In today’s briefing:
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible
- CPSE / BHARAT22 / CNXBANK Index Rebalance Preview: Capping Changes in March
- Index Rebalance & ETF Flow Recap: NKY, HSCEI, HSTECH, STAR50, MVIS, Japan Post Bank, Adani, KRX BBIG
- MVIS Vietnam Index Rebalance: One Deletion; Float & Capping Changes
- ASMPT (522 HK): PAG Potential Privatisation?
- SPX Targets and Post NFP Surprises
- Oishi Group (OISHI TB): ThaiBev’s Delisting Tender Offer at THB59.00
- Swire Back To Buying Back – One-Third To Go
- Collapse of Silicon Valley Bank (SVB) – Impact on Korean Banks
- Index Rebalance & ETF Flow Recap: MSCI China, S&P/ASX, KOSDAQ150, KOSPI, CPSE/Bharat22, YES, OZL
MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible
- The review period for the March rebalance ended yesterday. Announcement of the changes will be made on 10 March and will be implemented at the close on 17 March.
- Mineral Resources (MIN AU) is a potential index inclusion if it is added to the index universe with lithium revenues nearing the 50% threshold.
- ioneer Ltd (INR AU) is very close to the 98% deletion threshold and could be removed from the index at the March rebalance.
CPSE / BHARAT22 / CNXBANK Index Rebalance Preview: Capping Changes in March
- The BHARAT 22 ETF (ICICIB22 IN) will rebalance on 17 March while the CPSE ETF (CPSEBE IN) and Nifty Bank Index (NSEBANK INDEX) will rebalance on 29 March.
- There are no constituent changes for the indices in March but there will be capping changes for the stocks and there is a reasonable impact on some stocks.
- There are stocks that will have opposing flows on the two days, while there are some stocks that will have same way flows from passive trackers.
Index Rebalance & ETF Flow Recap: NKY, HSCEI, HSTECH, STAR50, MVIS, Japan Post Bank, Adani, KRX BBIG
- The MSCI Feb QCIR was implemented on Tuesday and there were a bunch of announcements for other indices from Wednesday to Friday.
- The implementation of the March rebalance for the Hang Seng family of indices and the SSE STAR50 (STAR50 INDEX) take place at the close on Friday.
- Redemptions continue on IShares Edge MSCI Min Vol Emerging Markets ETF (EEMV US) and KraneShares CSI China Internet ETF (KWEB US).
MVIS Vietnam Index Rebalance: One Deletion; Float & Capping Changes
- Saigon Thuong Tin Commercial (STB VN) will be deleted from the MVIS Vietnam Index at the close of trading on 17 March.
- One-Way turnover is 4.2% and the one-way trade is US$21m. There are two stocks where passive trackers need to buy over 1 day of ADV.
- There have been big inflows to the Market Vectors Vietnam ETF (VNM US) over the last three months as the index has traded near its lows.
ASMPT (522 HK): PAG Potential Privatisation?
- Bloomberg reported that PAG and other parties have expressed interest in taking ASM Pacific Technology (522 HK) private. PAG also sounded out several lenders.
- ASMPT has three substantial shareholders (Asm International Nv (ASM NA), FIL Limited and Schroders PLC (SDR LN)) which suggests a requirement for a reasonable takeover premium.
- ASMPT previously denied a privatisation rumour in 2020. Nevertheless, peers and historical multiples imply a fair price range of HK$82-97 per share, 11-31% premium to the last close.
SPX Targets and Post NFP Surprises
- Bearish from SPX 4,060-80. Near resistance at 4,020 was used to add to shorts. Downside surprise due this week on break of 3.900.
- Key support breaks amid systemic risk saw us raise our net short going into this more turbulent period that should wrap up near the 20th. Started shorting in Feb.
- Added Japan to our short list being a laggard. Once laggards buckle we will be closer to a short term low.
Oishi Group (OISHI TB): ThaiBev’s Delisting Tender Offer at THB59.00
- Oishi Group PCL (OISHI TB) has disclosed a delisting tender offer from Thai Beverage (THBEV SP) at THB59.00 per share, a 26.9% premium to the undisturbed price (10 March).
- The offer is conditional on Oishi shareholder approval which requires 75% approval by total outstanding shares and <10% rejection by total outstanding shares. ThaiBev can vote at the EGM.
- The offer price is reasonable and timing is the key risk. The delisting EGM will be held on 3 May. The offer must be open for 45 business days.
Swire Back To Buying Back – One-Third To Go
- After two months of zero buybacks under their HK$4bn buyback programme, on Friday Swire Pacific (A) (19 HK) | Swire Pacific (B) (87 HK) again bought back shares.
- Ostensibly, it was as Swire A shares fell below HK$60/share. They were 65% of B volume and 51% of A volume on Friday – not shy about their return.
- Assuming participation patterns normalise and the shares don’t bounce back above the self-imposed limit, the buyback will probably last 6-7 weeks more. The div arb is real if you hold.
Collapse of Silicon Valley Bank (SVB) – Impact on Korean Banks
- On Friday 10 March, Svb Financial (SIVB US) suddenly collapsed, becoming the largest bank to fail in the United States since the 2008 financial crisis.
- In our view, the collapse of SVB Financial will likely have a negative near-term impact on the Korean banks.
- Three ways that this will negatively impact Korean banks include risk-off investment sentiment, greater excuse to hold on to cash by Korean banks, and lower interest rate spreads.
Index Rebalance & ETF Flow Recap: MSCI China, S&P/ASX, KOSDAQ150, KOSPI, CPSE/Bharat22, YES, OZL
- Some KOSPI indices rebalanced at the close on Thursday while the Hang Seng family of indices and the SSE STAR50 (STAR50 INDEX) rebalanced at the close on Friday.
- The S&P/ASX family, MVIS family and a bunch of other indices will rebalance at the close on coming Friday.
- After seeing big inflows over the last couple of years, outflows from Samsung KODEX Secondary Battery ETF (305720) and Mirae Asset TIGER Secondary Cell ETF (305540) have started to pick up.
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