In today’s briefing:
- STAR50 Index Rebalance Preview: 3 Changes or 5? It Depends…
- Overlooked Aspect About MSCI’s SKT Foreign Room Calculation
- SET50 Index Rebalance Preview: +JMT, JMART, BJC / -RATCH, STGT, IRPC
- Microstrategy: More Losses For Bitcoin Spruiker
- Suchuang Gas’ Scheme Meeting on 10 June Is a Welcome Exit from the Ongoing Share Suspension
- SpinTalk: The Bausch Corporate Overhaul Is More Illusory Than Substantive At Least for Now
STAR50 Index Rebalance Preview: 3 Changes or 5? It Depends…
- There could be 3 or 5 changes to the STAR50 INDEX in June depending on the minimum listing history (6 months or 12 months) used by the index committee.
- Jinko Solar (688223 CH) is a high probability inclusion while Shanghai Microport Endovascular MedTech (688016 CH), ArcSoft Corp Ltd (688088 CH) and DBAPP Security Ltd (688023) are high probability deletions.
- Stocks performance over the last couple of months indicates the market is assigning a higher probability to the index committee using a 12 month minimum listing history.
Overlooked Aspect About MSCI’s SKT Foreign Room Calculation
- The MSCI does not have a rule on how to treat DRs in the foreign room calculation. It only considers the proportion of shares AVAILABLE to foreign investors.
- Unlike KT in 2019, SKT ADRs are not traded at a premium. It means that the MSCI may treat a portion of SKT ADRs as Still AVAILABLE Shares.
- For this reason, it cannot be concluded that SKT will be deleted simply because it is below 3.75%.
SET50 Index Rebalance Preview: +JMT, JMART, BJC / -RATCH, STGT, IRPC
- The market cap and liquidity review period for the June rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) ends in less than four weeks.
- Potential inclusions are JMT Network Services (JMT), Jaymart PCL (JMART) and Berli Jucker (BJC) while the potential deletions are Ratch Group (RATCH), Sri Trang Gloves (STGT) and IRPC PCL (IRPC).
- There are a couple of stocks that are close on liquidity and trading volumes over the next few weeks will determine if they are added, they stay or go.
Microstrategy: More Losses For Bitcoin Spruiker
- Microstrategy Inc Cl A (MSTR US) reported a net loss of $155.6mn in the fourth quarter, compared to the net loss of $124.3mn in the 4Q21.
- MSTR took a non-cash digital asset impairment charge of $170.1mn in the first quarter, up from $146.6mn in the 4Q21.
- A bet on MSTR is a bet on bitcoin. Yet MSTR is down 37% YTD, compared to ~20% for bitcoin.
Suchuang Gas’ Scheme Meeting on 10 June Is a Welcome Exit from the Ongoing Share Suspension
- The scheme document is out with the Court meeting scheduled for 10 June. The IFA considers the offer to be fair and reasonable. Suchuang Gas Corp (1430 HK) remains suspended.
- Key conditions are the headcount test and approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection).
- Excluding the irrecovables, no shareholder holds a blocking stake. As the timeframe to fulfil the resumption guidance remains highly uncertain, the offer is a welcome exit opportunity.
SpinTalk: The Bausch Corporate Overhaul Is More Illusory Than Substantive At Least for Now
- Bausch Health Companies (BHC US)‘s share price reversal over the past year has eliminated the substantial gains achieved after it announced plans for a major corporate overhaul in August 2020.
- No substantive change to BHC’s current holding company structure and leverage ratio will result from the imminent execution of the Bausch & Lomb IPO which is less transformational than expected.
- The potential for a more value-creating overhaul remains, but timing is uncertain. Until the relevant catalysts come into play, we expect the BHC share price to tread water at best.
Before it’s here, it’s on Smartkarma
