In today’s briefing:
- Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
- The Biggish Sep 2023 “Wednesday-Thursday Trade” With Added Monday/Friday Flavour
- Thai Beverage (THBEV SP): Cheaper than Peers with an Upcoming Catalyst
- Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP
- KOSPI 200 Rebalance Candidates in December 2023 & Changes to the KOSPI 200 Rebalance Process
- Quiddity HK Connect SOUTHBOUND Flows (Week to 22Sep23) : China Mobile, Meituan, Xpeng, Banks!
- Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno
- Doosan Robotics Institutional Lockups Breakdown Leaked Pre-Disclosure: Analyzing Flow Schedule
- Merger Arb Mondays (25 Sep) – ENM, Poly Culture, Eoflow, Origin Energy, Symbio, Costa, InvoCare
- Quiddity A/H Premium Weekly (To 22Sep23): Financials & Communications Dominate Flows
Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT
- Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
- As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
- Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.
The Biggish Sep 2023 “Wednesday-Thursday Trade” With Added Monday/Friday Flavour
- Every year it’s the same trade. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
- But there may be ¥800bn+ to buy on one day into the close later this month (+ another ¥200-300bn on two other days). Then a ¥500bn sell two days later.
- Over the past ten years, the two day return on the March trade is great. In Sep, not so much. This year there are Extra Special Flows.
Thai Beverage (THBEV SP): Cheaper than Peers with an Upcoming Catalyst
- Thai Beverage (THBEV SP) has trended lower over the last couple of years and the stock is trading very close to its lows.
- There has been a contraction in multiples and Thai Beverage (THBEV SP) trades cheaper than a lot of its Asia listed peers.
- A potential index inclusion could bring in significant passive inflows and result in a rerating of the stock.
Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP
- The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the Nikkei 225 (NKY INDEX) on Friday.
- The review period for the December rebalance of the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI Index ends on Friday.
- Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.
KOSPI 200 Rebalance Candidates in December 2023 & Changes to the KOSPI 200 Rebalance Process
- Korea Exchange is planning to change the criteria for rebalancing stocks in the KOSPI 200 index.
- The purpose of this change is to prevent stocks that surge ahead of the actual KOSPI 200 inclusion but fall significantly after the inclusion announcement.
- We think there is a 70-80%+ probability that POSCO DX and L&F Co will be included in KOSPI 200 index in December 2023.
Quiddity HK Connect SOUTHBOUND Flows (Week to 22Sep23) : China Mobile, Meituan, Xpeng, Banks!
- This is the brand spanking new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
- The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
- We like the nifty interactive tables and charts and welcome feedback. This week saw HKD 14.5bn+ of net buying. That makes ten weeks of net inflows.
Last Week in Event SPACE: Newcrest/Newmont, PTT/PTTEP, Naspers/Prosus/Tencent, Itochu Techno
- The Newmont (NEM US) CDI selldown on 15 December will have to be bought by active shareholders, not passive; a relatively large reverse funding trade on the ASX rebal.
- Naspers (NPN SJ)/Prosus NV (PRX NA)‘s CEO steps down. However, operations/investments, and the ongoing tweaking of the organizational structure with respect to Tencent (700 HK), should continue unabated.
- Activist shareholders and Toshiba Corp (6502 JP) stuck with each other for years. The takeover allows both sides to escape their mutual bearhug,
Doosan Robotics Institutional Lockups Breakdown Leaked Pre-Disclosure: Analyzing Flow Schedule
- The immediate float rate on the listing date (October 5) has reached 19.25% as the institutional lockup volume is not as high as initially expected.
- Even with a low institutional lockup level, there seems to be a possibility of a certain IPO day pop.
- The first exit point we can look for in the short term would be the 1-month lockup release (1.44% of SO) one month after listing.
Merger Arb Mondays (25 Sep) – ENM, Poly Culture, Eoflow, Origin Energy, Symbio, Costa, InvoCare
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Symbio Holdings (SYM AU), Mason Group Holdings (273 HK), JSR Corp (4185 JP), DDH1 (DDH AU), ENM Holdings (128 HK).
- Lowest spreads – Toyo Construction (1890 JP), Healius (HLS AU), Yaizu Suisankagaku Industry (2812 JP), Allkem Ltd (AKE AU), Pact Group Holdings (PGH AU), Pacific Current (PAC AU).
Quiddity A/H Premium Weekly (To 22Sep23): Financials & Communications Dominate Flows
- The Brand-Spanking New (7 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
- We used to do it and brought it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 47 Trade Recommendations.
- The last 6 weeks (since the start of the new Monitor and Portfolio 7 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%.
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