In today’s briefing:
- Kakao Pay’s MSCI August QIR Inclusion: Screening/Passive Flow Calculations
- Stock Connect Changes & MSCI/FTSE Deletions on Friday
- Last Minute MNACT Arb and Index Selling
- Atlas Arteria Group (ALX AU): IFM Makes an Approach
- Tencent/Netease: Smell of Common Prosperity in June Game Approval
Kakao Pay’s MSCI August QIR Inclusion: Screening/Passive Flow Calculations
- Alipay’s stake sale raises another critical issue: Kakao Pay’s MSCI inclusion. Kakao Pay comfortably satisfies the full MC threshold but tightly exceeds the float MC hurdle.
- As for the passive flow, we should see an inflow of 6.11x ADTV, equivalent to 1.48% of SO. It represents nearly 2M shares, close to ₩210B.
- If we build up a position betting on Kakao Pay’s downward trend due to Alipay’s block deal risk, we should consider temporarily switching the position when this event is triggered.
Stock Connect Changes & MSCI/FTSE Deletions on Friday
- Changes to the Northbound Stock Connect Buy and Sell list were announced yesterday with 35 SSE-listed stocks becoming sell-only, and 32 SZSE-listed stocks becoming sell-only.
- This will result in the deletion of 45 stocks from the FTSE All-World, All-Cap and Micro-cap indices, while there will be 9 deletions from the MSCI Standard Index.
- There are a few stocks with over 1 day of ADV to sell from passive trackers and these stocks could trade weaker than the market over the next few days.
Last Minute MNACT Arb and Index Selling
- Today is the last day of trading for Mapletree North Asia Commercial Trust (MAGIC SP) also known as MNACT.
- That means today is index deletion day for any number of global indices, even though MNACT is not in many of the major ones.
- Payment will be S$1.949/unit plus a Clean-Up Distribution. There may be opportunities at the close. Strategy below.
Atlas Arteria Group (ALX AU): IFM Makes an Approach
- IFM bought around 67.1m shares (7% of shares out) of Atlas Arteria (ALX AU) at A$8.1/share last evening taking its total holding to around 15% of shares outstanding.
- IFM intends to request certain information that would help it assess whether it can submit a non-binding proposal to acquire all the shares in Atlas Arteria that it does not own.
- With the indicative offer floor set at A$8.1/share, Atlas Arteria still trades cheaper than Transurban Group and offers a 14% premium to last close and even higher premiums to longer-term VWAPs.
Tencent/Netease: Smell of Common Prosperity in June Game Approval
- China announced game approval last night for June batch, after a break in May.
- We discussed in our previous note that China had resume game approval but at a slower pace.
- Tencent and Netease continue to score zero in June domestic game approval.
Before it’s here, it’s on Smartkarma
