In today’s briefing:
- Nikkei 225 Rebal – Beating a Dead Horse
- ICICI Securities Delisting: A Deja Vu of Troubles
- PCOMP Adhoc Index Rebalance: NIKL to Replace UBP in a BIG Move
- NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry
- Murakami-San’s Masterful Maneuvering to Stymy SBI’s Shysterish Shinsei Squeezeout
- DCM Takeover for Keiyo (8168) – Pretty Easy Deal
- Shenzhou Intl (2313 HK): Nike’s Inventories Declined By 10% Yoy in 1Q24
- Kasumigaseki Capital (3498) Moving To TOPIX End-November
- Ecoeye IPO Preview
- Singapore Exchange, Korea Exchange Lead Exchange-Owned ESG Indexer Growth
Nikkei 225 Rebal – Beating a Dead Horse
- The September 2023 Nikkei 225 Rebalance is tomorrow at the close. This will engender a lot of buying of three names, and a lot of selling of 3 names.
- It will also engender a funding trade of nearly ¥460bn.
- I am going to beat the dead horse and warn about certain issues with this rebalance.
ICICI Securities Delisting: A Deja Vu of Troubles
- ICICI Securities Ltd (ISEC IN) Turbulent Journey: From a disappointing IPO to a challenging delisting attempt.
- Delisting Plan and Shareholder Discontent: ICICI Securities Ltd (ISEC IN) seeks to become a wholly-owned subsidiary of ICICI Bank Ltd (ICICIBC IN), facing resistance from minority shareholders.
- Uncertain Future: The outcome of the delisting hinges on the decisions of institutional shareholders like Life Insurance of India (LICI IN) and the board’s actions.
PCOMP Adhoc Index Rebalance: NIKL to Replace UBP in a BIG Move
- In a surprise development, UnionBank of the Philippines (UBP PM) will be deleted from the Philippines Stock Exchange PSEi Index (PCOMP INDEX) and replaced with Nickel Asia (NIKL PM).
- There will be a BIG impact on both stocks as a result of the change with passive trackers need to trade in excess of 30 days ADV.
- Expect both stocks to move today and then continue that move for the next few days till the changes are implemented.
NIFTY Family Index Rebalance: Flows at the Close Today + F&O Expiry
- The rebalance of the NIFTY, Nifty Next 50, NSE Nifty Bank, CPSE ETF (CPSEBE IN) and a bunch of other indices will be implemented at the close of trading today.
- Depending on the index, there are constituent changes, changes to the number of shares and free float, plus capping changes. Put together, there is a lot of flow and impact.
- The round-trip trade will be in excess of US$1bn. Add in the futures & options expiry and volumes will be extremely high in the last 30 minutes of trading.
Murakami-San’s Masterful Maneuvering to Stymy SBI’s Shysterish Shinsei Squeezeout
- The SBI Holdings (8473 JP) takeout of SBI Shinsei Bank (8303 JP) was opportunistic – done at a price SBI Shinsei’s Board considered not reasonable. Until it changed its mind.
- I had thought appraisal rights a great trade. I also thought it a good trade to own the back end, but that involved one holder putting ¥55bn on the table.
- Activist Murakami-san’s S Grant Corporation has done that. It will own one share of 8 post-consolidation on Monday. They are now equal shareholders with the govt entities. Wow.
DCM Takeover for Keiyo (8168) – Pretty Easy Deal
- Today after the close, DCM Holdings (3050 JP) announced it would launch a friendly takeover by Tender Offer for Keiyo Co Ltd (8168 JP)
- This is totally not a surprise. They signed a Business and Capital Alliance in 2017. DCM bought more at a premium last autumn. This takeover was obvious in the long-term.
- There are enough friendly holders to get this done. Activism would be hard unless it was really cheap, which it does not seem to be, but process wasn’t great.
Shenzhou Intl (2313 HK): Nike’s Inventories Declined By 10% Yoy in 1Q24
- Nike (NKE US) reported better than expected 1Q24 results this morning, with the stock up 8% in after market trading.
- Nike’s inventories declined by 10% yoy during the quarter, which bodes well for Shenzhou Intl Group Holdings (2313 HK), as sales to Nike made up 30% of Shenzhou’s sales.
- Shenzhou is trading at 15x 2024E PE, compared to an average of 21x forward PE over the last decade.
Kasumigaseki Capital (3498) Moving To TOPIX End-November
- Real estate consultant/developer/speculator Kasumigaseki Capital (3498 JP) announced Friday that it would move from TSE Growth to TSE Prime on 6 October.
- The stock was on the list of top potential candidates in TOPIX Inclusions: Who Is Ready (Sep 2023) (and has been for nearly a year). It’s a good list.
- This event leads to a TOPIX inclusion on 29 November. Analysis below.
Ecoeye IPO Preview
- Ecoeye is getting ready to complete its IPO on the KOSDAQ exchange in November. Ecoeye specializes in carbon emission rights related businesses.
- The IPO price range is from 28,500 won to 34,800 won per share. The IPO offering amount is from 59.3 billion won to 72.1 billion won.
- Established in 2005, Ecoeye makes money through carbon emissions trading and brokerage, carbon reduction business, carbon emissions trading system, and operation consulting.
Singapore Exchange, Korea Exchange Lead Exchange-Owned ESG Indexer Growth
- Absolute value of index-linked assets is the ultimate measure of market share, but it misses an important aspect of the ESG-related indexing market – i.e., relative market share growth.
- A category of ESG index providers that leads vis-à-vis relative growth is exchange-owned ESG index providers, a group which currently accounts for US$46.3 billion in indexed assets.
- Asian exchange-owned ESG indexers are the clear leaders in that subcategory, with Singapore Exchange (SGX SP) and Korea Exchange leading that cohort with double-digit growth.
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