In today’s briefing:
- JX Advanced Metals (5016 JP) IPO: TPX Add in April; Global Idx: One in August; One in March or Sep
- Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
- MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End
- Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks
- Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
- FSS Officially Rolls Out New Ex-Div Rule for Quarterly Divs; Sammy May Finally Join the Change
- Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL
- Samsung’s 10T KRW Buyback Phase 2: The Timing of the Drop and How the Structure Is Looking
- [Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.
- Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer
JX Advanced Metals (5016 JP) IPO: TPX Add in April; Global Idx: One in August; One in March or Sep
- JX Advanced Metals (5016 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 19 March.
- At the indicative IPO price of JPY 862/share, JX Advanced Metals (5016 JP) will be valued at JPY 800bn (US$5.25bn).
- The stock should be added to the TOPIX INDEX at the close on 28 April while timing of inclusion in global indices will depend on domestic/overseas allocations and price moves.
Nikkei 225 Index Rebalance: Performance of Potential Adds/Deletes & Positioning
- The changes to the Nikkei 225 (NKY INDEX) as part of the March rebalance should be announced in just over 2 weeks. We expect 2-3 changes at the review.
- The forecast adds have massively outperformed the forecast deletes and the Nikkei225 Index over every time period going back 3 months with the largest outperformance in the last month.
- Positioning appears to be stretched in one forecast add while there appears to be under positioning in a couple of the forecast deletes.
MUFG Partial Offer by MUFG to Buy ~50% of Small Cap Zenhoren (5845) – Watch the Back End
- Friday after the close, Mitsubishi UFJ Financial (MUFG) (8306 JP) announced a partial offer to buy up to 13.026385mm shares (minimum 11.661185mm shs) of rent guarantor Zenhoren (5845 JP).
- That is 49.6% but an MUFJ sub already owns 1.46%. The offer comes at a 32% premium to last. Two holders with 33.59% of the register have agreed to tender.
- This will turn the company into a consolidated subsidiary of MUFG under MUFJ Nicos, the group’s consumer credit subsidiary. Shareholder structure matters. Watch the back end.
Alibaba (9988 HK): Results This Week; Over US$1bn Passive Selling in 3 Weeks
- Alibaba Group Holding (9988 HK) stock has rallied bigly over the last month and has gained 55% over that period.
- That has led to Alibaba‘s weight in the HSI INDEX, HSCEI INDEX, HSTECH INDEX and HSIII Index rising above the cap of 8%/12% and passives will sell on 7 March.
- We estimate passive trackers will need to sell US$1.2bn of stock due to capping. Shorts have been increasing, and quarterly results will be announced on 20 February.
Japan Eyewear Cancels Offering and TSE Prime Application on Internal Controls Problem – OFF
- On Friday after the close, Japan Eyewear Holdings (5889 JP) made a short announcement that it would cancel its equity offering and TSE Prime application announced 10 Feb, discussed here.
- I had suggested that the offering price, or a large dip would be a buy. I rescind that recommendation immediately.
- The reason for the cancellation? “Matters that need to be confirmed in relation to our internal control system have been discovered and that will take time.”
FSS Officially Rolls Out New Ex-Div Rule for Quarterly Divs; Sammy May Finally Join the Change
- Starting this year, both year-end and interim divvies follow the new rule, with ex-div dates set after the payout is confirmed.
- Quarterly dividend arbitrage will heat up, especially for high-yield bank stocks, attracting traders to cash in on the spread.
- Samsung Electronics is likely to update bylaws at the March AGM, with Q1 payout ex-div dates set after the dividend is confirmed.
Weekly Deals Digest (16 Feb) – Trend Micro, Zenhoren, HKBN, Fosun Tourism, Paragon REIT, CATL
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Contemporary Amperex Technology (CATL) (300750 CH) filed for an H Share listing to raise US$5 billion, and Hexaware Technologies (HEXW IN) seeks to raise US$1 billion.
- Event-Driven developments: Trend Micro Inc (4704 JP), Kaonavi Inc (4435 JP), Zenhoren (5845 JP), HKBN Ltd (1310 HK), Fosun Tourism (1992 HK), Paragon REIT (PGNREIT SP).
Samsung’s 10T KRW Buyback Phase 2: The Timing of the Drop and How the Structure Is Looking
- The 2nd phase of the buyback, around 3T KRW with a 3-month window, could drop this week, likely by mid- or end-week.
- The market’s worried Samsung might not retire the shares this time and could handle them differently.
- The latest talk is that Samsung will retire the shares immediately, like Phase 1. This could be an inflection point for solid short-term price action—time to set up positions.
[Quiddity Index Feb25] Nikkei 225 Mar Rebal: 2 or 3 IN, 2 or 3 OUT, ~$3bn 1-Way, 1 Squeeze.
- The data observation period is done. No rank changes in the top candidates since mid-Jan. Capping for Fast Retailing (9983 JP) is confirmed.
- For me, it is 2 or 3 ADDs, depending. Kokusai Electric (6525 JP) is still tops. BayCurrent Consulting (6532 JP) second. Shift Inc (3697 JP) third.
- Kokusai is +26.7% in 5 weeks since I wrote bullishly, despite news/confirmation of getting the boot from a global index at end-Feb. Baycurrent is +39.7% (link). Now we count flows.
Zenhoren (5845 JP): MUFG (8306 JP)’s Partial Tender Offer
- Zenhoren (5845 JP) announced a partial tender offer and capital and business agreement from Mitsubishi UFJ Financial (MUFG) (8306 JP). MUFG aims to make Zenhoren a consolidated subsidiary.
- The offer is for a minimum of 11.7m shares (44.36% ownership ratio) and a maximum of 13.0m shares (49.55% ownership ratio) at JPY1,000, a 31.9% premium to the last close.
- Due to the irrevocable, the minimum acceptance condition requires a minority acceptance rate of 16.6%. This threshold is achievable, as the offer is reasonable.
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