In today’s briefing:
- Newcrest/Newmont Conclusion Nearing – Flowfront & Gold Price
- Japan – Increase in Shorts on Some Interesting** Stocks
- Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank
- Celltrion Merger Swap Event: Trading Dynamics Post-Merger Approval
- Oriental Land: Google Search Signals Potential Miss; Guidance Could Challenge Consensus Optimism
- Quiddity A/H Premium Tracker (To Oct20): Volatility Up Further, Wide Spreads Even Wider. Messy²
- Seoul Guarantee Insurance Corp IPO – Cancelled
- KOSPI200 Index Rebalance Preview: The Tail End
- KOSDAQ150 Index Rebalance Preview: Big Sell Off Among Potential Inclusions as Momentum Fades
- Ohayo Japan | Nasdaq Snaps Losing Streak; More FDI for Japan’s Chip Sector
Newcrest/Newmont Conclusion Nearing – Flowfront & Gold Price
- Newcrest Mining (NCM AU) saw its shareholder meeting vote through the Scheme, then on teh 18th, the Special Div went ex-.
- Since then, as gold has rebounded sharply, Newmont Mining (NEM US) has underperformed peers and juniors (VanEck Gold Miners ETF/USA (GDX US)) since gold has spiked.
- Thursday is the last day of trading and there is a LOT of NEM to trade.
Japan – Increase in Shorts on Some Interesting** Stocks
- CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, Kurita Water Industries, GMO Payment Gateway, Keio Corp and NGK Insulators have underperformed the Nikkei225 over the recent past.
- The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
- Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.
Index Rebalance & ETF Flow Recap: NKY, ASX, Liontown, J&T Express, JP/IN Positioning, IndusInd Bank
- Light & Wonder (LNW US)/ Light & Wonder (LNW AU) replaced United Malt Group Ltd (UMG AU) in the S&P/ASX 200 (AS51 INDEX) last week.
- Newcrest Mining (NCM AU) stops trading this week and should be replaced by Newmont Mining (NEM US) CDIs in the ASX indices.
- Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.
Celltrion Merger Swap Event: Trading Dynamics Post-Merger Approval
- Celltrion Chairman Seo made a public statement, affirming that they are prepared to bear the entire cost, even if it exceeds the ₩1T ceiling, and proceed with the merger.
- The relatively substantial cost risk associated with Celltrion Inc. due to the involvement of NPS is causing the merger swap spread to widen once more in comparison to Celltrion Healthcare.
- If the prices persist above the appraisal rights exercise prices, the relative cost risk for Celltrion Inc. could escalate, leading to a significant widening of the swap spread.
Oriental Land: Google Search Signals Potential Miss; Guidance Could Challenge Consensus Optimism
- During 2QFY24, Tokyo Disneyland and Tokyo DisneySea both saw a QoQ decline in Google search interest.
- This suggests to us that there might be an earnings miss when Oriental Land (4661 JP) reports its FQ2 results on October 30, 2023.
- Additionally, there are potential downside risks to both FY24 and medium-term consensus projections following a revised FY24 guidance announcement.
Quiddity A/H Premium Tracker (To Oct20): Volatility Up Further, Wide Spreads Even Wider. Messy²
- The Somewhat-Brand-Spanking New (10 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- We used to do it. We brought it back better, with lots of cool interactive tables, and charts, heat maps, and comparative data. And 50 Trade Recommendations.
- The last 10wks (since the start of the new Tracker and Portfolio 11 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%, -0.29%, -0.71%, -68%.
Seoul Guarantee Insurance Corp IPO – Cancelled
- Seoul Guarantee Insurance (031210 KS) stated today that it will cancel its IPO mainly due to low demand.
- Despite the company’s emphasis on high dividends and high ROA of 5.8% in 2022 (5x average ROA of the domestic non-life insurance companies), many institutional investors emphasized on the negatives.
- The major negatives include high interest rates, lack of growth potential, concerns about additional shares sale overhang, and unattractive valuations.
KOSPI200 Index Rebalance Preview: The Tail End
- With the review period nearly complete, we expect 7 changes to the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December. Couple of changes are low probability though.
- The Materials sector could be the biggest gainer at the rebalance while nearly all deletions could come from the Consumer Discretionary sector.
- The impact on the potential inclusion ranges from 0.15-15 days of ADV while the impact on the potential deletions varies from 1.7-8.1 days of ADV.
KOSDAQ150 Index Rebalance Preview: Big Sell Off Among Potential Inclusions as Momentum Fades
- With the review period nearly complete, we see 15 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
- There could be index changes even before the December rebalance if there are prolonged trading suspensions and stocks migrate from the KOSDAQ Market to the KOSPI Market.
- The potential adds have sold off hard over the last six weeks, similar to the performance at the June rebalance.
Ohayo Japan | Nasdaq Snaps Losing Streak; More FDI for Japan’s Chip Sector
- Overseas: SPX -0.2% , Nasdaq +0.3%; Tech stocks moved higher after bond yields retreated from highs. Several big tech companies to report this week
- Today: NKY Futs +0.1% v cash. JPY 149.7/$; Nidec’s results were OK, but not great – ADR down -5%
- JapanX: Taiwan’s Powerchip Semiconductor’s investment in Japan, supported by government subsidies, aims to revive Japan’s semiconductor industry and diversify the global supply chain
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