In today’s briefing:
- Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY
- S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing
- Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution
- Rakuten Securities IPO Early Look – The Positives – Has Been Gaining Market Share
- L&F Considering On Switching Listing from KOSDAQ to KOSPI
- Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
- Investigating HMM’s Latest Bond Conversion Situation for a Shorting Setup
- Quiddity Leaderboard T50/100 Sep 23: AI Frenzy Causes Many Changes to Expectations
- Ohayo Japan |Inflation Moderation Drives Stocks; NUGGET:JP Office Equip Makers- Consolidation a Must
Index Rebalance & ETF Flow Recap: ASX, Chinext, URA, Korea Stocks, NKY
- Busy week in India with the adhoc changes to the NIFTY, NSE Nifty Next 50, S&P BSE SENSEX and Nifty Bank due to the HDFC Limited and HDFC Bank merger.
- The IDX could announce the changes to the IDX30, LQ45 and IDX80 indices in the coming week, though there is no firm schedule for announcements.
- Yet another week of inflows to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF and outflows from the Hang Seng H Share Index ETF (2828 HK).
S&P/ASX200 Ad Hoc Index Rebalance & Update to Potential Changes in September
- Ventia (VNT AU) will replace Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 21 July.
- The ad hoc change will lead to changes in the list of potential adds and deletes at the regular scheduled rebalance in September.
- Weebit Nano Ltd (WBT AU) is now a potential add in September and could see some pre-positioning in the near future.
What We Know Until Now About L&F & Ecopro BM’s Kospi Transfer Listing
- Yonhap News reported on the exclusive coverage of Ecopro BM and L&F’s KOSPI transfer listing.
- L&F announced through the disclosure that they are considering the KOSPI transfer listing. Ecopro BM told another local news outlet that they are not currently reviewing the KOSPI transfer listing.
- It seems that L&F’s KOSPI transfer listing is almost a confirmed fact. However, the Ecopro company in question may be Ecopro Co, not Ecopro BM.
Invincible Investment Corp Placement – Decent Accretion Despite the Large Dilution
- Invincible Investment (8963 JP) plans to raise around US$230m to fund the acquisition of six hotel assets in Japan.
- The stock has done well over the past year and so have most of its deals which we have covered in the past.
- In this note, we talk about the deal dynamics and run the deal through our ECM framework.
Rakuten Securities IPO Early Look – The Positives – Has Been Gaining Market Share
- Rakuten Securities (RAKUSEC JP), the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
- It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
- In this note, we talk about the positive aspects of the deal.
L&F Considering On Switching Listing from KOSDAQ to KOSPI
- On 19 July, there were local media accounts that L&F Co Ltd (066970 KS) is considering on switching its listing from KOSDAQ to KOSPI.
- L&F’s main business involves making cathode active materials for rechargeable batteries.
- Despite this positive move, we believe the valuations of L&F have become too high. Its operating margins also worsened from 9.6% in 1Q 2022 to 3.0% in 1Q 2023.
Yuanta ETFs Rebalance Preview: Soaring Stocks, Rising Shorts; AI Beats Shipping
- Using data from the close on 19 July, there could be 5 changes to the Yuanta/P-Shares Taiwan Top 50 ETF and 2 deletions for the Yuanta/P-Shares Taiwan Dividend Plus ETF.
- Stocks that are expected to benefit from the AI revolution could gain ETF inclusion while shipping stocks are the ones expected to be deleted from the ETF.
- There has been a huge increase in shorts on some of the potential inclusions and on most of the potential deletions. That will affect how stocks trade near term.
Investigating HMM’s Latest Bond Conversion Situation for a Shorting Setup
- Those that the local market is particularly interested in are the 192nd convertible bonds (CB) held by KDB, along with the 193rd bonds with warrants (BW) owned by KOBC.
- These two bonds’ call option exercise date is September 25th. Upon conversion of these bonds, 200M new shares will be issued (41% of SO and a 30% dilution).
- The key is the trade-off between not disrupting the selling process and avoiding any breach of trust. The prevailing local sentiment suggests that KDB and KOBC will choose stock conversion.
Quiddity Leaderboard T50/100 Sep 23: AI Frenzy Causes Many Changes to Expectations
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the September 2023 Rebalance.
- Some semiconductor/electronic component stocks have seen their share prices skyrocket in recent months due to AI-related excitement causing drastic shifts in Leaderboard rankings.
- In my last insight, I expected two T50 changes and one T100 change. Now I expect five T50 changes and three T100 changes.
Ohayo Japan |Inflation Moderation Drives Stocks; NUGGET:JP Office Equip Makers- Consolidation a Must
- OVERSEAS. SPX eaks out gains as markets continue to bid inflation moderation/soft landing narrative; GS Reports the futures is better; TELSA earnings beat despite aggressive price cuts
- JAPAN. Nikkei Futures flat vs Cash; USDJPY 139.7; Inbound Tourist back in full force; Daily Goods Manufacturers form logistics alliance to combat lack of drivers; Nidec, Disco reports today
- NUGGET. JP Office Equipment Makers – could be investment opportunities if they are proactive consolidation. Falling demand and overcapacity demands aggressive industry restructuring.
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