In today’s briefing:
- Korea Value-Up Guidelines Release Date Is Set for May 2nd
- HD Hyundai Marine Solution (443060 KS) IPO: No Passive Buying Near-Term
- Merger Arb Mondays (29 Apr) – Azure, Silver Lake, Roland DG, CF Logistics, China TCM, Hollysys
- A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As – Time To Get Long H/A
- A Country Without Shareholder Rights (주주 권리가 없는 나라) – A Book Review
- India: Potential Free Float Changes & Passive Flows in May
- Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American
- MBK’s ConnectWave Tender Offer: Details & Trading Angles
- Connect Wave: Tender Offer of 30% of Shares by MBK Partners
- SET50 Index Rebalance Preview: Market Consultation & More Changes in June
Korea Value-Up Guidelines Release Date Is Set for May 2nd
- Chosun reports Korean financial authorities advance Value-up plan guidelines to May 2nd, citing momentum decline post-election. Chosun’s credibility enhances report validity.
- Companies will commence Value-up-related disclosures in alignment with the guidelines within May. A dedicated Value-up website is set to launch in May.
- The May 2nd guideline release date is crucial for Value-up momentum trading. Anticipate heightened volatility in Value-up stocks approaching this date.
HD Hyundai Marine Solution (443060 KS) IPO: No Passive Buying Near-Term
- HD Hyundai Marine Solution (443060 KS) is looking to raise KRW 742bn (US$540m) in its IPO, valuing the company at KRW 3,707bn (US$2.69bn). Listing is expected to be in early-May.
- Competition for the shares has been fierce with institutional investors indicating demand for 201x the number of shares on offer at prices higher than the top end of the range.
- Barring a doubling of the stock price, the earliest that the stock will be added to major indices is December 2024. So, no passive buying in the short-term.
Merger Arb Mondays (29 Apr) – Azure, Silver Lake, Roland DG, CF Logistics, China TCM, Hollysys
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Qantm Intellectual Property (QIP AU), Azure Minerals (AZS AU), Hollysys Automation Technologies (HOLI US), Probiotec Ltd (PBP AU), Southern Cross Media (SXL AU), China TCM.
- Lowest spreads: Chilled & Frozen Logistics Holdings (9099 JP), Roland DG Corp (6789 JP), Mma Offshore (MRM AU), Pact Group Holdings (PGH AU), Newmark Property REIT (NPR AU).
A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As – Time To Get Long H/A
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND’s consecutive buying streak ended on Monday 25-March, then started again. 20 days straight net buying. NORTHBOUND saw big inflows Friday. A record day I believe.
- HK stocks bounced VERY hard. Seemed like big allocation trade. HSCEI +8.7% vs CSI300 +1.2%. In H/A Pairs, liquid pairs saw Hs outperform their A by 4+% on average.
A Country Without Shareholder Rights (주주 권리가 없는 나라) – A Book Review
- This insight is a book review of 주주 권리가 없는 나라 (A Country Without Shareholder Rights), which is one of the best books on the corporate governance in Korea.
- There are so much wisdom that are included in this book. The author really goes into details about numerous corporate governance problems in Korea and ways to fix them.
- This book was published in January 2024 and it was written by a famous Korean retail investor called Park Young-Ok.
India: Potential Free Float Changes & Passive Flows in May
- Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-September and/or end-December.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
- Depending on the date that the shareholding was published, there could be 14 stocks with passive inflows from global trackers while 7 could see passive outflows in May.
Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American
- The CSRC has announced five capital market cooperation measures for the Hong Kong Southbound Connect programs including RMB dual counters and REITs.
- Jardine Cycle & Carriage (JCNC SP)‘s current implied stub value and simple ratio are both highly elevated.
- A simple Keisei Electric Railway Co (9009 JP)model says “this doesn’t present me with enough upside to warrant it unless I am also really bullish Oriental Land (4661 JP).”
MBK’s ConnectWave Tender Offer: Details & Trading Angles
- MBK Partners will launch a tender offer for ConnectWave from today to May 24th. The target volume is 16.6M shares (40% of SO) at ₩18,000 per share, a 15.6% premium.
- MBK commits to acquiring all tendered shares, regardless of subscription rates, in order to expedite the delisting process. So, there is no cancellation or allocation risk.
- ConnectWave’s retail investor base, with high entry prices, may hinder reaching 70% of the target volume. Absence of risks suggests considering buy positions for potential secondary tender offer.
Connect Wave: Tender Offer of 30% of Shares by MBK Partners
- After the market close on 26 April, it was reported that MBK Partners has launched a tender offer of a 29.61% stake of Connectwave (119860 KS).
- The tender offer price is 18,000 won, which is 15.6% higher than the closing price (15,570 won) of the company on 26 April.
- The tender offer period is from 29 April to 24 May. The amount of the tender offer is about 300 billion won.
SET50 Index Rebalance Preview: Market Consultation & More Changes in June
- The SET has run a market consultation on relaxing liquidity thresholds for inclusion of stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) universe.
- The consultation is the result of an increase in Average Daily Trading Values and lower turnover ratios, especially for large cap stocks.
- Berli Jucker (BJC TB) is now a potential index inclusion in June and that could result in four constituent changes at the next rebalance.
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