In today’s briefing:
- Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)
- FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
- FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
- Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications
- NIFTY50 Index Rebalance: Shriram Finance to Replace UPL
- NIFTY NEXT50 Index Rebalance: Five Changes on Expected Lines; Big Turnover
- Nippon Express (9147) Secondary Offering – Banks, Sompo, Others Sell – “2024 Problem” Looms
- S&P500 Index Rebalance: SPCY Additions & Large Impact
- NPS to Invest 11 Trillion Won in Low PBR/Value Stocks in Korea?
- (Mostly) Assia-Pac M&A: Alumina, Superloop, Qantm, Samsonite, ESR, APM , Adbri, CSR, Outsourcing
Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)
- Amazon.com Inc (AMZN US) will replace Walgreens Boots Alliance (WBA US) in the Dow Jones Industrial Average (INDU INDEX) at the close on 23 February.
- Passives will need to sell a lot of Walmart (WMT US) following the 3:1 stock split and buy a lot of Amazon.com Inc (AMZN US).
- Given the ad hoc nature of the rebalances and the short timeline between announcement and implementation, the stocks could move over the rest of the week.
FnGuide Semiconductor Top10 Index Rebalance Preview: One Change Likely; Close Among Potential Adds
- ISC Co Ltd (095340 KS) could replace Wonik Ips (240810 KS) in the FnGuide Semiconductor Top10 Index at the April rebalance.
- Jusung Engineering (036930 KS) is ranked just behind ISC Co Ltd (095340 KS) and could be added to the index instead depending on relative price performance.
- Shorts on ISC Co (095340 KS) have been stable over the last few months while there has been big covering on Wonik Ips (240810 KS) and Jusung Engineering (036930 KS).
FnGuide Top10 Equal Weight Index Rebalance Preview: Celltrion Could Replace Samsung SDI
- The Samsung KODEX Fn Top10 Equal Weight ETF (395170 KS) tracks the FnGuide Top 10 Equal Weight Index and has an AUM of US$241m.
- We expect Celltrion Inc (068270 KS) will replace Samsung SDI (006400 KS) in the index at the March rebalance.
- There will be 0.26x ADV to buy in Celltrion Inc (068270 KS) while passives will need to sell 0.17x ADV of Samsung SDI (006400 KS).
Hyosung Corp (004800 KS): Spin-Off & KOSPI200 Index Implications
- Hyosung Corporation (004800 KS) has announced that it is spinning off part of its business holdings to Hyosung New Holding Corporation in a 0.818:0.182 ratio.
- The stock will remain suspended from late June to late July. We expect Hyosung Corporation (004800 KS) to maintain its index membership while the New Entity will not be added.
- The dynamics between listed ETFs and non-listed passive trackers differ and we take a look at the potential index flows.
NIFTY50 Index Rebalance: Shriram Finance to Replace UPL
- Shriram Finance (SHFL IN) will replace UPL Ltd (UPLL IN) in the NIFTY Index (NIFTY INDEX) at the close of trading on 27 March. This was a high probability change.
- Trent Ltd (TRENT IN) missed out on inclusion and that results in Bharat Petroleum Corp (BPCL IN) staying in the index.
- There is over 11 days of delivery volume to trade in the add and delete and there appears to be significant positioning in one of the stocks.
NIFTY NEXT50 Index Rebalance: Five Changes on Expected Lines; Big Turnover
- There are five changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that will be implemented at the close on 27 March. Changes are on expected lines.
- Estimated one-way turnover for the NSE Nifty Next 50 Index (NIFTYJR INDEX) is 10.1% resulting in a one-way trade of INR 22.2bn (US$268m).
- Apart from the impact on the adds and deletes, there will be a big impact on some of the non-F&O stocks due to capping and funding flows.
Nippon Express (9147) Secondary Offering – Banks, Sompo, Others Sell – “2024 Problem” Looms
- Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
- Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position.
- NX also announced an on-market buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.
S&P500 Index Rebalance: SPCY Additions & Large Impact
- Super Micro Computer (SMCI US) and Deckers Outdoor (DECK US) replace Whirlpool Corp (WHR US) and Zions Bancorporation (ZION US) in the S&P 500 INDEX at the close on 15 March.
- There are a bunch of inclusions, deletions and migrations across the S&P 500 INDEX (SPX INDEX), the S&P Midcap 400 Index, and the S&P SmallCap 600 Index.
- The largest flows will be in the S&P 500 INDEX (SPX INDEX) adds and the largest impact in the adds to the S&P SmallCap 600 Index.
NPS to Invest 11 Trillion Won in Low PBR/Value Stocks in Korea?
- NPS is in discussion to invest nearly 11 trillion won in low PBR/undervalued Korean stocks.
- Korea Exchange is in discussion with NPS to create a new index tracking low PBR/undervalued stocks in Korea in efforts to boost government’s efforts to boost the local stock market
- This index is tentatively named Korea Value-Up Index and institutional investors are expected to use it as one of the benchmark indices for equity investments.
(Mostly) Assia-Pac M&A: Alumina, Superloop, Qantm, Samsonite, ESR, APM , Adbri, CSR, Outsourcing
- I tally 54 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three new deals discussed this week on Smartkarma (possible four): Offers for Alumina (AWC AU), Superloop (SLC AU) & Qantm Intellectual (QIP AU); Samsonite (1910 HK)‘s ESR (1821 HK)‘s rumoured approaches.
- Key updates took place on APM Human Services Internation (APM AU), Adbri (ABC AU), CSR Ltd (CSR AU), Weiqiao Textile Co (2698 HK), and Outsourcing Inc (2427 JP).
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
