In today’s briefing:
- Index Rebalance & ETF Flow Recap: MSCI, ASX, STAR50, China 50, NIFTY100, SMM SP, Pertamina Geo IPO
- CSI500 Index Rebalance Preview: Potential Adds Continuing to Outperform
- Newmont’s Indicative Offer for Newcrest Mining (NCM AU)
- BBL/KBANK: Huge Outperformance as BBL Nears NVDR Limit
- Newmont Proposes Taking Newcrest Back Into The Fold
- Korea: Upcoming Changes to Dividend Rules & Implications
- Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management
- Quiddity Leaderboard-S&P/ASX Mar 23: Time to Be Bullish ASX 200 & 300 Potential ADDs
- Newcrest Mining (NCM AU): Newmont’s Light All-Scrip Offer
- Iwasaki Electric (6924 JP): JPY4,460 MBO Tender Offer from Carlyle
Index Rebalance & ETF Flow Recap: MSCI, ASX, STAR50, China 50, NIFTY100, SMM SP, Pertamina Geo IPO
- There were some review cutoffs last week as well as the implementation of the PCOMP INDEX, IDX 30 Index, LQ 45 Index and IDX 80 Index.
- The big event in the coming week is the announcement of the MSCI February QCIR on Friday morning Asia time with implementation at the close of trading on 28 February.
- Inflows to iShares Core MSCI Emerging Markets ETF (IEMG US) continue while IShares Edge MSCI Min Vol Emerging Markets ETF (EEMV US) continues to see redemptions.
CSI500 Index Rebalance Preview: Potential Adds Continuing to Outperform
- Three quarters of the way through the review period for the June rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 9 June.
- There is a big sector skew in the potential changes. We estimate a one-way turnover of 11.47% at the June rebalance resulting in a one-way trade of CNY 10.11bn.
- The potential adds have outperformed the potential deletes and the CSI500 Index over the last few weeks. There could be more outperformance till nearer the end of the review period.
Newmont’s Indicative Offer for Newcrest Mining (NCM AU)
- Newmont Mining (NEM US) has made an indicative, non-binding and conditional proposal to acquire Newcrest Mining (NCM AU). The exchange ratio is 0.38 Newmont shares for each Newcrest share.
- At Newmont Mining (NEM US)‘s last close, this values Newcrest Mining (NCM AU) at A$27.4/share and at an equity value of A$17.3bn, a 22% premium to the last close.
- Newmont Mining (NEM US) intends to list CDIs on the ASX following the acquisition and that will have implications for changes in the S&P/ASX family of indices.
BBL/KBANK: Huge Outperformance as BBL Nears NVDR Limit
- Bangkok Bank (BBL TB) has outperformed Kasikornbank PCL (KBANK TB) by 33% over the last 11 months and the price ratio is nearing the high end of the historical range.
- The number of NVDRs issued on Bangkok Bank Public (BBL TB) have continued to increase while decreasing on Kasikornbank PCL (KBANK TB).
- Bangkok Bank Public (BBL TB) now trades at a higher forward PE as compared to Kasikornbank PCL (KBANK TB) and the gap in price to book has narrowed significantly.
Newmont Proposes Taking Newcrest Back Into The Fold
- Newmont Mining (NEM US), the world’s largest gold miner, has pitched a non-binding, all-scrip proposal for Newcrest Mining (NCM AU), Australia’s largest listed gold company.
- The proposal offers 0.38 Newmont shares for every Newcrest share, or an indicative Offer price of A$27.16/share, a 21% premium to last close. An earlier proposal from Newmont was rejected.
- The proposal is subject to a raft of conditions, including granting of exclusivity to Newmont, due diligence, Newmont shareholder approval, and regulatory approvals, including FIRB.
Korea: Upcoming Changes to Dividend Rules & Implications
- On 31 January, Korea’s Financial Services Commission (FSC) and the Ministry of Justice announced plans to improve rules regarding dividends to bring them in line with international standards.
- Companies will be able to decide the dividend amount prior to the record dates for quarterly dividends, while the ex-date of the final dividend will be post the AGM.
- This was one of the issues highlighted by MSCI for Korea’s upgrade from EM to DM. There are also implications for the KOSPI200 futures basis and futures rolls.
Korea NPS Reportedly Finalized Additional 50 KOSPI Stocks in Its BM for Direct Management
- NPS said it would add 50 KOSPI stocks to KOSPI 200 for direct management. However, the key was when this would be implemented and which ones would be included.
- SBS, one of Korea’s major networks, exclusively reported that NPS finalized the constituent stocks of the NPS-KR250 and started rebalancing trading on the 50 additional KOSPI stocks from January.
- Hence, tracing and identifying who these additional 50 KOSPI stocks are is becoming the hottest topic in Korea’s local market at this point.
Quiddity Leaderboard-S&P/ASX Mar 23: Time to Be Bullish ASX 200 & 300 Potential ADDs
- In this insight, we take a look at the potential index changes for S&P ASX 20, 50, 100, 200, 300 in the run up to the March 2023 Rebalance.
- There could be one change for ASX 20 and one change for ASX 100 while ASX 200 could see four ADDs/DELs.
- For ASX 300, there could be 15 ADDs and 12 DELs in the March 2023 Rebalance including some high impact names based on days-to-trade.
Newcrest Mining (NCM AU): Newmont’s Light All-Scrip Offer
- Newcrest Mining (NCM AU) confirmed a non-binding indicative privatisation proposal from Newmont Mining (NEM US) at 0.380 Newmont shares per Newcrest share.
- The offer values Newcrest at a discount to Tier 1 gold producer EV/Resource multiples. Also, the offer carries the volatility risk around Newmont shares and FX rates.
- The offer underscores Newcrest’s value and helps the Board seek better terms. There is a possibility of a counterbid from other Tier 1 producers such as Barrick Gold (GOLD US).
Iwasaki Electric (6924 JP): JPY4,460 MBO Tender Offer from Carlyle
- Iwasaki Electric (6924 JP) has recommended an MBO tender offer, sponsored by Carlyle Group Inc (CG US), of JPY4,460 per share, an 86.1% premium to the undisturbed price (6 February).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
- The tender offer is attractive and represents a ten-year share price high. This suggests a done deal. The tender offer period is from 7 February to 22 March.
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