In today’s briefing:
- S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
- Lasertec (6920) – The State of Things May Be Different Than You Think
- Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics
- Rakuten Securities IPO: The Bull Case
- Quiddity Primer for CSI 300/500 Index Rebalance Events
- Tryt IPO Trading – Subscription Rates Mostly Outdid Recent Large Japan Deals
- China Gas Holdings (384 HK): Worth a Bet Now
- Privatization of HMM: Enormous Shares Dilution Risk
- Nippon Paint (Part I): A Deep Dive into NP’s Japan Business
S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
- The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
- Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.
Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
- Using data from the close on 19 July, there could be 5 changes to the Yuanta/P-Shares Taiwan Top 50 ETF and 2 deletions for the Yuanta/P-Shares Taiwan Dividend Plus ETF.
- Stocks that are expected to benefit from the AI revolution could gain ETF inclusion while shipping stocks are the ones expected to be deleted from the ETF.
- There has been a huge increase in shorts on some of the potential inclusions and on most of the potential deletions. That will affect how stocks trade near term.
Lasertec (6920) – The State of Things May Be Different Than You Think
- Lasertec (6920) is a shoo-in for Nikkei 225 inclusion in September according to the quantitative analysis. The amount to buy is a small multiple of ADV, making the inclusion “unimpressive.”
- It is probably worth looking at the details of ownership, of volume, and of relationship to other stocks in the same general sector.
- It is also worth thinking about flow channels (stock up or down changes flows) and forward fundamental calculations.
Important Rule Changes in Block Deals Pre-Disclosure in Korea: Analyzing Trading Dynamics
- Insiders holding more than 10% of SO must disclose block deals 30 days in advance if they plan to sell more than 1% of SO or an amount exceeding ₩5B.
- The trading window and pricing range for short positions, based on the assumption of deal-taking, will likely vary significantly as the timing of price reflection will see a drastic change.
- There is an increasing likelihood that major shareholders will accelerate their planned block deals and bring them to the market in abundance before October.
Rakuten Securities IPO: The Bull Case
- Rakuten Securities (RAKUSEC JP), a leading Japanese online brokerage, seeks to raise US$500 million. Rakuten Bank (5838 JP) (80.01%) and Mizuho Financial Group (8411 JP) (19.99%) are its shareholders.
- Rakuten Securities has grown its business by pursuing a low-cost, high-volume strategy. It has the largest number of non-consolidated securities accounts among Japanese securities companies.
- The key elements of the bull case rest on rapid customer growth, low-cost fees, market share gains, synergies with the Rakuten ecosystem and improving profitability trends.
Quiddity Primer for CSI 300/500 Index Rebalance Events
- CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
- During the periodic index rebalance events, a large number of stocks move into or out of these indices giving rise to significant flow events and attractive trading opportunities.
- In this insight, we take a brief look at the index selection methodology and the historical price and volume performance of the CSI 300/500 index rebalance baskets.
Tryt IPO Trading – Subscription Rates Mostly Outdid Recent Large Japan Deals
- Tryt Inc (9164 JP) raised around US$344m in its Japan IPO. The IPO consisted of 100% secondary shares.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- In this note we will talk about the trading dynamics.
China Gas Holdings (384 HK): Worth a Bet Now
- Dismal share price performance for China Gas Holdings (384 HK) has created an opportunity for bottom fishing. Management also looks positive with 30% profit growth guidance for FY23.
- There are rooms for good dollar margin recovery, unit sales rebound and improvement in free cash flow in FY24. Spin-off of value-added services is also a value-enhancing move.
- De-Rating over the last three years has put the stock on undemanding multiples of 8x PER and 0.75x P/B. Its 14.8% 3-year EPS CAGR is also better than sector average.
Privatization of HMM: Enormous Shares Dilution Risk
- The Korean government has initiated the M&A privatization of HMM, the largest container shipping company in Korea.
- We are Negative on the shares of HMM Co., Ltd. (011200 KS) in the next 6-12 months. We expect additional 20% to 30%+ downside risk on HMM in this period.
- Although HMM has a strong balance sheet, more investors are likely to emphasize on the negatives including excessive share dilution risk and worsening environment for the global shipping industry.
Nippon Paint (Part I): A Deep Dive into NP’s Japan Business
- This is the First of a series of reports on Nippon Paint Holdings (4612 JP) and in this insight, we deep dive into the company’s Japanese business.
- The automotive coating biz in Japan is heavily reliant on the domestic automotive market while decorative paints is facing challenges due to slowdown in population in the country.
- The outlook for Japan biz remains stagnant with growth rates slowing down and margins on a downward trend.
💡 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 Analytics and News
- ✓ Events & Webinars
