In today’s briefing:
- KRX New Deal Index Rebalance Preview (March): More Flow for LG Energy
- ASKUL (2678) – Large, Accretive, Not Enough for Prime So Look For More
- Astellas Pharma (4503) Buyback – Short-Term Pressure Catalyst
- NIFTY Bank Index Rebalance Preview: BOB Should Replace RBL Bank
- Timing Ideal Exit Points on MSCI & KOSPI200 Inclusion for 16 Biggest Korean IPOs in 2020 & 2021
- Premier Closes In On Myer (MYR AU)
- Selected European Holdcos and DLCs: January ‘22 Report
- CJ ENM: Potential Block Sale of Its Stake In Netmarble & Concerns About Corporate Reorganization
KRX New Deal Index Rebalance Preview (March): More Flow for LG Energy
- The review period for the KRX New Deal indices ended on 31 January. The changes will be announced toward the end of February and implemented on 10 March.
- We expect LG Energy Solution (373220 KS) to be included in the Battery and BBIG indices, while Kakao Pay (377300 KS) should be added to the Internet Index.
- The largest selling is expected to be on Douzone Bizon (012510 KS) due to a potential downweight in the Internet index and a deletion from the BBIG index.
ASKUL (2678) – Large, Accretive, Not Enough for Prime So Look For More
- Askul Corp (2678 JP) today announced a 4.9% buyback, likely via ToSTNeT-3, designed to lower the holding of parent Z Holdings (4689 JP), to meet TSE Prime Tradable Share criteria.
- While 5.1% earnings accretive, it will not be enough, and the structure suggests despite significant excess cash, the next tranche won’t come immediately.
- There is short-term strategy, and there is longer-term positioning. Both may work in this case.
Astellas Pharma (4503) Buyback – Short-Term Pressure Catalyst
- Large Japanese low-multiple pharma company Astellas Pharma (4503 JP) yesterday announced earnings and this morning announced a buyback.
- The buyback is small-ish, but the details are definitely worth knowing.
- A play against peers for the period and afterwards may have some merit. If you have an execution axe, definitely worth a look.
NIFTY Bank Index Rebalance Preview: BOB Should Replace RBL Bank
- The review period for the NSEBANK INDEX ended on 31 Jan. The rebalance will be effective after the close on 30 March and the announcement will come end February.
- Based on the index methodology, we see Bank Of Baroda (BOB IN) replacing RBL Bank Ltd (RBK IN) in the index.
- Passive trackers will need to buy 11 days of delivery volume on Bank Of Baroda (BOB IN) while selling 5 days of delivery volume on RBL Bank Ltd (RBK IN).
Timing Ideal Exit Points on MSCI & KOSPI200 Inclusion for 16 Biggest Korean IPOs in 2020 & 2021
- We delve in detail the ideal exit points for the biggest 16 IPOs in Korea in 2020 and 2021, with emphasis on the announcement of the MSCI and KOSPI200 inclusions.
- Typically, the announcement dates of the MSCI index inclusion (+/- two to three trading days) are the optimal period for taking profits.
- Overall, the MSCI index inclusion had a bigger impact in terms of signaling changes in the direction of these new, large IPOs in Korea.
Premier Closes In On Myer (MYR AU)
- Premier Investments (PMV AU) has added a further 3.9% in Myer Holdings (MYR AU) taking its stake to just short of 20%.
- There is no love lost between the boards of Premier and Myer since Premier took a 10.8% stake in March 2017.
- Premier has attempted to spill the board in the past. That scene looks set to repeat itself. That or a takeover.
Selected European Holdcos and DLCs: January ‘22 Report
- There is just one DLC in this report, Rio Tinto, following the unification of BHP and Shell.
- Discounts to NAV of holdcos have shown mixed performance: Alba, 41.3%; GBL, 26.9%; Heineken Holdings, 18.2%; Industrivärden, 12.1%; Investor AB, 11.6%; Kinnevik B, 8.8%(premium); Porsche Automobile Holding, 39.2%.
- Recommended trades: GBL vs. listed assets, Industrivärden vs. listed assets, Investor vs. listed assets, Porsche vs. VW (long 1 PAH3 GR/short 0.5136 VOW GR), Rio Tinto.
CJ ENM: Potential Block Sale of Its Stake In Netmarble & Concerns About Corporate Reorganization
- According to a local media outlet called ETNews, CJ ENM is considering on selling about half of its stake in Netmarble to potentially acquire the controlling stake in S.M. Entertainment.
- Although CJ ENM is the lead candidate to acquire SM Entertainment, other contenders including Kakao Corp and Naver are not totally out of the M&A race.
- Overall, we would wait on buying CJ ENM at current levels. We think that the market is still concerned about CJ ENM overpaying for SM Entertainment.
Before it’s here, it’s on Smartkarma
