In today’s briefing:
- Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- ‘Bidenomics’ Delays Recession, but USD Rebound & Fiscal Reins Are Tipping Points
- Poly Culture (3636 HK): Trading Wide To Terms. Get Involved.
- Australia: S&P/ASX, REMX, GDXJ, MVA, MVW & Other Index Flows on Friday
- FnGuide Top10 Index Rebalance Preview: Good Historical Performance; One Potential Change in December
- KOSDAQ150 Ad Hoc Index Rebalance: VATECH (043150 KS) Replaces Lutronic (085370 KS)
- Doosan Robotics: Strong Initial Book Building Results
- Innovent Biologics Placement (1801.HK) – There Is No Such Thing as a Free Lunch
- Alibaba: Daniel Zhang Shown The Door, Jack Ma Back In The Game
- HSTECH Index Rebalance Preview: Round-Trip Trade of US$255m in December
![](http://www.smartkarma.com/assets/plugins/a3-lazy-load/assets/images/lazy_placeholder.gif)
Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- In March 2023, Japan Post Holdings (6178 JP) sold ¥1.1trln of shares in Japan Post Bank (7182 JP), lowering its stake considerably, raising float. There will be a TOPIX upweight.
- In May, with earnings, they announced their intention to buy back ¥300bn of shares or up to 10% of shares out. Today, they announced the details. ¥300bn through March end.
- In a ¥300bn ToSTNeT-3 tomorrow, the govt will sell back ¥105.7bn. That leaves a residual worth examining. So we examine.
‘Bidenomics’ Delays Recession, but USD Rebound & Fiscal Reins Are Tipping Points
- ‘Bidenomics’ investment subsidies aided the 7.7%QoQsaar growth in business investment in Q2CY23, delaying the onset of recession. Policy rate to stay near 5.5% until Q2CY24, thereby restraining growth until then.
- ECB and BoE face less pressure to raise rates amid easing headline inflation, so yield differentials will strengthen USD; the latter will be a drag on net exports in H2CY23.
- The spending restraints agreed in May’23 kick in from Oct’23, and will be a drag on aggregate demand from Q4CY23, the quarter a mild recession is likely to begin.
Poly Culture (3636 HK): Trading Wide To Terms. Get Involved.
- Back on the 27 June, art and culture play Poly Culture Group Corp H (3636 HK) announced a pre-conditional privatisation at HK$8.88 per H-share.
- This Offer from SOE Poly Group is by way of a Merger by Absorption, incorporating a Scheme-like vote. There is no tendering condition.
- The pre-cons have now been fulfilled. The Composite Document, including the H Share Class meeting/EGM date and IFA opinion, is expected to be despatched on or before the 30 September.
Australia: S&P/ASX, REMX, GDXJ, MVA, MVW & Other Index Flows on Friday
- Changes to the S&P/ASX indices, REMX US, GDXJ US, MVA AU, MVW AU and other indices will be implemented at the close on Friday.
- There is over +/-A$5m to trade or +/-3x ADV to trade on nearly 100 stocks and will be a huge volume day for the stocks at the close.
- Use the volume on the buy and sell side to increase/reduce positions especially on the deletes where there will be liquidity to cover shorts on stocks that have dropped significantly.
FnGuide Top10 Index Rebalance Preview: Good Historical Performance; One Potential Change in December
- The Mirae Asset Tiger Top 10 ETF (292150 KS) tracks the FnGuide Top 10 Index and has an AUM of over US$1bn.
- We currently forecast one potential change at the next rebalance in December. There is another set of changes that could also take place.
- There has been a big increase in short interest on a couple of stocks while the rise has been more gradual on the other stocks.
KOSDAQ150 Ad Hoc Index Rebalance: VATECH (043150 KS) Replaces Lutronic (085370 KS)
- Value Added Technologies (043150 KS) will replace Lutronic Corp (085370 KS) in the KOSDAQ 150 Index (KOSDQ150 INDEX) at the close on 14 September.
- Passive trackers will need to buy over 1.5x ADV on Value Added Technologies (043150 KS). The impact is higher on Lutronic Corp (085370 KS) but the arbs will provide liquidity.
- Value Added Technologies (043150 KS) appears to trade cheaper than its peers on all valuation parameters and there could be a re-rating following the index inclusion.
Doosan Robotics: Strong Initial Book Building Results
- Chosun Business Daily mentioned today that initial results of Doosan Robotics book building have been very strong. The current IPO price range is from 21,000 won to 26,000 won.
- There is a high probability that the IPO price will be set at 26,000 won or more and close to 30,000 won.
- Our base case valuation per share of Doosan Robotics is 42,826 won, which is 65% higher than the high end of the IPO valuation range.
Innovent Biologics Placement (1801.HK) – There Is No Such Thing as a Free Lunch
- Innovent is actually not short of money, so the Placing this time looks “strange”.If Innovent is unable to deliver performance that matches expectations, investors would reconsider its future financing needs.
- Innovent is undergoing important transition from quantitative change to qualitative change as turning losses into profits is within reach. So, the “concept validation” of Innovent’s business model has been completed.
- Innovent decides to place the shares at this moment reflects that its stock price is already high. Based on our forecast, there could be limited upside room for share price.
Alibaba: Daniel Zhang Shown The Door, Jack Ma Back In The Game
- News broke yesterday that Daniel Zhang is no longer leading Alibaba (ADR) (BABA US)‘s Cloud Business unit.
- The statement from Alibaba’s current chairman, in which he mentions that Zhang would “switch to a different approach and continue to fight alongside us at Alibaba” raises skepticism.
- We also think that the $1.0bn Alibaba committed to a technology fund could be seen as a form of compensation to ensure Daniel Zhang’s silence.
HSTECH Index Rebalance Preview: Round-Trip Trade of US$255m in December
- With no stocks in inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in December.
- Capping changes will result in a one-way turnover of a touch below 1% and that will result in a round-trip trade of US$255m.
- The impact on the stocks is relatively small for now but that could increase till the end of November when the stocks will be capped.