In today’s briefing:
- Oops, Price Leaks Early on Toshiba – Now We Have To Think About Probability
- S&P/ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes
- Emperador (EMP PM): FTSE Inclusion Likely in September
- Discussing How We Should Time the KEPCO E&C Block Deal
- Sumber Alfaria Trijaya (AMRT IJ): LQ45 & MSCI Inclusion Done, FTSE Coming Up
- True/DTAC: Merger Support After Court Ruling
- SPH REIT Option Has 1 Week To Go – Look Elsewhere
- Link Net MTO Set to Launch as Axiata Completes Stake Acquisition
- FTSE UK Quiddity Leaderboard Sep 2022: Sanne Group Deletion Seems Likely in 3Q 2022
Oops, Price Leaks Early on Toshiba – Now We Have To Think About Probability
- An article this morning in the Yomiuri suggested JIC was bidding, even though they have not been in any “lists of 8 bidders” I have seen. The market yawned.
- An article this evening says bidders are offering “up to ¥7,000/share” but there is a range of pricing and conditions. Not surprising, but we know little.
- Shareholder structure matters. This has been event-y for a long time so I expect not many new buyers are ready to come in. This just shifts the range. And risk.
S&P/ASX Index Rebalance Preview (Sep): Plenty of High Impact Changes
- There could be one change to the S&P/ASX 200 (AS51 INDEX) in July following the privatisation of Uniti Group Ltd (UWL AU).
- Then there will be a whole bunch of changes to the S&P/ASX 100 Index, S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index in September as part of the regular rebalance.
- There is large short interest on a couple of the potential adds and a lot of the potential deletes. That will drive stock price moves closer to implementation.
Emperador (EMP PM): FTSE Inclusion Likely in September
- Emperador Inc (EMP PM) passes the FTSE Median Liquidity test and the inclusion thresholds for full market cap and investable market cap and could be added in the FTSE GEIS.
- The inclusion should take place at the September SAIR and that would require passive funds to buy over 84m shares. That is over 35 days of ADV.
- A potential secondary listing in Singapore has moved the stock in the past and that could be another trigger for the stock to move higher.
Discussing How We Should Time the KEPCO E&C Block Deal
- Since KEPCO announced the sale of its stake in KEPCO E&C, this will happen. But the question is when, and the market was betting that it would not happen immediately.
- But these bets collapsed yesterday. It is because Choo Kyung-ho, Deputy Prime Minister of Economy, publicly made remarks yesterday that seemed to pressure KEPCO to make additional self-rescue efforts.
- KEPCO may aim at the level of ₩60,000 by applying a 5-7% discount rate from the mid-₩60,000 price. With this price in mind, we need to time this block deal.
Sumber Alfaria Trijaya (AMRT IJ): LQ45 & MSCI Inclusion Done, FTSE Coming Up
- Sumber Alfaria Trijaya (AMRT IJ) was added to the LQ45 Index in January and the MSCI Indonesia Index in May. The pick-up in liquidity should result in FTSE inclusion.
- If added, passive FTSE trackers will need to buy 631m shares (US$78m; 5 days of ADV) of Sumber Alfaria Trijaya (AMRT IJ) at the close of trading on 16 September.
- Sumber Alfaria Trijaya Tbk Pt (AMRT IJ) trades in line with the average of its peers on EV/EBITDA and forward PE, though it trades expensive as compared to the median.
True/DTAC: Merger Support After Court Ruling
- According to local media, Thailand’s Central Administrative Court has dismissed a petition seeking to overturn a 2018 NBTC regulation that allowed mergers to take place without requiring the regulator’s approval.
- Reportedly the Court ruled earlier this month that the enforcement of this regulation was lawful; and that the DTAC/True merger would not cause unrecoverable damage to the telecom sector.
- Both DTAC and True gained on the news. A merger now appears increasingly more likely; although conditions may still be imposed to protect consumers.
SPH REIT Option Has 1 Week To Go – Look Elsewhere
- The SPH REIT (SPHREIT SP) “option” has performed admirably so far, up 4.2% in a month, and now it is time to look elsewhere.
- SPH REIT has outperformed its Retail S-REIT peers and is now near the top of its undisturbed 3-year range.
- And there are potential large flow events on the horizon which would benefit the Peers more than SPH REIT.
Link Net MTO Set to Launch as Axiata Completes Stake Acquisition
- Axiata Group (AXIATA MK) and XL Axiata (EXCL IJ) completed the acquisition of a combined 66.03% interest in Link Net (LINK IJ) at IDR4,800 per share.
- Axiata will disclose the details of the MTO in due course. We think that the MTO opens on 7 July with the earliest possible close of 11 August.
- At the last close, the gross and annualised spread of a 19 August payment is 3.7% and 23.7%, respectively.
FTSE UK Quiddity Leaderboard Sep 2022: Sanne Group Deletion Seems Likely in 3Q 2022
- In this insight, we take a look at the potential index changes for the FTSE 100 Index and the FTSE 250 Index in the September 2022 Rebalance.
- In addition to the Regular Rebalance changes, Sanne Group PLC (SNN LN) could get deleted during the quarter, leaving room for one intra-quarterly ADD for FTSE 250.
- There are more M&A events that could close in the next few months and trigger irregular index changes for both FTSE 100 and FTSE 250.
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