In today’s briefing:
- HDFC/HDFCB Merger: Mega Merger & Index Treatment
- Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
- Shocker! HDFC Bank To Merge With HDFC Limited
- MSCI India Index Rebalance Preview: Potential Changes in May
- Perpetual’s Indicative (& Opportunistic) Offer for Pendal Group: Details & Index Implications
HDFC/HDFCB Merger: Mega Merger & Index Treatment
- HDFC Limited (HDFC IN) and HDFC Bank (HDFCB IN) are looking at a mega-merger where HDFC shareholders will receive 42 shares in HDFCB for every 25 HDFC shares held.
- Regulatory and other approvals are expected to take around 18 months and the merger will create a US$145bn behemoth. Some regulatory approvals could be tougher to get than others.
- HDFC Limited (HDFC IN) is a member of the FTSE All-World and MSCI India indices, while HDFC Bank (HDFCB IN) is not. The index treatment is tricky.
Hang Seng TECH Index Rebalance Preview: Big Impact as NIO (9866) Could Replace ASM Pacific (522)
- NIO Inc (9866 HK) passes the velocity test and could replace ASM Pacific Technology (522 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the June rebalance.
- Given the low trading volumes and the large assets tracking the Hang Seng Tech Index (HSTECH INDEX), passive trackers will need to buy around 10 days of ADV on NIO.
- Passive trackers need to sell around 7 days of ADV on ASM Pacific Technology (522 HK). Given implementation is two months away, sell the stock on rallies.
Shocker! HDFC Bank To Merge With HDFC Limited
- This is at a time a shocker and at a time, not. Because of rising regulatory requirements for NBFCs, this was to be expected at some point.
- The deal pays Limited shareholders a slight premium vs previous close, but enables them to exit without a holdco discount.
- Early days yet regulatorily speaking, but accretive, and it makes a lot of sense. It will be appreciated.
MSCI India Index Rebalance Preview: Potential Changes in May
- As of the close on 1 April, we expect Tata Elxsi Ltd (TELX IN) and Jindal Steel & Power (JSP IN) to be included in the MSCI India Index.
- Potential deletions at the May SAIR are HDFC Asset Management Co Ltd (HDFCAMC IN), Indraprastha Gas (IGL IN), Mrf Ltd (MRF IN) and Petronet LNG (PLNG IN).
- Passive trackers will need to buy between 3-4 days of ADV on the inclusions and sell between 4-16 days of ADV on the deletions.
Perpetual’s Indicative (& Opportunistic) Offer for Pendal Group: Details & Index Implications
- Earlier today, Perpetual Ltd (PPT AU) made a conditional, non-binding indicative proposal for Pendal Group (PDL AU) to acquire 100% of the shares by way of a Scheme of Arrangement.
- Pendal Group (PDL AU) shareholders will receive 1 share of Perpetual Ltd (PPT AU) for every 7.5 shares of PDL plus A$1.67/PDL share in cash.
- This is a highly opportunistic offer and it is unlikely that Pendal Group (PDL AU)‘s Board will support the proposal. There could be further improved proposals that come in.
Before it’s here, it’s on Smartkarma
