In today’s briefing:
- A Detailed Guide About Korea’s FOL Stocks & MSCI Treatments
- WH Group (288 HK) – Stronger, But Still WAY Cheap to Peers
- SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out
- India: AMFI Stock Reclassification Preview
- Infomedia Draws in Vista Equity Partners to Start a Three-Way Auction
- HMM-Like Dilution Event: Korean Air Is Nearly Done, But Asiana Airlines Gearing Up
A Detailed Guide About Korea’s FOL Stocks & MSCI Treatments
- Korea has a total of 33 FOL stocks. The Korean government restricts foreign ownership in major national infrastructure operators such as broadcasting companies, airlines, and telecommunication companies.
- They each have a different FOL % in the range of 0-49.99%, and five are currently included in the MSCI Standard: SKT, LG Uplus, CJ ENM, KEPCO, & KAL.
- Those located on the borderline that will trigger a meaningful event in the MSCI Standard Index are the three telecom companies: SKT, KT, & LG Uplus.
WH Group (288 HK) – Stronger, But Still WAY Cheap to Peers
- WH Group has sharply outperformed both global peers and HK/China-listed peers since the last bullish insight pounded the table in mid-March 2022.
- Since then, the Pork/Feed ratio has been climbing in China and flat to down in the US, and pork prices in China are particularly robust recently.
- WH Group (288 HK) remains cheap as chips. And despite gains, still Cheapest in Yonks relatively speaking.
SET50 Index Rebalance: BLA, JMT, JMART Added; COM7, RATCH, STGT Out
- Bangkok Life Assurance (BLA), JMT Network Services (JMT) and Jaymart (JMART) will replace Com7 (COM7), Ratch Group (RATCH) and Sri Trang Gloves (STGT) in the SET50 INDEX.
- Estimated one-way turnover is 2.1% and will result in a one-way trade of THB 1,914m. There is little funding flow on the other index stocks.
- The inclusion of Bangkok Life Assurance (BLA TB) is a minor surprise. The deletion of Com7 PCL (COM7 TB) is a much bigger surprise.
India: AMFI Stock Reclassification Preview
- Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.
- We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.
- Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.
Infomedia Draws in Vista Equity Partners to Start a Three-Way Auction
- Infomedia Ltd (IFM AU) disclosed an indicative non-binding proposal from Vista Equity Partners at A$1.70 a share. The Board has provided due diligence to all three bidders
- Curiously, Vista’s offer is in line with TA/Viburnum but below the Battery Ventures’ offer of A$1.75. This suggests that Vista requires due diligence to firm up a higher bid.
- With the market downturn starting to blow up M&A deals, the three-way auction for Infomedia lowers its risk profile. At last close, the gross spread to the offers is 6.3-9.4%.
HMM-Like Dilution Event: Korean Air Is Nearly Done, But Asiana Airlines Gearing Up
- The KAL event is almost over. But we still have Asiana Airlines. The KDB’s Asiana CB conversion should also be considered a foregone conclusion.
- Applying the case of KAL, the KDB will likely file conversion when 30 days have elapsed since receiving the repayment notice. For this, the prevailing local consensus is June 10.
- Conversion filing on July 8 and listing on July 29 with the 15-day delay rule applied is a likely scenario. Hence, our entry point should be from July 4.
Before it’s here, it’s on Smartkarma
