In today’s briefing:
- Russian Impact on MSCI Korea: Total Inflow Size & Top 20 Inflow (X ADTV) Stocks
- Hitachi Transport Is the Eventy Energizer Bunny
- Ausnutria’s Offer Gets Up. But Only Just
- Razer’s Offer Spread Risk/Reward – Takeaways from Logitech’s Investor Day
- FTSE TWSE Taiwan 50 Index Rebalance: China Dev Fin (2883) Replaces Pegatron (4938)
- S&P/ASX Indices: March 2022 Index Changes and Trading Strategy
- Three Ways of Settling Nexon Inheritance Tax Payment: Each Way’s Ramifications
- S&P/ASX Index Rebalance (March 2022): Changes & Surprises
- Selected European Holdcos and DLCs: February ‘22 Report
Russian Impact on MSCI Korea: Total Inflow Size & Top 20 Inflow (X ADTV) Stocks
- Korea’s local market estimates an inflow (resulting from the Russian departure) to Korea at ₩1T
- Most of the preferred stocks in MSCI Korea top the list with the highest passive buying ratios to the 30-day average trading value.
- Other than that, S1 Corp, Coway, Samsung SDS, C&T, and KT&G are the others that sit high on the list.
Hitachi Transport Is the Eventy Energizer Bunny
- Hitachi Transport System (9086 JP) has been “virtually” for sale since October 2019 but it did not pop when others did then. But SG and HTS “consciously uncoupled” in 2020.
- Mid-Year last year saw news HTS was entertaining offers, which didn’t go anywhere but newer news suggests Round 2 of a new course of bidding is done.
- And the stock keeps on going up and up and up.
Ausnutria’s Offer Gets Up. But Only Just
- 52.7%. The only number that matters. That satisfied the acceptance condition to the mandatory conditional cash Offer. But it was a close-run thing.
- The Offer is now unconditional and will remain open for acceptance until the 17 March.
- Yili has no intention to privatise Ausnutria Dairy Corp (1717 HK) and intends to maintain its listing following the close of the Offer.
Razer’s Offer Spread Risk/Reward – Takeaways from Logitech’s Investor Day
- Razer Inc (1337 HK)‘s scheme document will be released after the FY21 results, which are on 17 March. The headcount test is a key challenge.
- Logitech International SA (LOGN SW)’s investor/analyst day on 3 March underscores Razer’s opportunity and adds to minorities’ grievances that the offer price is unattractive.
- Current deal probability implies broadly a 50/50 chance of success with a gross spread of 19%. We would be buyers up to HK$2.5 per share (implies 65% deal probability).
FTSE TWSE Taiwan 50 Index Rebalance: China Dev Fin (2883) Replaces Pegatron (4938)
- As expected, FTSE has announced that China Development Financial (2883 TT) will replace Pegatron Corp (4938 TT) in the FTSE TWSE Taiwan 50 index at the close on 18 March.
- Passive trackers need to buy 1 days ADV on China Development Financial (2883 TT) while passive selling on Pegatron Corp (4938 TT) is larger at 2.5 days of ADV.
- China Development Financial (2883 TT) trades expensive to its peers while Pegatron Corp (4938 TT) is cheaper than its peers. Traders can use the index flows to reposition.
S&P/ASX Indices: March 2022 Index Changes and Trading Strategy
- The S&P/ASX Index family is a widely-tracked group of indices and sub-indices which represent the performance of ASX-listed companies.
- The constituency changes for ASX 300, ASX 200, ASX 100, ASX 50, and ASX 20 were announced today.
- Below is a discussion of the official results and potential trading strategies to generate market-neutral returns in the run up to the Inclusion Event.
Three Ways of Settling Nexon Inheritance Tax Payment: Each Way’s Ramifications
- There are three ways families can settle inheritance tax: 1. payment in Kind, 2. direct sale of the NXC stake, and 3. NXC sells its stake in Nexon Japan.
- They have different ramifications from an investment point of view, and the third option is probably the one that the market desires most.
- If the family goes for the third option, they will likely sell all of NXC’s Nexon Japan stake (47.89%), which will lead to a TOB to Nexon Japan minority shareholders.
S&P/ASX Index Rebalance (March 2022): Changes & Surprises
- There are two changes for the S&P/ASX20, one change for the S&P/ASX50, four changes to the S&P/ASX 200 (AS51 INDEX), while there are 14 adds/ 9 deletes to the S&P/ASX300.
- While we had forecast nearly all the changes, there are a few surprises. The big one’s the inclusion of Santos Ltd in the ASX20 and the deletion of Block (SQ2 AU).
- Following its huge rally over the last few months, AVZ Minerals (AVZ AU) is a double inclusion to the S&P/ASX 200 and the S&P/ASX300 Index. Plus there are FTSE inflows.
Selected European Holdcos and DLCs: February ‘22 Report
- There is just one DLC left in this report, Rio Tinto, following the unification of BHP and Shell.
- Discounts to NAV of holdcos have shown mixed performance: Alba, 38.9%; GBL, 29%; Heineken Holdings, 19%; Industrivärden, 10.1%; Investor B, 11.61%; Kinnevik B, 3.3%(premium); Porsche Automobile Holding, 27.7%.
- 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.
Before it’s here, it’s on Smartkarma
