In today’s briefing:
- PCOMP Index Rebalance Preview: MPI Tender Offer Opens Up an Index Spot
- Index Rebalance & ETF Flow Recap: KS200, KQ150, HSI, CSI300/500, STAR50, SSE50, ChiNext, PCOMP, HDFC
- We Should Aim at Kiwoom Securities’ Potential Legal Risk-Induced Stock Price Decline
- MSCI May 2023 QCIR Preview: Potential Changes as Review Period Ends
- 2023 High Conviction Update – Shinsei Revises Up Profit Forecast – Now Ahead of Plan
- Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash
- Alibaba Cloud: Faces Nationalization Threat, IPO Prospects Remain Dim
- End of Mandatory Lock-Up Periods for 46 Companies in Korea in May 2023
- Contenders for MSCI Korea Inclusion in 2H 2023
- LQ45 Index Rebalance Preview (July): Identifying Potential Changes
PCOMP Index Rebalance Preview: MPI Tender Offer Opens Up an Index Spot
- Based on data to the close on 27 April, we do not expect any changes to the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the August rebalance.
- However, the Metro Pacific Investments Co (MPI PM) tender offer and voluntary delisting will open up an index spot that will need to be filled.
- At the current time, Bloomberry Resorts (BLOOM PM) is the highest ranked non-index constituent and is the most likely replacement.
Index Rebalance & ETF Flow Recap: KS200, KQ150, HSI, CSI300/500, STAR50, SSE50, ChiNext, PCOMP, HDFC
- Friday marked the end of the review cutoff for the MSCI, CSI300, CSI500, STAR50, SSE50, ChiNext and a bunch of other indices for the upcoming rebalances in May and June.
- There are no major index events coming up this week as a lot of markets are shut on different days.
- There were big inflows to mainland China ETFs during the week, while there was a big redemption from the iShares MSCI ACWI ETF (ACWI US).
We Should Aim at Kiwoom Securities’ Potential Legal Risk-Induced Stock Price Decline
- The recent matched order operation’s ringleader called in local major broadcasting companies for an interview and claimed the sell orders through SG on Monday were not from their CFD accounts.
- The trigger is Kiwoom Securities’ Chairman Kim, who created a continuous and rapid decline in stock prices and led to a vicious cycle of endless margin calls and covering orders.
- Rather than fishing for a bottom for the eight stocks from this point on, it seems necessary to actively design positions aimed at Kiwoom Securities’ legal risk-induced stock price decline.
MSCI May 2023 QCIR Preview: Potential Changes as Review Period Ends
- The review period for the price cutoff for the MSCI May Quarterly Comprehensive Index Review (QCIR) ended 28 April. MSCI should select a day from week one.
- The most changes are expected in China and there are a couple of stocks that could trigger the Extreme Price Increase thresholds.
- Some stocks appear on the list of potential changes on certain days during the review period and their addition/deletion will depend on the day that MSCI chooses for computation.
2023 High Conviction Update – Shinsei Revises Up Profit Forecast – Now Ahead of Plan
- A year ago, SBI Shinsei Bank (8303 JP)‘s new MTMP was to get from ¥35bn profit in FY22 to ¥70bn in FY24 including ¥55bn of organic profit, ¥15bn of synergies.
- On Friday, SBI Shinsei announced FY22 would be ¥42bn instead of ¥35bn, despite higher interest rates. More aggressive lending and gains in subs were credited.
- The MTMP calls for ¥70bn Profit in Mar-25 – ¥341 EPS so Friday’s close x 7.1x. The big picture takeout scenario remains intact and Real World Float is still small.
Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash
- Key insiders at Seoul City Gas (017390 KS) and Daou Data Corp (032190 KS) sold their shares before the recent crash.
- On 28 April, it was reported that Kim Young-Min (Seoul City Gas Chairman) sold 2% of Seoul City Gas on 20 April, resulting in net sales of 45.7 billion won.
- These Korean companies are two of the eight stocks related to the CFD derivatives sell-down that have been crashing in the past week.
Alibaba Cloud: Faces Nationalization Threat, IPO Prospects Remain Dim
- Alibaba (ADR) (BABA US) Cloud will cut prices for its elastic computing services using Arm and Intel-based chips by 15-20% and Nvidia’s V100 and T4 graphics processing units by 41-47%.
- It seems like the company is trying to combat increasing competition in the only way it knows how, by further subsidizing its already-subsidized cloud services.
- Price may not be the main reason for companies to avoid using Alibaba Group (9988 HK)‘s Cloud services. Government initiatives to nationalize the cloud-computing market could be a bigger factor.
End of Mandatory Lock-Up Periods for 46 Companies in Korea in May 2023
- We discuss the end of the mandatory lock-up periods for 46 stocks in Korea in May 2023, among which 4 are in KOSPI and 42 are in KOSDAQ.
- These 46 stocks on average could be subject to further selling pressures in May and could underperform relative to the market.
- Among these 46 stocks, the top 6 market cap stocks include KG Mobility, Dongwon Industries, Hugel, Yunsung F&C, Enchem, and Jeio.
Contenders for MSCI Korea Inclusion in 2H 2023
- We have provided a list of 10 stocks that could be included in the MSCI Korea index in 2H 2023.
- Among these 10 companies, the top five companies with the highest free float based market cap have greater probabilities of becoming included in the index, in our view.
- The five companies include Jyp Entertainment (035900 KS), Hyundai Rotem Company (064350 KS), DB Hitek Co., Ltd. (000990 KS), Cs Wind Corp (112610 KS), and LS Corp (006260 KS).
LQ45 Index Rebalance Preview (July): Identifying Potential Changes
- The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 31 July.
- Potential adds are Adaro Minerals (ADMR IJ), Bumi Resources Minerals (BRMS IJ), Panin Financial (PNLF IJ), Energi Mega Persada (ENRG IJ), Transcoal Pacific (TCPI IJ) and Pertamina Geothermal Energy (PGEO).
- Potential deletions are Japfa Comfeed Indonesia (JPFA IJ), Indocement Tunggal Prakarsa (INTP IJ), Timah Persero (TINS IJ), Bank Tabungan Negara Persero (BBTN IJ) and Chandra Asri Petrochemical (TPIA IJ).
💡 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 Data and News
- ✓ Events & Webinars
