In today’s briefing:
- JAPAN ACTIVISM: Silchester Goes After Bank of Kyoto
- KOSPI200 Index Rebalance Preview (June): Review Period Ends as Reversion Kicks In
- Index Rebalance & ETF Flow Recap: MSCI, S&P/ASX, STI, Sensex, Kotak Bank, SMM/KEP O&M, LIC
- Last Week in Event SPACE: Sembcorp/Keppel, Razer, Hitachi Transport, Renesas, CNOOC
- Hitachi Results, Special Gain on Asset Sale, and Semi-Bigly Buyback
JAPAN ACTIVISM: Silchester Goes After Bank of Kyoto
- Silchester International Investors has owned Bank of Kyoto (8369 JP) for 16 years and is now the largest shareholder in the bank.
- They have been dissatisfied, become vocal behind the scenes with their dissatisfaction, and BoK management disagrees so they will go to the mattresses. Gently.
- This could get some investors excited, but it is unlikely to be a successful activist effort.
KOSPI200 Index Rebalance Preview (June): Review Period Ends as Reversion Kicks In
- The review period for the June rebalance ended on Friday. The changes will be announced in around 3 weeks and will be effective after the close on 9 June.
- We see 7 changes for the index with most of them being high probability. The potential adds have outperformed the potential deletions, but have given up some gains in April.
- Short interest on some of the potential deletions has risen sharply over the last month and now almost equals the estimated passive selling.
Index Rebalance & ETF Flow Recap: MSCI, S&P/ASX, STI, Sensex, Kotak Bank, SMM/KEP O&M, LIC
- Last Friday was the last day of the review period for the MSCI May SAIR, Shanghai Shenzhen CSI 300 Index, STAR50 INDEX, KOSPI2 INDEX, KOSDAQ 150 Index and SENSEX INDEX.
- We expect Yangzijiang Financial Holding (YZJFH SP) will be deleted from the FTSE Straits Times Index (STI) (STI INDEX) at the close on 4 May.
- ETFs focused on China, Taiwan and Hong Kong had inflows during the week while there were outflows on Korea focused ETFs.
Last Week in Event SPACE: Sembcorp/Keppel, Razer, Hitachi Transport, Renesas, CNOOC
- Keppel (KEP SP) and Sembcorp (SMM SP) have announced the O&M business combination and it is a little more interesting than expected. It is a Very Big Desirable Order Book.
- Razer Inc (1337 HK)was trading at a 8% gross spread to terms a day before the vote, on headcount test concerns. But it was even close.
- KKR and Hitachi Ltd (6501 JP) have a deal to get KKR to buy Hitachi Transport System (9086 JP) in a VLBO (Very Leveraged BuyOut).
Hitachi Results, Special Gain on Asset Sale, and Semi-Bigly Buyback
- Hitachi Ltd (6501 JP) results were salutary but noisy and the year to March 2023 is forecast similar (salutary but noisy). Service integration and growth to external customers is key.
- Forecast growth in main businesses ex- to-be-sold listed subs is decent, but could be better.
- A SEMI-Bigly buyback will help cushion any selling, but it has recently outrun Siemens on a like-for-like basis.
Before it’s here, it’s on Smartkarma
