In today’s briefing:
- Sep24 S&P500 Index Rebal – Two Changes Expected; $6bn One-Way Flow and Two Spinoffs?
- IDX30/LQ45/IDX80 Index Rebalance: Constituent, Float & Capping Changes
- Zhihu (2390 HK/ZH US)’s Cheeky Buyback
- Jeisys Medical (287410 KS): Archimed Reloads Delisting Offer
- EQD | WHAT IF The NIFTY Starts to Pullback This Week?
- Tatsuta Electric (5809 JP): Eneos Returns with a Token Bump to JPY780
- Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger
- Tohokushinsha Film (2329 JP): Potential Scenarios as 3D Lobs a Privatisation Proposal
- Mandala Multifinance (MFIN IJ): Offer Now Open
- Taiwan Dual-Listings Monitor: TSMC and ASE Premium Trading Range Blow-Outs During Recent Sell-Off
Sep24 S&P500 Index Rebal – Two Changes Expected; $6bn One-Way Flow and Two Spinoffs?
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- In this insight, we take a look at the upcoming constituent changes in the run up to the September 2024 index rebal event.
- We expect two regular changes during September. More interestingly, a couple of SP500 members are working on spin-offs which could trigger some high-impact deletions over the next few months.
IDX30/LQ45/IDX80 Index Rebalance: Constituent, Float & Capping Changes
- There is 1 constituent change for the LQ45 Index and 2 constituent changes for the IDX80 Index at the rebalance to be implemented at the close on 31 July.
- The largest passive inflows are expected in Amman Mineral Internasional (AMMN), Bank Rakyat Indonesia (BBRI), Bank Central Asia (BBCA), Bank Mandiri Persero (BMRI) and Jasa Marga (Persero) (JSMR).
- The adds have moved higher over the recent past and are near their highs while the deletes have dropped over the last few years and are trading near their lows.
Zhihu (2390 HK/ZH US)’s Cheeky Buyback
- Back on the 19th July, online Q&A play Zhihu (2390 HK/ZH US) announced the buyback of 46.92mn ordinary A shares (15.9% of shares out) at HK$9.11/share (US$3.50/ADS).
- Assuming the buyback is fully taken up, chairman Yuan Zhou’s stake will increase to 44.4% from 42.9% currently (held via A shares and the weighted-voting B shares).
- The key condition is a simple majority vote from independent shareholders. Zhihu is sitting on net cash of US$764mn. A significantly larger buyback, or higher price, could have been initiated.
Jeisys Medical (287410 KS): Archimed Reloads Delisting Offer
- Last month, aesthetic laser maker Jeisys Medical (287410 KS) announced French PE outfit Archimed SAS was seeking to delist the company.
- Via a Tender Offer, Archimed sought to acquire 72% of Jeisys at ₩13,000. Archimed also inked agreements with founders/directors for 26.44%, taking its possible % holding to 98.44%.
- The Tender Offer closed on the 22nd July with Archimed holding 81.39% (including the aforementioned agreements). Archimed has now reloaded, on the same terms. There is no minimum acceptance condition.
EQD | WHAT IF The NIFTY Starts to Pullback This Week?
- The NIFTY Index defied gravity and kept rallying higher for the past 8 weeks. According to our models it’s massively OVERBOUGHT and has been so for a while.
- While many other Asian markets have pulled back decisively, the NIFTY is just going higher and higher.
- Assuming it has its own uncorrelated drivers, where would it be a BUY again, if it pulls back this coming week? Let’s discuss this in this WEEKLY insight.
Tatsuta Electric (5809 JP): Eneos Returns with a Token Bump to JPY780
- ENEOS Holdings (5020 JP) has increased the Tatsuta Electric Wire & Cable (5809 JP) tender offer price by 8.3% to JPY780 and extended the offer period to 19 August.
- Eneos tried to get the required acceptances by refusing to bump and subsequently extending the offer period. The tactics failed as minorities required a bump due to the market re-rating.
- While the revised offer remains light, the token bump and deal fatigue should suffice to nudge the marginal vote to accept. At the last close, the gross/annualised spread was 5.0%/85.8%.
Doosan Bobcat Employees Involved In Major Breach of Duty + Doosan Group Pushes Ahead With Merger
- On 26 July, it was reported in the local media that there has been a major breach of duty by nearly 40 current/former employees at Doosan Bobcat.
- The fact that this material breach of duty was not revealed prior to the merger announcement adds to the argument that this merger/split/delisting should be either cancelled or redone.
- We remain negative on all major companies involved in this deal including Doosan Bobcat and Doosan Robotics. The breach of duty at Doosan Bobcat adds to the fire.
Tohokushinsha Film (2329 JP): Potential Scenarios as 3D Lobs a Privatisation Proposal
- On 24 July, 3D Investment Partners proposed to privatise Tohokushinsha Film (2329 JP) through a tender offer at JPY600-650 per share. A special committee will evaluate the proposal.
- 3D’s privatisation plan, in its current terms, is a non-starter as the price is low, and its activism campaign has so far been met with the Board’s scepticism.
- The possible scenarios are that a white knight emerges to buy 3D’s stake/launch a counteroffer, 3D bumps the offer price, or the Board introduces a more ambitious MTM plan.
Mandala Multifinance (MFIN IJ): Offer Now Open
- Waaay back in June 2023, MUFG (8306 JP) and 92.7%-held Adira Dinamika (ADMF IJ) entered into SPAs with key shareholders to acquire an 80.6% stake in Mandala Multifinance (MFIN IJ).
- MFIN’s shareholders overwhelmingly approved the change of control at the 13th Feb EGM. OJK signing off was the next hurdle.
- The Tender Offer is now open, at the (expected) price of IDR 3,297/share. The close of the Offer is the 21st August, with payment on the 28th August.
Taiwan Dual-Listings Monitor: TSMC and ASE Premium Trading Range Blow-Outs During Recent Sell-Off
- TSMC: Crashed Then Rebounded to +15.1% Premium; Likely to Break Down Again
- UMC: -0.2% Discount; Earnings Imminent; Notable Decrease in ADR Headroom
- ASE: Rebounded to +9.2 Premium After Major Breakdown; Likely to Drop Again
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