Daily BriefsMost Read

Most Read: DearU, JMDC , Softbank Group, Taiwan Semiconductor (TSMC) – ADR, Abacus Group, Celltrion Inc, Evolution Mining, Computershare Ltd, Zhejiang Huayou Cobalt and more

In today’s briefing:

  • KRX BBIG K-New Deal Rebalancing: Official Results & Passive Flow Impacts
  • JMDC (4483 JP): Omron’s Partial Tender Offer
  • SoftBank Group (9984 JP); Arm IPO, Priced for Disappointment
  • MVIS US Listed Semiconductor 25 Index Rebalance: Upweight for TSMC
  • MVIS Australia A-REITs Index Rebalance: Abacus Group Deletion Means More Outflow
  • Progress of Merger Between Celltrion Inc and Celltrion Healthcare & Appraisal Rights Issue
  • MVIS Global Junior Gold Miners Index Rebalance: One Add, One Delete, Float, Capping = Big Impact
  • Omron Partial Offer for JMDC (4483) – The Engagement Is On! This Is the Script, This Is the Timing
  • MVIS Australia Equal Weight Index Rebalance: Float & Capping Changes
  • MVIS Global Rare Earth/​​​​​Strategic Metals Index Rebalance: One Add, Two Deletes & Big Turnover


KRX BBIG K-New Deal Rebalancing: Official Results & Passive Flow Impacts

By Sanghyun Park

  • After results were transitioned to non-public information, it has been observed that results are reflected in prices significantly later, with substantial price impact occurring close to the rebalancing trading day. 
  • Even though the AUMs have recently decreased, the passive impact size is quite substantial, considering a recent pattern of price impact concentrating within a maximum of about two trading days.
  • A heavy Long-Short setup on these pairs, DearU / Douzone Bizon and SK Biopharmaceuticals / SK Bioscience (302440 KS), is something we should very actively consider.

JMDC (4483 JP): Omron’s Partial Tender Offer

By Arun George

  • JMDC (4483 JP) announced a partial tender offer for Omron Corp (6645 JP), the largest shareholder. Omron aims to make JMDC a consolidated subsidiary.  
  • The offer is for a minimum of 12.0m shares (18.52% ownership ratio) and a maximum of 15.0m shares (23.08%) at JPY5,700 per share, a 22.4% premium to the undisturbed price.
  • Irrevocables (Noritsu Koki (7744 JP)) represent a 13.63% ownership ratio. While the offer is light, it will likely succeed as the minimum acceptance condition requires a 7.1% minority acceptance rate. 

SoftBank Group (9984 JP); Arm IPO, Priced for Disappointment

By Victor Galliano

  • SoftBank’s internal transaction acquiring the 25% Arm stake held by SVF1 valued Arm at USD64bn; the IPO valuation range is from USD48bn to USD52bn
  • This valuation range implies an Nvidia-like price to prospective 2024E sales multiple range of 22x-25x; the prospectus reveals risks with Arm China, and confirms its lacklustre revenue and earnings growth
  • Given SoftBank’s largely negative track record on the after-market performance of its investee companies IPOs and SPOs; we expect further downside to SoftBank’s share price

MVIS US Listed Semiconductor 25 Index Rebalance: Upweight for TSMC

By Brian Freitas

  • The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 15 September. There are no constituent changes, but there are float and capping changes.
  • The VanEck Vectors Semiconductor (SMH US) ETF tracks the index and has an AUM of US$9.7bn.
  • Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. The stocks are extremely liquid, the impact on the stock in terms of ADV to trade is small.

MVIS Australia A-REITs Index Rebalance: Abacus Group Deletion Means More Outflow

By Brian Freitas

  • As expected, Abacus Group (ABG AU) will be deleted from the MVIS Australia A-REIT Index at the close on 15 September.
  • Abacus Group (ABG AU) will also be deleted from the S&P/ASX 200 (AS51 INDEX) on the same day, so this increases the sell flow on the stock.
  • Estimated one-way turnover at the rebalance is 3.8% resulting in a one-way trade of A$23.8m. There are a few stocks with over 1x ADV to trade from passive trackers.

Progress of Merger Between Celltrion Inc and Celltrion Healthcare & Appraisal Rights Issue

By Douglas Kim

  • The appraisal right prices of Celltrion Inc (068270 KS) is 150,813 won (2.2% higher than current price) and Celltrion Healthcare (091990 KS) is 67,251 won (1.9% higher than current price).
  • Celltrion Inc has mentioned that the merger could be cancelled if the total amount of appraisal share purchase amount exceeds 1 trillion won. 
  • Although some investors are likely to exercise their appraisal rights in this merger, we would attach a higher probability of this merger getting completed (80-90%+). 

MVIS Global Junior Gold Miners Index Rebalance: One Add, One Delete, Float, Capping = Big Impact

By Brian Freitas


Omron Partial Offer for JMDC (4483) – The Engagement Is On! This Is the Script, This Is the Timing

By Travis Lundy

  • In February 2022, Noritsu Koki (7744 JP) sold a chunk of JMDC (4483 JP) to Omron Corp (6645 JP) for nearly US$1bn. 7mos later, Omron supported a primary offering.
  • Now Omron is going to 50+%, as Noritsu Koki is getting out. Other investors have to participate for this to succeed. 
  • The question of pro-ration may be a question of Elmer vs Mr Partridge. But Elmer has a point here. 

MVIS Australia Equal Weight Index Rebalance: Float & Capping Changes

By Brian Freitas

  • There are no constituent changes for the MVIS Australia Equal Weight Index at the September rebalance. JB Hi-Fi Ltd (JBH AU) and Charter Hall (CHC AU) have avoided deletion.
  • Float and capping changes will result in a one-way turnover of 3.5% and in a one-way trade of A$69m.
  • There is a lot of short interest on stocks that will have passive buy/sell flows, but there will not be enough volume traded for shorts to use to reduce positions.

MVIS Global Rare Earth/​​​​​Strategic Metals Index Rebalance: One Add, Two Deletes & Big Turnover

By Brian Freitas

  • There is one add and two deletes for the MVIS Global Rare Earth/Strategic Metals Index at the September rebalance. Plus there are free float and capping changes.
  • One way turnover is estimated at 11.1% and will result in a one-way trade of US$58m. There are a few stocks with over 0.5 days of ADV to trade.
  • The inclusion of Sociedad Quimica y Minera de Chile (SQM US) and deletion of Zhejiang Huayou Cobalt (603799 CH) are surprises.

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