In today’s briefing:
- MVIS Global Rare Earth/Strategic Metals Index Rebalance Preview: One Add, One Delete Possible
- SET50 Index Rebalance: SAWAD Added; Buying at the Close Today
- Adani Group: GQG Bets Big; MSCI Index Impacts
- Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT
- SHL Japan (4327 JP) Takeover – Illiquid, Easy, Non-Transparent, but a Done Deal
- IMM PE Lanches A Tender Offer on Hanssem
- SBI Sumishin Net Bank IPO: The Investment Case
- Nikkei 225 March 2023 Review – OLC, JAL, Renesas IN.
- Yashili (1230 HK): Mengniu Offer Imminent As Key Sale Concludes
- Quiddity ASX Rebal Mar 23: Good Hit Rate, Some Short Buildup, Decent Impact
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.
SET50 Index Rebalance: SAWAD Added; Buying at the Close Today
- Srisawad Power 1979 (SAWAD TB) has been added to the SET50 INDEX following the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger.
- Passive SET50 INDEX trackers will need to buy 9.7m shares (THB 534m; 1x ADV) of Srisawad Power 1979 (SAWAD TB) at the close of trading today.
- There could be two more changes in June with relatively new listings, Thai Life Insurance (TLI TB) and Betagro (BTG TB), being added to the SET50 INDEX.
Adani Group: GQG Bets Big; MSCI Index Impacts
- Post market close yesterday it was announced that GQG Partners (GQG AU) had invested INR 154.46bn (US$1.87bn) in four Adani Group companies via block deals.
- The blocks were at a discount of 4.3% for Adani Ports & Special Economic Zone (ADSEZ IN) to 12.2% for Adani Enterprises (ADE IN).
- There will be an increase in the free float for some Adani Group companies as a result of the blocks and there are implications for the stocks in indexes.
Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT
- Oriental Land (4661), Renesas Electronics (6723) and Japan Airlines (9201) will replace Toyobo (3101), Nippon Light Metal (5703) and Toho Zinc (5707) in the Nikkei 225 (NKY INDEX).
- Oriental Land (4661 JP) has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.
- Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There’s a big funding trade too.
SHL Japan (4327 JP) Takeover – Illiquid, Easy, Non-Transparent, but a Done Deal
- The parent company of SHL Japan Ltd (4327 JP)‘s largest shareholder is buying out its main customer in Japan.
- This is an LBO/MBO situation, and friends and family get it to 63% or so. A tiny sliver from others gets it over the hump.
- Should get done easily, but the corporate governance here is not encouraging. Yes, a premium, but no explanation, and it’s a bit low.
IMM PE Lanches A Tender Offer on Hanssem
- IMM private equity fund launched a tender offer on Hanssem Co Ltd (009240 KS) and its share price surged by 19.7% to reach 53,700 won today.
- IMM is currently the largest shareholder in Hanssem with a 27.7% stake in the company. IMM’s stake in Hanssem will rise to about 36% if this tender offer is successful.
- Hanssem’s share price still 2.4% below the tender offer price of 55,000 won. In the coming days, we believe the share price will reach closer to the tender offer price.
SBI Sumishin Net Bank IPO: The Investment Case
- SBI Sumishin Net Bank (7163 JP), an online bank in Japan, has revived its listing plans to raise up to US$440 million (vs the 2022 target of US$1 billion).
- Founded in 2007, SBI Sumishin Net Bank is owned 50% by SBI Holdings (8473 JP) and 50% by Sumitomo Mitsui Trust Holdings (8309 JP).
- The investment case rests on market share gains, the rude health of the digital bank segment, the nascent BaaS segment turning profitable and ambitious medium-term goals.
Nikkei 225 March 2023 Review – OLC, JAL, Renesas IN.
- As expected, Oriental Land (4661 JP), Renesas Electronics (6723 JP), Japan Airlines (9201 JP) IN, and Toyobo (3101 JP), Nippon Light Metal (5703 JP), Toho Zinc (5707 JP) OUT.
- The Nikkei implemented the “Tricky Twist” discussed. This lowers the total amount to buy on Oriental Land vs what many would have expected.
- That’s “disappointing” BUT… the behavioural aspects here are really interesting, and the timetable for the event is worth thinking about.
Yashili (1230 HK): Mengniu Offer Imminent As Key Sale Concludes
- Yashili International Holdings (1230 HK) has announced that the disposal of Dumex China to Danone SA (BN FP) has been completed.
- This satisfies the second of three SPAs announced last May, leaving the sale of Danone’s 25% stake in Yashili to China Mengniu Dairy Co (2319 HK) outstanding.
- This stake sale should conclude next week, to be followed by the launch of the Scheme later this month, early next.
Quiddity ASX Rebal Mar 23: Good Hit Rate, Some Short Buildup, Decent Impact
- The index changes for the ASX Index family for the March 2023 Rebalance were announced after the close on Friday 3rd March 2023.
- There will be one, two, and four changes for ASX 20, ASX 100, and ASX 200 indices, respectively. There will also be 12 ADDs and 9 DELs for ASX 300.
- In this insight, we take a closer look at our expectations for index flows, short interest, and recent price performance of the names involved in the rebalance event.
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