In today’s briefing:
- MSCI Feb 2022 Index Rebalance Preview: And That’s A Wrap
- Sony – Guidance Upgrade
- KRX New Deal Index Rebalance Preview (March): More Flow for LG Energy
- ASKUL (2678) – Large, Accretive, Not Enough for Prime So Look For More
- NIFTY Bank Index Rebalance Preview: BOB Should Replace RBL Bank
MSCI Feb 2022 Index Rebalance Preview: And That’s A Wrap
- Post the end of the review period, there are 19 potential adds for Asia and 9 potential deletes. High probability names include 16 adds and 8 deletes.
- There are stocks that will have same way flow from the FTSE AW/AC trackers in March, while others could have same way flows from KOSPI200 or CSI300 trackers in June.
- Potential additions that got beaten down over the last few weeks have started to recover and could remain supported going into announcement date on 10 February (Asia time).
Sony – Guidance Upgrade
- Sony posted a strong quarter on the back of resilient margins in gaming and stellar performance in the pictures segment.
- Guidance was raised to ¥1.2trn above the top of consensus at ¥1.185trn but results will likely be around ¥1.3trn, a little below the ¥1.37trn we called in early 2021.
- Next year should see further growth and we expect firm performance going forward.
KRX New Deal Index Rebalance Preview (March): More Flow for LG Energy
- The review period for the KRX New Deal indices ended on 31 January. The changes will be announced toward the end of February and implemented on 10 March.
- We expect LG Energy Solution (373220 KS) to be included in the Battery and BBIG indices, while Kakao Pay (377300 KS) should be added to the Internet Index.
- The largest selling is expected to be on Douzone Bizon (012510 KS) due to a potential downweight in the Internet index and a deletion from the BBIG index.
ASKUL (2678) – Large, Accretive, Not Enough for Prime So Look For More
- Askul Corp (2678 JP) today announced a 4.9% buyback, likely via ToSTNeT-3, designed to lower the holding of parent Z Holdings (4689 JP), to meet TSE Prime Tradable Share criteria.
- While 5.1% earnings accretive, it will not be enough, and the structure suggests despite significant excess cash, the next tranche won’t come immediately.
- There is short-term strategy, and there is longer-term positioning. Both may work in this case.
NIFTY Bank Index Rebalance Preview: BOB Should Replace RBL Bank
- The review period for the NSEBANK INDEX ended on 31 Jan. The rebalance will be effective after the close on 30 March and the announcement will come end February.
- Based on the index methodology, we see Bank Of Baroda (BOB IN) replacing RBL Bank Ltd (RBK IN) in the index.
- Passive trackers will need to buy 11 days of delivery volume on Bank Of Baroda (BOB IN) while selling 5 days of delivery volume on RBL Bank Ltd (RBK IN).
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