In today’s briefing:
- FTSE China A50 Index: FOL Changes Done; 100 Index Members Next?
- S&P/ASX Index Rebalance Preview (June): Potential Changes from Now to June
- Merger Arb Mondays – Yashili, Razer, 51Job, Uniti, Link, Sezzle, Guodian
- TOPIX Inclusion: Loadstar Capital (3482 JP)
- KOSPI 200 IT (TIGER ETF) Rebalancing Preview
- KOSPI 200 Rebalance in June 2022 Amid Portfolio Changes Post Outbreak of War in Ukraine
- WISE Secondary Cell (TIGER ETF) Rebalancing Preview
- Mapletree Revise Scheme – Give MNACT Holders Cash for NAV and a Free Option
- KRX Auto (KODEX ETF) Rebalancing Preview
FTSE China A50 Index: FOL Changes Done; 100 Index Members Next?
- With the FOL changes implemented at the March rebalance, the next step could be an increase in the number of FTSE China A50 Index (XIN9I) constituents from 50 to 100.
- The June rebalance will also see a change in the index universe from the FTSE China A All Cap Free Index to the FTSE China A All Cap Index.
- If the 50 to 100 stock increase is implemented on one-step, one-way turnover will be around 27.6% and result in a one-way trade of over CNY 13bn.
S&P/ASX Index Rebalance Preview (June): Potential Changes from Now to June
- The privatisation of Crown Resorts and CIMIC Group could lead to one change to the S&P/ASX100 and two changes to the S&P/ASX 200 (AS51 INDEX) prior to the regular rebalance.
- There will be more changes at the regular rebalance – one close change in the S&P/ASX50, one close change in the S&P/ASX100 and a few for the S&P/ASX 200.
- The potential inclusions have outperformed the potential deletions by a wide margin. Couple of the potential inclusions were added to the S&P/ASX300 and FTSE All-Cap indices on 18 March.
Merger Arb Mondays – Yashili, Razer, 51Job, Uniti, Link, Sezzle, Guodian
- We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
- This week, the highest gross spreads are Yashili International Holdings (1230 HK), Razer Inc (1337 HK), 51 Job Inc Adr (JOBS US), Uniti Group Ltd (UWL AU)
- The lowest gross spreads are CIMIC Group Ltd (CIM AU), Virtus Health (VRT AU), China Logistics Property Holdings (1589 HK), Z Energy Ltd (ZEL NZ), Singapore Press Holdings (SPH SP)
TOPIX Inclusion: Loadstar Capital (3482 JP)
- On 11th March 2022, Japan-based real estate investment business Loadstar Capital (3482 JP) announced they had received approval to move from TSE’s Mothers Section to the First Section.
- Today, they completed this move. This will trigger inclusion into the TOPIX Index at the end of April 2022.
- In this insight, we take a look at the Index Inclusion Parameters to evaluate the upside potential of the TOPIX Inclusion Event.
KOSPI 200 IT (TIGER ETF) Rebalancing Preview
- KOSPI 200 IT sector index rebalances twice a year in June and December. The effective date for the upcoming rebalancing is June 10.
- The IT sector has a high degree of price cointegration of the stocks within the sector. Therefore, the impact/price correlation is robust despite a smaller impact size.
- At this point, the following three stocks deserve our attention: Samsung SDI, Kakao Pay, and LG Corp. We can expect a passive inflow of +0.15x for these highly liquid names.
KOSPI 200 Rebalance in June 2022 Amid Portfolio Changes Post Outbreak of War in Ukraine
- We discuss the potential additions and deletions in the upcoming June 2022 KOSPI200 rebalance. The outbreak of war in Ukraine has impacted the potential additions/deletion candidates.
- These top 10 potential inclusions are up on average 10.8% YTD, outperforming KOSPI which is down 9.1% YTD.
- Among the potential inclusions, Ildong Pharm, Meritz F&M Insurance, Hana Tour, Dongwon Systems, and Lotte Rental have been materially outperforming the market in the past three months.
WISE Secondary Cell (TIGER ETF) Rebalancing Preview
- WISE Secondary Cell rebalances every quarter in January, April, July, and October. The effective date for the upcoming rebalancing is April 15.
- The flow impact/price correlation of small/mid-caps is shown to be at a meaningful level. Therefore, we may need to design long/short basket trading setups focusing on these small/mid-caps.
- The following five stocks are expected to have a significant level of flow impact at this point: SKC, Soulbrain, Youlchon Chemical, Posco Chemical, and LG Energy Solution.
Mapletree Revise Scheme – Give MNACT Holders Cash for NAV and a Free Option
- Quarz and MNACT holders “win” to get a Cash-Only Consideration bump to 1.0x Price/Sep2021 NAV at S$1.1949/unit. This gets them out at NAV.
- However there is a catch they want to stay invested in the assets, they have to buy MCT in the market or accept that the scrip ratio was correct.
- To fund the Cash-Only Consideration option, there will be a Preferential Offering at S$2.0039/unit, and MIPL has offered to underwrite the entire deal. MNACT holders get a free option now.
KRX Auto (KODEX ETF) Rebalancing Preview
- KRX Autos rebalances once a year in September. The effective date of the upcoming rebalancing is September 9.
- The market cap difference between the top three stocks and the rest of the stocks is significant. So, the passive impact of the non-capped constituents is substantial.
- Accordingly, this index rebalancing is well worth a preemptive position build-up. At this point, notable stocks from a flow perspective are Hanon Systems, Kumho Tire, and Halla Holdings.
Before it’s here, it’s on Smartkarma
