In today’s briefing:
- Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
- Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS
- The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
- L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price
- Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning – India, Japan, Korea
- Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
- Where & How to Check CFD Trading Data Starting Sept 1st
- MVIS Australia Equal Weight Index Rebalance Preview: Deletes, Close Deletes, Capping Changes
- MVIS Australia A-REITs Index Rebalance Preview: One Delete, One Close Delete & Capping
- Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars
Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
- The data for the Nikkei 225 Rebalance is cemented as of 31 July 2023. Lasertec Corp (6920 JP) looks like a shoo-in. The DELETEs are obvious too.
- Fast Retailing (9983 JP) doesn’t get a cap (yet). But the other ADDs are a real question. It is a matter of interpreting the methodology and qualitative aspects. And FLOAT.
- One way, Socionext (6526) and Mercari (4385) are ADDs. Another way, it looks like Nitori Holdings (9843) and ZOZO Inc (3092) or Ryohin Keikaku (7453). FLOAT IS A PROBLEM ANYWAY.
Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS
- Chindata Group (CD US) has entered a definite agreement with Bain Capital at US$8.60 per ADS, 7.5% higher than its previous offer of US$8.00 per ADS.
- Completion is conditional on shareholder approval, dissenting shareholders representing less than 12% of outstanding shares and any applicable regulatory approvals. The completion conditions should be met.
- CMC’s offer, while higher, does not meet the “superior proposal” criterion. At the last close price and December-end completion, the gross and annualised spread is 6.0% and 16.6%, respectively.
The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
- This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it.
- We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations.
- We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here.
L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price
- In response to media speculation, L’Occitane (973 HK) has clarified that Reinold Geiger, the Chairman and the largest shareholder, is contemplating a possible transaction through a voluntary general offer.
- However, the rumoured offer of HK$35 per share is false. Mr Geiger has confirmed that the potential offer price would be no less than HK$26.00 per share.
- The floor price of HK$26 is light and needs a bump (towards HK$30), particularly if Mr Geiger wants 95% of voting rights to exercise the right of compulsory acquisition (squeeze-out).
Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning – India, Japan, Korea
- The review period for the September rebalance of the S&P/ASX family of indices ends on Friday. There will be a lot of changes across the family.
- Hang Seng Indices will announce the changes to the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI after market close on Friday.
- There were HUGE inflows to onshore China focused ETFs during the week with CSI 300 Index, CSI 500 Index and SSE50 Index ETFs taking in the largest amounts.
Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
- Itochu owns 36.3% of building materials and engineering firm Daiken Corp (7905 JP). They have launched a tender with gimmicky Majority-of-Minority to buy the rest at ¥3,000/share, 4.7x FY2024e EBITDA.
- That’s low-ish, but given securities holdings, inventory, and net receivables at 4+x EBITDA it’s probably too cheap, but it gets quite close to the minimum threshold just with cross-holders.
- This deal price doesn’t include synergies (according to the valuations and the SC) but a bump would need an agitator. Hope alone won’t get it.
Where & How to Check CFD Trading Data Starting Sept 1st
- The CFD balance information (both overall and individual stock) will be provided by KOFIA and KOSCOM, starting from September 1st.
- September 1st also marks the day when local brokerages that temporarily suspended CFD trading services will resume them.
- With the disclosure of individual stock CFD balances starting from September 1st, there’s a high probability of another volatility turning point.
MVIS Australia Equal Weight Index Rebalance Preview: Deletes, Close Deletes, Capping Changes
- There could be two deletes for the index in September. There are two other stocks that are close to the deletion threshold.
- Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of around 2.7% and a one-way trade of A$51m.
- Short interest has been increasing on Charter Hall (CHC AU) and JB Hi-Fi Ltd (JBH AU) and could be partially driven by potential index deletions.
MVIS Australia A-REITs Index Rebalance Preview: One Delete, One Close Delete & Capping
- There should be one deletion from the index in September. And there could be another deletion. And there will be capping changes for a few stocks.
- The index changes will lead to a one-way turnover of 2.12% resulting in a one-way trade of A$13m. There is only one stock with over A$5m to trade.
- Following the spinoff, Abacus Group (ABG AU) and Abacus Storage King (ASK AU) will be the lowest ranked index constituents and at risk of deletion from the index.
Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars
- OVERSEAS. Uncertainty reigns as SPX closed flat Friday; US Treasury Yields rise as Yield Curve flattens on strong producer price data; Headwinds Mount in China’s Economy; Oil Demand reach record.
- JAPAN. Nikkei Futures -0.1% vs Cash; USDJPY 145; Kishida Cabinet approval down; Wholesale prices slow; Japanese firms opt to go private rather than face activists; Inbound Boost from China.
- NUGGET. Honda has a robust earnings structure that we think will be resilient to the increasing investment spend on BEV, with motor bike profitability
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