In today’s briefing:
- Big Honda (7267) Offering – Flow Timing Matters
- S&P/ASX Index Rebalance Preview: Potential Changes from Now to September
- Kokusai Electric (6525 JP): The Current Playbook
- Zhihu (ZH US/2390 HK): Negative EV Play Launches a Share Buyback at HK$9.11/US$3.50
- The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (July 19)
- Over Capacity in Chinese Auto Market
- Consumer Tales & Trends #July 11-20: THBEV SP Swap Deal, Bad Debts in Thailand, AI in Beauty.
- (Mostly) Asia-Pac M&A: AIS/Thaicom, Capitol Health, Alumina, Ansarada, TCM, CPMC, Fancl, Hollysys
- EQD | Where/When Will the Nikkei Index Reach a Bottom And Bounce?
- Last Week in Event SPACE: Gulf Energy/Intouch, CK Infra, Zhongsheng, Thai Beverage, Fraser & Neave
Big Honda (7267) Offering – Flow Timing Matters
- The ¥500bn Offering of Honda shares is now priced (¥1,664.5/share) making it ¥497.46bn. Bookbuilding for retail – 80% of the book – is now. The price today closed at ¥1,665/share.
- The Offering has follow-on “non-discretionary” demand which is non-negligible. It is worth understanding the amounts and timing.
- The lockups and non-discretionary demand, along with Honda’s relative cheapness as a large cap OEM and likely upcoming offerings on competitors means it has support.
S&P/ASX Index Rebalance Preview: Potential Changes from Now to September
- With nearly 80% of the review period complete, there could be 28 adds/deletes across the S&P/ASX family of indices in September.
- There is a lot of stocks for passive trackers to trade on the index changes with the largest impacts on the potential changes to the S&P/ASX 200 (AS51 INDEX).
- The potential adds have outperformed the potential deletions by a LOT over the last few months and continued positioning could lead to further gains.
Kokusai Electric (6525 JP): The Current Playbook
- Since the US$2.0 billion secondary placement announcement, Kokusai Electric (6525 JP)’s shares are down 5.6% from the undisturbed price of JPY5,520 per share (8 July).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Kokusai’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 22 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.
Zhihu (ZH US/2390 HK): Negative EV Play Launches a Share Buyback at HK$9.11/US$3.50
- Zhihu Technology (ZH US) has launched a conditional share buyback offer to acquire a maximum of 46.9m Class A ordinary shares (15.93% of outstanding shares) at HK$9.11 (US$3.50 per ADS).
- The offer is conditional on shareholder approval by a majority of votes cast at the EGM. There is no minimum acceptance condition. The EGM vote is done due to irrevocables.
- Zhihu’s share buyback returns 19% of cash not subject to government controls, below Douyu International Holdings (DOYU US)’s comparable 34%. The minimum pro-ration is expected to be around 34%.
The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (July 19)
- Equity ETF flows in China continued to lead Asia as the “National Team” in China supports market levels during the 3rd Plenum.
- CK Infrastructure Holdings (1038 HK) , Genscript Biotech (1548 HK) and BOC Aviation (2588 HK) saw positive news sentiment and share price movements for the week.
- Jiumaojiu (9922 HK) , Aluminum Corporation Of China (2600 HK) and China Hongqiao (1378 HK) saw negative news sentiment and share price drops for the week.
Over Capacity in Chinese Auto Market
- News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
- Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
- Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems
Consumer Tales & Trends #July 11-20: THBEV SP Swap Deal, Bad Debts in Thailand, AI in Beauty.
- Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
- Thai Beverage (THBEV SP)‘s proposed swap deal with promoter company raises several questions for shareholders. Start with the back story about how Fraser And Neave (FNN SP) joined the group.
- Bigger weddings could become a trend in India – Read why we like Kalyan Jewellers(KALYANKJ IN) . Also, household debt in Thailand as % of GDP is highest in ASEAN.
(Mostly) Asia-Pac M&A: AIS/Thaicom, Capitol Health, Alumina, Ansarada, TCM, CPMC, Fancl, Hollysys
- I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three new deals discussed this week on Smartkarma: Samson Holding (531 HK)‘s Scheme, and VTOs for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
- Key updates took place on Capitol Health (CAJ AU), Alumina (AWC AU), Ansarada (AND AU), TCM (570 HK), CPMC (906 HK), Fancl (4921 JP),and Hollysys Automation Technologies (HOLI US).
EQD | Where/When Will the Nikkei Index Reach a Bottom And Bounce?
- The Nikkei 225 INDEX pulled back last week, and it may continue to fall for another 1-2 weeks.
- Make sure you read the Market Reversal Matrix – Charts Analysis section below: we are introducing a possibile new Premium Service using our trend prediction models in algorithmic trading format.
- The price support area to buy the Nikkei 225 would be between 39800 and 39300, this coming week (or the next).
Last Week in Event SPACE: Gulf Energy/Intouch, CK Infra, Zhongsheng, Thai Beverage, Fraser & Neave
- The Gulf Energy (GULF TB)/Intouch (INTUCH TB) merger is an opportunistic, bullying method designed to have GULF shareholders buy INTUCH and therefore AIS (ADVANC TB) at too low a price.
- CK Infrastructure Holdings (1038 HK)‘s interest in a possible London listing coincides with the LSE undergoing a listing regime change.
- Management continue to creep their stake in Zhongsheng Group (881 HK), and now hold a shade under 50%.
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