In today’s briefing:
- MSCI Feb 2023 QCIR Preview: Nearing the Start of the Review Period
- Fujitsu (6702) Subsidiary Selldowns To Come
- January TOPIX FFW Review – Some Big Sells
- Cosmo Energy (5021) Vs Murakami – It’s On!
- K200 ETFs’ Swap Trading on Meritz & Fresh Buy-In JB Financial on Jan 27
- Japan Excellent (8987). It WAS Most Excellent. That’s Now Done.
- Taiwan Tech Weekly: Global Optimism for Semi Stocks, Taiwan’s New Subsidies, TSMC CEO Buying Stock
- Esso Thailand: Bangchak Corp’s Takeunder
- Fast Retailing (9983) | Q1 Miss
- Aequitas 2023 Asia IPO Pipeline – India, ADRs, Korea, Japan and ASEAN
MSCI Feb 2023 QCIR Preview: Nearing the Start of the Review Period
- We expect a number of changes to the MSCI Standard indices for the Asia Pacific region at the first Quarterly Comprehensive Index Review to be implemented on 28 February.
- As usual, most changes are expected in China with a smattering of adds and deletes for the other markets.
- On average, the adds have outperformed the deletes over the last few weeks and months and pre-positioning should continue for the next couple of weeks.
Fujitsu (6702) Subsidiary Selldowns To Come
- Three years ago I wrote Fujitsu Subsidiary Selldowns or Buy-Ins? My choice then was Fujitsu Frontech which was bought out 8 months later.
- A Bloomberg article today with quotes from an interview with the CEO of Fujitsu fuelled some movement today.
- The “obvious” trade is Shinko Electric Industries (6967 JP) but you have to buy the new dream.
January TOPIX FFW Review – Some Big Sells
- The January 2023 TOPIX FFW Trade was announced today. The two-way trade is worth about ¥325bn.
- There are four ADDs previously discussed: Sun* (4053 JP), Appier Group (4180 JP), Chubu Steel Plate (5461 JP), and Chubu Steel Plate (5461 JP).
- There are 57 downweights, 11 upweights (but only seven FFW buys). The rest is reverse funding to buy. There are 10 names with >$10mm AND >3 days ADV to sell.
Cosmo Energy (5021) Vs Murakami – It’s On!
- In March 2022, longtime Cosmo Energy Holdings (5021 JP) holder Mubadala sold the last 15.7% of Cosmo Energy in a block sale after having sold 5% 8 months earlier.
- A month later it was revealed noted Japanese activist Murakami-san had bought 5.1%. A week later it was 8.3%. Then he bought more. Cosmo announced a buyback in May 2022.
- By November Murakami-san had 19.8%. But behind the scenes there had been discussions and those are now coming to light. Cosmo has announced possible defence measures.
K200 ETFs’ Swap Trading on Meritz & Fresh Buy-In JB Financial on Jan 27
- KOSPI 200 ETFs will have to sell Meritz FIRE and buy Meritz FINANCIAL at the close on January 27. JB Financial, the top reserved issue, will replace FIRE.
- We should consider a Long Short for two Meritz companies just before the 27th. As a follow-up setup, we should aim for a potential widening of the swap arb spread.
- As for the Long JB Financial, I would set the entry timing one week towards the implementation at the latest and look into Kodex Banks ETF (091170) for a hedge.
Japan Excellent (8987). It WAS Most Excellent. That’s Now Done.
- 4.5 months ago I wrote about a possible “Sustained Flow Event” on Japan Excellent (8987 JP). Since then, the stock has outperformed every other Office REIT. It’s up since then.
- Outperformance within Office REITs has been a minimum of 3.5%, and a maximum of ~20.8% vs the biggest peer, with an average and median outperformance of 11.7% and 13.4% respectively.
- This idiosyncratic story has come to an end. It may be a temporary end, but I don’t see the next catalyst.
Taiwan Tech Weekly: Global Optimism for Semi Stocks, Taiwan’s New Subsidies, TSMC CEO Buying Stock
- Taiwan’s government has passed new major tax subsidies to support semiconductor firms’ R&D and capex spending.
- TSMC results will be out this afternoon; Interestingly, TSMC’s CEO has been buying shares during October, November, and December.
- Hon Hai has begun iPhone 15 trial production, and Zhengzhou is back to 100%.
Esso Thailand: Bangchak Corp’s Takeunder
- Refiner/retailer Bangchak Corporation (BCP TB)‘s board has approved the purchase of a 65.99% stake in Esso Thailand (ESSO TB) from Exxon Mobil (XOM US).
- The purchase price is subject to a price adjustment mechanism and will only be known upon completion of the SPA. The indicative Offer Price is THB 8.84, 20% below undisturbed.
- Once completed – tentatively anticipated in the 3Q23 – a mandatory tender offer will be triggered for the remaining 34.01% of shares out in Esso.
Fast Retailing (9983) | Q1 Miss
- We remain bearish on Fast Retailing given its valuation premium versus global peers
- Q1 sales were resilient despite global cost of living issues. Profits missed on rising costs and China’s Covid hangover
- Cost pressures on the wage bill could be a multi-year issue as Uniqlo seeks to align with global pay standards
Aequitas 2023 Asia IPO Pipeline – India, ADRs, Korea, Japan and ASEAN
- In this note, we will take a look at the Asia Pacific IPO pipeline for 2023, specifically for India, Asia-linked ADRs, Korea, Japan and ASEAN.
- This list has been compiled on a best effort basis from tracking the company filings and through various other sources.
- The deals you see in this note are only a part of our full IPO pipeline tracker. Feel free to drop us a message for additional information on these IPOs.
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