In today’s briefing:
- Korea: Upcoming Changes to Dividend Rules & Implications
- Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks
- Delta Electronics (DELTA TB / 2308 TT): Waiting for a Reversal
- Quiddity Leaderboard-S&P/ASX Mar 23: Time to Be Bullish ASX 200 & 300 Potential ADDs
- Nintendo (7974) | Game Over for Switch
- DTAC/TRUE Merger: Index Flows & Potential SET50 Replacement
- Carlyle 86% Premium ¥4460 TOB on Iwasaki Elec – Probably Light, and Interesting Shareholder Register
- Boustead Projects’ Underwhelming Unconditional Offer
- Nissan’s Renault Led Selldown Very Early Look – US$4.3bn Prolonged Overhang or Lack Thereof
- Toshiba – Good News?
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.
Toshiba (6502) – Funding Definitely Probably Now Secured – Next Steps and Risks
- On 31 January, the expected “deadline” for a bank loan agreement with the JIP Consortium bidding for Toshiba, we got news that commitment confirmation would be extended to 3 February.
- Every other time we got a deadline extension, we got an article. On 3-6 Feb, we got no article, suggesting we were close. Today, a Bloomberg article says terms agreed.
- That gets us over the biggest hump. Now we have to look at possible next steps and timing.
Delta Electronics (DELTA TB / 2308 TT): Waiting for a Reversal
- Delta Electronics Thai (DELTA TB) is now the largest stock in Thailand by market cap. The recent SET50 INDEX inclusion has set the stock on fire.
- The Delta Electronics Thai (DELTA TB) / Delta Electronics (2308 TT) spread is very wide now, but still well within the historical highs.
- We’d put on a placeholder position and monitor the spread for an entry once there is a clearer indication of a reversal in the spread.
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.
Nintendo (7974) | Game Over for Switch
- Nintendo reported operating profit of 190b yen (-8% YoY), falling far short of Street expectations
- The Nintendo Switch is now a six-year old console and demand is exhausted. A normalization of chip/supply chain issues benefits the newer PS5
- Our thesis is that the hardware cycle has peaked and that the share price will head lower in tandem with the dwindling top line
DTAC/TRUE Merger: Index Flows & Potential SET50 Replacement
- The Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) joint shareholder meeting is in two weeks and amalgamation could be completed in the next month or two.
- We forecast inflows to the NewCo from MSCI trackers while there will be no flows from FTSE All-World/All-Cap and Stock Exchange of Thailand SET 50 Index (SET50 INDEX) trackers.
- Srisawad Power 1979 (SAWAD TB) is currently comfortably in the lead to be added to the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in an ad hoc rebalance.
Carlyle 86% Premium ¥4460 TOB on Iwasaki Elec – Probably Light, and Interesting Shareholder Register
- Carlyle has agreed to do an MBO on Iwasaki Electric (6924 JP) where the existing CEO who is 65yrs old will take a 0.5% stake.
- As a purveyor of specialist industrial lighting, including transition to LED lighting for public space use, the company’s place in the ecosystem is not undesirable. But it isn’t hugely profitable.
- This smallcap takeout at an 86% premium is probably still too light. And the Shareholder Structure is interesting.
Boustead Projects’ Underwhelming Unconditional Offer
- Boustead Projects (BOCJ SP), a high-spec facilities designer and builder, has announced an unconditional Offer from Boustead Singapore Limited (BOCS SP) at S$0.90/share. The price is not final.
- BOCS currently holds 54.87% in BOCJ. FF Wong, a shareholder in BOCS, holds a further 19.28%; therefore 74.16% is held by parties acting in concert.
- It is the intention of BOCS to delist BOCJ. This should trade tight. This should be bumped. The Offer price is wrong.
Nissan’s Renault Led Selldown Very Early Look – US$4.3bn Prolonged Overhang or Lack Thereof
- With Nissan (7201 JP) and Renault coming to a new arrangement regarding their working relationship, Renault will be left with a US$4.3bn Nissan stake that it will look to sell eventually.
- The selldown will probably take a long while to materialize.
- In this note, we talk about the announcement and take a very early look at the possible selldown.
Toshiba – Good News?
- So JIP appears to have finally secured funding for its tortured Toshiba bid.
- The market is reacting positively and we think this is reasonable but the real question is whether Toshiba management will be amenable to the new terms of JIP’s deal.
- In our view, there are certain quirks regarding recent news flow which point to a potential answer to that question.
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