In today’s briefing:
- Newcrest-Newmont Merger: Fancy Index Shenanigans
- Yuanta/P-Shares Taiwan Dividend Plus ETF: 20% One-Way Turnover & US$2.72bn Trade
- JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem
- PICC’s (1339 HK) Lifetime Low Implied Stub
- Exploring the Launch of a Posco Group-Focused ETF: Flow Trading Insights
- Boustead Plantations (BPLANT MK): LTAT Emerges as a White Knight
- EOFlow: Insulet’s Injunction Doesn’t Thwart Medtronic’s Acquisition
- Aeon (8267) Partial Tender at ¥1610 for Inageya (8182) Aiming for Takeover Next Year
- Long Short Flow Trading Opportunity: TIGER Semicon Top 10 ETF Rebalancing Next Friday
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.
Yuanta/P-Shares Taiwan Dividend Plus ETF: 20% One-Way Turnover & US$2.72bn Trade
- Using data from the close on 28 September, there could be 6 adds and 5 deletes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
- There will also be capping and funding flows that will lead to a one-way turnover of 19.8% and a one-way trade of US$1.36bn.
- There are 15 stocks with at least 3 days ADV to trade from passive trackers and another 10 stocks that have at least 1-day ADV to trade.
JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- When this was launched, it traded more a fair bit on the first day, but then more volume traded than I expected. This could mean a couple of things.
- Re-Reading the original doc leaves nuances. The change in management responsibilities this past summer make some holders less certain. It’s complicated.
- There have been several blocks traded, and a large short instantiated. And if one has a more conservative estimate at a higher top-end participation, the back end gets uglier.
EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem
- The US judge has proposed a preliminary injunction which prevents Eoflow (294090 KS) from using Insulet Corp (PODD US)’s trade secrets and disclosing them to any third party.
- Eoflow and other defendants must respond by 5 October. The court hearing is set for 16 October. The potential trial is to be discussed in Spring of 2024.
- Medtronic Plc (MDT US) faces a difficult choice. If the injunction is enforced, Medtronic would acquire a ring-fenced asset exposed to potential court-determined liabilities.
PICC’s (1339 HK) Lifetime Low Implied Stub
- People’s Insurance (PICC) (1339 HK) is currently trading at an all-time low implied stub.
- Stripping out PICC’s 68.98% stake in PICC Property & Casualty H (2328 HK), the market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date.
- PICC is outperforming the HSI. It’s just that PICC P&C is on a hot streak, possibly driven (pun intended) by EV insurance.
Exploring the Launch of a Posco Group-Focused ETF: Flow Trading Insights
- KRX approved the listing of ACE POSCO Group Focus. This fund mirrors the performance of the FnGuide POSCO Group Focus Index. KRX will announce the listing date next week.
- This index encompasses 6 Posco affiliates and 4 non-Posco stocks. The top 3 constituents, each assigned a 25% weight, are POSCO Holdings, Posco International, and Posco Future M.
- We should explore various long-short setups for stocks within the local battery sector (long Posco affiliates and short others), starting with the listing of this ACE POSCO Group Focus ETF.
Boustead Plantations (BPLANT MK): LTAT Emerges as a White Knight
- Boustead Plantations (BPLANT MK) shares have been on a rollercoaster ride. As Kuala Lumpur Kepong (KLK MK) pulls its offer, LTAT has emerged as an unlikely white knight.
- LTAT aims to launch a general offer at RM1.55 per share, in line with KLK’s aborted MGO price. The government will backstop LTAT’s funding for the offer.
- LTAT is vague on approvals and timing. Regulatory approvals should be a formality as LTAT is the Armed Forces pension fund. At the last close, the gross spread was 10.7%.
EOFlow: Insulet’s Injunction Doesn’t Thwart Medtronic’s Acquisition
- After Insulet Corp (PODD US) lodged a lawsuit against EOFlow (294090 KS), Flex, inter alia, on the 3rd August, the judge has thrice extended the temporary restraining order.
- But the big (ger) news is that a preliminary injunction comes into force today. Shares are down 2.5% as I type.
- This latest development should have been expected. And put simply: a proposed preliminary injunction doesn’t prevent Medtronic Plc (MDT US) from acquiring EOFlow.
Aeon (8267) Partial Tender at ¥1610 for Inageya (8182) Aiming for Takeover Next Year
- Aeon Co Ltd (8267 JP) and Inageya Co Ltd (8182 JP) agreed in late April to prepare a plan so Aeon would buy 51% this year.
- They would combine Inageya with 53+%-owned United Super Markets (3222 JP) aiming for a ¥1trln sales supermarket chain in Kanto. That is due end- calendar 2024.
- There is a partial offer to buy 33+% of Inageya at a small premium, and inadequate price before merging next year. Cross-holders determine pro-ration.
Long Short Flow Trading Opportunity: TIGER Semicon Top 10 ETF Rebalancing Next Friday
- LX Semicon and Tokai Carbon Korea will be excluded, and these two positions will be filled by Eo Technics and either HPSP or ISC Co Ltd.
- The effective date is October 16th, and the rebalancing trading by the TIGER ETF occurs towards the closing (likely to start around 2 p.m.) on Friday, October 13th.
- The practical setup would entail an EO Technics-TCK Long Short pair. For a more aggressive strategy, we could explore the inclusion of HPSP in this setup.
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