In today’s briefing:
- Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- China National Building Material (3323 HK): H Share Buyback Vote on 19 February
- Goodman Group (GMG AU) – Big Placement, Big Index Flow But…
- S&P/ASX Index Rebalance Preview: Changes Stable as Adds Outperform Deletes Bigly
- Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.
- Goodman Group Placement – Large Deal, Doesn’t Seem Well Flagged, Not Particularly Exciting
- Post-Ban Short Play Idea: TIGER Top 10 ETF Rebal in June
- MV Australia Equal Weight Index Rebalance Preview: Potential Changes in March; Multiple Overlaps
- Canvest (1381 HK): Regulatory Precondition Satisfied
Goodman Group (GMG AU): Much Bigger Index Impact of US$2.5bn Equity Offering
- Goodman Group went into a trading halt and then announced results and an underwritten equity placement of A$4bn (US$2.54bn) to pursue growth opportunities across logistics and data center operations.
- The stock has dropped since CIC’s stake sale in December but still continues to handily outperform peers.
- There will be some passive buying in the stock at the time of share settlement and more a few days later to mop up around 37% of the offering.
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
- With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
- The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.
China National Building Material (3323 HK): H Share Buyback Vote on 19 February
- The IFA opines that the China National Building Material (3323 HK) share buyback, which will acquire a maximum of 841.7 million H Shares at HK$4.03, is fair and reasonable.
- The share buyback seems designed to enable the CNBM parent company to bypass the creeper rule and squeeze the shorts.
- The fortuitous material derating of peers has helped make the buyback attractive. Therefore, the votes should pass, and the minimum acceptance condition should be met.
Goodman Group (GMG AU) – Big Placement, Big Index Flow But…
- After a minor “disaster” in a secondary placement in December, this morning industrial/infrastructure (including data centres) REIT/etc Goodman Group (GMG AU) announced results and an A$4bn primary offering.
- The large offering comes at a 6.9% discount, and For a combination of reasons, there is a LOT of buying to do with index tracking over the next short while.
- But that too has complications. Some is immediate. Some a little delayed. A bunch may be supplied by short sellers. There is one easy trade. A few more complicated.
S&P/ASX Index Rebalance Preview: Changes Stable as Adds Outperform Deletes Bigly
- Nearing a few days left in the review period, there could be 39 adds/deletes across the S&P/ASX family of indices in March.
- Passive trackers will need to trade a lot of stock in the forecast changes, with the impact being especially large for the changes to the S&P/ASX 200 and S&P/ASX 300.
- Except for the S&P/ASX 200 (AS51 INDEX) that is heavily tracked, the performance of the forecast changes to the other indices has been very stable with adds outperforming deletes bigly.
Alibaba (9988 HK): How Options Traders Are Navigating the Rally and Volatility. Top Trades.
- This Insight analyses Alibaba Group Holding (9988 HK) tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
- These traders tailor structures to risk budgets and take calculated bets. Several large box trades appeared on the ticker.
- Expect more movement on Alibaba Group Holding (9988 HK)‘s Q3 earnings announcement tomorrow, 20 February 2025. Option-implied move at the end of this Insight.
Goodman Group Placement – Large Deal, Doesn’t Seem Well Flagged, Not Particularly Exciting
- Goodman Group (GMG AU) is looking to raise around US$2.5bn to partly fund its data centre expansion plans.
- Goodman’s shares have performed exceptionally well over the past year, driven by its pivot towards data centers.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Post-Ban Short Play Idea: TIGER Top 10 ETF Rebal in June
- POSCO Holdings and Samsung SDI stand out for shorting, as both were hit hard by the EV battery chasm. With June rebal looming, they’re likely getting the boot.
- Samsung Biologics and Hanwha Aerospace could replace them, with a large float cap gap and strong price momentum, making it unlikely for the gap to flip by May.
- As June rebalancing nears, volume could drop, increasing passive impact. With shorting back, passive flow intensity may rise, leading to significant price action.
MV Australia Equal Weight Index Rebalance Preview: Potential Changes in March; Multiple Overlaps
- With 6 days left to review cutoff, there are 2 potential adds and 3 potential deletions for the MV Australia Equal Weight Index at the March rebalance.
- Even if there are no constituent changes, capping changes will lead to one-way turnover of 3% and a round-trip trade of A$159m.
- The final list of inclusions/exclusions will depend on price movements till next Friday and whether the provider makes any significant changes to the free float of stocks in the universe.
Canvest (1381 HK): Regulatory Precondition Satisfied
- The regulatory precondition concerning Canvest Environmental Protection Group (1381 HK)’s privatisation offer from Grandblue Environment Co A (600323 CH) has been satisfied.
- The sole remaining precondition concerns resolving loan guarantee issues. Canvest is taking steps to resolve these issues, and satisfying this precondition is low-risk.
- Despite peers’ re-rating, the offer remains attractive, and the vote is low-risk. At the last close, the gross/annualised spread was 4.5%/15.0% for a mid-June payment.
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