In today’s briefing:
- Alibaba (9988 HK/BABA): Possible Softbank Sale and Passive Impact
- MSCI Feb 2022 Index Rebalance: Day 1 Chosen Again
- Toyota Industries Back To Covid Lows Vs. Toyota Motors
- Shimizu Corp Partial Offer for Nippon Road (1884 JP) May Get Interesting
- LG Energy IN/LG Chem OUT: TIGER (WISE) Done on Feb 8 & KODEX (FnGuide) Under Progress Until Feb 22
Alibaba (9988 HK/BABA): Possible Softbank Sale and Passive Impact
- Alibaba Group (9988 HK) has filed a F-6EF Registration Statement to register an additional 1bn ADS. This will most likely be Softbank Group selling part (or all) of the stake.
- There is a possibility that Softbank Group (9984 JP) is looking to use the stock as collateral for a financing trade and moving their holdings to a more liquid market.
- If Softbank Group (9984 JP) sells some of their shares, there will be buying from MSCI and FTSE trackers. There will be minimal buying from HSI, HSCEI and HSTECH trackers.
MSCI Feb 2022 Index Rebalance: Day 1 Chosen Again
- There are 17 adds and 8 deletes for the Asia Pacific region. Most of the changes were expected, but there are a few surprises.
- China Resources Microelectronics-A (688396 CH), Grab (GRAB US) and Lufax Holdings (LU US) have been added, while Qinghai Salt Lake (000792 CH) and Pop Mart International (9992 HK) have not.
- The last tranche of Sea‘s inclusion in the SIMSCI INDEX will take place at the QIR. With the inclusion of GRAB, there will be two foreign listings in the SIMSCI.
Toyota Industries Back To Covid Lows Vs. Toyota Motors
- Toyota Industries (6201 JP)‘s implied stub and simple ratio with 8.5%-held Toyota Motor (7203 JP) has significantly bifurcated in the last 12 months.
- Yet recent and forward earnings at the stub level indicate this dislocation is unjustified.
- Toyota Industries is a set up at this current level.
Shimizu Corp Partial Offer for Nippon Road (1884 JP) May Get Interesting
- Shimizu Corp (1803 JP) has held ~25% of Nippon Road (1884 JP) and has now announced a Partial Tender Offer to go to 50.1%. It’s a 20-year high, but…
- … it’s the wrong price. And it has been. And a quasi-activist has built a 16% stake in recent years.
- The question is whether this gets done. They only need to buy 25.25% out of the 75% they don’t own, but it’s a question.
LG Energy IN/LG Chem OUT: TIGER (WISE) Done on Feb 8 & KODEX (FnGuide) Under Progress Until Feb 22
- For KODEX (FnGuide), the actual rebalancing trading must have begun yesterday, Feb 8, and runs until Feb 22, presumably at an equal daily weighting.
- TIGER (WISE) announced that its implementation of LG Energy IN/LG Chem OUT was completed as of the end of yesterday.
- As for the daily passive impact from KODEX until Feb 22, LG Energy is expected to receive an inflow of 0.03x DTV, whereas LG Chem’s outflow should be -0.10x ADTV.
Before it’s here, it’s on Smartkarma
