In today’s briefing:
- MVIS Global Rare Earth/Strategic Metals Index Rebalance: CXO & LKE Added; AVZ Out
- Kito (6409) – Shareholder Register Quirks Evolving – Becoming More Arb-Y Less Friendly
- MVIS Vietnam Index Rebalance: Two Adds, One Delete, Capping & Float Changes
- Last Week in Event SPACE: Atlas Arteria, Frasers Hospitality, DTAC/True, Crown Resorts, Saratoga
- China VAST (6166 HK): Jinmao’s Pre-Conditional Offer
- Tullow Oil/Capricorn Energy: Lowering Leverage
- Index Rebalance & ETF Flow Recap: STAR50, S&P500, REMX, MVIS Vietnam, Atlas Arteria, OOIL
- Asia-Pac Weekly Risk Arb Wrap: Tunas Ridean, Hwa Hong, China VAST, Mapletree, Giordano
MVIS Global Rare Earth/Strategic Metals Index Rebalance: CXO & LKE Added; AVZ Out
- Core Lithium Ltd (CXO AU), Lake Resources Nl (LKE AU) and Piedmont Lithium ADR have been added to the MVIS Global Rare Earth/Strategic Metals Index. AVZ Minerals has been deleted.
- Core Lithium Ltd (CXO AU) and Lake Resources Nl (LKE AU) are S&P/ASX 200 additions that will be also implemented at the close of trading on 17 June.
- With only 4 trading days to implementation (Monday is a holiday), the stocks with significant days of ADV to trade could out(under)perform their peers and the market.
Kito (6409) – Shareholder Register Quirks Evolving – Becoming More Arb-Y Less Friendly
- The Kito Corporation (6409 JP) take-private by KKR which is in process started with an interesting register. It has become interestinger.
- One possibly-strategic “pure investment” holder has gone 10+%. A “friendly activist” has gone below. Another large friendly holder sold 4%. Volume since it achieved near-deal-price has been 24.7% of votes.
- The register has likely become more arb-y and possibly strategic, and less friendly to Kito, but it is up to the holders to follow up. And there is a warning.
MVIS Vietnam Index Rebalance: Two Adds, One Delete, Capping & Float Changes
- There are 2 additions and 1 deletion for the MVIS Vietnam Index at the upcoming rebalance at the close on 17 June. Plus capping and float changes.
- The adds are Saigon – Hanoi Commercial (SHB VN) and Viet Nam Construction & Impo (VCG VN), while Tien Phong Securities (ORS VN) is the deletion.
- The largest passive outflows are on Vingroup Jsc (VIC VN), Feng Tay Enterprise (9910 TT) and Eclat Textile Company (1476 TT).
Last Week in Event SPACE: Atlas Arteria, Frasers Hospitality, DTAC/True, Crown Resorts, Saratoga
- It’s not clear why it would be better for Frasers Hospitality (FHT SP)‘s assets to be unlisted rather than listed, so this is purely financial not strategic given the ownership.
- Atlas Arteria (ALX AU) boasts low risk, stable yielding, toll road assets. That’s an attractive proposition for cash-up IFM, which now has a 15% economic interest.
- If DTAC TB / TRUE TB‘s merger goes through, the top two players control ~96% of the market. Even the generally complicit Thai regulator might be reluctant to grant approval.
China VAST (6166 HK): Jinmao’s Pre-Conditional Offer
- Urban planner China Vast Industrial Urban Development (6166 HK) has received a pre-conditional Offer, by way of a Scheme, from China Jinmao Holdings (817 HK).
- The cancellation price is HK$2.40/share, a ~30% premium to the undisturbed price. The Offer Price is final.
- Pre-Conditions include approvals from SAMR, SASAC, and NDRC. These won’t be an issue as Jinamo is backed by SOE Sinochem.
Tullow Oil/Capricorn Energy: Lowering Leverage
- Tullow offers 3.8068 shares per Capricorn share in a transaction meant to repair Tullow’s balance sheet and develop both Tullow’s and Capricorn’s assets in a supportive crude price environment.
- Although Tullow’s share price has declined by 95% over the last ten years, the company has managed to remain as a going-concern due to a successful restructuring in 2021.
- It is not completely clear that Capricorn’s shareholders will vote the scheme. Their shares are worth 6% more than the shares to be received under the exchange equation.
Index Rebalance & ETF Flow Recap: STAR50, S&P500, REMX, MVIS Vietnam, Atlas Arteria, OOIL
- Last week saw the rebalance implementation of the KOSPI2 INDEX, KOSDAQ 150, HSI INDEX, HSCEI INDEX, HSTECH INDEX, CSI 300 Index, STAR50 INDEX and the SSE family of indices.
- The coming week has the rebalance implementation of the FTSE All-World/All-Cap, EPRA Nareit, FTSE China 50, FTSE China A50, FTSE TWSE Taiwan 50 and S&P/ASX indices.
- Big inflows to the Yuanta/P-shares Taiwan Top 50 ETF (0050 TT) as we enter dividend season. The trade looks bigger than usual this year.
Asia-Pac Weekly Risk Arb Wrap: Tunas Ridean, Hwa Hong, China VAST, Mapletree, Giordano
- There are 48 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Two new deals this week: Jardine Cycle & Carriage (JCNC SP) & Tunas Andolan’s indirect delisting proposal for Tunas Ridean (TURI IJ) & China Vast Industrial Urban (6166 HK)‘s pre-conditional Offer.
- Key updates took place for: Yancoal Australia (YAL AU), Hwa Hong Corp (HWAH SP), Mapletree North Asia Commercial Trust (MAGIC SP), and Lanzhou Zhuangyuan Pasture (1533 HK).
Before it’s here, it’s on Smartkarma
