In today’s briefing:
- Yuanta/P-Shares Taiwan Dividend+ ETF Preview: Two Weeks to Cutoff
- CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Changes Afoot
- Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket
- Anycolor (5032 JP) – Moving to Prime Next Week, TOPIX Inclusion Next Month
- SET50 Index Rebalance Preview: Should Be Two Changes in June
- End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2023
- (Mostly) Asia M&A, May 2023: Allkem / Livent, InvoCare, Golden Eagle, Yita Coal, Shinsei Bank
- Hanjin Kal: Fight For Control Amid FTC Regulatory Concerns of Korean Air & Asiana Airlines Merger
- JD.com: Three Key Controversies
Yuanta/P-Shares Taiwan Dividend+ ETF Preview: Two Weeks to Cutoff
- With two weeks left to the cutoff, there could be 5 changes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in June.
- Apart from the adds/deletes, there will also be capping and funding flows that will lead to an estimated one-way turnover of 13.5% and a one-way trade of US$886m.
- There are 9 stocks with at least 5 days ADV to trade from passive trackers and another 12 stocks that have at least 1 day ADV to trade.
CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
- There are 3 changes for the CNI Semiconductor Chips Index that will be implemented at the close on 9 June.
- The inclusions will also be added to other indices over the next couple of weeks and there will be inflows from multiple index trackers.
- The adds have outperformed and with 9 trading days to implementation of the changes and the inclusions also being added to other indices, there could be further outperformance near-term.
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: Changes Afoot
- The review period for the June rebalance ended on 31 May. Announcement of the changes will be made on 9 June with implementation at the close on 16 June.
- There could be 3 or 4 A-share additions due to their inclusion in Northbound Stock Connect. That in turn expands the index universe and could result in 2-3 deletions.
- If there are 4 adds and 2 deletes at the June rebalance, estimated one-way turnover at the rebalance will be 13.4% and will result in a one-way trade of US$81m.
Tax-Loss Selling in Australia – Brief Historical Analysis And A Trade Basket
- I am not a tax advisor and I do not play one on TV but it is a subject of interest in Australia, as an AFR article last year shows.
- The general gist of the idea is that retail investors in Australia will take gains on things which run up in price, or get taken over, then look for losses.
- Below I present a study using data from 2012-2022 of how a basket portfolio trade might work.
Anycolor (5032 JP) – Moving to Prime Next Week, TOPIX Inclusion Next Month
- Anycolor (5032 JP) IPOed a year ago, rose several-fold, saw the underwriting broker offer a huge target price, then it fell. There was an offering. And then the murders began.*
- The offering in January, discussed here, created overhang, and the stock fell sharply in the next 6 weeks. Blowout earnings came in mid-March. Along with a TSE Prime transfer application.
- Now we have the Prime promotion on 8 June, which leads to a TOPIX inclusion on 28 July.
SET50 Index Rebalance Preview: Should Be Two Changes in June
- With the review period complete, we see Thai Life Insurance (TLI TB) and WHA Corp Pcl (WHA TB) being added to the SET 50 Index in June.
- Jaymart PCL (JMART TB) is a certain deletion from the index while the second deletion will be determined on the criteria used for liquidity or on market cap.
- JMT Network Services (JMT TB) was deleted from the MSCI Thailand index yesterday and could be deleted from the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) next.
End of Mandatory Lock-Up Periods for 45 Companies in Korea in June 2023
- We discuss the end of the mandatory lock-up periods for 45 stocks in Korea in June 2023, among which 6 are in KOSPI and 39 are in KOSDAQ.
- These 45 stocks on average could be subject to further selling pressures in June and could underperform relative to the market.
- Among these 45 stocks, the top five market cap stocks include Won Tech, Voronoi, Zinus, Bionote, and NanoTIM.
(Mostly) Asia M&A, May 2023: Allkem / Livent, InvoCare, Golden Eagle, Yita Coal, Shinsei Bank
- For the month of May, 8 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$15bn.
- The average premium for the new deals announced (or first discussed) in May was 32%.
- This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.
Hanjin Kal: Fight For Control Amid FTC Regulatory Concerns of Korean Air & Asiana Airlines Merger
- There is a relatively high probability (70-80%+) that the FTCs in Europe and the United States will officially block the merger between Korean Air and Asiana Airlines in 2H 2023.
- This could result in the Korea Development Bank (KDB) selling its 10.58% stake in Hanjin KAL Corp which could result in a fight for the control of Hanjin Kal.
- Our NAV analysis of Hanjin Kal suggests NAV of 3.8 trillion won or implied target price of 57,259 won per share, representing 13% upside from current levels.
JD.com: Three Key Controversies
- Despite a recovery in Chinese retail sales, JD.com’s revenue growth slow-down has accelerated, losing market share to disruptive online competitors amidst ramped-up pricing pressure.
- Margin progression remains on track as JD.com refocuses on its core operations, optimizing its product mix and sales channels to improve operating efficiency.
- JD.com trades on only a 4.1x Dec-23f PE multiple when excluding its net cash balance sheet and associates at book value.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
