In today’s briefing:
- Appier (4180) Nearing A TSE Prime (And TOPIX) Announcement?
- JAFCO (8595) Cancels Tender Offer – I Offer a Modest Proposal For Good Governance
- HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- TOPIX Inclusions: Who Is Ready (Dec 2022)
- STAR50 Index Rebalance Preview: Another Five Potential Changes in March
- Xingda Int’l (1899 HK): Partial MBO
- China Rebalances at the Close Today- BIG Flows
- Nitro Software (NTO AU): Potentia Raises to A$2.00 as the Battle Heats Up
- Good Morning Japan |Equities Continue to Hold; China Stocks on Fire; Japan Major SQ
- Infosys (INFY)’s US$1.1bn Buyback
Appier (4180) Nearing A TSE Prime (And TOPIX) Announcement?
- On 17 Feb 2022, Janaghan Jeyakumar, CFA wrote about Appier Group (4180 JP) suggesting it was a TOPIX inclusion candidate in the not-distant future.
- In mid-August 2022, he reiterated his opinion. Three days later, the company said they had applied for TSE Prime membership. We are coming up on the timing for an announcement.
- It would mean buying, but the shareholder structure is interesting, and intentions are not easy to read. But if they announce imminently, the calendar makes the event even more interesting.
JAFCO (8595) Cancels Tender Offer – I Offer a Modest Proposal For Good Governance
- Jafco Co Ltd (8595 JP) announced the reference period VWAP for the Tender Offer Buyback was ¥2,362.4136 vs target ¥2,525. Murakami-san refused to play, so the Tender Offer is cancelled.
- This is good news and bad news. The announcement wording doesn’t make JAFCO look good, but they will continue discussions with City Index Eleventh. But there is potential.
- I shall now therefore humbly propose my own thoughts, which I hope will not be liable to the least objection (Jonathan Swift, 1729)
HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
- Tongcheng-Elong Holdings Ltd (780 HK) could replace Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
- One way turnover is estimated at 2.1% resulting in a one-way trade of HK$1.7bn. Passive trackers will need to buy nearly 10x ADV on Tongcheng-Elong Holdings Ltd (780 HK).
- After being deleted from the MSCI China Index at the November SAIR, this could be the next major index deletion for Ming Yuan Cloud Group (909 HK).
TOPIX Inclusions: Who Is Ready (Dec 2022)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- This insight is a follow-up to TOPIX Inclusions: Who Is Ready (Oct 2022)
- At present, there are 60 names that satisfy all of these conditions and there are more names that are close to being in that group.
STAR50 Index Rebalance Preview: Another Five Potential Changes in March
- Nearly 85% of the way through the review period, we see 2 changes using a 12-month minimum listing history, and 5 changes using a 6-month minimum listing history.
- Given the significantly higher market cap of the inclusions using a 6-month minimum listing history, we expect the index committee will continue to use the shorter listing history requirement.
- With 5 changes a side, one-way turnover is estimated at 5.15% and will result in a one-way trade of CNY 3,994m. Impact on some deletions is quite high.
Xingda Int’l (1899 HK): Partial MBO
- Late night Xingda (1899 HK) announced a partial Offer from a consortium comprising management – known as the Five parties – at HK$1.88/share – a 24.5% premium to last close.
- The consortium – widely known as the Five Parties – currently holds 45.6%, and the intention of the Offer is to hold 50.01%, or a controlling stake.
- There is a minimum/maximum number shares to be acquired under the Offer. I’d expect the minimum acceptance condition to be met.
China Rebalances at the Close Today- BIG Flows
- There are multiple local China indices that rebalance at the close of trading today. Plus MSCI China and FTSE All-World/All-Cap flows due to changes to the Northbound StockConnect Buy-and-Sell list.
- China Pacific Insurance (Group) Co., (601601 CH) replaces Beijing-Shanghai High Speed Railway-A (601816 CH) in the FTSE China A50 Index (XIN9I INDEX).
- The round-trip turnover at the close of trading today should be in excess of US$8bn.
Nitro Software (NTO AU): Potentia Raises to A$2.00 as the Battle Heats Up
- Nitro Software Ltd (NTO AU) has received a revised Potentia off-market takeover offer at A$2.00 per share, an 11.1% premium to its previous offer and in line with Alludo’s offer.
- By bumping its offer, adding a scrip alternative and signalling a potentially higher price on due diligence access, Potentia has ramped up the pressure on the Board.
- Potentia/Alludo offer remains at the low end of the IE’s valuation range. Alludo would have anticipated this move and likely will have factored in the need to raise its offer.
Good Morning Japan |Equities Continue to Hold; China Stocks on Fire; Japan Major SQ
- Good Morning Japan: We strive to provide the best macro, stock and thematic overnight news that impacts your trading day in Japan. FOLLOW TO KEEP ABREAST.
- OVERSEAS: SPX continue to hold as Tech leads the rebound; FTC moves to block MSFT acquistion of Activision (good); China stocks continue to be bid; Broadcom strong; PPI on Friday
- JAPAN: Major SQ futures point to +0.4% open on the NKY; Govt continues to push forward with Nuclear rebirth(postive MHI); Kishida outlines how to pay for massive defense spending rise
Infosys (INFY)’s US$1.1bn Buyback
- Infosys Ltd (INFO IN) (Infosys Ltd Sp Adr (INFY US)) on 5-6 December announced an on-market buyback of more than US$1.1bn.
- The company has done buybacks before, and it is worthwhile looking at the details.
- The buy-back looks small, and may be impactful near-term in near-space.
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