In today’s briefing:
- KRX New Deal Index Rebalance Preview: KMW Into BBIG to Drive Flows
- Hitachi Transport (9086 JP): STILL Trading Too Wide
- Kotak Mahindra Bank (KMB IN): FTSE Inclusion Likely; Flows Will Be Staggered
- Xtep International Placement – Parent Trimming at ATHs, Last Deal Didn’t Do Well
- Link and DND Shake Hands at A$4.81
- Zomato IPO Lock-Up – A US$3.4bn Lockup Release Test Case for India
- 51job’s Egregious Offer: Dissentient Shareholders Commence Court Proceedings
- Zhuangyuan Pasture (1533 HK): Offer Now Unconditional
- DAX/MDAX/SDAX Quiddity Leaderboard Sep 2022: Some Changes for SDAX and MDAX
- Cross Markets: Is the Ship Turning?
KRX New Deal Index Rebalance Preview: KMW Into BBIG to Drive Flows
- The review period for the September rebalance of the KRX New Deal indices started on 1 May and will run till 29 July. Implementation is on 8 September.
- Intellian Technologies (189300 KS) and Seojin System Co, Ltd. (178320 KS) could replace Danal Co Ltd (064260 KS) and Kcp Co Ltd (060250 KS) in the Internet Index.
- Nexon Games (225570 KS) could replace Devsisters (194480 KS) in the Game Index, and KMW Co Ltd (032500 KS) could replace AfreecaTV (067160 KS) in the BBIG Index.
Hitachi Transport (9086 JP): STILL Trading Too Wide
- Overnight we got news that the EU had cleared the purchase of Hitachi Transport System (9086 JP) by the KKR bidco.
- What started as an expected five-month process to gain regulatory clearances should now be down to two months. Risk arb is trading wide, but this is an “easy” deal.
- Now trading at 10% annualised to the cash-out date implied by a 30-Sep start date, this is a “good risk.”
Kotak Mahindra Bank (KMB IN): FTSE Inclusion Likely; Flows Will Be Staggered
- Kotak Mahindra Bank (KMB) was deleted from the FTSE All-World Index following the introduction of the minimum headroom rule. With foreign room below 20%, the stock was not added back.
- The latest shareholding pattern as of 30 June shows foreign room at 20.01%. This means that Kotak Mahindra Bank (KMB IN) should be added to the index in September.
- However, the inclusion will take place in a staggered manner. Subject to foreign room staying above 20%, the inflows will come over the next couple of years.
Xtep International Placement – Parent Trimming at ATHs, Last Deal Didn’t Do Well
- Group Success Investments is looking to raise up to US$133m by trimming its holdings in Xtep International (1368 HK).
- We can’t say that the deal is expected and short interest on the stock hasn’t been creeping up as well.
- While the deal won’t be a large one, representing just 5.7 days of three month ADV, the firm’s last deal hasn’t done well.
Link and DND Shake Hands at A$4.81
- Link Administration (LNK AU) has entered a revised scheme implementation deed with Dye&Durham/DND at A$4.81 per share. The scheme meeting will be held in mid-August.
- Shareholders will be supportive due to deal fatigue, and the offer price is 11% above the undisturbed price and at the low end of the original IE valuation range.
- Regulatory approvals are a key risk. DND is presumably confident in its undertakings to gain ACCC approval. At last close, the gross spread is 7.8%.
Zomato IPO Lock-Up – A US$3.4bn Lockup Release Test Case for India
- Zomato (Zomato IN) raised US$1.3bn in its India IPO in Jul 2021. At that time, it was the largest technology sector listing in India.
- Zomato is one of two leading food delivery app operators in India. It recently acquired Blinkit marking its foray into the instant grocery segment.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
51job’s Egregious Offer: Dissentient Shareholders Commence Court Proceedings
- Back on 1 March, 51 Job Inc Adr (JOBS US) entered into a revised merger agreement at US$61.00/share, down 22.8% from the initial terms.
- This merger was approved at an EGM on the 27 April and became effective on the 6 May.
- Court proceedings have commenced for dissenters, accounting for a staggering 30.9% of shares out. It’s not just “fair value” under the microscope; but the legality of the downward revision.
Zhuangyuan Pasture (1533 HK): Offer Now Unconditional
- On the 25 April, PRC dairy farmer Lanzhou Zhuangyuan Pasture (1533 HK) announced a Conditional Cash Offer for all its H-shares at $10.89/share.
- This two-step voluntary cash offer incorporated a Scheme-like vote and a 90% tendering condition.
- Shareholders voted for the transaction on the 29 June. The tendering condition has now been satisfied. The last day of trading is on the 1 August.
DAX/MDAX/SDAX Quiddity Leaderboard Sep 2022: Some Changes for SDAX and MDAX
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices for the September 2022 Rebalance.
- While no names currently satisfy the requirements to move into or out of the DAX Index, there could be some changes for the MDAX and SDAX Index.
- Below is a closer look at the recent price and volume performance of these names.
Cross Markets: Is the Ship Turning?
- Is the inflation ship turning? Price action in markets warrants this question
- The clearest breaks have been in US stocks which should still rally
- Bonds may be the next to move – it is the central market to watch
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