In today’s briefing:
- Index Rebalance & ETF Flow Recap: KS200, KQ150, HSI, CSI300/500, STAR50, SSE50, ChiNext, PCOMP, HDFC
- LQ45 Index Rebalance Preview (July): Identifying Potential Changes
- Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash
- Quiddity Jun23 HSTECH Flow Expectations Update: SHORT AAC Vs LONG Lenovo Might Be Interesting
- Giant Biogene IPO Lock-Up – US$1.7bn Lockup Release Will Increase Free Float by 14x
- Quiddity HSCEI Jun 23 Flow Expectations Update: Two Expected Changes, US$608mn One-Way Flow
- AAG Energy (2686 HK): AGM Results Suggest a Scheme Fail Was Inevitable
- JAPAN ACTIVISM: Murakami-San Goes Substantial on Arcland SHD (3085) Ahead of Merger Vote Record Date
- Liontown: Counter-Bid All But Baked In
- NIFTY100 Index Rebalance Preview: Double/Triple Whammy for Some Stocks
Index Rebalance & ETF Flow Recap: KS200, KQ150, HSI, CSI300/500, STAR50, SSE50, ChiNext, PCOMP, HDFC
- Friday marked the end of the review cutoff for the MSCI, CSI300, CSI500, STAR50, SSE50, ChiNext and a bunch of other indices for the upcoming rebalances in May and June.
- There are no major index events coming up this week as a lot of markets are shut on different days.
- There were big inflows to mainland China ETFs during the week, while there was a big redemption from the iShares MSCI ACWI ETF (ACWI US).
LQ45 Index Rebalance Preview (July): Identifying Potential Changes
- The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 31 July.
- Potential adds are Adaro Minerals (ADMR IJ), Bumi Resources Minerals (BRMS IJ), Panin Financial (PNLF IJ), Energi Mega Persada (ENRG IJ), Transcoal Pacific (TCPI IJ) and Pertamina Geothermal Energy (PGEO).
- Potential deletions are Japfa Comfeed Indonesia (JPFA IJ), Indocement Tunggal Prakarsa (INTP IJ), Timah Persero (TINS IJ), Bank Tabungan Negara Persero (BBTN IJ) and Chandra Asri Petrochemical (TPIA IJ).
Insiders At Seoul City Gas and Daou Data Corp Sell Shares Before the Crash
- Key insiders at Seoul City Gas (017390 KS) and Daou Data Corp (032190 KS) sold their shares before the recent crash.
- On 28 April, it was reported that Kim Young-Min (Seoul City Gas Chairman) sold 2% of Seoul City Gas on 20 April, resulting in net sales of 45.7 billion won.
- These Korean companies are two of the eight stocks related to the CFD derivatives sell-down that have been crashing in the past week.
Quiddity Jun23 HSTECH Flow Expectations Update: SHORT AAC Vs LONG Lenovo Might Be Interesting
- In my previous insight in Mid-March 2023, we had a look at the potential index changes and the resultant capping flows for the HSTECH Index in June 2023.
- Since then, our flow expectations have changed with changes in prices and/or float and total share counts.
- Here are our latest flow expectations based on the current prices.
Giant Biogene IPO Lock-Up – US$1.7bn Lockup Release Will Increase Free Float by 14x
- Giant Biogene raised around US$70m in its Hong Kong IPO, after having downsized the deal and priced it at the low-end. Its six-month lockup will expire soon.
- GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Quiddity HSCEI Jun 23 Flow Expectations Update: Two Expected Changes, US$608mn One-Way Flow
- In my previous insight in Mid-March 2023, we had a look at the potential index changes and the resultant capping flows for the HSCEI Index in June 2023.
- Since then, our flow expectations have changed with changes in prices and/or float and total share counts.
- Here are our latest flow expectations based on the current prices.
AAG Energy (2686 HK): AGM Results Suggest a Scheme Fail Was Inevitable
- Aag Energy Holdings (2686 HK)’s latest AGM results show a strong dissent from minorities. The number of NO votes per resolution varied from 590.9-652.5 million or 17.40%-19.22% of outstanding shares.
- The AGM voting shows that Xinjiang Xintai Natural Gas (603393 CH) will struggle to pass the scheme even if the record date is changed and some NO votes are invalidated.
- The risk-reward profile remains unfavourable as the downside to a scheme fail (12.1% to 17.0% downside) is greater than the upside to a scheme pass (+12.1% to HK$1.85 offer).
JAPAN ACTIVISM: Murakami-San Goes Substantial on Arcland SHD (3085) Ahead of Merger Vote Record Date
- Today, City index Eleventh, the corporate entity often used by noted activist Yoshiaki Murakami, announced (EDINET filing) they owned 1.756mm shares or 5.31% of Arcland Service (3085 JP)
- In mid-April, Arclands Corporation (9842 JP) announced it would merge with 55%-owned restaurant subsidiary Arclands SHD. Murakami-owned 5+% of Arclands at the time. Then it sold 9842 and bought 3085.
- This looks like a confusing set of moves. It is not as confusing when you think about it. He is setting up something for later.
Liontown: Counter-Bid All But Baked In
- On the 28 March, lithium play Liontown Resources (LTR AU) rejected Albemarle Corp (ALB US)‘s third proposal of $2.50/share, citing the revised terms as opportunistic.
- Since, that date, it’s been “crickets.” Preliminary due diligence was not provided to Albemarle. Liontown responded to media speculation today saying it has received no new takeover proposals.
- Yet behind the scenes, an interested party has been building a stake, paying up to $2.75/share, 1.5% above the last close.
NIFTY100 Index Rebalance Preview: Double/Triple Whammy for Some Stocks
- Halfway through the review period, we see 5 potential changes for the Nifty Next 50 Index (NIFTYJR INDEX)/ Nifty 100 Index (NSE100 INDEX) at the September rebalance.
- All the potential adds are expected to migrate from MidCap to LargeCap at the AMFI June reclassification, while we expect two of the potential deletes to move the other way.
- Of the potential deletes, one is a high probability deletion from the MSCI India Index at the May QCIR while there is another that is a lower probability deletion.
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