In today’s briefing:
- Newcrest-Newmont Merger: Fancy Index Shenanigans
- JMDC (4483) Partial Offer Results – Tough Tender, I’d Watch For “THE Block” (Maybe)
- WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: 45% Turnover & US$2.5bn to Trade
- Shinko Electric (6967) – Waiting for a Package
- POSCO DX (022100 KS): Index Impact of KOSDAQ to KOSPI Transfer
- WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week
- Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem
- NWS Holding (659 HK): Offer Opens with NWD Vote on 2 November
- Korea Finally Offers Reliable Data Channel on Companies with Improved Dividend Procedures
- Zomato Lock-Up – A US$240m+ Softbank Linked Lockup Release
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Newcrest-Newmont Merger: Fancy Index Shenanigans
- Back in February, Newmont Proposes Taking Newcrest Back Into The Fold. Newmont bumped, there was due dili, then Newcrest Backs Newmont’s US$19bn Offer in May.
- More recently, we have Newcrest: Shareholder Vote On 13th Oct, with a prescribed schedule. That makes things fun.
- There will be considerable movement of shares, and that will mean opportunity. Both up and down. I see US$3bn to buy, then A$1.5bn or more to sell a bit later.
JMDC (4483) Partial Offer Results – Tough Tender, I’d Watch For “THE Block” (Maybe)
- Results for the Omron Corp (6645 JP) Partial Tender Offer for JMDC (4483 JP) are out.
- The Pro-Ration was 51.63%, at the lower end of my initial estimate of 50-58% range, and at the higher end of my revised range (42-56%).
- The pro-ration, the nature of the shapes (technical term) tendered, and what that suggests for Noritsu Koki’s position suggests the back end could be more squeezy than not.
WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: 45% Turnover & US$2.5bn to Trade
- The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.
- The October rebalance will result in a one-way turnover of ~45% and in a one-way trade of US$1.24bn. There are ~300 stocks with over 1 day of ADV to trade.
- With only 4 trading days to implementation, there could be large moves on stocks with large flows and impact over the next few days.
Shinko Electric (6967) – Waiting for a Package
- Shinko Electric Industries (6967 JP) has been on the block. 2nd Round Bids were apparently due last month, but with “Economic Security” considerations, one wonders if that stretches a bit.
- The stock is now at the low end of its range vs Ibiden, and the timing is right for a deal which could give it a pop.
- A “split price” takeover seems reasonable as a structure. I expect upside. Still.
POSCO DX (022100 KS): Index Impact of KOSDAQ to KOSPI Transfer
- Posco DX (022100 KS) has applied to the KRX for a transfer from the KOSDAQ market to the KOSPI market.
- Based on history, the approval for the transfer and the listing change could take place in the next two months.
- That means a deletion from the KOSDAQ 150 Index (KOSDQ150 INDEX) and inclusion in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX). But the timeline is important.
WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week
- The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.
- The October rebalance will result in a one-way turnover of ~37% and in a one-way trade of US$926m. There are 92 stocks with over 1 day of ADV to trade.
- In Asia, the largest buy flows are expected on Astra International (ASII IJ) and the largest sell flows on POSCO Holdings (005490 KS).
Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem
- Fast Retailing (9983 JP) today announced better than guided results, and 10% revenue growth, 18% OP growth to August 2024. NP is light, but still well higher than street consensus.
- At 10.37% Nikkei 225 weight, it is still above the target for 31 July 2024. If it does not underperform Nikkei 225 between now and then, US$2bn to sell end-Sep24.
- If people like the growthiness, that can be absorbed. But if the stock were to go up 10% vs Nikkei, there’d be US$2bn, then maybe another US$2bn to sell.
NWS Holding (659 HK): Offer Opens with NWD Vote on 2 November
- Nws Holdings (659 HK)’s IFA opines that the conditional voluntary general offer from the Cheng family is fair and reasonable. The offer + 2H dividend is HK$9.46 per share.
- The key condition is (majority vote) approval by independent NWD shareholders (EGM on 2 November). The timetable is designed such that the shareholders will also receive the NWS final dividend.
- NWD has a high but declining AGM minority participation rate. Retail forums suggest support for the transaction. On balance, we believe that this deal gets up.
Korea Finally Offers Reliable Data Channel on Companies with Improved Dividend Procedures
- The Obligatory Corporate Governance Report Disclosure System will stand as the only source for furnishing trustworthy data on the proportion of listed companies that have genuinely adopted enhanced dividend procedures.
- From a dividend strategy perspective, the companies of primary interest for strategic trading are predominantly those falling under the scope of this disclosure obligation.
- Next year, it’s anticipated that with dependable data, we will have the means to craft dividend strategies aimed at this specific group.
Zomato Lock-Up – A US$240m+ Softbank Linked Lockup Release
- In Aug 2022, Zomato (ZOMATO IN) completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.
- Softbank then sold a part of its stake in Aug 2023, the rest of its stake will come out of lockup soon.
- In this note, we will talk about the lock-up dynamics and recent updates.