In today’s briefing:
- FTSE EPRA Nareit Developed Asia Preview: Adds, Close Adds & Misses for June
- Tabcorp Spinoff (TLC/TAH) & S&P/ASX: Where They Stay and Where They Go
- KOSPI200 Index Rebalance: Se7en Changes
- Marking Post-WPL-Spin BHP to Market and Model
- Shh! SAIC’s Unconditional Offer For Dongzheng (2718 HK)
- Toyo Construction Comes Out Fighting Against YFO, But Sincerely.
- Explosive Demerger For Incitec Pivot
- KOSDAQ150 Index Rebalance Preview: A Dozen Changes in June
- Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free
- KOSPI 200 Rebalancing: Noteworthy Names for Passive, Shorting, & Short Covering Flows
FTSE EPRA Nareit Developed Asia Preview: Adds, Close Adds & Misses for June
- The FTSE EPRA Nareit Index June rebalance will use data from 23 May. The changes will be announced on 1 June and implemented at the close on 17 June.
- Potential inclusions at the review include Ichigo Inc (2337 JP) and LOTTE Reit Co Ltd (330590 KS) while there is a possibility of Digital Core REIT (DCREIT SP) being added.
- Mapletree North Asia Commercial Trust‘s NPI from Developed Markets is 72% making it ineligible for index inclusion, while Frasers Hospitality Trust‘s drop has taken it out of the inclusion list.
Tabcorp Spinoff (TLC/TAH) & S&P/ASX: Where They Stay and Where They Go
- The Lottery Corp (TLC AU) and new Tabcorp Ltd (TAH AU) have commenced trading today as standalone entities following their demerger.
- We expect Tabcorp Ltd (TAH AU) to be deleted from the S&P/ASX50 and S&P/ASX100 indices at the June rebalance, while it would remain in the S&P/ASX 200 (AS51 INDEX).
- Given Crown Resorts (CWN AU) has delayed the second court hearing, there should be an extra deletion from the S&P/ASX 200 (AS51 INDEX) in June.
KOSPI200 Index Rebalance: Se7en Changes
- There will be 7 additions and 7 deletions for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the June rebalance that will be implemented on 9 June.
- We got all 7 inclusions right and 5 of the 7 deletions right. The adds have 3-6 days ADV to buy, while the deletes have 4-12 days ADV to sell.
- Short interest on the deletions is a significant portion of the estimated passive selling and there could be short covering in the week leading up to implementation of the changes.
Marking Post-WPL-Spin BHP to Market and Model
- BHP goes ex-WPL at the open of 25 May 2022. The ex-WPL price is A$5.24 lower than Tuesday’s close and there is another A$2.20 of franking credits on top.
- Historically, the BHP/RIO ratio has traded within a relatively defined range. It moves, then after a while it tends to revert. I present a trading model.
- And grids. I present spinoff grids with live tracking of the BHP ex-WPL/RIO Ratio within its last 6- and 12-month (div-adjusted) ratios.
Shh! SAIC’s Unconditional Offer For Dongzheng (2718 HK)
- On the 19 May, SAIC Motor (600104 CH) acquired China Zhengtong Auto Services Hldg (1728 HK)‘s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction.
- Reportedly SAIC was the only bidder. The price paid appears to be at the minimum bid price of HK$1.294/share.
- The acquisition will trigger an unconditional Offer for the H shares. SAIC and ZhengTong have announced the outcome of the auction. But still no word from Dongzheng.
Toyo Construction Comes Out Fighting Against YFO, But Sincerely.
- As discussed in the last insight, there was the possibility that YFO was jumping the gun. From the near 100+ pages released by Toyo Construction (1890 JP) today, they did.
- TC accused YFO of being “dishonest” in its attitude and actions, from the “reasons” stated in its Large Shareholder Report and market purchases to YFO’s Murakami-san’s previous interactions.
- What TC doesn’t yet understand is that when a company is in play, if a “market check” comes in, that’s OK. Investors are not hurt by a higher bid.
Explosive Demerger For Incitec Pivot
- Fourteen years after its acquisition, Incitec Pivot (IPL AU) plans to demerge Dyno Nobel from its fertilizer ops.
- The split has been a long time coming. A strategic review of its fertilizer segments dates back to at least September 2019.
- If the demerger is approved, IPL shareholders will receive shares in Incitec Pivot Fertilisers Limited in proportion to their existing shareholding in IPL, which will be rebranded Dyno Nobel Limited.
KOSDAQ150 Index Rebalance Preview: A Dozen Changes in June
- There are 12 inclusions and 12 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance to be implemented at the close on 9 June.
- Most of the inclusions were expected, but there are quite a few surprises among the deletions. The impact on the deletions will be higher than that on the inclusions.
- The adds have outperformed the deletes and there has been another leg up in the last couple of weeks. Expect the trend to continue till implementation week.
Grab IPO Lock-Up – Over 60% of the Stock Worth Nearly US$8bn Comes Free
- Grab raised around US$4.5bn in its de-SPAC listing in Dec 2021. The shares are now trading around 68% below the listing price.
- At the time of listing, all of its top investors were locked up for six months. The lock-up expires on 30th May 2022.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
KOSPI 200 Rebalancing: Noteworthy Names for Passive, Shorting, & Short Covering Flows
- SD Biosensor leads the addition group with an estimated inflow of 4.59x ADTV. SK Discovery and Yungjin Pharmaceutical have the most substantial outflow at 7.23x and 6.07x ADTVs, respectively.
- For short-covering, CJ CGV stands out the most at this point. Its short interest is 4.57% of SO, and the short interest has increased the most of late.
- For short resumption, two names stand out: Meritz Fire and Hana Tour.
Before it’s here, it’s on Smartkarma
