In today’s briefing:
- STAR50 Index Rebalance Preview (Sep): Change Is the Only Constant
- Fraser Hospitality Trust Halted – Privatisation Likely. Far East The Better Trade Here.
- Toshiba – Push Me Pull Me
- Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year
- OOIL (316 HK): Peak Index Inclusion?
STAR50 Index Rebalance Preview (Sep): Change Is the Only Constant
- With only one change expected in September using a 12 month minimum listing history, we expect the index committee to continue using a 6 month minimum listing history.
- That will see the maximum of 5 changes that are permitted at a single rebalance resulting in a one-way turnover just shy of 5%.
- Over the last few rebalances, the adds have outperformed the deletes post the end of the review period. That’s expected given passive trackers need to buy/sell a lot of stock.
Fraser Hospitality Trust Halted – Privatisation Likely. Far East The Better Trade Here.
- Frasers Hospitality Trust (FHT SP) has been the subject of media reports about possible “strategic options” or go-private interest since this spring. They responded on 8 April.
- Today the shares were halted. We should expect news shortly. A Bloomberg article this morning suggested the promoters were seeking funding. Presumably, they will find it relatively quickly.
- This could take a week rather than a day but given the run-up, one should also expect it a) to work and b) get done with small premium from here.
Toshiba – Push Me Pull Me
- Aaaaand staying public is apparently an option again according to CEO Shimada’s interview with Bloomberg.
- Shimada has also said that he wants any buyer to keep Toshiba whole limiting some of the levers a PE fund could potentially pull.
- With the company’s EV/EBIT multiple of 13.7x now significantly above peers such as Hitachi’s 11.3x prospects for a hefty premium seem weak.
Net Protections Holding IPO Lock-Up – Small Expiry Now, Before 20% Is Released Later in the Year
- Net Protections Holdings, a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
- As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
- In this note, we will talk about the upcoming lock-up expiry on 12th Jun 2022.
OOIL (316 HK): Peak Index Inclusion?
- Over the last 3 months, Orient Overseas International (316 HK) has been added to the FTSE All-World Index, MSCI Standard Index and Hong Kong Hang Seng Index (HSI INDEX).
- The stock has outperformed its Asia peers and now trades at a higher valuation. Shorts have been building positions over the last couple of months.
- Cumulative excess volume on the stock has been increasing. While a lot of positioning has likely been unwound, there could be more unwinding over the next few weeks.
Before it’s here, it’s on Smartkarma
