In today’s briefing:
- MSCI May 2022 Index Rebalance Preview: Changes from Week 1 in the Review Period
- Renault (RNO FP) To Sell Nissan (7201 JP) Shares? Not Yet, and Not Yet Positive Nissan.
- TOPIX April Rebalance – Two Days To Go
- Razer (1337 HK): Trading Wide Ahead Of Court Meeting
- SK Telecom/KT Corp LONG SHORT on the MSCI SAIR Event
MSCI May 2022 Index Rebalance Preview: Changes from Week 1 in the Review Period
- We have completed days 1-5 in the review period for the MSCI May SAIR. We see 52 potential adds and 80 potential deletes with most changes in China.
- The largest potential inclusions are Powerchip Semiconductor Manufacturing Corp, Tata Elxsi Ltd, Orient Overseas International, Walsin Lihwa, Jindal Steel & Power, Eva Airways, Pop Mart, Adani Power and China Airlines.
- Converge ICT Solutions (CNVRG) is a potential inclusion following an increase in foreign room above 25% while SK Telecom (017670) is a potential deletion with foreign room dropping below 3.75%.
Renault (RNO FP) To Sell Nissan (7201 JP) Shares? Not Yet, and Not Yet Positive Nissan.
- On Friday, a Bloomberg article suggested Renault SA (RNO FP) is considering selling some of its 43% stake in Nissan Motor (7201 JP) to help fund its efforts in EVs.
- Sources were “people familiar with the matter.” Since 2018, Bloomberg and Les Echos have been the outlets which do “scoops” on the Renault/Nissan relationship, but they are not always right.
- However, it raises some interesting questions and possibilities. And given the prices, it makes the decision somewhat uncomfortable for both.
TOPIX April Rebalance – Two Days To Go
- There are two days to go until the TOPIX April-end rebalance.
- On an average-weighted, sector-neutral basis, the “announcement to event” trade is -0.3% from 7 April to 25 April. The rest of the buy vs sell basket is doing worse.
- There should be ¥740bn-ish to buy and sell (each) on Wednesday at the close. If you have trades to execute in Japan, the attached spreadsheet shows where there is opportunity.
Razer (1337 HK): Trading Wide Ahead Of Court Meeting
- Razer Inc (1337 HK)‘s Court Meeting will be held tomorrow.
- The highly anticipated abolishment of the headcount test will not become law ahead of the shareholder vote.
- Trading at a gross spread of 8%, unchanged since the record date. That’s positive. Plus this Offer has proxy advisor support.
SK Telecom/KT Corp LONG SHORT on the MSCI SAIR Event
- The MSCI has shown a pattern of determining the addition/deletion of Korean stocks based on the first or second trading day during the 10-day review period.
- SKT’s foreign room ratio exceeded 3.5% for these two trading days. On the other hand, KT’s foreign room was below 15% on the 18th and 19th.
- MSCI flow seems to be the only factor that will affect these two companies in the short term, and the probability that SKT will outperform KT this week is high.
Before it’s here, it’s on Smartkarma
