In today’s briefing:
- S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)
- Hock Seng Lee (HSL MK): Unconditional Offer
- Investors Caught Out As Twiggy Backs IGO’s Offer For Western Areas
- Korean Companies Announcing Share Cancellations Are Outperforming the Market
- HSI Index Rebalance: Nongfu Spring & Lenovo IN; Still Tiptoeing Towards 80 Index Members
- HSCEI Index Rebalance: Another Evergrande Stock Is Deleted; Xinyi Solar IN
- Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
S&P/ASX Indices: Quiddity Leaderboard for March 2022 Rebalance (Final)
- The S&P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies.
- In March 2022, Index rebalance events will take place for the S&P/ASX capitalization-weighted indices including ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20.
- In this insight, we take a look at the leading candidates who could become Adds/Deletes during the March 2022 Rebalance and other potential irregular changes.
Hock Seng Lee (HSL MK): Unconditional Offer
- Hock Seng Lee (HSL MK) has announced an unconditional voluntary take-over offer of RM1.35/share.
- The joint ultimate offerors, led by director Yu Chee Hoe, currently hold 84.2%.
- HSL is already in non-compliance with Bursa’s 25% free float. The Offeror does not intend to main HSL’s listing
Investors Caught Out As Twiggy Backs IGO’s Offer For Western Areas
- Andrew Forrest’s Wyloo Consolidated, with 9.8% of shares out, will now support the IGO Ltd (IGO AU) / Western Areas (WSA AU), just three weeks after paying through terms.
- That pledge pivots off a newly-inked side agreement between IGO and Wyloo to jointly evaluate opportunities for nickel downstream processing in Australia.
- This removes the immediate prospect of a competing Offer from Wyloo, and in turn, IGO’s need to bump terms. Yet BHP Group (BHP AU) still waits in the wings.
Korean Companies Announcing Share Cancellations Are Outperforming the Market
- In this insight, we have identified 16 Korean companies that have announced common shares cancellations in 4Q 2021 and 1Q 2022.
- There has been a tremendous outperformance of KOSDAQ listed companies that have announced shares cancellations in this period.
- Given the continued outperformance of Korean companies that are outperforming the market after announcing treasury shares cancellation, this reflects an alpha generating trend that bears close scrutiny.
HSI Index Rebalance: Nongfu Spring & Lenovo IN; Still Tiptoeing Towards 80 Index Members
- The Hang Seng Index was meant to have 80 constituents by mid-2022 before moving to 100 members. At 66 constituents post the March review, we are not gonna make it.
- Nongfu Spring (9633 HK) and Lenovo (992 HK) will be added to the index. Nongfu’s inclusion was expected while Lenovo is a relative surprise.
- Nongfu Spring (9633 HK) will also be added to the FTSE AW Index at the March SAIR at the close on 18 March. The stock should move higher.
HSCEI Index Rebalance: Another Evergrande Stock Is Deleted; Xinyi Solar IN
- As expected, Xinyi Solar Holdings (968 HK) replaces Evergrande Property Services (6666 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close of trading on 4 March.
- Using prices from the close on 18 February to cap the stocks, estimated one-way turnover at the rebalance is 4.37% and will result in a one-way trade of HK$3,350m.
- Short interest on Xinyi Solar Holdings (968 HK) is 13 days of ADV to cover. While the inclusion was expected, short covering could take the stock higher.
Hang Seng TECH Index Rebalance: Forced Changes Lead to BIG Turnover
- SenseTime Group (20 HK), Li Auto (2015 HK) and XPeng (9868 HK) replace Autohome (2518 HK), Weimob Inc. (2013 HK) and Tongcheng-Elong Holdings Ltd (780 HK) in the HSTECH INDEX.
- A few changes have been made from the way stocks are treated to ensure the inclusion of Li Auto (2015 HK) and XPeng (9868 HK) in the index.
- SenseTime Group (20 HK) has been included at a much higher float than what it should be and this could take the stock higher in the next couple of weeks.
Before it’s here, it’s on Smartkarma
