In today’s briefing:
- Suzuki’s NAV Discount And Implied Stub Plumb New Lows. Again
- Emperador Secondary Listing: Borderline STI Inclusion
- WISE Theme Indexes Rebalancing Today: Flow Projections as of Close on April 12
- SK Shieldus IPO: Index Inclusion Timeline
- EML Payments Flirtation with Bain Likely Not the Last
- Dongwon Industries Merger: KOSPI 200 Flow Trading & Shorting Prospects on Cancellation
- FTSE UK Index Series: Leaderboard for June 2022
Suzuki’s NAV Discount And Implied Stub Plumb New Lows. Again
- Suzuki Motor (7269 JP)‘s implied stub and simple ratio (Suzuki/ Maruti Suzuki India (MSIL IN)) are currently at all-time lows.
- This bifurcation has become endemic in the relative value space, especially in Japan.
- Maruti is trading rich amid its ongoing support for hybrid vehicles. That scenario won’t play out well.
Emperador Secondary Listing: Borderline STI Inclusion
- Emperador Inc (EMP PM) has received conditional eligibility to list (ETL) from the SGX (SGX SP) for its Secondary Listing by way of introduction on the SGX.
- Emperador Inc (EMP PM) is a borderline inclusion to the FTSE Straits Times Index (STI) (STI INDEX) on three criteria – free float, liquidity, and market cap.
- If EMP passes all criteria and is added to the STI, passive trackers will need to buy 26.4m shares (US$8.7m). EMP should also be a FTSE All-World inclusion in September.
WISE Theme Indexes Rebalancing Today: Flow Projections as of Close on April 12
- Three WISE theme indexes undergo quarterly rebalancing today at the close.
- The flow projections shown below in the DETAIL are based on the closing prices of April 12.
- We have 13 Long/Short tradable names based on these flow projections: an ADTV of at least ₩10B & a passive flow impact of 0.10x ADTV or more
SK Shieldus IPO: Index Inclusion Timeline
- SK Shieldus (ABFHIZ KS) is looking to raise up to US$860m selling a mix of primary and secondary shares. The stock is expected to in the second half of May.
- The company will be valued at US$2.87bn at the top end of the IPO range and will not get Fast Entry to any of the major indices.
- Entry to the KOSPI2 INDEX is unlikely, MSCI inclusion could take place at the November SAIR, while FTSE inclusion could take place at the December QIR.
EML Payments Flirtation with Bain Likely Not the Last
- In response to an AFR article, EML Payments Limited (EML AU) confirmed takeover interest from Bain Capital. However, discussions have ceased. The shares closed 10.5% higher at A$2.94.
- The bombed-out share prices of payment companies have supported recent M&A activity such as Afterpay Holdings (AFY AU)/Square Inc (SQ US) and Sezzle Inc (SZL AU)/Zip Co Ltd (Z1P AU).
- Despite today’s pop, the shares are still 50% down over the last 12 months. EML’s market positioning and expected stronger 2HFY22 should continue to fuel takeover interest.
Dongwon Industries Merger: KOSPI 200 Flow Trading & Shorting Prospects on Cancellation
- Dongwon Industries merger will welcome 44.88M new shares, bumping up the total issued shares by 2.5 times.
- So, we will likely see a passive inflow of 0.39x ADTV at the close on October 20, a level certainly worth our attention for flow trading.
- However, a short position approach to betting on this possibility is expected to face quite a tight journey.
FTSE UK Index Series: Leaderboard for June 2022
- The FTSE UK Index Series is a widely tracked family of sub-indices representing the performance of the public equity markets in the UK.
- These indices are reviewed on a quarterly basis in March, June, September, and December.
- In this insight, we take a look at the potential constituency changes for FTSE 100 and FTSE 250 that happen between now and the completion of the June 2022 review.
Before it’s here, it’s on Smartkarma
