrion OUT is virtually a foregone conclusion.
- We should consider an individually-hedged approach, instead of a plain long/short, with a tightly moving-together peer, preferably on a single-day trading window.
- I suggest using KB Financial and Celltrion Healthcare as hedges of LONG & SHORT for Shinhan and Celltrion, respectively.
Cocoaland’s RM1.50 Per Share Privatisation Offer from Fraser & Neave
- Cocoaland Holdings (COLA MK) announced a privatisation offer from Fraser & Neave Holdings (FNH MK) at RM1.50 per share, a 26.1% premium to the undisturbed price.
- The key conditions are the headcount test and <10% rejection from all disinterested shareholders. The shareholder (Leverage Success) with a blocking stake has provided an irrevocable.
- The offer is attractive in comparison to long-term historical share prices and multiples. The Board must respond by no later than 5 pm on 17 June.
Last Week in Event SPACE: Toshiba, Woodside, Genting Berhad, SPH REIT, Virtus Health, Xiamen Port
- Eight proposals seem a lot for Toshiba Corp (6502 JP). However, if you are a PE fund on the radar of private equity LP investors, you have to get involved.
- The size of the trade is apparently 38 million shares. If you have been in the Woodside Petroleum (WPL AU) / Santos Ltd (STO AU) trade, take the deal, tactically.
- Perhaps a big pharma could make a splashy bid for Genting Bhd (GENT MK)‘sTauRx, but we’re not there yet.
Index Rebalance & ETF Flow Recap: NKY, CSI300, SSE, REMX, ASX, SET50, CH50/A50, EPRA, Mercari, GOTO
- Last week was a busy one with the TPX INDEX rebalance, the MSCI rebalance and announcements of changes to the FTSE China A50/50, EPRA, FTSE Taiwan 50 and S&P/ASX indices.
- The coming week has the implementation of KOSPI2 INDEX, KOSDQ150 INDEX, HSI INDEX, HSCEI INDEX, HSTECH INDEX, SHSZ300 INDEX, STAR50 INDEX, SSE50 INDEX rebalances and the announcement of REMX changes.
- There were inflows to Korea, Japan, Hong Kong and Australia focused ETFs during the week, while there were outflows from China and India focused ETFs.
Asia-Pac Weekly Risk Arb Wrap: Australian Unity Office, Nissui Pharma, Virtus, SPH REIT, Cocoaland
- There are 45 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Four news deals this week: Australian Unity Office (AOF AU)‘s Aliro bid, Xiamen International Port (3378 HK)‘s parent buyout; Nissui Pharmaceutical (4550 JP)‘s Offer, and Cocoaland (COLA MK)‘s F&N’s Offer.
- Key updates took place for: Virtus Health (VRT AU), AKM Industrial (1639 HK), Kito Corporation (6409 JP), and SPH REIT (SPHREIT SP).
Before it’s here, it’s on Smartkarma
