In today’s briefing:
- NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank
- HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace GDS (9698 HK)
- KOSDAQ150 Index Rebalance Preview: Posco DX Listing Transfer
- MVIS Australia A-REITs Index Rebalance: ASKing for a Reversal
- MarketVector Vietnam Local Index Rebalance: One Add & Other Changes
- The Psychology of Money: A Book Review
- MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won
- Japan Weekly | Advantest, Ibiden, Recruit, Infroneer, Glosel
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Sigma Health, Vinda, Outsourcing, Allkem, Costa, Hollysys
NIFTY200 Momentum30 Index Rebalance: 18 Changes a Side, 58% Turnover, Momentum Intact
- There are 18 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 28 December. We had forecast all the index changes.
- Estimated one-way turnover is 57.7% resulting in a one-way trade of INR 21.75bn (US$261m). 8 stocks have over 1x ADV to trade; 21 stocks have atleast 0.5x ADV to trade.
- The adds have continued to outperform the deletes and the index and there could be further outperformance heading into year-end and buying from passive trackers.
Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank
- There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.
- There are a lot of implementations this week, with KOSPI 200 and KOSDAQ 150 on Thursday and then others across a bunch of countries on Friday.
- There were big inflows to Tracker Fund of Hong Kong (2800 HK) during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.
HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace GDS (9698 HK)
- Tongcheng Travel Holdings (780 HK) is expected to replace GDS Holdings (9698 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the March review.
- Constituent changes and capping changes will result in a one-way turnover of 2.32% and that will result in a round-trip trade of US$628m.
- Short interest on Tongcheng Travel Holdings (780 HK) is near its lows while there has been some recent short covering in GDS Holdings (9698 HK).
KOSDAQ150 Index Rebalance Preview: Posco DX Listing Transfer
- The KRX has preliminarily approved Posco DX (022100 KS)‘s listing transfer from the KOSDAQ Market to the KOSPI Market.
- Posco DX (022100 KS) has announced that its stock will start trading on the KOSPI Market from the open on 2 January.
- We expect Temc (425040 KS) to replace Posco DX (022100 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 28 December.
MVIS Australia A-REITs Index Rebalance: ASKing for a Reversal
- There are no constituent changes for the Vaneck Vectors Australian Property ETF (MVA AU) in December but there are float and capping changes.
- Abacus Storage King (ASK AU) is the biggest sell and is due to a drop in float, a reversal of the excessively high float assigned at the September rebalance.
- Estimated one-way turnover is 4.5% and will result in a one-way trade of A$26m. There are a few stocks with over 1x ADV to trade.
MarketVector Vietnam Local Index Rebalance: One Add & Other Changes
- CEO Group JSC (CEO VN) will be added to the MarketVector Vietnam Local Index at the close on 15 December.
- Estimated one-way turnover is 5.24% and that results in a one-way trade of US$30m. There are a couple of stocks with more than 1x ADV to buy from passives.
- The largest passive inflows will be in Vingroup Jsc (VIC VN), Vietnam Dairy Products JSC (VNM VN), CEO Group JSC (CEO VN) and Vinhomes (VHM VN).
The Psychology of Money: A Book Review
- In this insight, I review a fantastic book written by Morgan Housel called The Psychology of Money (published in 2020).
- “The most important part of every plan is planning on your plan not going according to the plan.”
- Three parts of the book were particularly outstanding including letter to author’s son, the story of Rick Guerin, and how mice helped the Russians to defeat the mighty German army.
MBK Partners Raises Tender Offer Price of Hankook and Co to 24,000 Won
- After market close on 15 December, MBK Partners raised the tender offer price of Hankook & Company by 20% to 24,000 won, which is now 51.4% higher than current price.
- With Cho Yang-Rae’s recent acquisition of shares, Cho Hyun-beom, Cho Yang-rae, and related parties now own about 45.6% of Hankook & Co, up from 42.9% previously.
- MBK Partners has requested an official investigation by the FSS, claiming that Cho Yang-rae and HY have violated the Capital Markets Act by recently purchasing shares of Hankook & Co.
Japan Weekly | Advantest, Ibiden, Recruit, Infroneer, Glosel
- Market Watch: Japanese equities made minor gains as US Fed indicated potential rate cuts in 2024. BOJ next week, but no changes anticipated
- Major Movers: Outsourcing leaps on MBO; Advantest +15% as Semicon Japan gets underway; Ibiden beneficiary of improved tech sentiment
- Activist Watch: New positions for Murakami in Glosel; Nippon Active Value watching Fuji Media more closely; fresh interest in Goodspeed, the car dealer
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Sigma Health, Vinda, Outsourcing, Allkem, Costa, Hollysys
- I tally 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Four new deals discussed this week: Sigma Healthcare (SIG AU)‘s reverse takeover; Tanotos’ tilt for Vinda (3331 HK); and Tender offers for Shinko Electric (6967 JP) and Outsourcing (2427 JP).
- Key updates took place on: Pact Group Holdings (PGH AU), Allkem (AKE AU), Costa Group Holdings (CGC AU), T&K Toka Co Ltd (4636 JP) and Hollysys Automation Technologies (HOLI US).
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