In today’s briefing:
- Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses
- Nikkei 225 Index Rebalance: Passives Trade on Friday
- Index Rebalance & ETF Flow Recap: MSCI KR, S&P/ASX, SSE50, ChiNext, NIFTY, KQ150, AMFI, Rakuten Bank
- KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
- Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
- Rakuten Bank (5838) IPO – New Price Is One To Take (Part 1)
- Gigavis IPO Preview
- Gigavis IPO Valuation Analysis
- Hong Kong Buybacks Weekly (Apr 7th): Tencent, Aia, CSPC
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm?
Nikkei 225 Index Rebalance Preview (Sep 2023): Potential Changes & Dark Horses
- The review period for the Nikkei 225 (NKY INDEX) September rebalance ends end July. We highlight 3 potential inclusions and exclusions for the index.
- There are a few alternate adds that are interesting and their inclusion in the index could move things around a fair bit.
- Due to the large size difference between the potential adds/deletes, there will be a large funding trade with passive trackers needing to sell over 0.5x ADV on many index constituents.
Nikkei 225 Index Rebalance: Passives Trade on Friday
- Oriental Land (4661 JP), Renesas Electronics (6723 JP), Japan Airlines (9201 JP) will replace Toyobo (3101 JP), Nippon Light Metal (5703 JP), Toho Zinc (5707 JP) in the Nikkei 225.
- Estimated one-way turnover at the rebalance is 1.08% and will result in a round-trip trade of JPY 412.8bn (US$3.16bn) at the close on 31 March.
- There has been recent pre-positioning on the stocks as well as movement in short interest over the last couple of months.
Index Rebalance & ETF Flow Recap: MSCI KR, S&P/ASX, SSE50, ChiNext, NIFTY, KQ150, AMFI, Rakuten Bank
- There are a bunch of implementations in the coming week, the largest being the Nikkei 225 (NKY INDEX) March rebalance.
- There are some ad hoc changes to the KOSPI2 INDEX and KOSDAQ 150 Index following constituent stocks being designated as Administrative Issues and Investment Attention Issues.
- Inflows to the iShares MSCI Emerging Markets ex China ETF (EMXC US) have continued and has taken AUM to a new high.
KOSDAQ150 Ad Hoc Index Rebalance: Humasis (205470 KS) To Replace Cellivery (268600 KS)
- Following Cellivery Therapeutics (268600 KS) designation as an Administrative Issue and an Investment Attention Issue, the stock will be deleted from the KOSDAQ 150 Index and replaced with Humasis (205470 KS).
- The timing of the index change is currently uncertain but will be implemented latest by the close of trading on 17 April.
- Humasis (205470 KS) was limit up on Friday following the ex-date of a 1:3 scrip issue. The stock could continue to move higher over the next week.
Index Rebalance & ETF Flow Recap: Nikkei225, KOSDAQ150, KT Corp
- The March rebalances of the NIFTY indices and the Nikkei 225 (NKY INDEX) were implemented last week. Plus some ad hoc rebalances for the KOSPI2 INDEX and KOSDQ150 INDEX.
- A quieter week coming up with multiple market holidays across markets. We also near the start of the review period for the MSCI May QCIR.
- There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and iShares FTSE/Xinhua A50 China (2823 HK) during the week while there were outflows from some Korea ETFs.
Rakuten Bank (5838) IPO – New Price Is One To Take (Part 1)
- Rakuten Bank (5838 JP) has priced at a new range of ¥1,300-1,400/share, down from ¥1,630-1,930/share. That lowers TTM PER and PBR to well below where SBI Sumishin was priced.
- This will now be universally recognised by pre-IPO analysts as a raging buy. Even at the top end. Important considerations: Rakuten parent TAM, growth, index inclusions, etc.
- There are OTHER important considerations going forward which show themselves in the documents.
Gigavis IPO Preview
- Gigavis is offering 2.22 million shares in this IPO. The expected market cap of the IPO is from 436 billion won to 503 billion won.
- The maximum IPO offering amount is 88.1 billion won. The IPO price is between 34,400 won to 39,700 won.
- Gigavis makes automatic optical repair equipment (AOR) for the semiconductor industry.
Gigavis IPO Valuation Analysis
- Our base case valuation of Gigavis IPO is target price of 61,755 won per share, representing 56% higher than the high end of the IPO price range.
- We estimate the company to generate sales of 126.6 billion won (up 27% YoY) in 2023 and 150.9 billion won (up 19.2% YoY) in 2024.
- Our base case valuation is based on 21.8x P/E using our estimated net profit of 35.9 billion won in 2023.
Hong Kong Buybacks Weekly (Apr 7th): Tencent, Aia, CSPC
- We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Apr 7th based on HKEx daily reports.
- In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Cspc Pharmaceutical (1093 HK).
- In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Swire Pacific (19 HK).
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Calm Before the Storm?
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
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