In today’s briefing:
- FTSE All-World/All-Cap Index Rebalance Preview: Asia Ex Japan Ex China
- LG Chem Trading Cheap As LG Energy Opens Its Books
- KOSPI200 June Index Rebalance Preview: High Probability Adds/Deletes
- Selected European Holdcos and DLCs: December ’21 Report
- STAR50 Index Rebalance Preview (March 2022): What Will The Index Committee Do?
FTSE All-World/All-Cap Index Rebalance Preview: Asia Ex Japan Ex China
- The price review period for the FTSE All-World/All-Cap March 2022 SAIR ended on 31 December. The changes are expected to be announced on 18 February and implemented on 18 March.
- There are a few potential inclusions to the AW Index, a lot of inclusions to the AC Index, and a lot of migrations from the AC to the AW Index.
- There are 20 stocks that have at least US$20m passive buying and over 2 days ADV to buy. That increases to 25 stocks that have at least US$10m to buy.
LG Chem Trading Cheap As LG Energy Opens Its Books
- Korean EV battery unit play LG Energy (LGENERGY KS) has now opened its books to raise up to US$10.7bn, which will be the country’s largest-ever IPO.
- Shares are expected to be sold in a price range of ₩257,000 to ₩300,000 per share, in line with information released last month.
- Separately, LG Chem Ltd (051910 KS) is trading at its widest indicative discount to NAV in the past twelve months.
KOSPI200 June Index Rebalance Preview: High Probability Adds/Deletes
- The review period for the June rebalance of the KOSPI2 INDEX ends 30 April. The KRX will announce the changes in May with implementation at the close on 9 June.
- LG Energy Solution (LGENERGY KS) could get Fast Entry to the KOSPI200 Index in March. Hyundai Engineering Co Ltd (HEC KS) needs a price jump to get Fast Entry.
- We see 6 potential changes to the KOSPI200 in June; most of these are high probability. The potential adds are already outperforming the potential deletes – there should be more.
Selected European Holdcos and DLCs: December ’21 Report
- Premiums of selected DLC’s have generally tightened during December, following the unification of BHP : BHP/BLT 1.3%; Rio Tinto AU/LN, 9.9% (widened); Shell, nil premium.
- Discounts to NAV of holdcos have shown mixed performance: Alba, 42.7%; GBL, 30%; Heineken Holdings, 17.9%; Industrivärden, 14.4%; Investor AB, 7.5%; Kinnevik B, 22.4% (premium).
- Recommended trades: BHP/BLT, GBL vs. listed assets, Industrivärden vs. listed assets.
STAR50 Index Rebalance Preview (March 2022): What Will The Index Committee Do?
- The main question, for yet another rebalance, is whether the index committee chooses a 6 month minimum listing history or increases it to 12 months in line with the methodology.
- That decision will result in either 4 or 5 changes at the rebalance. The deletions remain the same, while there is only 1 inclusion common across both lists.
- There is a fair bit to trade on the potential inclusions and exclusions and we expect the inclusions to outperform the deletions over the next couple of months.
Before it’s here, it’s on Smartkarma
