In today’s briefing:
- Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out
- Nikkei 225 March 2023 Rebal On The Follow – Predictions (3 In, 3 Out) & Problems
- Toshiba (6502) Update – Shares Down Since Last Look, “News” Isn’t Really. IRR Grid.
- STAR50 Index Rebalance Preview (Sep): Adds Outperforming the Deletes
- Toshiba – The Bidders Emerge
- S&P/ASX Quiddity Leaderboard Sep 2022: Potential ADDs Could Outperform Potential DELs
- Perpetual Needs To Pay Up For Pendal
- Understanding DB HiTek Shorting Event Amid DB’s Holdco Conversion
- FTSE TWSE Quiddity Leaderboard Sep 2022 (2.0): Two ADDs/DELs Expected & Dividend+ Index Implications
- Tassal: Cooke Increases Its Stake to 10.49%
Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out
- The Nikkei 225 Annual Review is in September based on end-July data. Jumping the gun, I propose 3 additions and 3 deletions with granular data and details offered per sector.
- I see ¥600bn to buy and a funding trade of 99% of that. There are 15+ names with more than 1 day of ADV to sell (funding only).
- The impact on Real World Float is non-negligible. One name in particular is deserving of attention.
Nikkei 225 March 2023 Rebal On The Follow – Predictions (3 In, 3 Out) & Problems
- Yesterday I published Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out. Assuming correct, and we move the last 6mos of data 6mos forward, March23 Rebal is below.
- This too is 3 in, 3 out. But it is complicated. “Required” changes would move the sector balance further out of whack.
- And while some of the trades are “interesting”, the rebal is smaller and the bigger question is “What comes after that?”
Toshiba (6502) Update – Shares Down Since Last Look, “News” Isn’t Really. IRR Grid.
- Overnight, Toshiba Corp (6502 JP) has released an update “Progress Report on Discussions with Potential Investors and Sponsors. Four advance to the second round, including both PE and strategic investors.
- Nikkei reported those advancing were Bain, CVC, Brookfield, and JIP-JIC. Blackstone did not advance. Yesterday, Reuters reported that KKR had declined to bid, but might join another bid.
- Now parties will start due diligence, and Toshiba will examine bids for “measures to enhance corporate value” and certainty of execution (given national security-sensitive issues, and funding).
STAR50 Index Rebalance Preview (Sep): Adds Outperforming the Deletes
- Over 96% of the way through the review period, we see 1 change using a 12 month minimum listing history, and 5 changes using a 6 month minimum listing history.
- We expect the index committee to continue using the shorter minimum listing history since the potential adds have much larger market caps than the potential deletes.
- The potential adds have outperformed the potential deletes over the last month and there could be more once the current consolidation is complete.
Toshiba – The Bidders Emerge
- The Nikkei reported yesterday that Toshiba had winnowed the pool of potential partners down to four candidates.
- All four names (Bain, CVC, Brookfield and Japan Industrial Partners/Japan Investment Corp) have been connected to Toshiba previously.
- We wonder whether this pool of candidates points to a higher likelihood of a strategic partnership rather than a full buyout.
S&P/ASX Quiddity Leaderboard Sep 2022: Potential ADDs Could Outperform Potential DELs
- In this insight, we take a look at the potential index changes for S&P ASX 300, 200, 100, 50, and 20 in the September 2022 Rebalance.
- I expect there to be 7 ADDs and 7 DELs for the ASX 200 Index and 23 ADDs and 18 DELs for the ASX 300 Index.
- Based on recent price performance, I believe the Potential ADDs could outperform the Potential DELs over the next few weeks.
Perpetual Needs To Pay Up For Pendal
- Back on the 4 April, asset manager Pendal Group (PDL AU) announced a non-binding proposal from investment firm Perpetual Ltd (PPT AU).
- As widely expected, Pendal’s board unanimously determined that the indicative cash/scrip Offer significantly undervalued the current and future value of the company.
- Pendal said yesterday that it is still in discussions with Perpetual regarding a potential transition. Using yesterday’s close, and applying the same terms, backs out an indicative price of A$5.67/share.
Understanding DB HiTek Shorting Event Amid DB’s Holdco Conversion
- DB was notified of the conversion to a holding company by the Korea FTC. DB must complete the conversion to a holding company by January 1, 2024.
- DB has no option but to ECO DB HiTek, the same trick employed for LG Energy Solution, to meet the 30% stake obligation for DB HiTek.
- There are still opportunities for outright shorting on DB HiTek as DB will likely announce DB HiTek split before August 12.
FTSE TWSE Quiddity Leaderboard Sep 2022 (2.0): Two ADDs/DELs Expected & Dividend+ Index Implications
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the Taiwan 50 and Taiwan Mid-Cap 100 Indices for the September 2022 Rebalance.
- In addition to the Indices specified above, I have also discussed the upcoming index change expectations for the FTSE TWSE Taiwan Dividend+ Index.
- I also discussed some interesting LONG-SHORT trades involving some potential ADDs and DELs.
Tassal: Cooke Increases Its Stake to 10.49%
- On 19 July, Cooke, the spurned suitor, increased its stake in Tassal (TGR AU) to 10.49%. The average price to build the 10.49% stake is A$4.14 per share.
- Cooke also hired Phil Wiese, the former CEO of Huon Aquaculture (HUO AU), as a MD in Canada. Mr Wiese is well qualified to run Tassal should Cooke acquire it.
- With shareholders happy to sell to Cooke despite the Board’s assertions that the previous bid undervalued Tassal, a new offer will force the Board to engage.
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