In today’s briefing:
- HSI, HSCEI, HSTECH: March Rebalance Flows Post Capping
- Toshiba – Privatisation Rebuttal and Then a Change in CEO…
- Nikkei 225 Change – Shinsei (8303) OUT, ORIX (8591) IN
- Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)
- Nexon – Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play
HSI, HSCEI, HSTECH: March Rebalance Flows Post Capping
- The March rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituents at 8%. This will lead to large flows.
- The largest inflows will be on Alibaba Group (9988 HK), JD.com Inc. (9618 HK), Meituan (3690 HK), Nongfu Spring (9633 HK), Li Auto (2015 HK) and Lenovo (992 HK).
- The largest outflows will be on HSBC Holdings (5 HK), Kuaishou Technology (1024 HK), China Construction Bank H (939 HK) and Tongcheng-Elong Holdings Ltd (780 HK).
Toshiba – Privatisation Rebuttal and Then a Change in CEO…
- Yesterday Bloomberg published an interview with Toshiba CEO Satoshi Tsunakawa where he effectively said a privatisation was not going to happen.
- Today, Toshiba announced that Tsunakawa and his deputy, Mamoru Hatazawa would be resigning effective immediately.
- What an interesting coincidence… one which could make shorting Toshiba quite attractive.
Nikkei 225 Change – Shinsei (8303) OUT, ORIX (8591) IN
- The Nikkei Index team announced changes to the Nikkei 225 Average today after the close.
- Shinsei Bank (8303) is OUT and ORIX (8591) is IN based on the new rule changes effective with the new market structure in place at the TSE on 4 April.
- There is a special sit on Shinsei, and ORIX has several days to buy. It could be interesting.
Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)
- Orix Corp (8591) replaces Shinsei Bank (8303) in the Nikkei 225 at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.
- We estimate there will be passive buying of 27.5m shares on Orix Corp (8591 JP) while there will be selling of 2.75m shares on Shinsei Bank (8303 JP)
- There appears to be some pre-positioning on Orix Corp (8591 JP) – the stock could outperform heading into index inclusion.
Nexon – Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play
- The founder and former chairman and CEO of Nexon (3659 JP) passed away according to both Nexon and his holding company NXC. Both announced it late afternoon 1 March.
- NXC – the near-parent (47+% stake) of Nexon tried to sell Nexon/NXC in H1 2019 to no avail. Since then, profits have rebounded somewhat, and investments have multiplied.
- The estate may wish to sell Nexon shares, or its entire stake, at some point near-term.
Before it’s here, it’s on Smartkarma
